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Committee grills officials over £206m Cardiff Airport plan

19 Sep 2024 6 minute read
Cardiff Airport. Photo by Holidayextras is licensed under CC BY-ND 2.0

Chris HainesICNN Senedd reporter

Senedd members pressed officials about Cardiff Airport’s performance and the Welsh Government plans for a £206m taxpayer-funded subsidy.

Natasha Asghar, a Conservative member of the Senedd’s public accounts committee, quizzed officials about the ten-year subsidy plan which was announced in July.

Andrew Slade, the Welsh Government’s director general for economy, said the Welsh Government is waiting to hear back from the Competition and Markets Authority (CMA).

He confirmed advice from the CMA about compliance with subsidy rules will not be binding.

Ms Asghar pointed out that Bristol Airport is investing £400m over five years and, unlike in Cardiff, it will not cost the public purse a penny.

Mr Slade replied that more than 80% of world airports are publicly owned, stressing that it is incumbent on the Welsh Government as owners to put similar investment in place.

‘In the dark’

Asked if a breakdown of the £206m will be given once the CMA publishes its report, he said the Welsh Government will be able to share more – subject to commercial confidentiality.

Ms Asghar said: “The Welsh Government has received and approved 15 capital expenditure requests of between £50,000 to £1m to date from the airport, totalling £4.6m.

“And three that were requested above £1m, totalling £13m, from a total pre-approved budget of approximately £29m ring fenced until March 2026.”

The shadow transport secretary called for greater transparency, saying: “Quite frankly, that’s a lot of money going to certain things that we are absolutely in the dark about.”

Mr Slade said officials would write to the committee with a summary.

Ms Asghar concluded: “I don’t see the public making a profit from the airport … but I hope you’ll be able to fill me with some confidence because as it stands I don’t have much of it.”

‘Rescue’

Labour’s Rhianon Passmore asked about progress three years into a five-year rescue plan.

Mr Slade said: “The airport’s still with us, doing well, has had a good summer and I would argue that the rescue and restructuring plan has been successful.”

Referring to industry uncertainty created by the pandemic, Spencer Birns, chief executive of Cardiff Airport, said the plan was critical to rebuilding.

He told the committee an assessment, carried out by professional services firm Grant Thornton, estimated the airport generates £200m of economic value.

Mr Birns said at least 4,000 people are employed in the region on the back of the airport.

‘Setback’

Pressed about missing a target of 1.3m passengers, which the airport is not expected to hit for another two years, Mr Birns pointed to the setback of Wizz Air pulling out.

He said the airport, which has seen 7% growth so far in 2024, is short of targets because it has not been able to replace carriers quickly enough.

Mr Birns explained there is a shortage of aircraft and crews, leading airlines to focus on bigger market opportunities first.

Islwyn MS Ms Passmore said the airport held about £50m in March 2023 but has yet to meet conditions for around £30m of the government grants.

Mr Birns said the airport has been keeping cash for compliance and capital investment.

Wayne Harvey, chair of the airport’s operating company, told the committee the airport has £600,000 – of the £42.6m rescue package – left to draw down.

‘Why no Jet2?’

Mike Hedges, a Labour MS who represents Swansea East, said: “I was at Morriston working men’s club and they said ‘why haven’t we got Jet2?’…. Is there something you’re not doing to attract Jet2 which flies from an awful lot of other smaller, regional airports?”

He suggested promoting KLM flights as a “jump-off point” from Cardiff to Amsterdam’s Schiphol airport, where you can fly to almost anywhere in the world.

Mr Birns told members the airport is in talks with Jet2 and other airlines such as Easyjet and Ryanair but they do not yet see Wales as a significant marketplace to invest in.

“They’re fundamentally telling us they’re very happy serving the Welsh market from another airport…,” he said. “That is part of our challenge when we’re dealing with these airlines.”

He agreed KLM, which has been operating at the airport for 35 years, is critical for Wales: “Their flights are rammed and we’re asking them to put more capacity on.”

‘Best value’

Plaid Cymru’s Adam Price pressed the witnesses about spending on security after the Welsh Government announced an extra £6.6m for new 3D airport scanners.

Mr Slade said costs were included in the rescue plan but it came in higher than expected, with Mr Harvey adding that technology costs more than doubled from 2018/19 estimates.

Mr Birns said the scanners were due to be delivered earlier this year but, following supply chain issues, should be operational by the end of 2024.

Mark Isherwood, who chairs the committee, asked about appointments to the airport’s board which are not regulated by the Commissioner for Public Appointments.

Witnesses stressed that public appointment processes were followed nonetheless.

Mr Slade said he was pleased by the “best value” appointment process for a new chair of the holding company, Reg Kilpatrick, and two non-executive directors.

‘Exit plan’

Mr Isherwood raised concerns about the independence, objectivity and impartiality of appointing a non-exec who had previously been involved with the airport for a decade.

He also questioned the resignation of the airport’s finance director in May.

Mr Slade said Geraint Davies has lots of relevant experience “which is hugely helpful”.

And Mr Harvey told the committee Jonathan Scott decided to take a different direction with his career, with a new financial director starting at the end of November.

Closing the evidence session on September 19, Mr Isherwood asked about a change of ownership and whether the Welsh Government has an exit plan.

“We don’t have an exit plan in the way you frame that point,” Mr Slade replied, stressing that Welsh ministers are not “slavishly stuck” to one ownership model or another.


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Neil Anderson
Neil Anderson
15 days ago

Thank the heavens that we don’t have to worry about global warming and climate change anymore!

“As well as water vapour (the primary exhaust emission), jet engines emit carbon dioxide, small amounts of un-burnt hydrocarbons, oxides of nitrogen, soot particles (sometimes termed non-volatile particulate matter, or nvPM) and carbon monoxide.”

But, fortunately, “Such emissions are regulated by the International Civil Aviation Organization (ICAO).”

Phew!

They’re sure to advise us if there is a problem. Like the water companies.

Full speed ahead!

Neil Anderson
Neil Anderson
15 days ago

The quotations above were from Gov.uk. Still seems like a lot of money that might be put to better use…say, more healthy use (no guesses!).

Welsh Patriot
Welsh Patriot
15 days ago

Now KLM has reduced its service to two flights a day, long haul via Amsterdam is pointless, unless you want to spend a night at Schiphol Airport.
Cardiff Airport is turning into a joke.

Jonesy
Jonesy
15 days ago
Reply to  Welsh Patriot

Believe me, no one in North Wales is in any way even mildly happy about continuing subsidies paid for a failed airport which we don’t use.

Tanwg
Tanwg
15 days ago

Pointless spending money in the airport until they sort out transport links first. Link from Cardiff central every 15/20 minutes and better link to/from M4.

Rob
Rob
15 days ago
Reply to  Tanwg

Agreed, links between Central station need to run on 24/7 basis to consider late night arrivals and check-in deadlines for early morning departures. However unless your going to attract airlines to CWL then even transport links are also going to be a waste of money. Its a chicken and egg situation.

Rob
Rob
15 days ago

How about devolving Air Passenger Duty to Wales like it already is in both Scotland and Northern Ireland. If Bristol feels aggrieved then they can lobby the UK Government to reduce APD in England.

Gareth
Gareth
15 days ago
Reply to  Rob

As the report stated , airlines are happy to serve the Welsh market from another airport, due to the unfair financial advantage the UK Gov deliberately gives to Bristol over Cardiff .

Dai Ponty
Dai Ponty
15 days ago

By devolving Passenger duty to the Welsh government instead of London controling Cardiff their answer is it would damage Bristol and Birmingham airport but its alright to damage Cardiff airport if Control of passenger duty to Welsh government it would be a level playing field it would not damage the English airports they have more than they can Handle especially Bristol no its London they are bloody Control freaks and i say to you people who want to shut Cardiff which some on here do an Independent Wales will need its own Airport have you ever heard of a country… Read more »

M McCabe
M McCabe
15 days ago

A key issue that no politician mentioned is the complete lack of quick access from the M4. I have been using the airport since 1989 with many flights to Dublin. I used to use Cardiff for holidays, while BMI Baby was there. In the last 12 months I have stopped using the airport. It is easier to use Bristol, Heathrow or Gatwick. Once on the M4 from Swansea, it is easier to go on to Bristol or London. Because of the speed limits it is now 1 hr 20 minutes from Swansea, if you come off at Bridgend to go… Read more »

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