Long term strategy and new routes for Cardiff Airport revealed
The Welsh Government has laid out its long-term strategy for Cardiff Airport as its three year support package comes to an end – identifying key new routes and declaring an openness to work on new ownership models.
In a Written Statement published today (22 July) and issued during the Senedd recess, Ken Skates, Cabinet Secretary for Economy, Transport and North Wales, has shared that the Welsh Government has been working with Cardiff Airport’s leadership team to develop a longer-term strategy for the business, “focused on how the Airport can contribute to economic growth and help to reduce economic inequality in south Wales”.
Challenges
Cardiff Airport is estimated to generate over £200m in Gross Value Added (GVA) annually and supports thousands of jobs in the south Wales.
As with other airports across the UK, the Covid-19 pandemic presented significant challenges, including a steep fall in passenger numbers and the number of flights offered.
In an unprecedented move, the Welsh Government took “decisive action” to protect the Airport during the pandemic, providing essential financial support through a 3-year rescue and restructuring package.
Strategy
The newly announced strategy aims to build on Cardiff Airport’s unique strengths with two main objectives – attracting and growing aviation and aerospace businesses linked to the airport, alongside a focus on increased passenger connectivity to a small number of global air hubs and economic centres of importance to Wales.
Key to the strategy will be support to existing businesses at the airport to enable them to grow, and attracting new businesses to both the airport and the Bro Tathan business park.
The Welsh Government also hope to develop facilities to encourage private aircraft owners to use the airport when visiting south Wales. This, they hope, would enhance the Airport’s offering to organisers of major sporting and cultural events in the region, as well as becoming more attractive for VIP business travellers and foreign investors.
Air cargo is another area that they hope to develop – attracting more logistics operations to improve supply chain and export options for the region and maximise the use of increasing cargo capacity in line with route development
In the longer term, the Welsh Government is also looking at developing sustainable aviation technologies and making the most of the aerospace cluster and green energy initiatives in the region.
The additional jobs anticipated, combined with the range of aviation and aerospace courses provided by Wales’ further and higher education establishments, they say, would offer an even greater pipeline of career opportunities in the sector for people across the whole region.
New routes
To improve connectivity, Cardiff Airport will seek to develop routes to locations identified in the Welsh Government’s international strategy as being important for Wales’ economic growth, such as the Middle East and South Asia, major economic and finance centres and hub airports within the European Union – and North America.
It is anticipated that these route developments could see the airport’s annual passenger numbers increase to just over 2 million within the next decade, according to the Welsh Government.
Cardiff Airport’s existing terminal building has been targeted for improvements to ensure it can accommodate the higher number of passengers whilst also reducing the carbon footprint of its ground operations.
Improving bus connectivity between the airport and the centre of Cardiff is also set to be addressed as part of the strategy.
Position
According to Mr Skates, the measures put in place by the Welsh Government during and after the pandemic to protect the airport “have done their job but have left the business in a position where it does not have the financial resources necessary to kick-start these economic developments”.
To ensure that the south Wales region can make the most of these opportunities, the Welsh Government is planning to provide the Airport with long-term additional investment funding and will be seeking regulatory approval for a package up to a maximum of £206m across a ten-year period.
Analysis commissioned by the Welsh Government has indicated that by 2034, this funding could lead to the Airport supporting a significantly higher number of jobs across the region and generating a significant increase in annual GVA contribution.
“Commercial freedom”
Unwilling to share a public breakdown of figures, Mr Skates writes: “To achieve the economic objectives outlined in this statement, it is important that the Airport leadership can operate with the commercial freedom and agility necessary to secure the best possible agreements with airlines and other businesses.
“Therefore, whilst the Welsh Government and Airport do have a plan for how the new investment money would be targeted, we will not be providing a public breakdown of the figures.
“Subject to these commercial considerations, for transparency, we will report regularly on the flow of funding to the Airport and ensure a close monitoring of the economic outcomes of investment.
“As the investment in the Airport would be classed as a subsidy of particular interest under the UK subsidy regime, our proposed investment package must be referred to the Competition & Markets Authority (CMA) for their consideration in the first instance.
“This referral will take place over the summer recess period and will take 3-4 months to conclude. Once Cabinet Secretaries have had an opportunity to consider the CMA’s report and then taken a final decision on what form any investment package should take, they will report back to the Senedd.”
Tensions
Acknowledged the tensions between owning an airport and addressing the climate emergency, Mr Skates writes: “We recognise this continued challenge. However, on balance, we believe that the Airport returning to pre-pandemic levels of activity would bring substantial economic benefits to the region.
“People and businesses in Wales will still want to fly and if they cannot fly from Cardiff, they will simply go elsewhere, potentially with additional carbon emissions in the process.
“Strategies for reducing our global aviation emissions are best considered at the UK level and implemented via international institutions. That being said, owning the Airport does give the Welsh Government an opportunity to take responsibility for some of Wales’ aviation emissions.
“We want to take that opportunity, which is why our airport strategy aims to encourage the development and local adoption of more sustainable aircraft propulsion technologies and to reduce carbon emissions from the Airport’s infrastructure.
Looking towards the longer term, the Welsh Government has declared an openness to exploring different ownership models for the Airport, potentially including arrangements with the private sector or other public sector partners.
Mr Skates shared: “We are open-minded about how the Airport is owned in the future, as long as we can be confident that it is maximising its potential as a means to achieve sustainable economic growth and reduce inequality in the south Wales region.
“In the medium term, however, we hope to see this significant investment ensuring that the Airport will deliver on the opportunities only it can, both for our people and our economy.”
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The best investment for Cardiff Airport is to give Cardiff what most capital cities around the developed world already have – That is a fast and frequent rail link from the Airport Terminal to the City Centre stations.
This will boost economy activity to repay the investment made.
It will enable people arriving in Cardiff with luggage easy transfer to trains to their destinations.
It is what a modern country needs for its capital city.
Bristol Airport doesn’t have a rail connection nor even decent roads, yet more people from South Wales use it than use Cardiff?
Reason, Air Routes, lots of routes and competition.
The WG would be better to give North Somerset Council money to build new road off the M5 rather than stemming the losses at Cardiff.
There is a reason why its called the Welsh Government. Its supposed to put the Welsh national interest first and foremost. Funding road projects in neighboring countries is not within its remit.
Bristol Airport already has coach links to South Wales, what more do we need? What the WG should be doing is demanding the Air Passenger Duty be devolved to Wales, like it is in Scotland and Northern Ireland, so that Cardiff would be able to attract more airlines, boosting Wales as a tourist destination.
That’s going to be a difficult sell for Reform
Why? They are English Fascists m
Please look fascist up in the dictionary.
Can Ryan Air put on Winter flights to Geneva or France? They would have an annual instant market from schools in Wales who would want to go skiing. Has this option been explored?
What about Ryan air going to Geneva or France during Winter months? So many schools would use this to get to ski resorts. Has this been considered?
Just checked the latest rolling yearly CAA Airport statistics (May 24)
Cardiff now stand at 859,000 pax / year, down from 888,000 in May 23
What really stands out is Cardiff is alone out of the 30 or so UK airports as the only one where passenger numbers are still falling, every other Airport shows year on year rise.
For example Bristol now stands at 10,253,000 up from 8,885,000 a year earlier.
How long can this white elephant and money sump remain open?
https://www.caa.co.uk/Documents/Download/11903/cc374f6d-5a1e-4470-8a68-1f7a49525161/16627
The airport needs a direct link to the M4 . In addition, It now takes an hour to get to the centre of Cardiff for all practical purpose.It needs improved links to Cardiff
The improved 5 mile lane, A4226, upto the A48 has made the journey into Cardiff far easier by car.
Road and rail links are secondary the first thing that is needed is an operator that is willing to make Cardiff a hub for a large number of routes and present them with an attractive financial package to do so over a long period.
A quieter airport is attractive to many users, it is easier to navigate, as are cheaper parking and free drop offs and pickups.
My experience of Bristol has been very bad. It has a management whose only priority is making money. It’s transport connections are very poor and very expensive. Cardiff airport can’t possibly be any worse but there are no direct flights to Berlin where I live. So I am forced to endure Bristol. I love Wales I love the people but surely you could be better governed ? For example the lift at the entrance to Newport station has been out of action for MONTHS and nobody seems to know or care when it will be fixed. As someone with limited… Read more »
There is only so much the Welsh Government can do, its hands are tied as state aid was reserved to the UK Government by the Internal Market Act. The Tories refused to devolve Air Passenger Duty to Wales because of concerns it would harm business at Bristol Airport. Hopefully now that we have the same party in power on both sides of the M4 we might have better cooperation although I wouldn’t hold my breath sadly.
None of the English regional airports have state aid or the option of reducing Air Passenger Duty. Why does Cardiff airport deserve an unfair advantage?
Why should Scotland and Northern Ireland have the power to set Air Passenger Duty but not Wales? In 2019 the Welsh Affairs Select Committee chaired by David TC Davies (hardly a supporter of devolution) recommended the devolution of Air Passenger Duty to Wales, and concluded that it would have no adverse affect on Bristol. English MPs are well within their rights to to lobby the UK Government to demand a reduction of Air Passenger Duty for English Airports if they wanted to, but what they should do is deny Wales this power just to look after the interests of Bristol.… Read more »
target the us and amsterdam. that way will be more attractive than bristol and heathrow.
Have you seen how expensive inter continental connections are from Amsterdam
After 3 long years of ploughing taxpayer’s money into Cardif Airport…….they come up with a plan!
I can’t believe the direct bus from Cardiff was scrapped. The T9 bus was a game changer for people who live in Cardiff especially students travelling home etc. You could put a decent bus service back on without building or changing anything. That would be a good start.
T9 was great, used it often, but most times we were the only people on it.
The problem with the rail link to Cardiff is that if your travelling on the South Wales Line you have to- 1) change trains at either Cardiff Central or Bridgend, and then 2) change for a bus link at Rhoose station for the terminal. Its not ideal for those arriving from a long distance who are suffering from jet lag. Another problem is that it does not operate on a 24 hour basis therefore with fails to consider late night arrivals or 2 hour check-in deadlines for early morning departures. I used to use the T9 and it wasn’t always… Read more »
Could Mid Wales just have better regional connections? Old old story Wales is only the South and Valleys.
The vanity project continues.
Of course I want Cymru to have a successful International Airport but not in the location which has B road Access and a railway station that doesn’t even serve the airport.
When BMI Baby pulled out of Cardiff the then head of that airline said that nobody in their right minds would want to operate flights from Cardiff.
This wasn’t just a one off with Wizz Air also having enough,Air France pulling the Paris flight and how ironic that Qatar have returned to all other UK airports except Cardiff.