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19th July 2019

Welsh Conservatives call for Cardiff Airport to return to private ownership

BY: Nathan Spackman

Welsh Conservative Shadow Ministers are today calling for the Welsh Government to explain to taxpayers how and why loss-making Cardiff Airport is still funded by the public purse.

In figures revealed by Darren Millar AM, Shadow Minister and Policy Director for the Welsh Conservatives, Cardiff Airport is shown to be in £30.6million of debt to the Welsh Government as of March 2018, five years after it was bought.

The airport, located in Rhoose in the Vale of Glamorgan, was bought by the Welsh Government in 2013 for £52million after flight numbers had dwindled over the years.

The purchase price was based on forecasts for a growth of up to 2 million passengers per year and underlying profits of around £20million within five years, but by March 2018 there were fewer than 1.5 million passengers and the airport's annual losses have more than doubled.

The £52million price-tag has now almost been matched by £51million of taxpayer-funded loans, grants and losses on projected figures over the five years.

At the time of the acquisition, Welsh Conservatives put to the Welsh Government a blueprint for how the Party would set out to pay taxpayers back the £52million, plus £1millon of consultancy fees paid ahead of the purchase.

The blueprint included the need for better transport links to the airport, impeded greatly this year by the shunning of the M4 relief road project against the will of its inquiry’s author. It also called for the devolution of the air passenger duty tax, which it maintains is essential for the airport – as long as it remains in Welsh Government ownership – to become more competitive with its English neighbours.

The Welsh Conservatives say today’s figures show that failure by the Welsh Labour Government to implement a successful plan has seen the airport rack up annually-increasing losses on projected figures of up to £16,000 a day in 2018; caused by poorer than expected flight and passenger numbers. These losses now total £19.8million since 2013.

Commenting, Shadow Business, Economy and Infrastructure Minister, Russell George AM, said: “We’ve known for several years that Cardiff Airport has been a huge drain on the Welsh public purse, but it is clear from these figures that it was overpriced and continues to underperform."

“Wales needs to stay connected but the airport mustn’t be allowed to spiral into financial crisis.

“The Welsh Government’s decision to purchase the site was based on overly optimistic forecasts of passenger growth and profitability which have failed to materialise.

“Ministers also failed to project the benefits that devolving air passenger duty would have had on attracting flight operators and allowing Cardiff to compete fully with the likes of Bristol.”

Deb Bowen Rees, CEO at Cardiff Airport commented, “Our last annual accounts were issued in Autumn 2018 for the 2017/18 financial year. Financial performance has continued to improve with a positive EBITDA being achieved for the first time in 8 years, alongside an increase in passenger numbers of 9% during that time.

“Cardiff Airport has been through a period of recovery over the last 5 years and has invested in developing our facilities and in relationships with airline partners with the key objective of creating a sustainable airport business. This has been against the backdrop of industry challenges and regulatory costs which all have an impact on small airports.

“In terms of future ownership, we are focussed on driving the sustainability of the business to deliver economic value to Wales.”

A spokesperson for Ken Skates said: “Darren Millar’s comments show a startling lack of business awareness and pride in Wales.

“We took ownership of the airport at a time when widespread improvements were needed, and that’s what the fantastic team at the airport has delivered. We now have an attractive national airport that is amongst the fastest growing in Europe, with passenger numbers having grown considerably and consistently since we took control in 2013. This is a period which has coincided with the airport playing an instrumental role in Wales’ successful delivery of major global events such as the Nato Summit and Champions League Final and attracting businesses such as Aston Martin to Wales. It’s absolutely essential to the way we operate and the way Wales is viewed globally that we have a thriving national airport.

“The Conservatives may regard it as a ‘waste’ and may be happy to let down passengers, major events and businesses but we make no apologies for supporting Cardiff Airport which in turn supports the viability of Anglesey Airport in North Wales.”

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