Cardiff Airport ‘at critical point’, boss tells Senedd
CARDIFF Airport has reached a critical point in terms of its survival.
That was the stark assessment made by the airport’s chief executive officer Spencer Birns yesterday.
Mr Birns was responding to scrutiny questions by members of the Senedd’s Public Accounts and Public Administration Committee.
He said: “In terms of survival, this is a critical point. We, along with the rest of the aviation industry, are predicting that it’s going to take five years to recover. That the global outlook on recovery to pre-pandemic levels.
“We were asked to do everything possible to minimise the demand on the Welsh public purse, but remain open as a business.
“The UK Government were telling us you know you need to seek shareholder support before you come to us.
“Welsh Government agreed it was important for Wales to have an airport and we agreed to a rescue risk, rescue and recovery grant agreement with the Government for a five-year programme that was confirmed in March 2021.”
Mr Birns said it would have cost more to sell the airport off than give it millions more public money.
The Welsh Government purchased the airport in 2013, and it has since been operated at arm’s length on a commercial basis.
The airport’s value was, at the same time, valued at £15m which is less than a third of what Welsh Government paid for it.
In March 2021, it was announced the airport was being given another £42m of taxpayers’ cash – and another £40m it owes to the Welsh Government was written off.
UK airports lost 223 million passengers in 2020 due to the pandemic, according to figures by the Civil Aviation Authority. Of this, travel numbers for Cardiff Airport dropped f r o m 1.6 million in 2019 to 219,984 in 2020. By the end of March 2021 the Cardiff figures were 48,000 – a 98% reduction in passenger numbers and the lowest number at the airport since 1950.
Questioning Welsh Government officials in the committee meeting, Labour MS Mike Hedges (Swansea East) asked: “I see there were three options with the airport to give the support they asked for to keep going; to see about releasing it to somebody else with a dowry; or closing it and then because it’s got A1, A3, B8 and possibly other planning permissions to actually sell the residual land, are those the options you looked at?”
He was told a number of options were looked at but the restructuring plan would provide a return greater than if the airport went into liquidation.
Mr Hedges was also told a 12-month mothballing scenario was looked at.
The other option was to “do nothing” which would have seen the airport close and sold on a break-up basis.
The committee was told the aim is to get back to 52 routes. So far, 18 are back and by November 2022 the hope is it will be 25.
Wizz Air’s plans were paused but bookings are being taken for flights and they are hopeful that will go ahead from next year.
There are “significant discussions” ongoing with Qatar Airlines. The airline hasn’t resumed its operations at Cardiff, Birmingham or Gatwick.
Mr Birns said UK Government has given an assistance scheme to English airports – and that was extended in the UK Budget last week.
“They’ve been given access to up to £12m in terms of costs for recovery to safety, security and rates relief.
“Scottish and Northern Irish devolved governments also provided relief to the airports in their countries. The fact that we’re owned by the Welsh Government was a major factor in helping airlines stay committed.”
The committee was told 75% of operating costs go on safety and security, a figure that cannot be cut.
“At Cardiff, just so you’re aware of it, 75% of our operating costs are actually related to safety and security obligations that we have,” Mr Birns said.
Airport chairman Wayne Harvey said: “It’s important to appreciate that airports across the UK, Europe and indeed the globe do not really make money out of flights landing and taking off.
“What they do is produce passengers who spend money at the airport and the primary source of income for any airport is the retail items, and the commission was generated off the back of those outlets.”