Qatar Deal ‘could be the catalyst for opening Wales to Middle Eastern investment’
Business Editor Sion Barry on why the Qatar Airways route is not just good news for Cardiff Airport, but for Wales plc too
The phrase game changer is often overused in Wales, but it certainly applies to the winning of the first scheduled long-haul direct route from Cardiff Airport to the Middle East.
Huge credit must go to the executive team at the airport, led by its chief executive Debra Barber and its commercial director Spencer Birns, but also the networking and big picture zeal of its non-executive chairman Roger Lewis.
While having air passenger duty devolved to the Welsh Government would have strengthened their case, the team was able to win the route against competition from other UK airports, including its closest rival in Bristol.
And Qatar Airways don’t see the new route as just providing a direct connection to Wales and vice versa, as important as that is, but very much as a springboard for improving connections across western Europe.
As a result it will also provide a boost to Cardiff Airport’s current main scheduled airlines in Flybe and Vueling with passengers coming in from the Middle East making use of their routes for connecting flights to other parts of the UK and Europe.
And it will also strengthen the case for Cardiff landing a direct route to North America, with the bonus of having passengers embarking from the Middle East making use of the Rhoose operation as a “hub airport” for connecting flights, say to New York.
A host of other airlines could opt to invest in Cardiff if the Qatar Airways route proves to be a commercial success.
Domestically, this new direct route to Doha will not only serve the south Wales market, but crucially, the south-west of England too. There are currently nearly a million passengers from the west of Britain, who have to travel to London airports each year to use Qatar Airways’ network of flights.
It will take time, but the aim has to be to get as many of those as possible to use Cardiff Airport instead.
And that could add hundreds of thousands of new passengers to Cardiff’s current growing number of 1.3 million per annum.
For the Welsh economy, and its export focused businesses, it will make it quicker and far easier to travel to the Middle East, but also for connecting flights at Doha for key markets such as India, China. Singapore and Australasia. It is not just about improving business links between Wales and the Middle East, but also links in areas such as education, tourism and sport.
And it could also be the catalyst for opening up Wales to Middle Eastern investment, such as sovereign wealth funds, for long-term financial return infrastructure projects.
The current terminal building at Cardiff Airport could accommodate up to around three million passengers a year.
However, if that number is on target to be reached over the next five to 10 years the airport, which is wholly-owned by the Welsh Government, will need a new terminal facility in an investment that could run into several hundred million pounds.
The Welsh Government’s current position is that such an investment would need to be funded by the private sector. So this could be the point at which the Welsh Government is willing to give up equity in the Rhoose-based airport to a private sector investor.
And with Qatar Airways also having a stake in Heathrow Airport, as well as British Airways and Vueling-owned IAG, could they be a natural investor in Cardiff Airport at some future point?
Well, having a commercially successfully route from Cardiff would make those conversations on potential investment and an ownership stake in the airport a lot easier to have.
Although passenger numbers have been growing month-on-month for well over a year, the new route also further vindicates the Welsh Government’s decision to acquire the airport from Spanish firm Abertis in March, 2014, for £52m, minus professional advisory fees.