Bosses say airport is now ready for take-off
WHAT does the future hold for Cardiff Airport as it looks to recover from the pandemic? While having to remain operational to stay Civil Aviation Authority (CAA) compliant, apart from freight flights bringing in much-needed Covidrelated PPE, all commercial flights were grounded following the first UKwide lockdown.
Airports around the world, where the public ownership model is more prevalent than in the UK, saw billions in taxpayer life support finance being provided to save them from collapse, while privately-owned airports have turned to shareholders and debt funders.
This has been no different for Cardiff Airport, with a further £42m of repayable finance, which can be drawn down over the next five years, provided as part of a rescue and recovery package from its ultimate owner in the Welsh Government, which also wrote off the same amount of previous funding in its 2021-22 budget.
Once the airport was acquired by the Welsh Government, arguably as a pet project of then First Minister Carwyn Jones back in 2013 for £52m from previous owner Abertis, it was always going to come under close scrutiny and become something of a political football.
Prior to the pandemic it had broken into profitability, not on pre-tax profit, but on the measure of Ebitda, with optimism too that its upwards trajectory of year-on-year passenger growth could see it reaching three million by 2025.
At that point it would require a new terminal building g and new investment to finance that could provide a partial exit for the Welsh Government with an investor(s) nvestor(s) coming on board.
That, and other ther long-term masterplan investment tment projects including hotels, s, have now been put on hold. .
With the Welsh h Government advice still not to o travel unless essential, the airport irport is now looking to get back ack to its prepandemic annual ual passenger number of 1.6 million llion by 2026.
But, while a long turnaround lies ahead, South h African-born chief executive Spencer Birns, supportrt- ed by the board – chaired by y former senior partner in
Wales for pro
fessional advisory firm Deloitte Wayne Harvey – said that having been in pandemic survival mode, there are tentative signs of recovery with passenger numbers at the Rhoose-based airport now at 10% of pre-pandemic levels.
For comparison, the figure for UK airports as a whole is 35%, reflecting the UK Government’s less stringent guidance on international travel. Th e We lsh Government is currently pondering whether to follow England which now only
requires passengers to take lateral flow tests and less expensive PCR ones when entering English airports from non-red list countries.
On the outbreak of the pandemic and the airport’s operational response, Mr Birns said: “As an airport we have gone through a number of disruptions disrupt over the years like the Icelandic ash cloud, where nothing flew for a couple of days, and the September 11 terrorism attack with a big grounding groundin of airspace.
“Even i in the economic downturn of 2008-09 2008-0 and 2010-11 we had aircraft having havi to park as there wasn’t enough b business for them, so we have gone through thro those cycles in the past, but nothin nothing to the extent of a national lockdown and everyone staying indoors.
“At a national n piece of infrastructure we are ar part of a UK plan for activity, so if anything needs to divert (planes) we have to be open and available. So from that perspective it was abou about effectively what were the things tha that we needed to keep the airfield o open, how could we reduce utilisation in the terminal where there was no demand
and maintaining a safe and
secure operation.”
Mr Harvey, who took over as chairman from the ebullient Roger Lewis in June last year, added: “The delicate balance here is that you cannot half open an airport and you have to have one that is functional at the very highest level of safety and security. And we are required to do that not by our shareholder in the Welsh Government, but effectively by the global aviation community.”
Mr Birns added: “The UK has probably the highest safety focus of all markets. It is notoriously strict, but it is good for that reason. We have probably 75% to 80% of our actual operating costs which are safety and security related. We are talking here about maintenance from the runway, radars and lighting to air traffic controllers, security staff and bio-equipment.”
The oubreak of the pandemic initially saw around 65% of airport staff on the UK Government’s now ended furlough scheme. With more flexibility in terms of being available to work later being built in, at the heart of the second lockdown last winter that rose to more than 90%.
The airport currently has around 273 staff on its books, having been higher before the pandemic at around 364.
Mr Birns said: “In terms of business changes we took the hard decision in March this year where we went to our senior management team only and five left the business. We have been working really closely with the Welsh Government and maintaining as many people on our books as we can, but also looking at how we could use their skill sets elsewhere.
“At one stage we had about 30 to 40 staff on secondment, so we did track, trace and protect with staff seconded to Cardiff and Vale Health Board. Some went to the Vale of Glamorgan Council from our IT department and we have also allowed sabbaticals. There are also currently 13 staff seconded into Welsh Government for up to 23 months.”
Mr Spencer succeeded Debra Barber as chief executive last summer, having previously been chief commercial officer. He has been at the airport for 15 years.
On passenger numbers, Mr Birns said: “For 2020 passenger numbers were around 220,000 which was a