Conservatives demand more routes for Cardiff Airport after £3.5m government loan
Tory party members have called for the value of Cardiff Airport to be made public – two years after it was sold to the Welsh Government for £52 million. Conservative politicians have criticised the airport’s failure to attract new flights, but the Labour Welsh Government said securing routes was a long term process and that a route development loan had yet to come into play. In November 2014 ministers announced that Cardiff Airport was to get a £3.5m loan to help develop new routes, as part of the Welsh Government budget for 2015/16. That happened after Lufthansa-owned Germanwings said it would close its service to Dusseldorf in 2015. The Tories want the airport improved and then sold back to the private sector, and so far there is evidence that the money from hard-pressed taxpayers has achieved much. A LibDem councilor commented: “The big question remains… where is the plan?” Labour said: “The Conservatives need to show some patience, especially when demanding to see the results of a £3m loan that will not be available until the next financial year.”
Conservatives demand more routes for Cardiff Airport after £3.5m government loan
4 February 2015 (Wales online)
By David Deans
Tory party members have called for the value of Cardiff Airport to be made public – two years after it was sold to the Welsh Government for £52m
The Welsh Conservative party has called for the value of Cardiff Airport to be made public – two years after it was sold to the Welsh Government for £52m.
Tory politicians have criticised the transport link’s failure to attract new flights from the Welsh capital, but the Labour Welsh Government said securing routes was a long term process and that a route development loan had yet to come into play.
Loan for new routes
Last November ministers announced that Cardiff Airport was to get a £3.5m loan to help develop new routes, as part of the Welsh Government budget for 2015/16.
The move came after Lufthansa-owned Germanwings said it would close its service to Dusseldorf in 2015.
Ahead of a Tory debate on the issue in the Senedd on Wednesday, Byron Davies AM, Shadow Minister for Transport, said: “Cardiff Airport has the potential to be an enormous success story for Wales, as a key business link and gateway for tens of thousands of foreign tourists, but I fear Labour mismanagement is stifling its growth.
Demand for results
“We disagreed with Labour’s decision to spend £52m buying Cardiff Airport, but now it is state-owned, Labour Ministers should work with it to expand routes, improve the passenger experience and then return it to the private sector.
“Millions of pounds of public money have been put into a route development fund, but we need evidence that this money is delivering results and value for money for hard-pressed taxpayers.”
During the debate Julie Morgan, AM for Cardiff North, said: “The best thing for the Conservative opposition to do is to throw its support (behind the airport) and not whinge on.”
Eluned Parrot, Lib Dem AM, said: “The big question remains… where is the plan?”
‘Opposition from day one’
Plaid Cymru’s Rhun ap Iorwerth, whose party supported bringing the airport into public ownership, said his colleagues want to see “a strategy for growth in the future.”
Edwina Hart, economy minister, told the debate that there had been opposition to the Welsh Government purchase from the Tories from day one.
She said supporting the Tory’s calls in their motion tabled in the debate would mean divulging commercial information that couldn’t be shared.
“Lets hope, when passenger numbers improve, we look to a greater valuation,” she said.
A Welsh Government spokesman said: “Our investment in Cardiff Airport is an investment for the long-term benefit of Wales. Securing new routes is a long-term process.
“The Conservatives need to show some patience, especially when demanding to see the results of a £3m loan that will not be available until the next financial year.”
Some earlier news about Cardiff airport:
Cardiff Airport drop in passenger numbers prompts Tories’ private ownership call
The Welsh Conservatives have called for Cardiff Airport to be returned to private ownership after September saw a year-on-year drop in passenger numbers of 7%. The fall was described as “expected” by the Welsh Government. An air industry insider said: “This is more bad news for Cardiff Airport – and the figures don’t include the imminent closure of the CityJet route to Glasgow. The downward trend is noticeable – in August the passenger numbers were down 8.2% at 135,900.” Shadow Transport Minister Byron Davies said: “These reports of a near double digit decline in passenger numbers at Cardiff Airport in the past two months compared to 2013 are deeply concerning. Welsh Conservatives disagreed with Labour’s decision to spend £52m buying Cardiff Airport, but now it is state-owned, Labour ministers must work hard to help it achieve its potential.” There will soon be one Ryanair flight per week from Cardiff to Tenerife. All just holiday traffic. Bucket ‘n spade.
Former boss of Cardiff airport says its expansion plans are massively unrealistic, without public subsidy
Keith Brooks, the former chief executive of airports group TBI, said Cardiff Airport’s passenger forecast is “massively unrealistic” and that it needs to be more realistic in its expectations. Last week, in an unexpected move, it was announced that the airport’s chief executive Jon Horne will stand down next week after only 18 months in the role. The airport’s director of operations will be interim managing director. While Cardiff airport has not published any specific short to long-term passenger growth targets, since being taken over by the Welsh Government for £52m last year it has arrested year-on-year decline. Annual passenger numbers now stand marginally up at just over one million. Keith Brooks said: “They have had massively unrealistic expectations of what they can do in this period [since acquisition]…..Aviation is a very slow moving industry and negotiations with airlines take a long time.” Getting a significant low-cost carrier, like Ryanair, to expand routes from very low levels would require “significant subsidy” inducements. That means government subsidy, and tax payers’ money. The Welsh government “will not just be able to turn things around in a short period of time.”
Ryanair to have one flight per week to Tenerife in winter from Cardiff airport
Ryanair has been seen as the holy grail for passenger numbers at Cardiff Airport. But Cardiff will now have just one Ryanair route, once a week to Tenerife during the winter. “However, there is a wave of optimism that this one route will develop into a network that will improve the airline offering at Cardiff.” There is a history to the relationship between Ryanair and Cardiff Airport. Ryanair had a very successful route between Cardiff and Dublin from 2001 to 2006. The departure of Ryanair followed a reported disagreement with the airport over airport charges.improve the experience for all passengers. Ryanair is an opportunity if the passenger numbers on the new route convince Ryanair to develop even more new routes. However Ryanair would need to deliver substantial passenger numbers to compensate for the lower charges that Cardiff airport will be paid. It would also be necessary to maintain the existing carriers as competition so that Cardiff doesn’t become an airport totally reliant on a single carrier that is using market power to continuously drive down airport income.
Cardiff to Anglesey air link continues to get large government subsidy as bus grants are slashed
March 31, 2014 The Welsh Government has defended a big increase in subsidy for the North-South Wales air service while it cuts funding for lifeline bus services. From 2010-11 to 2012-13, subsidy for the flights between Anglesey and Cardiff increased by 37.2%. Subsidy was £184 for each passenger who used the service in 2012-13. Over the same 2-year period, the Welsh government reduced its grant to councils for unprofitable bus services by 29.2%. At least 94 bus routes have been withdrawn since 2011. Other services are under review because subsidy per passenger exceeds £2 or £3. The Welsh Government has been reviewing bus funding since early 2012 – but has not evaluated the air service’s costs and benefits since the global financial problems and major reductions in public-sector budgets. The route from Cardiff to Anglesey has 2 flights each way, each weekday, and there were almost 15,000 passenger journeys in 2008-09, but only 8,406 passenger journeys in 2012-13. Subsidy for the air operator and the civilian air terminal at RAF Valley on Anglesey increased from £1.08m in 2008-09 to £1.55m in 2012-13.
Welsh Economy Minister says Cardiff Airport likely to return to profit only in ‘long-term’
March 21, 2014
The Welsh Economy Minister, Edwina Hart, has said that Cardiff Airport – now in public ownership – is likely to return to profit eventually, but not in the short term. She said its downward spiral is no longer continuing. The airport finally becoming profitable is a “long-term” strategy. She was giving evidence to the National Assembly’s Enterprise and Business Committee on the airport, which was bought by the Welsh Government for £52m at the end of 2012. Ms Hart suggested there wouldn’t be a quick sale of the airport back into the private sector, which the Scottish Government is seeking for the newly-nationalised Prestwick Airport in Ayrshire. Pressed by the Plaid Cymru economy spokesman on when the government expected the taxpayer to recoup its investment. She said the Budget announcement for support for regional airports to set up new routes would apply to Wales and that they would “wait for the detail of it”, but confirmed the Welsh Government is likely to bid in for funding. Chancellor George Osborne announced a £20m annual fund will be used to encourage new routes from regional hubs like Cardiff.
Cardiff Airport shuttle bus from Cardiff centre to attract more traffic averages 4 passengers per journey
February 7, 2014
A shuttle bus to transport passengers from Cardiff centre to the airport has carried on average fewer than 4 passengers a journey since its launch in August 2013. The service is funded by the Welsh government, with the cost suggested to be around half a million ££s. The bus runes every 20 minutes and has so carried an average of 2,778 passengers a week. Last month the Conservatives said the service was “unsustainable”. A review of the service has been carried out by Prof Stuart Cole from the University of South Wales. Cardiff airport was bought by the Welsh government for £52m in March 2013 and the bus service is part of the strategy to reverse a slump in passenger numbers.A local MP said: “At almost half a million (pounds) in Welsh Labour government subsidy, that’s an exceptionally expensive service to support and on current passenger numbers is simply unsustainable.” But a Cardiff Business School transport expert said such services were needed to convince airlines there would be passengers available. “Airlines planning cycles are such that they’re not just going to start routes instantly. It’s going to take [6 – 12] months, to attract routes into the airport and, therefore, it’s a bit like the chicken and egg.”
Sec of State for Wales says South Wales to Heathrow rail link would provide major economic boost
November 7, 2013
Secretary of State for Wales David Jones has said a £500m direct rail link between Heathrow and South Wales would be a major economic driver for the area. He said better infrastructure would play a crucial role in growth of the Welsh economy. Last year the UK Government outlined its commitment to the Western Rail Access scheme – a new rail link which will cut 30 minutes off the journey times from South Wales. Network Rail is currently looking at options for the proposed spur, including direct services from South Wales on the Great Western Main Line into Heathrow, or providing a separate shuttle service from Reading. And David Jones added the standard speil about “Fast and convenient links to our major airports are crucial as we look to compete in the global race.” What race? Colin Matthews said 8.8% of the 1.3 million people in the UK working for foreign-owned firms that use Heathrow are from Wales.
Cardiff Airport is bought by the Welsh government for £52m (over-priced?)
March 27, 2013
The current owner of Cardiff Airport, Abertis, which bought the airport from local councils in 2005, has now managed to sell it to the Welsh Government for £52 million. That price is well above market value when compared to recent transactions involving UK airports. The airport was valued at about £34 million in 2010. It has been making large losses and losing passengers for many years. The Government is desperate that it gets more passengers and gets back to making a profit. Welsh First Minister Carwyn Jones said it would not be operated by the government and would be managed “at arm’s length” and “on a commercial basis”. Cardiff’s passengers have declined from around 2 million in 2007 to just over 1 million in 2012, as many have chosen Bristol airport instead. Bristol airport is now concerned that Cardiff would now unfairly benefit from state support. Cardiff was hit by the loss of bmibaby in 2011. The airport’s board will try and get in a commercial operator and hopes to attract long haul and transatlantic flights. Only recently there was news that Swiss airline Helvetic will pull out of Cardiff, 2 years after the Welsh government spent £500,000 marketing Wales in Switzerland.
Welsh government buying Cardiff airport from Abertis in £50m cash deal by the end of March
February 21, 2013 The Welsh Government is expected to complete its acquisition of Cardiff Airport by the end of March in a straight cash deal understood to be around £50m with current owner Abertis. A due diligence process is being undertaken on behalf of the Welsh Government. The deal will not see the Welsh Government taking on any debt at the airport – which posted pre-tax losses of just over £300,000 in 2011. In the short to medium term the Welsh Government would need to inject about £6m a year in capital expenditure and airline route development support – including agreeing to underwrite any losses in the first few years accrued by airlines establishing new routes out of Cardiff. ie public subsidy. It is understood that representatives of the Welsh Government have already sounded out a number of low cost airlines over setting up operations, including Ryanair – which was asking too much. Discussions are continuing. It is unlikely that the airport, post deal, would be directly owned by the Welsh Government but by some special purpose vehicle instead. Click here to view full story…