Welsh Assembly members say Cardiff airport lacks a long-term enough plan for expansion
The Welsh Public Accounts Committee has said Cardiff Airport is missing its passenger targets and lacks a long-term plan to expand. The airport was bought by the Welsh Government for £52 million in 2013. The decision to buy and the price paid caused controversy, but the Public Accounts Committee said ministers had had “a clear rationale” for going ahead with the deal. The transport minister said swift action saved the airport from closure. After the airport was taken into public ownership, passenger numbers rose from 995,000 to 1.079m in 2013-14, but in 2014-15 the numbers declined to 1.005m. The airport now expects numbers to rise to 1.4m by 2017-18, although the business plan produced at the time it was bought projected passenger figures of around 2 million by that date. Some consider the airport was only worth £20 – £30 million and the Welsh government paid too much. Flybe announced it would operate flights between Cardiff and London City Airport during the six week closure of the Severn rail tunnel from 12 September to 21 October. “Aviation Wales” hopes Air Passenger Duty will be devolved, so they can cut it. Bristol airport is very anxious about this, and launched a “A Fair Flight for the South West” campaign, fearing a loss of passengers to Cardiff.
Cardiff Airport lacks long-term expansion plan, say AMs
23 March 2016 (BBC)
Cardiff Airport is missing its passenger targets and lacks a long-term plan to expand, a committee of AMs has said.
The airport was bought by the Welsh Government for £52m in 2013.
The decision to buy and the price paid caused controversy, but the Public Accounts Committee said ministers had had “a clear rationale” for going ahead with the deal.
The transport minister said swift action saved the airport from closure.
Edwina Hart added that customer satisfaction was at an “all-time high”.
After Cardiff Airport was taken into public ownership, passenger numbers rose from 995,000 to 1.079m in 2013-14, but in 2014-15 the numbers declined to 1.005m.
The airport now expects numbers to rise to 1.4m by 2017-18, although the business plan produced at the time it was purchased projected passenger figures of around 2m by that date.
On the cost of the purchase, the committee refers to the range of independent valuations offered to ministers, including one by KPMG that suggested the site was worth £20m-£30m.
The report said: “We remained unconvinced that the Welsh Government had a clear negotiation strategy, and we question the decision to make an initial offer of £55m, with a view to negotiating the purchase price down afterwards.”
Committee chair and Conservative AM Darren Millar said it was clear the airport had been “in decline” before 2013, and “prospects for turning it around under its previous ownership were bleak”.
“We also recognise the importance to Wales of having its own international airport and the wider benefits for Wales arising from this,” he said.
“However, although the airport has the potential to grow significantly, we note its progress against the acquisition business plan in terms of passenger growth are behind target.”
The report said Glasgow Prestwick Airport produced business plans looking up to eight years ahead, while Cardiff Airport had only two-year plans.
Responding, Mrs Hart said: “If we had not acted swiftly the airport would have undoubtedly closed.
“Instead, customer satisfaction is now at an all-time high with 1.2m passengers using the airport over the past 12 months – the highest level since 2011.”
Airport managing director Debra Barber said: “We would like to make it very clear that while we report to our holding company with a rolling two-year business plan, we operate with much longer term projections.
“The PAC [Public Accounts Committee] is looking backwards. We are continuously forward-looking with a real vision for the future of the airport.”
Meanwhile, airline Flybe announced it would operate flights between Cardiff and London City Airport during the six week closure of the Severn rail tunnel from 12 September to 21 October.
South West economy risks losing £843m and 1,569 Jobs as tax on flying set for devolution to Wales
12th Feb 2016 (Bristol Airport press release)
The South West economy is set to lose £843 million and 1,569 jobs if the power to set Air Passenger Duty (APD) is devolved to the Welsh Government, according to figures released today.
The risks of APD devolution to Wales include:
- The loss of £843 million in gross value added (GVA) from the West of England economy over the next decade.
- The loss of 1,569 jobs in the West of England over the next decade.
- The likely loss of almost a third of Bristol Airport’s existing air routes, and long-haul routes expected to be launched soon, reducing choice for passengers from the region, air access for overseas visitors, and trade links for the local economy.
- A 25% drop in passengers travelling from Bristol Airport by 2020 – seriously damaging a regional business which generates almost £400m in GVA and supports 11,000 jobs for the regional economy.
…… and it continues at length ….. for full article see
One of the most hotly debated topics concerning Wales and in particular, Cardiff Airport is the devolution of Air Passenger Duty (APD) ………
The Silk Commission report on devolved powers to Wales recommended that Air Passenger Duty be devolved and the current UK government is bound by election promise to review it.
Air Passenger Duty currently stands at £26 (£13 lower rate for cheapest class) for trips under 2000 miles and £142 (£73 lower rate for cheapest class) for long haul flights.
A devolved power over APD would allow the Welsh Government to lower that rate offering Wales as an attractive point of entry and exit from the UK in particular to long haul passengers and long haul operators providing a massive boost to the Welsh Economy. [In reality, it is likely that it would just make it cheaper for Welsh people, and nearby English people, to fly off on leisure journeys abroad, taking their money out of the area and out of the UK, boosting the tourism deficit. There is more movement of tourist OUT than tourists IN. AW comment].
The thought of Cardiff Airport being a more affordable destination for UK visitors has caused Bristol Airport to instigate Project Fear (or “A Fair Flight for the South West” as they call it) which will show the people of the South West that their region will become a desolate wasteland and they will all be speaking Welsh if APD is devolved.
….. and it continues at length …. at “Air Passenger Duty: Its Our Right” (sic)
Some other recent news stories about Cardiff airport:
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.”
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.”
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.