The Welsh Government’s decision to acquire loss-making Cardiff Airport has been defended by Economy Minister Vaughan Gething. The minister also stressed that the Cardiff Bay administration would not face any conflict of interest in deciding where to locate the first freeport in Wales.
The airport, which was acquired by then First Minister Carwyn Jones in 2013 from Spanish conglomerate Abertis for £52m, was dealt a blow in its post-Covid recovery plans last week with the decision that low-cost carrier Wizz Air is pulling its base from the Rhoose-based airport permanently - having mothballed it for the current winter season.
The airport, which operates on commercial grounds through an at arm’s length company from Welsh Government, said the decision by the Hungarian-own airline was unexpected and that demand for Wizz flights for the planned summer season was strong. Wizz blamed the decision on wider economic challenges. Since acquiring the airport the Welsh Government has written off more than £40m in debt. Its latest funding of £40m to support its recovery is repayable.
Asked at a press conference whether it was time for the Welsh Government to cut its losses and seek to sell the airport (assuming there is market interest) - which sits in the ministerial portfolio of Lee Waters in the Climate Change department - Mr Gething said: "The challenge for Cardiff Airport, and for regional airports around the UK, is really difficult. We saw that Doncaster closed not so long about and it is about whether there is an approach for the importance of regional airports around the UK and whether we really think it would be a good thing for Wales not to have an international airport. Post the pandemic the whole aviation sector is still facing very real challenges and many regional airports are still struggling to get people to return.
"And in a cost of living crisis it is not surprising that passenger numbers are not increasing as we would have wanted them to. It is very difficult that they haven’t come back (Wizz), but we remain committed to a sustainable future for the airport. Myself and the First Minister have also had conversations with Qatar Airways about their return to the airport. So, we are looking at what we can do to provide a future for the airport itself and recognise its broader importance to the Welsh economy.”
Qatar Airways mothballed what was the first scheduled route from the Rhoose-based airport to the Middle East (to Doha) at the start of the pandemic. If the route does return it is not expected until 2024 at the earliest.
As part of its current five year post Covid recovery plan it is looking to drive its non terminal related income by positioning itself for things like aircraft testing and maintenance repair and overall.
The airport is part of a freeport bid being led by Newport Council, with the local authority having included it in a multisite approach with a number of other undisclosed strategic sites across the Cardiff Capital Region.
The other bids, for what will be first freeport in Wales, is the Celtic Freeport - combining the ports of Milford Haven and Port Talbot and which aims to exploit opportunities from renewable projects including new licences from the Crown Estates for floating windfarms in the Celtic Sea - and the Port of Holyhead which is owned by Stena Line.
A decision on the winning bid, expected in the spring, will be made jointly by the Welsh Government and the UK Government’s Department for Levelling.
Freeport status, like the case with Shannon Airport in Ireland, could be a catalyst for a more nuanced revenue model at the airport.
Mr Gething said he couldn’t comment on how a freeport could potentially boost the airport due to the live bidding process.
However, he said: “Freight is part of what the airport themselves are interested in to try and improve the amount that goes through (airport) and that is how they see part of their business. Obviously I am not trying to direct the airport’s business as there is a team in place and a chairman and a board who understand the need to create more business for its economic sustainability. But it is an important transport hub for Wales and not just for one particular coroner of the country.”
Asked if the Welsh Government faced a potential conflict of interest with regards assessing the Cardiff Airport freeport bid, Mr Gething said: “It sets out in the prospectus that Welsh Government owned-land can be part of a bid, but it has to be identified. That doesn’t guarantee any bids a privileged position and if you look at other freeport bids across other parts of the UK I would be surprised if there wasn’t government owned-land that wasn’t potentially identified as part of the selection process.
“There is a professional process between the two governments and our officials are assessing the bids that have come in and I look forward to receiving the advice on those bids and then to go through the decision-making process. So, I don’t accept there is a conflict of interest and we do have processes that insulate decision-makers from those particular issues. So, I look forward in the not too distant future, to be able to make a decision with the UK minister in the Levelling Up Department.
Moreover, Mr Gething has called on the UK Government to provide a stable and long-term strategy to help tackle the economic challenges facing Wales and the rest of the UK.
He also confirmed several initiatives from his administration to support the Welsh economy, including:
- A new Net zero Skills Action Plan, setting out how Welsh Government will work with businesses and workers to embrace the skills that will drive a low carbon economy.
- A new Innovation Strategy, with clear missions – from better health outcomes to stronger business - designed to win more investment in a more "innovative Wales."
- A new Green Business Loan Scheme - via the Development Bank of Wales - providing low-cost loans with consultancy support to help businesses lower their energy costs for good;
- A refreshed Manufacturing Action Plan, setting out our ambitions for a Welsh manufacturing sector with a truly global reach that supports good jobs in local communities.
Mr Gething said: “Wales and the rest of the UK needs the UK Government to develop a responsible and coherent strategy for sustainable economic recovery and growth.
“The lessons are clear - good engagement has the power to deliver stronger economic outcomes. It is time for the UK Government to invest in partnership to develop a stronger Welsh economy in a fairer, more secure UK economy.”
Read More:
