A piece in the welsh news today talking about how CWL was losing money and another unprofitable year. Many people commenting that Bristol was their airport of choice because of price (with extended travel to get there for some) and destinations.
How involved are the welsh government?
Cardiff Airport is wholly owned by the Welsh Government (WG) through an 'arm's-length' airport company. The WG purchased the airport in 2013 from its previous Spanish owners who had allowed it to deteriorate alarmingly, reportedly only spending sufficient money on it to keep it 'legal' in terms of a certificated airport. The major recession of the late 'noughties' also had a major affect on the airport's performance with, for example, annual passenger numbers falling by around 50% from the 2007 high of just over two million.
Since buying the airport in 2013 the WG has seen annual passenger numbers rise from just over one million a year to 1.6 million with almost continual growth during that time. The original plan as espoused by the first minister at the time was to seek a private sector partner but, for whatever reason, that has not come about but certainly hasn't been dismissed as a future option.
The WG paid £52 for the airport and has also made over £50 million available to its airport company as loans to be repaid on a commercial basis. The WG sees its airport as an asset for the whole of Wales, one that will assist in expanding the country's economy, and although it clearly wants the airport to become profitable the WG seems willing to bide its time given that the alternative might be closure, something that the previous first minister suggested was a serious option had the government not purchased the airport although how much this statement was aimed at political opponents of the purchase is hard to tell.
As this is a BRS thread and BRS were clearly hopeful of attracting Qatar it's worth pointing out that the WG struck a deal with Qatar Airways to market Wales around ther world. According to press reports the WG (not its airport company) and Qatar Airways both contributed one million pounds to the two-year agreement with an option of a further two years under the same financial conditions. I'm not suggesting for a minute that this was the reason that BRS failed to entice Qatar Airways - the airline CEO outlined several other reasons for choosing CWL - but it is an example of the importance the WG attaches to its airport.
Although CWL has remained loss-making since being bought by the WG the latest substantial increase in the annual loss has to be seen in the context that around half is a write-down of the value of intangible assets on the airport company books.
The WG also believes that smaller airports across the UK are disadvantaged because their fixed costs are disproportionately higher than airports with greater passenger throughput. Although CWL's passenger numbers have risen markedly over the past six years they have still not reached a point where the fixed costs begin to be evened out by the increased revenue streams that higher passenger numbers would bring.
There seem to be two factors that would help CWL's growth towards profitability, both of which could affect BRS to a significant degree.
The first is devolution of APD to the Welsh Government who would probably reduce or abolish the tax with an eye to attracting new airlines and an increased presence of existing ones. The second is a permanent BRS cap of 10 mppa causing airlines to seek other airports if they wished to serve or expand their service to the West Country with CWL likely to benefit.