TheLocalYokel
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- Jan 14, 2009
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- #681
Once CWL became owned by the WG it was always likely to find itself in a dichotomy.
A private sector airport has one major goal: to act in the best interests of its shareholders which invariably means profitability, dividends and future sustainability. If that means most of the flights take holidaymakers abroad then that is not a particular cause for concern for the successful private sector owner. Ideally such an airport would help to boost the local economy as well, but the private sector owner is neither a government nor a charity and has no direct responsibility for the local economy.
The WG-owned Cardiff Airport company obviously wants to see its airport become profitable but the government has the dual aim of using its airport to enhance the Welsh economy, and to an extent the two aims can be conflicting.
If they can attract a Ryanair it is inevitable that most of the passengers will be flown out of the country for leisure purposes when some might have stayed at home and spent holiday money in Wales instead. It’s highly unlikely that many passengers would be flying into Wales from Alicante or Malaga either to do business in Wales or to take a holiday there.
The almost certain greatly increased footfall that these leisure travellers would bring would undoubtedly enhance the ancillary revenue spend at the airport (car parking, retail outlets for example) helping CWL along the road to profitability.
If the airport management eschews this and concentrates on business routes then there might be some benefit to the Welsh economy, although it’s always difficult to quantify, but the airport footfall is likely to be much less than for leisure flights to the sun with a resultant lower ancillary revenue stream spend and airport profitability much less certain.
Ideally, the airport would achieve both simultaneously but that is a very long shot.
If they build footfall first by sending more people to the sun that will go a long way towards the profitability goal; according to CWL's advisers giving evidence to government committees 2 mppa seems to be the magic number that tips everything into positive economy of scale in terms of airport fixed costs.
Once the airport becomes profitable more focus can be put on business connectivity which is not to say that a limited amount won’t have been achieved alongside the ‘rush to the sun’. A Ryanair base would be likely to offer at least a few routes that aren't solely leisure opportunities to the sun with Dublin an obvious very strong candidate to be one of them.
I know that CWL has had unfortunate experiences with two major scheduled airline presences in the past - bmibaby and Flybe - but I don’t consider that a reason not to put out the welcome mat to someone like Ryanair just in case they up sticks in the future. Any airport can suffer the loss of a major airline customer - for all sorts of reasons. Nearby BRS would be in considerable difficulty if easyJet ceased to exist or even if it significantly downsized there.
