Ken Skates, the Welsh Government’s Cabinet Secretary for Economy, Transport, and North Wales, has released a long-term strategy for Cardiff Airport. This commits the government to making a maximum £206mn investment in the airport over the next decade. As always, with any government spending on Cardiff Airport, this has provoked a mixed reaction.
In Skates’s written statement, the strategy is set out with two main objectives. First, to attract and grow the aviation and aerospace business linked to the airport. And second, to have a programme of route development that focuses on connectivity to global air hubs and destinations of economic importance to Wales.
A more viable business
To create new jobs, the airport will seek to expand aircraft maintenance, repair, and overhaul (MRO), general aviation activities, air cargo, and sustainable aviation technologies. As part of improving connectivity, it will develop routes to the Middle East, South Asia, North America, and major economic centres and hub airports in the EU. It will also encourage its existing airlines to increase jobs in the Cardiff area.
The airport’s management has previously stated that one challenge was the ratio of the passenger side to the non-passenger side of revenue. It has looked to increase non-passenger-related revenue in recent years, with more operations besides the British Airways Maintenance Centre (BAMC) onsite, and increased non-passenger aircraft movements through the airport. Examining the new strategy, it seems that may continue to be the focus for Cardiff Airport’s future, to make it a more viable business.
The investment of many more millions in Cardiff Airport is of course considered controversial. Some call it a money pit and a vanity project, most notably the Shadow Transport Minister Natasha Asghar.
Ashgar is vehemently against any further financial investment in the airport, but doesn’t offer much in the way of an alternative plan other than to sell it and hope the private sector doesn’t mess it up again, then come begging to the Welsh Government for more money. Then again, the government itself has said it would be open to private sector involvement in the future.
Public investment
The Welsh Government has owned Cardiff Airport since 2013. As of September 2023 it had invested up to £172.1mn in it, including the £52mn purchase cost. Loans and grants have kept the airport open and directly employing around 300 people, plus supporting 2400 other jobs (such as 700 at BAMC onsite). A further 1600 jobs are supported at the St Athan airfield. Cardiff Airport contributes £200mn of Gross Value Added (GVA) to the Welsh economy, according to the government.
Some argue that both past and new investment in the airport could have been used for other things, like the NHS. But budgets don’t work that way. And then, would Wales have an international airport? Yes, health is of course vitally important, and it’s only right that it receives the lion’s share of government spending. But a government isn’t responsible for only one sector.
The Welsh Government spends money on many different things. Transport and economic development are part of that, and the aviation and aerospace industry provides high-skilled jobs. It employs 23,000 people in Wales. Public funding can be seen as economic investment in the future of the country and its people, rather than as simply wasted money.
The future of Cardiff Airport
The challenge for the airport now, as a business, is how to recover from the effects of the loss of Flybe and Thomas Cook, and of the pandemic. During the latter, despite being closed as a passenger airport due to travel restrictions, the site remained as an active airfield – including receiving valuable PPE from China for the NHS.
Hopefully, when the new funding is approved by the competition authorities, it will give Cardiff Airport the stability it needs to attract new routes and airlines and enhance the non-passenger side of the business. This would create further skilled jobs for the area, and development of its facilities. It could return to its pre-pandemic passenger levels, then push beyond that to the two-million passenger mark.
As part of an economic drive by the new Labour UK Government, we might also see (at least) long-haul Air Passenger Duty (APD) being devolved. Increased investment can give Wales an international airport that better connects us to the world, bringing in even more investment again, and allowing people to travel to and from Wales directly rather than via England.
