Cardiff: General Airport Discussion & Updates

[CAN&I]

Could be any reason why he stepped down. He's been in the job for 8 years, i'd be shocked if it was anything to do with the case against the Welsh Government.

In no way disagreeing with you or saying otherwise, BUT...

...he did take it upon himself to position a cynical campaign against a much smaller competitor that relied on dubious spin, press and media coverage and political positioning, precisely to push the buttons of those who are no fans of CWL's ownership and funding, only for himself and his legal team to see the CAT judgement find against BRS unanimously and on all points.

His media showcases in Cardiff both in the lead up to and during the proceedings lacked class, as did his press response last week. The judgement cast numerous questions concerning the credibility of the BRS's submission and arguments and he's also cost his business £2million and a whole load of negative press and sentiment at a time when Bristol Airport can least afford it, with the planning permission request into North Somerset Council only recently submitted.

Not calling it as the sole reason for his departure. However, the timing of the announcement (i.e. amidst the CAT proceedings, a possible appeal and the planning submisison) is nevertheless interesting.

Its also notable that he's staying on until the end of the year while a successor is found, which implies there is nobody waiting in the wings and a recruitment process will be required. If this was a manged departure a long time coming, there would be news of an appointment in the same press release. Equally, if he had a new job lined up, the release would have been worded differently. Instead this amounts to what appears to be a long, slow break-up.

For all his acheivements in role, his professional conduct and personal handling of the case against Cardiff Airport did himself no favours whatsoever.

 

[Jerry]

For all his acheivements in role, his professional conduct and personal handling of the case against Cardiff Airport did himself no favours whatsoever.

Obviously we don't know what's happening, could be loads of factors but also losing the case could be part of it thinking about it. The fact that there is no immediate successor is interesting.
What will be interesting post election is how Bristol approaches its relationship with the Welsh government in the future especially a new one whether they'll try and take a more collaborative approach. Guess that depends on the new CEO and the owners.

 

[CAN&I]

Obviously we don't know what's happening, could be loads of factors but also losing the case could be part of it thinking about it. The fact that there is no immediate successor is interesting.
What will be interesting post election is how Bristol approaches its relationship with the Welsh government in the future especially a new one whether they'll try and take a more collaborative approach. Guess that depends on the new CEO and the owners.

Indeed. As you say, we can only hope for a more collaborative approach with the new personnel involved at both airports and the Welsh Government. 👍

Again, not calling the CAT outcome as the reason for his departure, just questioning the timing and the detail involved given everything that has gone on / is going on.

 

[Foxlimayankee]

But I suppose the counter argument is that by getting so far ahead the playing field isn't level anymore and are Cardiff and Bristol actually even on the same playing field anymore?
I do personally see having control of APD as a self governance thing. Wales governments should have all the tools available to them to attract airlines to Wales to connect Wales like the governments of other countries do.

The first and second paragraph are a contradiction of each other.

On one hand your saying CWL and BRS aren't on a level playing field because Bristol took better decisions in its past with the private sector investment it received to grow. Which is how private business works. You snooze, you lose.

And on the other hand your saying the Welsh Government should control APD, and im guessing reduce it to attract airlines, with is effectively tax payer subsidy to attract airlines.



There is also no guarantee airlines will reduce their prices and will just charge the same and pocket the extra.

 

[Jerry]

On one hand your saying CWL and BRS aren't on a level playing field because Bristol took better decisions in its past with the private sector investment it received to grow. Which is how private business works. You snooze, you lose.

And on the other hand your saying the Welsh Government should control APD, and im guessing reduce it to attract airlines, with is effectively tax payer subsidy to attract airlines.

I don't see how they contradict each other. Bristol is incredibly successful and has 10x the passenger numbers. That creates a distorted playing field between the two airports.
As for APD it's a tax. Taxes are used by governments as tools in the economy in this case to attract airlines to create better connectivity and create jobs at the airport. It's no different from a government cutting rates for small businesses or cutting corporation tax just in a smaller area of the economy.

There is also no guarantee airlines will reduce their prices and will just charge the same and pocket the extra.

But it wouldn't be about airlines cutting prices. Any cut or change would be about making it more attractive for an airline to operate from Cardiff or to operate more marginal routes.

 

[CAN&I]

Not sure the cutting of APD amounts to a "tax payer subsidy" to attract airlines.

As has already been clarified in this thread, devolution of APD would equate to a reduction in the block-grant awarded to the Welsh Government, who would then have to somehow absorb the reduced amount of tax income they receive if they decided to reduce it. That is the same position for any devolved tax.

WG would also have the choice of either maintaining or increasing the tax or to reducing or scraping it to encourage potential airline investment and growth.

As Jerry rightly states, taxes are not merely income generators. They are also economic levers open for use by either Government to balance tax income against economic benefit. Fiscal leverage can generate investment and growth which would (in theory) result in an associated benefit to the economy. The decisioning involved does not therefore amount to a direct "tax payer subsidy" to airlines.

It would be a gamble for sure as airlines may still be reluctant to look beyond Bristol Airport regardless of the carrot on offer and existing service providers could maintain the status quo by pocketing the difference. Should that prove to be the case the Government would need to balance the books or reverse any tax cuts.

Besides, this is all hypothetical as the devolution of APD is unlikely to be sanctioned by the UK Government any time soon.

 

[Foxlimayankee]

I don't see how they contradict each other. Bristol is incredibly successful and has 10x the passenger numbers. That creates a distorted playing field between the two airports.

They were previously both privately run companies. One excelled, one declined. I wouldn't class a successful business usings it's earned assets to continue to grow and invest as distorting the playing field. I would class it as a business being run well, and the other not so.
Business's get left behind all the time, it's all competition. If they were both in the private sector then the investment would be required for CWL to grow again. The issue in this case in the huge amount of risk.

Don't get me wrong, I'm a big support of CWL and want it to succeed. But I don't believe we can cry distortion in the market just because CWL failed to keep up.

As for APD it's a tax. Taxes are used by governments as tools in the economy in this case to attract airlines to create better connectivity and create jobs at the airport. It's no different from a government cutting rates for small businesses or cutting corporation tax just in a smaller area of the economy.

Not sure the cutting of APD amounts to a "tax payer subsidy" to attract airlines.

As has already been clarified in this thread, devolution of APD would equate to a reduction in the block-grant awarded to the Welsh Government, who would then have to somehow absorb the reduced amount of tax income they receive if they decided to reduce it. That is the same position for any devolved tax.

Try and spin that to the general public.
"WG get less money from UK Gov because they are spending more of it on the Airport, to cover the losses of revenue not gained from APD tax to reduce the fees for Airlines, while those using the flights to mainly holiday destinations aren't seeing cheaper flights"

or they choose to increase the taxes

MO'L will be all over the media screaming foul play and expensive fee's at CWL, which will feed into expensive landing fees narrative and more screams of "why are my taxes funding this loss making airport that no-one wants to fly into (because MO'L said so).

 

[Jerry]

wouldn't class a successful business usings it's earned assets to continue to grow and invest as distorting the playing field.

Well it does though when they're competing for the same airlines and passengers etc. Yes you can say it's capitalism and there's a perfectly good reason why Bristol is so far ahead but it doesn't mean the playing field is level between the two airports now. They're in different leagues.

MO'L will be all over the media screaming foul play and expensive fee's at CWL, which will feed into expensive landing fees narrative and more screams of "why are my taxes funding this loss making airport that no-one wants to fly into (because MO'L said so).

The same people already complaining about the airport having a lack of flights etc? Are you saying that Wales shouldn't control APD because of what Michael O'Leary could say if it's not cut to zero? Whatever the Welsh government did with APD someone would complain but imo that doesn't mean they shouldn't have control of it.

 

[Foxlimayankee]

Well it does though when they're competing for the same airlines and passengers etc. Yes you can say it's capitalism and there's a perfectly good reason why Bristol is so far ahead but it doesn't mean the playing field is level between the two airports now. They're in different leagues.

Yes, they are in different leagues. It doesn't mean the one trailing behind should be given government advantages to catch up.

The same people already complaining about the airport having a lack of flights etc? Are you saying that Wales shouldn't control APD because of what Michael O'Leary could say if it's not cut to zero? Whatever the Welsh government did with APD someone would complain but imo that doesn't mean they shouldn't have control of it.

Of course I'm not. I'm being realistic about what the narrative will be if APD is increased and I just don't see what benefit it will actually bring to Wales. If they reduce it, the Welsh Government needs to find more money, if they increase it the Government may earn more tax revenue, but it may not benefit the Airport.

 

[Jerry]

Yes, they are in different leagues. It doesn't mean the one trailing behind should be given government advantages to catch up.

But never realistically going to catch up though are they? Realistically passenger numbers wise Bristol is likely to eventually get to the 15 million mark while Cardiff may well struggle to get to the 3 million mark.

Of course I'm not. I'm being realistic about what the narrative will be if APD is increased and I just don't see what benefit it will actually bring to Wales. If they reduce it, the Welsh Government needs to find more money, if they increase it the Government may earn more tax revenue, but it may not benefit the Airport.

Whatever the Welsh government did someone will be unhappy somewhere. My belief is that they should have the ability to make decisions based on whatever strategy they have in place. Ultimately any Welsh government's goal imo should be to want to help as many people as possible fly to and from Wales with a focus on inbound international visitors and they should should have the tools available to do that.

 

[Foxlimayankee]

But never realistically going to catch up though are they? Realistically passenger numbers wise Bristol is likely to eventually get to the 15 million mark while Cardiff may well struggle to get to the 3 million mark.

Exactly. So what is the ultimate goal here?

My belief is that they should have the ability to make decisions based on whatever strategy they have in place.

Which is a political belief, not a business strategy.

Ultimately any Welsh government's goal imo should be to want to help as many people as possible fly to and from Wales with a focus on inbound international visitors and they should should have the tools available to do that.

And how exactly will devolving APD do that and what benefit will it bring to the WG? CWL is already receiving the £205 million with roughly half of that for route development. So why is a reduction in APD also needed?
Reduction in APD will lead to less money available to the WG, meaning money will need to be found elsewhere. The sums just don't add up for me in that devolving APD will actually lead to any benefit whether it is or isn't.

 

[Jerry]

Exactly. So what is the ultimate goal here?

If we're talking passenger numbers long term 2 million a year has to be the goal. Route network wise provide connectivity through 2-4 major hubs like Amsterdam and a few popular city destinations like Dublin. Leisure wise to provide a good enough network with the frequency to match for Welsh people to be able to fly from Wales on the most popular leisure routes. Non passenger side build up the cargo operations and MRO operations but also look to make use of the site to generate income ie maybe look at an office complex onsite to increase tenant income. All with the goal of at least breaking even.

And how exactly will devolving APD do that and what benefit will it bring to the WG?

It would give the WG another tool to incentivise airlines to fly to Wales and bring people to Wales helping the tourism industry.

CWL is already receiving the £205 million with roughly half of that for route development. So why is a reduction in APD also needed?

Again it just gives them another tool. Obviously we'll never know but if they'd had the ability to reduce or change APD would the route development money be as large as £10 million a year? We can only speculate but having more options may as well lead to different decisions.

 

[Em0866]

In the unlikely event that UK Gov devolved APD to Wales there's no guarantee they would use it. As we know it has been devolved to Scotland and Northern Ireland but they've not cut or abolished it there so why would it be any different here. Besides I really don't believe that any UK Government is going to abolish this tax in the near or far future as it's revenue for the coffers.

 

[Jerry]

In the unlikely event that UK Gov devolved APD to Wales there's no guarantee they would use it. As we know it has been devolved to Scotland and Northern Ireland but they've not cut or abolished it there so why would it be any different here. Besides I really don't believe that any UK Government is going to abolish this tax in the near or far future as it's revenue for the coffers.

Yep they might not but the choice would be in their hands.

 

[CAN&I]

Try and spin that to the general public.
"WG get less money from UK Gov because they are spending more of it on the Airport, to cover the losses of revenue not gained from APD tax to reduce the fees for Airlines, while those using the flights to mainly holiday destinations aren't seeing cheaper flights"

or they choose to increase the taxes

MO'L will be all over the media screaming foul play and expensive fee's at CWL, which will feed into expensive landing fees narrative and more screams of "why are my taxes funding this loss making airport that no-one wants to fly into (because MO'L said so).

That’s all well and good, but the hyperbole you've come up with does not support up your initial claim that devolution of APD amounts to a direct "tax payer subsidy to attract airlines", which it isn’t as we have already explained.

Your subsequent claim that the Welsh Government would “get less money from UK Gov because they are spending more of it on the Airport" isn’t factually correct either.

Not sure why this has to be spelled out but the rationale that “WG get less money from UK Gov because they are spending more of it on the Airport, to cover the losses of revenue not gained from APD tax…" is simply wrong.

Sticking to actual the facts of the matter in the scenario where APD is devolved, the UK Government would reduce the block grant accordingly in line with the expected reduction in revenue to the UK Treasury, not as a direct consequence of the Welsh Government “spending more on Cardiff Airport" as you claim.

Devolution of APD doesn't necessarily mean abolishment from day 1 either.

Should APD be retained by WG initially, the status quo would be maintained. The debate would then be whether to use the tax as growth leverage, which is where the economic gamble comes in.

This is no different to politicians offering promises of cutting 1p in the pound off income tax in the hope of generating growth through “giving” the public more money in their pockets, all the while promising spending cuts elsewhere amounting to pennies, in order to enhance public investment.

All well and good in theory but what happens if the sums don't add up and books are not balanced? It’s the same gamble, again potentially affecting income to the UK Treasury based on the current devolved income tax system.

As already stated by others here, the APD debate is around the potential to generate growth for the benefit of the Welsh economy in an envoironment where airlines hold all the cards, not necessarily to generate cheaper fares or "level up" with Bristol Airport (a ship that has well and truly sailed as you rightly point out).

It may be pie in the sky thinking and notably the argument for devolution isn’t as clear cut as elsewhere. However, should APD be devolved, it would be for the Welsh Government to use (or not!) as a potential lever should economic conditions allow or its use make sense, hence the way it has been implemented (or mostly hasn’t) in Scotland and Northern Ireland.

As for the disconnected narrative about “landing fees” we’re not sure what that’s about frankly. There's no point in debating hypothetical hysteria associated with a matter that has been created on the basis of disconnected rationale.

Finally, if we are having a sensible and informed debate can we at least stick to the facts rather than pulling others down with hypothesis and extrapolations that don’t completely add up, or theories of negative public reaction to an extented narrative created just to add weight to one side of an argument?

We seem to be getting bogged down with disconnects and emotional "what ifs" instead of sensibly debating a matter that is unlikely to happen any time soon if at all.

In the unlikely event that UK Gov devolved APD to Wales there's no guarantee they would use it. As we know it has been devolved to Scotland and Northern Ireland but they've not cut or abolished it there so why would it be any different here. Besides I really don't believe that any UK Government is going to abolish this tax in the near or far future as it's revenue for the coffers.

EXACTLY!!! Also, while devolution of APD to Wales may have had its merits and flaws when debated in 2018 and 2019, the world has moved on and the balance between both has shifted, particularly where net zero and other fiscal considerations are involved. 👍

 

[Foxlimayankee]

That’s all well and good, but the hyperbole you've come up with does not support up your initial claim that devolution of APD amounts to a direct "tax payer subsidy to attract airlines", which it isn’t as we have already explained.

Not sure why this has to be spelled out but the rationale that “WG get less money from UK Gov because they are spending more of it on the Airport, to cover the losses of revenue not gained from APD tax…" is simply wrong.

Sticking to actual the facts of the matter in the scenario where APD is devolved, the UK Government would reduce the block grant accordingly in line with the expected reduction in revenue to the UK Treasury, not as a direct consequence of the Welsh Government “spending more on Cardiff Airport" as you claim.

Forgive me, but as an example.....
- if APD is devolved UK Gov reduces the block grant by £5m.
- WG chooses to reduce APD to try and attract airlines and only earns £4m in APD revenue.
- There is a shortfall of £1m which the WG needs to find from elsewhere.

Surely, regardless of where that money comes from, the outcome of the scenario is APD reduction has cost the WG £1m, as a result of trying to attract airlines into CWL.

This is no different to politicians offering promises of cutting 1p in the pound off income tax in the hope of generating growth through “giving” the public more money in their pockets, all the while promising spending cuts elsewhere amounting to pennies, in order to enhance public investment.

Which is true, however if CWL was privately owned, would the scenario be different? It goes back to WG being stuck in an awkward position by being the owner of CWL.

As for the disconnected narrative about “landing fees” we’re not sure what that’s about frankly. There's no point in debating hypothetical hysteria associated with a matter that has been created on the basis of disconnected rationale.

It's not debating hypothetical hysteria, it's a regular rhetoric that in seen in discussions about CWL. One that I myself often attempt to shoot down.

Finally, if we are having a sensible and informed debate can we at least stick to the facts rather than pulling others down with hypothesis and extrapolations that don’t completely add up, or theories of negative public reaction to an extented narrative created just to add weight to one side of an argument?

I don't believe I've pulled anyone down, there's been discussion and debate and differing opinions, as there always has and always will be on this forum. As a long time poster on this and other forums, most will know I am a strong supporter of CWL but also take a realistic view of how things go.

As for negative public reaction, that's a narrative also used by politicians as political leverage, so I would advocate that it is very relevant.

We seem to be getting bogged down with disconnects and emotional "what ifs" instead of sensibly debating a matter that is unlikely to happen any time soon if at all.

It was a sensible debate, but I see that already we're back to patronising responses and overloading information to shoot other people down. Surprised it took so long.

 

[geoff]

The 14 days within which BRS had to appeal the decision has now expired. I wonder if that decision had any bearing on the BRS CEO terminating his post. Another factor could be the change of ownership at BRS, the Toronto Teachers Pension Fund, having sold BRS to Mcquaire Investment Fund of Australia.

 

[CAN&I]

Forgive me, but as an example.....
- if APD is devolved UK Gov reduces the block grant by £5m.
- WG chooses to reduce APD to try and attract airlines and only earns £4m in APD revenue.
- There is a shortfall of £1m which the WG needs to find from elsewhere.

Surely, regardless of where that money comes from, the outcome of the scenario is APD reduction has cost the WG £1m, as a result of trying to attract airlines into CWL.


Which is true, however if CWL was privately owned, would the scenario be different? It goes back to WG being stuck in an awkward position by being the owner of CWL.


It's not debating hypothetical hysteria, it's a regular rhetoric that in seen in discussions about CWL. One that I myself often attempt to shoot down.


I don't believe I've pulled anyone down, there's been discussion and debate and differing opinions, as there always has and always will be on this forum. As a long time poster on this and other forums, most will know I am a strong supporter of CWL but also take a realistic view of how things go.

As for negative public reaction, that's a narrative also used by politicians as political leverage, so I would advocate that it is very relevant.



It was a sensible debate, but I see that already we're back to patronising responses and overloading information to shoot other people down. Surprised it took so long.

If “overloading” the forum with “information” is unwelcome then we’re not sure why an illustrative example of the devolved taxes / block grant mechanism is relevant, particularly given everyone involved in the conversation here appears intelligent enough to understand how it works.

Again, devolving or reducing the tax is not a tax-payer subsidy. It is a fiscal lever that is used (albeit with a gamble involved) to balance economic growth against taxation income, just as with any other tax.

As an example on our part, decreasing business rates to encourage growth does not amount to a tax-payer subsidy on businesses, yet the loss of tax income will still have to be plugged elsewhere.

The reduction of the block grant does not occur because the Welsh Government is "spending more money on the airport" either. It would be reduced because the Welsh Government would have taken on the responsibility for the tax, in order to balance the income HM Treasury would have otherwise directly received. The risk moves to WG as opposed to UKG, meaning the safety net moves in the opposite direction.

Regardless, your illustration doesn’t justify the previous claims, which appear to have have shifted from your earlier position which was:

• the devolution of APD would effectively be a "tax payer subsidy to attract airlines" and
• the Welsh Government would “get less money from UK Gov because they are spending more of it on the Airport".

Neither are factually correct for the reasons we stated, nor were they previously positioned as examples of political or public rhetoric, which is why we challenged them.

Surely we can all accept open challenge and stand up and address the claims we make and the positions we take without resorting to hitting out at others with claims of “patronising responses” and “overloading information”?

There is absolutely no need to be offensive, catty or personal either.

 

[Foxlimayankee]

Whichever way you want to spin it, as you say the WG takes on the risk, therefore any reduction in APD and potential loss of tax revenue is a cost the WG has to bear, whereas if it's not devolved they wouldn't have to find the money in the overall budget.

if we are having a sensible and informed debate can we at least stick to the facts rather than pulling others down with hypothesis

There is absolutely no need to be offensive, catty or personal either.

........

particularly given everyone involved in the conversation here appears intelligent enough to understand how it works.

Indeed.

 

[CAN&I]

Whichever way you want to spin it, as you say the WG takes on the risk, therefore any reduction in APD and potential loss of tax revenue is a cost the WG has to bear, whereas if it's not devolved they wouldn't have to find the money in the overall budget.



........


Indeed.

We're not "spinning" anything. Just sticking to the facts and re-interating that both your previous statements, i.e.:

• devolution of APD would effectively be a "tax payer subsidy to attract airlines" and
• the Welsh Government would “get less money from UK Gov because they are spending more of it on the Airport".

...were inaccurate.

For whatever reason since we raised the matter, both our opinions now appear to be aligned.

Not sure why, but such is life.