Cardiff Airport - General Thread

[aviatorconcorde]

What an appalling use of tax payers cash

Covid: Cardiff Airport valued at £15m due to pandemic

A valuation estimates it could be worth less than a third of the £52m Welsh ministers bought it for.

www.bbc.co.uk

 

[Jerry]

What an appalling use of tax payers cash

Covid: Cardiff Airport valued at £15m due to pandemic

A valuation estimates it could be worth less than a third of the £52m Welsh ministers bought it for.

www.bbc.co.uk

Would you rather the below?
"
"If we didn't take action the airport would have gone bust, it would have closed. We know there are roughly 2,400 aviation related jobs that would have been directly impacted by that and in total over 5,000 indirect jobs, supported by the airport.
"That would have been a loss to the taxpayer"

 

[Jerry]

It's still good news for CWL and its owners because it will increase the likelihood of the 'lost' domestic routes being reinstated and perhaps more begun.

Hopefully it might help bring Edinburgh and Glasgow back which are listed in this Simon Calder article about the review as a whole. Can only keep fingers crossed!

What the Union Connectivity Review could mean for travel within the UK

‘It’s encouraging to see the crazy bridge to Northern Ireland shunted out of the review’ – Thomas Ableman

www.independent.co.uk

 

[geoff]

CWL must be one of the few airports, which has received no replacement airlines after the FlyBE demise, except BHD with Eastern. You would have thought the numbers on the Edinburgh, and Dublin routes would have attracted some airline.

 

[TheLocalYokel]

CWL - public money

Similar arguments are taking place with regard to Teesside Airport where huge amounts of public money are being pumped in to keep it operational.

A few years ago the area's Conservative mayor made taking the failing airport back into public ownership an electoral pledge and duly obliged when he was elected. He remains the main public face and champion of the airport which he claims he saved from closure, but there is growing public and political unease in the area about the situation, with Teesside Airport still loss-making although it's supposedly on the 10-year growth plan track (it might not be any more with the pandemic). Teesside does have a private sector partner with a minority share.

Teesside doesn't even have a nationalistic argument as there is a perfectly adequate and larger airport up the road at Newcastle. Neither does the local combined authority that owns most of the airport shareholding have a budget remotely approaching that of the Welsh Government, so a bigger proportion of local taxpayer's money is being spent there on the airport than at CWL.

I post this to add context for members who might not read all the forums on F4A.

 

[aviatorconcorde]

Would you rather the below?
"
"If we didn't take action the airport would have gone bust, it would have closed. We know there are roughly 2,400 aviation related jobs that would have been directly impacted by that and in total over 5,000 indirect jobs, supported by the airport.
"That would have been a loss to the taxpayer"

still doesn’t change the fact it’s an appalling use of tax payers money. The airport has never made a profit under welsh government, it’s likely never going too, i’m a big supporter of cardiff airport as you know but as a businessperson i know it gets to a point where enough is enough.

Welsh government are fast becoming the government of failed projects.

 

[IanFarquharson]

Lets hope Wizz make a success of Cardiff and grow there and not get up and go when the subsidies run out !
It will interesting to see when / if Qatar restart.

 

[Jerry]

still doesn’t change the fact it’s an appalling use of tax payers money. The airport has never made a profit under welsh government, it’s likely never going too, i’m a big supporter of cardiff airport as you know but as a businessperson i know it gets to a point where enough is enough.

Welsh government are fast becoming the government of failed projects.

Maybe then you need to start thinking of the airport as vital transport infrastructure rather than just a business.
They either support it or let it go bust? What would people say if they closed it? I'd imagine all the people criticising the WG for rescuing it would be criticising them for letting it close.

 

[Jerry]

Lets hope Wizz make a success of Cardiff and grow there and not get up and go when the subsidies run out !
It will interesting to see when / if Qatar restart.

The airport stated that the deal with Wizz is a commercial one with no subsidies. And hopefully we'll see Qatar back in 2022!

 

[Jerry]

CWL must be one of the few airports, which has received no replacement airlines after the FlyBE demise, except BHD with Eastern. You would have thought the numbers on the Edinburgh, and Dublin routes would have attracted some airline.

I think the problem is Bristol and Southampton and lack of money. Ryanair and Aer lingus no doubt want Welsh passengers to travel to Bristol to fill their flights there, Eastern seems to be focused on Southampton and I expect Loganair would require a pretty big subsidy for Edinburgh and considering the airport nearly going bankrupt I can't see the airport having the money if they were willing to pay.

 

[Jerry]

Cardiff Airport is one potential site for a freeport in Wales. I'd expect this would include St Athan as well.

Wales will get a freeport ‘come what may’ – Simon Hart

While the Welsh Government has called for joint decision-making on freeports, the Secretary of State for Wales, Simon Hart, has said Wales will…

www.thenational.wales

 

[Foxlimayankee]

still doesn’t change the fact it’s an appalling use of tax payers money. The airport has never made a profit under welsh government, it’s likely never going too, i’m a big supporter of cardiff airport as you know but as a businessperson i know it gets to a point where enough is enough.

Welsh government are fast becoming the government of failed projects.

Just 2 recent articles about funding offered to the Steel Industry

https://gov.wales/written-statement-steel-update

https://www.business-live.co.uk/manufacturing/hopes-high-funding-deal-save-18480461.amp

The Steel companies are private companies that within Wales provide thousands of jobs. I imagine over the years there's been other loans, funding and bailouts. But these are the more recent ones.
Is this a waste of taxpayers money?

CWL isn't failing because of WG ownership. At the time it was bought it probably saved it. Investment was needed and things were on the right track, but then things started taking a turn for the worst, through no fault if CWLs.
Losing CWL would have huge economic fallback. Its a long term investment which has potential. There is a rocky road ahead though.

 

[KARFA]

I had a look at the accounts out of curiosity.

Loss before tax
Year up to 31 March 2019 - loss £18.5m
Year up to 31 March 2018 - loss £6.63m
Year up to 31 March 2017 - loss £5.97m
Year up to 31 March 2016 - loss £4.88m
Year up to 31 March 2015 - loss £2.95m
15 months up to 31 March 2014 -loss £4.32m
Year up to 31 December 2012 - loss of £3.13m

It is clear from this that at no point has the airport been in danger of being self supporting over the last 8/9 years. Something has to change to put it on a sustainable path, and it doesn't seem current ownership is able to do that.

What is the answer tho? Maybe closure isn't, but what are the changes that need to be made to make it a successful airport?

 

[KARFA]

The Steel companies are private companies that within Wales provide thousands of jobs. I imagine over the years there's been other loans, funding and bailouts. But these are the more recent ones.
Is this a waste of taxpayers money?

One off loans no. Continual subsidising of otherwise loss making business which are unable to ever be viable on their own, yes.

 

[Foxlimayankee]

One off loans no. Continual subsidising of otherwise loss making business which are unable to ever be viable on their own, yes.

Which until covid, the majority of the money given to CWL by the WG was on a commercial loan basis. Had it not been for covid then the loan write off and additional money would unlikely have happened.
Tata is seeking £500m off the government.

It is clear from this that at no point has the airport been in danger of being self supporting over the last 8/9 years. Something has to change to put it on a sustainable path, and it doesn't seem current ownership is able to do that.

What is the answer tho? Maybe closure isn't, but what are the changes that need to be made to make it a successful airport?

There's very few options. Current or future ownership doesn't really come into it. CWL has struggled with what can only be described as bad luck over the past 2-3 years, much of which has been outside the control of CWL and its owners. The fact remains that Airlines will only come if they believe there is a market and if its cost effective. Cost effective for an Airport means relying on ancillary and passenger revenue over revenue from Airlines.
What we will never know is where CWLs accounts wouldve been if TCX and Flybe were still around and covid hadn't hit. Only then can we see the true potential of what CWL could achieve.
Out of curiosity what were the profit/loss stats for 2005-2012?

The Northpoint review listed CWL as a cost effective Airport, and since then even more cost effective measures have been put in place.

Either way, CWL won't be for sale anytime soon and won't be shutting anytime soon, and people need to start accepting that.

 

[KARFA]

Which until covid, the majority of the money given to CWL by the WG was on a commercial loan basis. Had it not been for covid then the loan write off and additional money would unlikely have happened.

It's not really a commercial loan if it's the case no commercial lender was willing to make the loan on those terms though.

Must be nice being a loss making business which is continually being given loans backed and subsidised by the taxpayer and offloading your losses to the state. I am not saying loans from the state should never happen, but it seems despite these loans the airport was never in danger of actually turning around and becoming sustainable without them.

Had it not been for covid then the loan write off and additional money would unlikely have happened.

So what would have happened?

 

[Foxlimayankee]

It's not really a commercial loan if it's the case no commercial lender was willing to make the loan on those terms though.

Must be nice being a loss making business which is continually being given loans backed and subsidised by the taxpayer and offloading your losses to the state. I am not saying loans from the state should never happen, but it seems despite these loans the airport was never in danger of actually turning around and becoming sustainable without them.



So what would have happened?

Who knows? But it would have been interesting to see last year's accounts without the investment that were made in the 2019 accounts. Domestic demand would have still been there to encourage new airlines to cover those routes, QR would still be growing and there could well have been Wizz planned all along to start up.
Alongside different plans implemented internally to make the business cost effective which we don't see in the public limelight.

 

[Jerry]

Must be nice being a loss making business which is continually being given loans backed and subsidised by the taxpayer and offloading your losses to the state.

Welsh government obviously feel it's strategically important enough to put the money in.
With reference to ownership what would a private owner be able to do differently? If they wanted to save the business they'd have to find the money.

 

[Jerry]

Who knows? But it would have been interesting to see last year's accounts without the investment that were made in the 2019 accounts. Domestic demand would have still been there to encourage new airlines to cover those routes, QR would still be growing and there could well have been Wizz planned all along to start up.
Alongside different plans implemented internally to make the business cost effective which we don't see in the public limelight.

Also St Athan would've been on the books so it would've been interesting to see how that changes things.

 

[KARFA]

Welsh government obviously feel it's strategically important enough to put the money in.

When does the cost of support outweigh this supposed strategic value?

Is the plan to just accept it will be loss making and live with the cost of support?

With reference to ownership what would a private owner be able to do differently? If they wanted to save the business they'd have to find the money.

A private owner may come up with a plan to run the airport profitably, the lack of a backstop from the state may be a motivating factor.