Dave Lees, the CEO of Bristol Airport, has raised “serious concerns” over a GBP 205 million subsidy, funded by taxpayers, that is being proposed for Cardiff Airport.
In an open letter to the Cabinet Secretary published on 29 April, Lees said the total state funding being awarded to Cardiff since it was nationalised amounts to GBP 286 for every household in Wales. He described the proposed investment as an “unprecedented subsidy” that represents a “serious lack of transparency”.
A written Statement published on 3 April set out how the Welsh Government plans to proceed with an initial investment of GBP20 million. However the following day the UK Subsidy Transparency Database revealed the Welsh Government actually plans to spend GBP 205.2 million.
According to Lees, the proposed subsidy would “exceed Cardiff Airport’s current annual turnover, in each year of the planned 10-year duration.” He also argued that no other airport in the UK has received public subsidy funding on that level, with the funding already on top of the nearly GBP200 million of taxpayers’ money already provided to the airport.
“Bristol Airport welcomes competition, but this must be on a level playing field to avoid market distortions,” Lees urged. “This subsidy could move activity between locations at huge cost to the taxpayer but without any net economic benefit. Distorting competition between airports and airlines will lead to higher prices for consumers and unbalanced public subsidies will have a chilling-effect on future private sector investment.”
He also emphasised that one of five passengers travelling to Bristol Airport originates from South Wales as he pointed out his airport’s role includes supporting the Welsh visitor economy as well as sports fixtures held in the region. He also pointed to the GBP 400 million of private capital funding that Bristol is investing to improve the passenger experience in its facility at no cost to the taxpayer.
While the Welsh Government said in a recent statement that consideration had been given to the Competition and Markets Authority’s assessment, Lees also said the government had failed to sufficiently engaged with his airport to understand the impact of its investment on competition for the aviation sector.
Commenting on his concern that no detailed information has been made publicly available on the largest public subsidy to a UK airport, Lees stated: “Repeated attempts by Members of the Senedd and others to seek further detail on how Welsh Government intends to respond to the concerns raised in the CMA assessment has also been unsuccessful, resulting in a serious lack of transparency.”
He also said that the proposal risks undermining the confidence on future private sector investment in the UK as it will disrupt the level playing for airports and airlines.
In conclusion, Lees said he and his team “are publicly calling for details to be urgently made available on the proposed subsidy including the benefits it will deliver, what alternatives have been considered, how the impacts have been assessed, in the context of the significant additional cost burden to the taxpayer in Wales.”
Image source: Bristol Airport
