Home UK News Cardiff Airport: Millions wasted on vanity project, says Tory AM

Cardiff Airport: Millions wasted on vanity project, says Tory AM

by InterSpaceReporter

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The airport was bought under previous Labour First Minister Carwyn Jones

Millions of pounds of taxpayers’ money are being wasted on loss-making Cardiff Airport, a Tory AM has said.

Darren Millar said the airport “almost looks like a vanity project” and must start generating cash, or be sold.

The Welsh Government bought the airport in 2013 for £52m, after a steady drop in passenger numbers.

It said it took over when “widespread improvements” were needed, and Cardiff was now amongst the fastest growing airports in Europe.

In addition to the purchase cost, ministers have provided tens of millions of pounds more in loans, now being repaid, grants and further share purchases.

Pre-tax losses up to the end of March 2018 were £6.6m, up on the previous two years.

After five years of Welsh Government ownership, Clwyd West AM Mr Millar believes the taxpayer is getting a raw deal.

“It looks like we’ve had an airport that has been over-priced and is clearly under-performing.

“It looks to me as though tens of millions of pounds worth of taxpayers’ money have been wasted by the Welsh Labour government, and on purchasing an airport which almost looks like a vanity project,” he told BBC Wales.

But passenger numbers are now rising substantially, albeit from a low base.

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Darren Millar questions the cash spent on an airport “when schools and hospitals are on their knees”

The airport says securing new operators such as Qatar Airways are key to building new business.

The airport also says a key performance measure looking at earnings before interest, tax, depreciation and amortisation (EBITDA) has gone into the black for the first time in eight years.

A significant moment, but some investors remain cautious about placing too much emphasis just on that measure.

Justin Urquhart Stewart, co-founder of Seven Investment Management said: “You’ve got to be very careful of actually what you are looking at.”

“Look at the trends to see what’s going on, and is it consistent?”

Airports, he said are often seen as “sort of a status symbol of cities and countries to have”.

“Be very careful what you are getting. An airport is a shopping mall with a tarmac attached to it for planes to land on.

“So if you’re just depending on planes you are going to need a lot of them going through, and currently in Cardiff not a lot are going through.”

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Simon Calder: “Cardiff is having a tough old time”

Travel writer Simon Calder said Cardiff Airport was “not doing brilliantly”.

“It’s just in the top 20 of UK airports but Southend is challenging fiercely at 21st place,” he said.

“And compared with Birmingham, which is about eight times larger, and Bristol, which is six times larger, Cardiff is having a tough old time.

“Of course those two airports are taking a lot of the traffic that might otherwise go to Cardiff.”

While most politicians agree they want Cardiff Airport to thrive, the big question is whether public ownership is the right way to make it happen and if it is, how long should taxpayers have to wait to get their cash back.

‘Recovery’

Cardiff Airport chief executive Deb Bowen Rees said: “Financial performance has continued to improve with a positive EBITDA being achieved for the first time in eight years, alongside an increase in passenger numbers of 9% during that time.

“Cardiff Airport has been through a period of recovery over the last five years and has invested in developing our facilities and in relationships with airline partners with the key objective of creating a sustainable airport business.”

She added: “In terms of future ownership, we are focused on driving the sustainability of the business to deliver economic value to Wales.”

A spokesperson for the Economy Minister Ken Skates said Mr Millar’s comments showed “a startling lack of business awareness and pride in Wales”.

“We now have an attractive national airport that is amongst the fastest growing in Europe, with passenger numbers having grown considerably and consistently since we took control in 2013.

“This is a period which has coincided with the airport playing an instrumental role in Wales’ successful delivery of major global events such as the Nato summit and Champions League final and attracting businesses such as Aston Martin to Wales,” they said.

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