Cardiff Airport: Welsh government plan to buy from TBI

The airport would be run on a commercial basis by an independent operator on behalf of the government

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The Welsh government wants to buy Cardiff Airport from its current owners, First Minister Carwyn Jones has announced.

He said an agreement had been reached with owner TBI and it will work towards a purchase over the next few months.

The airport would be run on a commercial basis by an independent operator on behalf of the government.

It will not receive subsidies and should make a "return to the Welsh taxpayer", Mr Jones said.

Start Quote

We have to make sure that we can secure the future of what is Wales' only international airport”

End Quote Carwyn Jones AM First Minister

Plaid Cymru welcomed the announcement and said the airport needed to be a "shopfront" for Wales, but Conservatives demanded evidence that nationalisation would provide value, and Liberal Democrats warned it would become a "money pit" for public funds.

Mr Jones said: "Over the past 12 months, I have repeatedly emphasised the importance to Wales of a dynamic international gateway airport in Cardiff.

"During the course of the year we have developed a very constructive and positive relationship with TBI. Together we have been discussing how best to develop the airport to position it for the challenges ahead.

New routes

"Such an arrangement would enable us to develop a more coherent approach to our national infrastructure planning, and integrate the airport into our wider economic development strategy."

Cardiff Airport

  • The airfield at Rhoose in the Vale of Glamorgan was built in 1941.
  • Control was transferred from the Ministry of Defence to the former Glamorgan County Council in 1965, and then to its three successor councils of West, Mid and South Glamorgan in the 1970s.
  • The airport was privatised in 1995, with TBI now owned mainly by the Spanish company Abertis with a minority stake held by the Spanish airports operator AENA.
  • Passenger numbers fell in the first half of the year to 440,000 from 558,000, which the airport said was mostly caused by the decision by low-cost carrier bmibaby to end its Cardiff flights.
  • It reported a 2011 operating loss of £319,000

In a statement the airport said the option of selling had emerged during months of discussions.

Mr Jones said the deal would be met from within the Welsh government's existing budget and would not require borrowed money.

He declined to say how much the deal would cost but Welsh government sources said it was likely to be "tens of millions".

The first minister said the government would "set the direction for the airport" after taking ownership.

"It's not our role to physically run it from day to day. That's something for a commercial operator," he said.

The operator will be chosen through a tender process. Mr Jones said the government would work with the company that gets the contract to develop and attract new routes.

Start Quote

Cardiff needs to see the development of our international airport so that it is run properly, that it offers a wide choice of destinations at affordable prices and is a good shopfront for people visiting this country”

End Quote Leanne Wood AM Leader, Plaid Cymru

Long haul routes to Dubai and other places in the Middle East would be very useful, he said, as would flights to North America.

But the first priority was to increase the footfall of passengers. "That means more short haul in the short term," Mr Jones said.

"We have to make sure that we can secure the future of what is Wales' only international airport," he told a news conference.

He stressed that the aiport would be run as a commercial operation without a subsidy from the government, adding: "We of course expect the airport to demonstrate a return to the Welsh taxpayer in return for the investment that we would look to put in, subject to the work that I have outlined being taken forward."

The first minister has been sharply critical of the airport in recent months, and in doing so he said he was reflecting the "many many emails and conversations that I have had from members of the public".

Asked if the government had similar plans for other areas of transport, such as the railways, Mr Jones said the airport deal was a "one-off".

Business Minister Edwina Hart said: "The message from business leaders and tourism operators across Wales is clear: strong, international transport links are vital to our prosperity, and key to future economic growth."

Plaid Cymru leader Leanne Wood, who in October called for the government to take a stake in the airport, said: "Cardiff needs to see the development of our international airport so that it is run properly, that it offers a wide choice of destinations at affordable prices and is a good shopfront for people visiting this country.

"Cardiff Airport, in its current state, offers none of these things."

Cardiff airport Passenger numbers dropped by over 100,000 to 440,000 from the first half of 2011 to the first half of 2012

However she said attention must be paid to global warming, and hoped to see passengers switch to using Cardiff from other airports rather than an overall increase in the number of flights.

Liberal Democrat Eluned Parrott questioned whether buying the airport would reverse the decline in passenger numbers.

"The kind of investment called for by the Welsh government over the last year is no more affordable to taxpayers than it is to private businesses.

"I feel the airport will simply become a money pit, sucking in public funds at a time of economic restraint which will deliver no obvious return," she said.

Conservative Byron Davies said the first minister had taken "every opportunity to run down and force it into a position of weakness and thereby making it vulnerable to Welsh government takeover".

He added: "The first minister must now provide evidence of value for money and demonstrate that nationalisation will restore confidence to Wales' only international airport.

"Welsh Conservatives will be scrutinising the government's due diligence operation and we remain to be convinced that the figures add up."

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