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Cardiff Airport: Welsh Government invests additional £6m

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image captionThe cash will fund further improvements to the terminal building

The Welsh Government has invested a further £6m into Cardiff Airport to fund improvements to its terminal.

The airport was bought by the Welsh Government for £52m in 2013 and has previously received a £10m loan to improve the terminal.

The Welsh Government said it was basing the decision on "sound evidence" the airport, which had a recent pre-tax loss of £5.97m, was moving into profit.

Economy Secretary Ken Skates said the money was "an investment in Wales".

The airport's latest results for 2016-17, released in January, showed a pre-tax loss of £5.97m, an increase on the £4.9m pre-tax loss the previous year.

However, airport managers are forecasting that the airport will return to profit next year.

'Year-on-year growth'

The Welsh Government said it was investing the £6m in exchange for shares "following news the [airport] has reached its targets ahead of schedule, bringing closer the date" that private investment might be brought in.

Mr Skates said the "equity injection" would increase the equity value of the airport by about £12m.

"We would not be investing this heavily if we had not had sound evidence that the airport is succeeding in its plan to move towards profitability," he said.

"When I launched our Economic Action Plan at the end of 2017, I recognised the importance of connectivity within Wales, the rest of the UK and the world, to businesses and people.

"Clearly, for south Wales, Cardiff Airport is a fundamental part of the solution. Since we acquired the airport, it has seen year-on-year growth in passenger numbers, which are now nearing 1.5 million a year."

'Ringing endorsement'

He said performance was ahead of the company's projections and that the airport had expanded its routes.

Qatar Airways will soon start operating from Cardiff Airport with a reduced service due to a "delay in aircraft deliveries".

Roger Lewis, chairman at Cardiff Airport, said the extra investment was a "ringing endorsement" of confidence in the business.

Conservative shadow economy secretary Russell George said the investment "raised eyebrows", suggesting that the situation at the government-owned airport may not be as comfortable as ministers have suggested.

He said: "Frankly, a cash injection of this kind is usually taken as a sign of a company in financial distress - not a company on the up and up. We all want to see the airport succeed, but we have been repeatedly told that the route to success is through private equity.

"It's not the long term master plan we were sold by the Cabinet Secretary in January."

Related Topics

  • Wales economy
  • Welsh government
  • Wales business
  • Cardiff Airport

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