Bristol Airport has escalated concerns over Welsh Government plans to provide more than £200m in subsidy support to its nearest rival Cardiff Airport by instructing lawyers.
Last month Bristol Airport’s chief executive Dave Lees wrote to Welsh Government Cabinet Secretary with responsibility for the Rhoose-based airport, Rebecca Evans, seeking clarification on how it intends to deploy the subsidy backing over a 10-year period.
The Welsh Government acquired the airport from Spanish firm Abertis in 2013 for £52m. While it is operated at arm’s length via a commercial entity, to date - including the acquisition cost - the Welsh Government has invested around £180m in the loss-making operation.
The Welsh Government said the funding support would help drive a diversification strategy in areas such as aviation maintenance, repair and overhaul (MR0), general aviation and increasing freight movements. Some of the funding has also been earmarked to attract new airlines and routes, with the aim of increasing passenger numbers to exceed two million annually over the next decade.
It first submitted its subsidiary plans last year to the Competition and Markets Authority (CMA), through its Subsidy Advice Unit. Bristol Airport responded that the plans appeared to breach the Subsidy Control Act by giving its nearest rival an unfair competitive advantage. The Welsh Government said having assessed the non legally binding report from the CMA, it has amended its planned subsidiary support programme.
If the subsidy is focused on developing MRO operations at the airport and freight traffic - areas where Bristol isn’t particularly active - it could weaken any claims of the Welsh Government providing an unfair competitive advantage.
If Bristol Airport does submit a legal challenge, which could fail, it would have to be lodged via the Competition Appeals Tribunal.
One possible counter would be for the Welsh Government to bring the airport under its direct control by transferring its staff into a government department.
Lawyers working on behalf of Bristol Airport have now written to the Welsh Government demanding for more information on the subsidy plans.
The legal instruction follows the publishing of an open letter to Ms Evans, the Cabinet Secretary of the Economy, Planning and Energy, in which Mr Lees claimed her government was refusing to provide sufficient information on the public subsidy and how it will be spent – despite the Competition and Markets Authority highlighting considerable issues.
The chief executive of Regional & City Airports, which is responsible for Bournemouth and Exeter, has also criticised the Welsh Government’s plans. Andrew Bell said: “It raises fundamental questions about fairness, transparency, and the strategic direction of regional aviation policy in the Ƶ.”
Mr Lees said: “We have publicly called 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.
“There have been 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 around this unprecedented subsidy in Ƶ aviation, which is being funded at great expense by the taxpayer.
“It is therefore appropriate for our legal team to make a formal pre-application request to the Welsh Government for more detailed information on the proposed subsidy, as there has been insufficient detail published or shared to date to fully understand how the subsidy will be used.”
In the year to February Bristol Airport had 10.7 million passengers, compared to 881,000 at Cardiff. Around 20% of Bristol’s passengers are Welsh.
Welsh Conservative Shadow Cabinet Secretary for Transport & Infrastructure, Sam Rowlands MS, said: "Labour’s continued mismanagement of Cardiff Airport has seen them pour hundreds of millions of taxpayers’ money into propping up the failing airport since its nationalisation.
“Despite repeated calls for transparency, Labour has failed to provide clear answers on how this money will be spent or why alternative solutions haven’t been considered - their refusal to engage in meaningful scrutiny is deeply concerning.
“The Welsh Conservatives firmly believe that ministers in Cardiff Bay lack the essential expertise required to manage an airport effectively. An experienced private sector corporation, with a proven track record in the aviation industry, would be far better equipped to ensure that Cardiff Airport not only survives but thrives.”
A Welsh Government spokesperson said: "We recognise the importance of Cardiff Airport to the Welsh economy and believe very strongly that, with the right investment, the airport has the potential to make an even greater contribution, creating hundreds of additional jobs and boosting regional GVA.
“Welsh Government investment will allow Welsh ministers to focus the strategic direction of the Airport on the delivery of long-term economic growth with a view to realising these benefits.
“We acknowledge the correspondence received from Bristol Airport regarding the subsidy and will be responding as we consider appropriate in due course.”
