Cardiff Airport has reported a slight rise in annual passenger numbers as it edges closer to the one million mark.
The Rhoose-based airport, which is wholly-owned by the Welsh Government but operates as an at arm’s length business, said in the year to the end of September it handled 928,000 passengers - up a 5.3% on the previous year.
The airport is still below its pre-pandemic annual passenger number of 1.6 million. As part of its pandemic recovery plan it forecast to get back to that figure by 2026, but that is now unlikely to be achieved.
The airport said the increase in passengers over the last year reflects growing confidence from key airline partners including TUI and Ryanair, both of whom have expanded operations. Ryanair marked 10 years of flying from the airport with its biggest-ever summer schedule, offering a choice of destinations across Europe. The low-cost airline is also expanding its choice this winter, operating Alicante, Dublin and Tenerife routes.
Business Editor Sion Barry gives his verdict on Cardiff Airport
It’s been over a decade since the Welsh Government acquired Cardiff Airport from Abertis for £52m.
At the time, the rationale given by the then administration of Carwyn Jones was that its Spanish owners were planning to close the Rhoose-based airport, and the only deal they were willing to consider was with the Welsh Government. However, 12 years later, would they have envisaged the airport being continuously loss-making, with passenger numbers showing no sign of returning to its pre-pandemic level of 1.6 million a year? It is currently below one million.
Including the acquisition cost and subsequent financial support - most of which has been converted into equity in a business the Welsh Government already wholly own - Cardiff Airport has received around £200m of taxpayer support. At the time of the acquisition, there were optimistic forecasts of passenger numbers exceeding two million a year and calls for investment in a new terminal building.
To try to revive its fortunes, the current Welsh Government has set out plans to inject a further £200m into the airport over the next decade, aimed at attracting more airlines as well as generating non terminal-related income, such as from aircraft maintenance, repair, and overhaul activities. The land around the airport has significant potential for such investment.
Like many smaller regional airports, Cardiff Airport is not in a position to make significant income from airline landing charges. Most of its terminal-related revenue comes from profit-sharing agreements with retail tenants and other sources such as car parking.
Bristol Airport’s legal challenge argues that the planned £200m investment amounts to anti-competitive state aid - a claim the Welsh Government rejects.
However, if Bristol is successful, Cardiff Airport would be left in a difficult position - although elements of its intended investment could be approved.
The Welsh Government could be forced to sell the business, which, through its direct, indirect, and induced impacts, generates an annual gross value added (GVA) of around £200m for the Welsh economy.
But assuming there is commercial interest, what price tag could be placed on a loss-making business in need of significant investment? The market may conclude that the Welsh Government would have to accept it could be effectively worthless.
From a wider economic perspective, could Wales afford not to have its own international airport, given the proximity of Bristol, Birmingham, Manchester, and the London airports?
The answer is no. Besides, even if Cardiff Airport were to close to commercial passengers, it would still have to operate, with all the associated costs, to support British Airways’ maintenance facility, for which the airline has a long-term lease.
In the short term, the airport must at least break even operationally.
And on the passenger side - which ultimately depends on offering flights to destinations people want, at convenient times and competitive prices - it needs to start by reclaiming some of the two million passengers a year from Wales who currently travel via Bristol.
Moreover, TUI is basing a second aircraft at Cardiff for its winter season, while for the 2026 summer season it has confirmed plans to base a fourth aircraft at the airport, the launch of new routes to Faro and Hurghada, along with Fuerteventura, which is being extended into next year following its winter season launch. The airport said it was disappointed to learn that for operational reasons outside its control, Loganair will be withdrawing its Cardiff to Edinburgh service from January .
However, it has confirmed it is in discussions with other airlines to restore the route as soon as possible. It said work on its runway rehabilitation project, which will help secure safe and efficient operations, is near completion In addition, Swissport has been appointed as a new cargo handling partner, bringing investment in upgraded facilities and equipment that will strengthen Cardiff’s role in supporting Welsh export activity.
The airport has appointed a new chief executive in Jon Bridge, who will take up his role next month. He has more than 30 years’ experience across the retail, hospitality and transport sectors, with previous roles including being chief executive of brewing and hospitality firm SA Brian & Co.
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Ceri Mashlan, director of operations at Cardiff Airport, said: “This has been one of our strongest summers in recent years, and it’s great to see more people choosing to fly local. With continued investment, new routes and strong partnerships with our airlines, the future looks very bright for Wales’ national airport.”
In its last financial year the airport posted an Ebitda (earnings before interest, tax, depreciation and amortisation), of £5.8m.
However, this was before the release of a Welsh Government grant of £10.1m as part of the airport’s five year post-Covid recovery plan.
With grant, debt and equity support, and the £52m paid to acquire it from Spanish group Abertis in 2013, the Welsh Government has invested around £180m in the airport.
It plans to invest £205m in the airport over the next decade to support a number of activities including securing new routes to get passengers up to two million a year by 2035, and growing non terminal related incomes, such as from aircraft maintenance repair and overhaul.
However, the funding plans are subject of a legal challenge from Bristol Airport on the grounds of anti-competitive state aid citing the Subsidy Control Act 2022.. The case is expected to be determined next February by the Competition Appeal Tribunal. Around 20% of passengers at Bristol Airport are drawn from Wales (some two million).