Bristol Airport has expressed deep concern over the Welsh Government’s plans to provide over £200m in subsidy support to its competitor, Cardiff Airport. The airport warned that the proposed state aid would put Bristol Airport at a commercial disadvantage. The funding package of £205m over a decade for Cardiff Airport is intended to attract new airlines and routes, with the aim of increasing passenger numbers to over two million annually in the next decade.
The Welsh Government aims to support Cardiff Airport’s strategy of diversification, focusing on areas such as aviation training, sustainable aviation fuel, cargo, and maintenance. This move could potentially impact Bristol Airport, as Cardiff Airport’s growth plan targets different routes and carriers compared to Bristol’s more high-volume approach. Cardiff Airport aims to reach 1.6 million passengers annually by 2026, a significant increase from its current figures.
The Competition and Markets Authority (CMA) has raised concerns over the subsidy plans, noting potential impacts on competition and investment in the aviation industry. Bristol Airport highlighted its concerns over market distortion and the lack of clarity on how the subsidy would be allocated across airport activities. The airport proposed collaboration in non-competitive areas to reduce costs and burdens on taxpayers.
Other UK airports, including Birmingham Airport and Regional and City Airports, have also expressed concerns about competition distortions. The CMA has called for more evidence regarding potential competition impacts and a clearer presentation of the counterfactual scenario without the subsidy. The Welsh Government acquired Cardiff Airport in 2013 and has since invested nearly £180m in the airport.
Following the CMA report, the Welsh Government stated it would carefully consider the assessment and potentially refine its investment program based on feedback. The government’s position is that without the subsidy, Cardiff Airport would struggle to grow and compete effectively in the aviation market. The CMA has called for a clearer definition of the counterfactual scenario and evidence supporting the need for the subsidy.
The debate over the subsidy plans for Cardiff Airport continues, with Bristol Airport and other industry players raising concerns about potential market distortions and competition impacts. The Welsh Government aims to stimulate growth and diversification at Cardiff Airport through state aid, but the implications on the wider aviation sector remain a point of contention. The CMA’s evaluation report and feedback from industry stakeholders will likely shape the future of the subsidy plans and the aviation landscape in Wales.