The Welsh economy minister said taxpayers’ cash had to be poured in or it ‘would mean the loss of the airport’
Lets look at what we know about the costs so far:
- 2013 Welsh Government bought Cardiff Airport for around £52m (not including legal fees, well over market value of 20-30 million)
- 2013 separate Welsh Government loan facility Cardiff Airport £38 million
- 2014/15 Welsh Government loaned Cardiff Airport £3.5 million
- 2016 Cardiff Airport reported a loss of just over £4 million
- 2017-18 Welsh Government put £6m into the airport in exchange for shares, and loaned it another £5m
- 2018 Cardiff airport reports losses of £6.63 million
- 2019 Welsh Government loans Cardiff Airport a further
- 2020 Covid
- 2021 The Welsh Government will write off £42.6m in Cardiff Airport debt, and provide another £42.6m in the form of a grant, to secure its long term future and recovery post-Covid.
Cardiff Airport is being given another £42m of taxpayers cash – and another £40m it owes to the Welsh Government is to be written off.
Wales’ minister for the economy and transport Ken Skates MS announced the plans on Thursday adding any delay “would mean the loss of the airport”.
The airport, which has been owned by the Welsh Government since 2013 and is yet to make a profit.
Its already dwindling passenger numbers at the Rhoose site have dropped massively since the start of the coronavirus pandemic.
Mr Skates said the “impact has been felt at Cardiff Airport as it has been at every other airport across the world”.
Mr Skates said: “As the shareholder, and recognising the importance of this key infrastructure, we have decided to take decisive action now – to delay would mean the loss of the airport and our entire investment.” (which is now set to be well over £100million)
The Welsh Government has been operating the airport at arm’s length on a commercial basis.
The value of the airport has also been massively written down by £46m, according to Mr Skates’ statement.
Mr Skates said: “The Welsh Government have agreed a financial package to provide support to Cardiff International Airport Limited (CIAL) in the medium term against a five year plan for the rescue and restructure of the airport.
“This Government business support package satisfies the terms of the UK-EU Trade and Co-operation Agreement, in particular the provisions around subsidies for the purposes of rescue and restructure.
“We have agreed investment by way of a grant of up to £42.6m which will be given to enable Cardiff Airport to restructure its operations, and secure its long term viability.
“Separately, as sole shareholders of Cardiff Airport, we have made the decision on a purely commercial basis to write off £42.6 million of the airports debt. This decision maximises the likelihood of recovery of Welsh Government loan investment and delivers the lowest lifetime cost option. It provides the best way forward for the Welsh Ministers as sole shareholders of the airport from a commercial perspective.
“We are also impairing the equity at this time as a prudent step to reflect the loss of value as a result of Covid which amounts to £46.3m. By taking this action we are confident that this will best protect the value of the public investment in the airport and ensure that it is sustainable into the future.”
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The coronavirus pandemic has had a huge impact on the aviation industry, with passenger numbers plummeting for obvious reasons.
Cardiff Airport has remained open during the period with large deliveries of PPE and medication during BREXIT deals flown into the site.
It comes as Cardiff Airport’s newest budget airline Wizz Air recently postponed its launch due to coronavirus restrictions
Wizz Air is to create a permanent base at the Rhoose site providing flights to destinations across Europe and Egypt.
The first flights with the airline were due to depart from Cardiff Airport in March, but owners have now postponed the launch to mid-may.
The budget airline will also create 40 jobs as it brings nine new routes in a much-needed boost for the airport. The airline said the move will also indirectly create 250 further jobs in the supply chain.