Cardiff Airport and its recovery route

It as been a tough few years for Cardiff Airport, with the pandemic knocking its passenger growth off course and with it any hopes of moving closer to a pre-tax profit.

However, while a long road to recovery lies ahead there are positive signs that passengers are heading in the right direction with latest annualised figures now close to a million - around 60% of the pre-pandemic figure and Qatar Airways close to confirming the recommencing of its scheduled service to Doha.

However, airlines can go as quickly as they come - as the airport discovered with the short duration of Wizz Air. If they see an opportunity to deploy aircraft elsewhere on more profitable routes, they will.

It is a decade since the Welsh Government acquired the airport, claiming at the time, as it continues to do, that without its intervention it would have closed. Well perhaps, but that well-worn thesis was never tested in the marketplace.

Most regional and smaller national airports globally are publicly-owned or have a taxpayer stake. Including the £52m acquisition cost from Spanish firm Abertis, some £200m of taxpayers’ money has been pumped into the airport over the last ten years. It is therefore understandable that it has become something of a political football. However, it is not an airport run day to day by remote civil servants, but via an arm’s length commercial company.

Airports like Cardiff make money not from charging airlines landing fees, but from what passengers spend through their terminal buildings. Cardiff has seen a significant displacement within its core South Wales catchment to rival Bristol Airport in recent years - attracted by a greater variety of routes at prices and times that suit.

At some future stage the Welsh Government could look to recoup part of its investment by a sale or part sale, but whatever the ownership model it would be hard to envisage a globally focused small nation without having a commercial airport. There are those who say with a climate change emergency that Wales shouldn’t have one, but if it did close displaced passengers would just fly just from elsewhere as airlines move to more sustainable aviation fuels - while there is also, longer-term term, potential for electric and hydrogen powered flights, particularly on shortfall routes.

Can Cardiff Airport be truly sustainable? Well it is not that long ago, under the then ownership of TBI, that it had annual passengers of more than two million. The asset was a profitable part of its airports portfolio which allowed it to pay handsome dividends to shareholders.

The airport is looking to build a more diversified revenue stream by reducing its dependence on passengers through its terminal, in areas like freight and related industries on land in and around it, as well as from aviation testing and maintenance, repair and overhaul activities.

Cardiff Airport has its challenges, but also significant potential, which hopefully can be realised for the benefit of the wider Welsh economy.

• Author: BusinessLive Wales Editor Sion Barry