Bristol Airport has expressed deep concern over the Welsh Government’s plans to offer over £200 million in subsidies to Cardiff Airport, its nearest competitor. The airport cautioned that this state aid could put Bristol at a disadvantage commercially. The Welsh Government’s proposal includes a funding package of £205 million over ten years to enhance Cardiff Airport’s operations, attract new airlines and routes, and increase passenger numbers to over two million annually.
While Cardiff Airport just managed to serve approximately 841,000 passengers in 2023, Bristol Airport had its busiest year on record, handling 9.8 million passengers. Bristol Airport raised concerns about the potential negative impact of the subsidy on competition between airports and airlines. It emphasised that it employs over 4,000 people, supports the Welsh economy significantly, and operates without state financial support.
The Welsh Government submitted details of its subsidy plans to the Competition and Markets Authority (CMA), which recently published a non-binding evaluation report on the proposal. Bristol Airport’s submission to the CMA highlighted worries about the magnitude of the Welsh Government’s subsidy plans and how they may distort the market. The airport expressed willingness to collaborate with Cardiff Airport in non-competitive areas to reduce costs and seek clarity on the allocation of the proposed subsidy across airport activities.
Other UK airports, including Birmingham Airport, also raised concerns about potential distortions to competition and investment. The CMA’s report suggested the Welsh Government should provide more evidence on potential impacts on competition and investment in the region. Following the CMA report, the Cabinet Secretary for the Economy, Rebecca Evans, stated they would carefully consider the assessment and decide on the next steps regarding the investment program for Cardiff Airport.
The Welsh Government argues that without the subsidy, Cardiff Airport would face limitations in growing its business. It believes the funding is essential for offering incentive payments to airlines and promoting the development of non-passenger businesses. The CMA’s report, however, noted that the assessment lacked a clear counterfactual and called for a more defined presentation of the airport’s potential challenges without the subsidy.
Overall, the issue of the substantial subsidy support for Cardiff Airport by the Welsh Government has raised concerns about its impact on fair competition in the aviation sector. Bristol Airport and other key players in the industry will closely monitor any developments following the CMA’s assessment.