Referral of the proposed subsidy to Cardiff International Airport Limited by the Welsh Government
The Subsidy Advice Unit (SAU) has accepted a request for a report providing advice to the Welsh Government (WG) concerning its proposed subsidy to Cardiff International Airport Limited (CIAL).
Administrative timetable
| Date | Action |
| 2 October 2024 | SAU’s report to be published |
| 5 September 2024 | Deadline for receipt of any third-party submissions (submissions after this date may not be taken into account) |
| 21 August 2024 | Beginning of reporting period |
Request from the Welsh Government
21 August 2024: The SAU has accepted a request for a report from the Welsh Government concerning the proposed subsidy to CIAL. This request relates to a Subsidy of Particular Interest.
The SAU will prepare a report, which will provide an evaluation of the Welsh Government’s assessment of whether the subsidy complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.
Information about the subsidy provided by the Welsh Government
Welsh Government (WG) purchased Cardiff Airport in 2013 due to lack of private operator investment and decline in passenger numbers. It remains in WG ownership, as a commercial company (Cardiff International Airport Ltd - CIAL) owned at arm’s length from WG via a holding company (WGC Holdco Ltd). WG continues to support the Airport to benefit Wales through economic development and tourism.
WG is proposing to contribute up to £205.2 million over 10 years to CIAL for the purposes of growing the regional economic activity associated with the Airport to help address the lower level of economic development in Wales compared to the rest of the UK and to encourage growth in areas in the vicinity of the Airport with high levels of deprivation – key WG priorities and economic policy objectives for the Airport.
The investment will focus on attracting new non-passenger businesses and targeted air route development by focussing on maintenance repair and overhaul facilities, general aviation, cargo and development of lower carbon aviation technologies.
Maintenance, Repair and Overhaul (MRO) facilities
The aim is to invest in at least two new MRO operations centres, to be built on-site. They will be smaller than the existing facility operated with British Airways Maintenance Cardiff Ltd and forecast to employ at least 500 people, the majority of whom would be resident in South Wales.
General Aviation (GA), Fixed Base Operations (FBO) & hangarage
To make the most of the potential GA market, the Airport intends to upgrade some of its on-site facilities, with a focus on supporting the growth of existing local GA companies and increasing the Airport’s appeal to major event organisers. To support this, the Airport will also invest in enhancing its FBO centres for business jet activity.
Expanding FBO and GA services at the Airport will provide recruitment opportunities. Again, it is expected that most jobs created will be taken by people resident in South Wales and the range of jobs will provide a mix of very high skill, high wage roles together with more accessible roles.
Cargo
The Airport will invest in cargo centre enhancements and initiatives to increase the use of belly hold freight on hub flights. As well as benefiting regional businesses by offering shorter supply chains to new markets, higher cargo capacity will also require more handlers, so new local jobs will be created.
Lower carbon aviation technologies
There are clear tensions between owning an airport and tackling the climate emergency, but the WG sees the Airport as a means by which it can, over time, take action to lower the environmental impact of flights to and from Wales and generate more green jobs. One avenue to achieve this is via accelerating the use of Sustainable Aviation Fuels at the Airport.
Air Route Development
The targeted air route development programme will concentrate on global aviation hubs and economic centres that are central to the WG’s wider economic growth aspirations. The route development programme also contains some provision for incentivising existing airline customers to expand their operations - especially those currently operating services to cities of economic importance - either through new routes, increased service frequency, larger aircraft, or some combination thereof.
Other capital investments, mainly in the form of terminal building upgrades, are included to enable the Airport to service the forecast number of annual passengers in a manner consistent with WG polices around sustainability and equalities (especially for disabled passengers). The Airport also needs to be able to cope with surges in demand linked to major events, many of which take place in the summer peak period.
The proposed subsidy was publicly announced on the 22nd July: Written Statement: Cardiff Wales Airport – long term strategy
Information for third parties
If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning the proposed subsidy to Cardiff International Airport Limited, please send your comments on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Please send your submissions to us at sau-cardiffairport2024@cma.gov.uk, copying the public authority: subsidycontrolunit@gov.wales
Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).
Notes to third parties wishing to make a submission
The SAU will only take your submission into account if it can be shared with the Welsh Government. The SAU will send a copy of your submission to the Welsh Government together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the subsidy or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with the Welsh Government using the email address provided above.
The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.
For further details on confidentiality of third party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Contacts
- SAU project team: sau-cardiffairport2024@cma.gov.uk
- CMA press team: 020 3738 6460 or press@cma.gov.uk