Bristol Airport Challenges Welsh Government's £205m Cardiff Airport Subsidy
Bristol Airport has launched a significant legal challenge against the Welsh Government's plans to provide a substantial £205.2 million subsidy package to its rival, Cardiff Airport, over the coming decade. The dispute centres on what Bristol claims is an unprecedented level of state support in UK aviation that could distort market competition.
The Core of the Legal Dispute
According to tribunal documentation, Bristol Airport alleges that the Welsh Government intends to provide Cardiff Airport with approximately £71.50 for every new passenger it attracts. This calculation is based on the government's aim to increase Cardiff's annual passenger numbers from just under one million to 2.4 million through the subsidy scheme. Bristol contends this per-passenger subsidy exceeds the average cost of a one-way Ryanair flight from Cardiff Airport, which stands at just under £40.
The legal challenge, which began with a two-day hearing, argues that the Welsh Government failed to properly assess whether Cardiff Airport qualifies as "ailing or insolvent" – a crucial consideration under the Subsidy Control Act 2022. Bristol maintains that the proposed subsidy level is disproportionate and could unfairly harm airport and airline competition across the region.
Financial Breakdown and Allegations
Bristol Airport's analysis reveals that approximately £100 million of the proposed funding has been allocated specifically for route development initiatives. The airport claims the Welsh Government attempted to reclassify this portion as a 'subsidy scheme', which could potentially limit third-party challenges to the measures. According to Bristol, this classification was not included in ministerial advice presented to Welsh Government ministers Ken Skates and Rebecca Evans during the original decision-making process.
The remaining funding would focus on boosting cargo operations, general aviation services, and maintenance, repair, and overhaul activities. A first tranche of £20 million has already been released to Cardiff Airport, with the Welsh Government having acquired the facility from Spanish firm Abertis in 2013 for £52 million. To date, including the acquisition cost, the government has provided £181 million in financial support to the airport.
Bristol Airport's Position and Regional Impact
Bristol Airport Chief Executive Dave Lees expressed regret at having to pursue legal action, stating: "We never wanted to resort to taking legal action in this way, but had no choice due to the serious lack of transparency around this unprecedented subsidy in UK aviation, which is being funded at great expense by taxpayers in Wales."
Lees emphasised that Bristol Airport does not wish to see Cardiff Airport fail but wants it to operate "in a commercially appropriate manner that is lawful." He revealed that Bristol had made repeated attempts to collaborate with the Welsh Government, including proposals regarding shared airspace, but these efforts resulted in just one meeting that failed to yield substantive outcomes.
The airport highlights its significant regional economic contribution, noting that around 20% of its annual passengers – more than ten million in total – come from South Wales. Furthermore, 11% of Bristol Airport's employees reside in South Wales, and the facility supports major events, provides a gateway for visitors, and enables inbound investment across the region.
Welsh Government's Economic Justification
The Welsh Government counters that Cardiff Airport serves as a key economic driver for the wider region, generating an estimated economic impact of £220 million while supporting thousands of jobs directly and through its supply chain. Government documents state that the subsidy aims to "address inequality in the Welsh economy compared to the rest of the UK by growing the aviation sector and aerospace businesses with the Airport at the centre."
According to the Competition Appeal Tribunal's case summary, the Welsh Government maintains that subsidies provided to attract new airlines will not target existing routes from Bristol Airport. The investment aligns with government well-being objectives, including building a sustainable economy based on fair work principles, enabling tourism and cultural industries to thrive, and enhancing Wales's international presence.
A Welsh Government spokesman stated: "This case is currently before the Competition Appeal Tribunal, and Welsh ministers will present their position through the proper legal process. As the case is the subject of ongoing litigation, it would not be appropriate for us to comment further at this stage."
The tribunal's judgment, which could potentially be appealed, may arrive after the Senedd Election in May, adding political significance to this substantial aviation subsidy dispute.
