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Cardiff Airport Requires Bailout Amid Plight
Covid-19 is a perfect storm for the aviation industry, putting the airlines and airports at risk. The United Kingdom’s Cardiff Airport — the only international airport in Wales — has made itself clear that it would not have survived Covid-19 without the government’s 85 million pounds ($113.3 million) bailout.
Spencer Birns, Chief Executive believed the bailout “can re-grow the business that can provide the economic value back to Wales.”
The Welsh government said the economy could be benefited from the airport. Earlier, Birns said the airport has employed 2,500 staff.
However, Welsh Conservatives are against the bailout and believe the further investment in Cardiff Airport is putting the taxpayer’s money into an “empty pit” and suggest the airport should be “cut your loss and sell it.”
The Welsh government already invested 130 million pounds to save the airport, including writing off 42.6 million pounds of debt and another five-year grant of 42.6 million pounds. According to local media, the value of Cardiff Airport is currently only 15 million pounds.
Welsh government acquired Cardiff Airport for 52 million pounds in 2013 after declining passenger number and unprofitable. The government has promised the airport will be operated “at arm’s length” by an independent company. Cardiff Airport was at its peak with 2.1 million passengers in 2007 and made a profit of 7 million pounds. In 2011, the passenger number decreased to 1.2 million with a loss of £319,000 pound.
In response to the withdrawal of Bmibaby, the Welsh started flying from its rival and neighboring airport, Bristol Airport. Cardiff is advised that it should increase the budget carrier to compete with other airports. Before the pandemic, Cardiff served 52 destinations and currently has only 15 destinations.
Earlier, Brins said that during the pandemic, aviation was the first sector to be going into lockdown, and one of the last sectors to come out.
“Domestic travel is not as big as it is in other markets such as America and China and places like that where they can see their domestic travel come back quicker,” Brins said, regarding the situation and that the airport has focused on the European market.
Struggling to Survive
During the pandemic, Cardiff Airport’s passenger load capacity has dropped 87% to nearly 220,000 passengers — the largest dip in the country amid the pandemic. In 2019, the airport handled 1.6 million passengers. However, the passenger capacity of the U.K.’s Bristol Airport in 2020 reached 2.2 million and the passenger number was 8.9 million in 2019.
Cardiff has seen a sign of recovery. Wizz Air has announced that it is going to launch its services at Cardiff in 2022 after two postponements. Cardiff will become Wizz Air’s fourth base in the U.K. In the meantime, TUI will increase its frequencies next year.
Meanwhile, the British government announced the Air Passenger Duty would be decreased by half for domestic flights from April 2023 to boost the aviation industry. The stimulations should start early.
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