Andrew RT Davies: its about airlines not airports!

This week we sat down with Welsh Conservative leader and South Wales Central Assembly Member (AM) Andrew RT Davies to talk Airports, Cardiff Aviation and Air Passenger Duty.

Aviation Wales – Hi Andrew, Lets dive straight in, The Welsh Conservatives were very vocal about the Welsh Government buying Cardiff Airport. Why was this?

Andrew RT Davies – We just don’t believe it’s the Governments job to run airports. We believe it’s the government’s job to help economic development and regeneration but there were plenty of private purchasers running the rule over Cardiff Airport we know that from our discussions with the then Managing Director [Patrick Duffy] and the then owners [TBI Abertis]. It is a fair accusation to level at the previous owners that they had all but ceased investment into Cardiff Airport for a number of years but in some respects the Welsh Government hadn’t helped them in route development for example.

I remember when I was transport spokesman for the conservatives back in 2008 Emirates wanted to move planes here and they were in direct competition with Newcastle and because Newcastle were able to put route development money on the table, they got the jets. Likewise Delta wanted to have a  direct link to North America they booked the codes and again the airport had made a direct application for route development money and again the Welsh government refused to put money on the table.

The Welsh Audit Office said the money paid was at the “lower end of the valuation” yet the Welsh Conservatives say they paid to much, why?

Most industry experts, and I take the point that the Audit Office run their rule over it, but most private individuals who have expertise in this field indicated that the true value of the airport was most probably somewhere  between £20-30m and for whatever reason the government decided to pay £52m and have subsequently put an additional £18m with loans and support etc. to develop the airport. That’s a significant sum of money that could have potentially unlocked a huge amount of opportunities for other developers whilst keeping that £52m to spend on vital public services.

If those terms were offered to the private sector one could imagine how much business could have been captured

Given the consistent growth at Cardiff Airport, has the view of the Welsh Conservatives changed?

It’s vital Wales has a successful international Airport but if you look at the money that’s been put in to assist airlines coming to Cardiff Airport, the deal with Flybe for example was a very attractive deal to basically commission a number of Flybe planes to fly routes out of Cardiff Airport irrespective of whether they made money or lost money. They were basically contracted by the airport operator underwritten by money that was given to them by the Welsh Government. If those terms were offered to the private sector one could imagine how much business could have been captured earlier in the cycle before the disastrous fall in numbers.

We’ve also seen airlines pulling out of the airport such as Aer Lingus. So it’s a mixed bag picture really these [passenger] numbers couldn’t have gone any lower so its welcome that they’re starting to go up but we need make sure they continue to go up  and get somewhere close to the 2-2 & 1/2 million that were using the airport a decade or so ago.

One of the companies that came into the Aviation Enterprise Zone in the Vale of Glamorgan was Cardiff Aviation. They received around £1.6m in funding from Finance Wales but it hasn’t been the success it was expected to be.

It is disappointing that the numbers of jobs originally promised haven’t materialised, and I think the Welsh government along with Cardiff Aviation were predicting somewhere in the region of 550-600 jobs coming there over time, haven’t materialised and let’s be honest, haven’t got anywhere close to that. I know [Cardiff Aviation] have had real difficulties with the landing system at St Athan and the Welsh Government have been particularly slow in resolving this issue so they’ve had limited flying in and flying out times which for the maintenance industry of aviation is a real problem.

There’s a combination of factors why Cardiff Aviation haven’t succeeded and one of them is obviously the fact that haven’t been able to use the airport to its full availability but the other has to be obviously one must assume that they haven’t been successful in tendering for volume work that would guarantee an uplift in the number of workers working on the site.

I think its more a political discussion rather than a rational one

One of the subjects that comes up regularly in aviation circles in Wales and from our readers is Air Passenger Duty. Your Colleague Alun Cairns has left it out of the Wales Bill, Your Colleague Guto Bebb said it was “Right and Proper” that Wales didn’t have devolved APD in the same way that Scotland and Northern Ireland do. Where do you stand?

It should be devolved, there’s no question in my mind and I’ve held this position for quite some time. This is a discussion that colleagues and me will have to have. There are some areas that you do find disagreement over and this is one of the issues. I can find no rational issue at all why APD is not devolved to Cardiff Bay and it is for the UK Government to explain that position. I will work colleagues across the political divide to try to make as strong a case as possible on this one.

From where I sit looking at the evidence I can’t see a sensible reason why APD cannot be devolved, although I do get the politics of it, and I think its more a political discussion rather than a rational one.

One of the things that came from our readers was that the silence by AM’s over APD is almost deafening…

I appreciate we don’t get the highest of profiles in this place but if anyone cares to check the records of my comments on it and indeed politicians from across the political divide they will find that we have been doing our bit to raise the profile of APD.

I as a conservative would like to see that tax going down, I do think its prohibitive, I do think it acts as a strangulation on growth and I don’t buy into people’s environment argument about it being a deterrent for stopping people flying because it improves the environment.

All projections for aviation show that its expanding but for us in Wales its expanding in the wrong places, we want it to expand here in Wales and get some of that international market  and importantly get passengers flying into Wales not just passengers flying out of Wales because we really do have to develop the international tourist market coming into Wales and people see Wales as a really good offer when they’re deciding where they are going to spend their week, their fortnight or dare I say that trip of a lifetime and use Wales as a gateway to the UK rather than Heathrow, Gatwick, Stansted, Bristol I mean the list could go on.

One of the issues surrounding Cardiff Airport is the road and rail infrastructure, what should and could be done to improve that?

Well there are improvements in the pipeline, what they call the five-mile lane is designated for a £26m uplift to make it more direct so that will help.

I appreciate people talk about transport links as being a problem and in a desirable world they would be better but lets face it, Bristol hasn’t got particularly good transport links and they’ve managed to grow from the low millions to the mid millions [passengers] and frankly if you’ve got a product and more importantly if you’ve got the flights: because we did a policy launch at Cardiff Airport about what we would like to do to Cardiff Airport to promote it, to grow it and one of the comments we had come back from one of the airlines was that no-one ever asks the airlines what they want because actually very often you have to get the airlines there in the first place and then people will put up for a period of time with not the best land routes into that airport because they know a direct route to their destination can be found at that airport.

There is little or no point in suddenly putting a huge amount of money into a new rail head or a road when you’ve driven to the airport and they still havent got the flights.

instead of tying up £52m of public money in capital and owning the bricks and mortar you could have used that money more imaginatively

So what does Cardiff Airport need to do?

I think we’ve got to listen to the airlines we’ve got to develop solutions to meet their requirements but above all you’ve got to offer a facility that above all is modern and ultimately can handle the goods and services that in freight terms can be out of that airport as quick as possible or on the planes as quick as possible and that would give you the margin over other airports  that maybe have got more antiquated systems for handling freight.

You’ve mentioned freight as part of Cardiff Airports future so if a freight company, say DHL said we will operate a freight service from Cardiff Airport if you build us a facility, should the Welsh Government pay for it?

They should assist them, as long as the business model stacks up. The easiest thing in the world is to say just do it but the business model needs to stack up.

I go back to the point where I said about instead of tying up £52m of public money in capital and owning the bricks and mortar you could have used that money more imaginatively to assist companies like DHL to actually get facilities at the airport.

When should the Welsh Government sell Cardiff Airport?

When they’ve certainly recouped their money and secondly as they’ve made the commitment now they are confident that that asset to the Welsh public can be sustained in the future because it is an asset to the Welsh public.

Our criticism of the purchase of the airport was nothing about the airport per se because as I said, we believe there should be an international airport but in a time of austerity is right that £52m worth of taxpayers money was tied up buying an airport when we know for a fact there were other solutions on the table that could have complemented other streams of regeneration money and development money that could have been put in by the Welsh Government without tieing up such a huge sum of capital money that the industry has proven was overpaid for.

I do find it remarkable at the time when the First Minister [Carwyn Jones] announced in that December that the Welsh Government were going to be buying the airport yet they hadn’t struck the deal and they hadn’t agreed the price. I mean if you were buying a house you wouldn’t announce to the householders as you arrived on their doorstep “I’m buying this house” because first of all you haven’t asked what the price is going to be and made the assessment of what you were prepared to pay because the seller has got you over a barrel then and especially in the world of politics where you’ve gone on the public record you’re going to buy something, you can’t really roll back from that then so it was a value for money exercise that we think the Welsh government handled very poorly.

But we’ve got to move on from that, we’ve got to secure the future for Cardiff Airport and get that money returned to the Welsh taxpayer so it can be used on what Welsh taxpayers pay it for which is providing quality hospitals, excellence in education and assisting local authorities to deliver services in local communities the length and breadth of Wales.

Interview by Aviation Wales.