Cardiff Airport (CWL/EGFF) is being given another £42 million of taxpayers cash from the Welsh Government and will have £40m it already owes written off.
Welsh Labour Economy & Transport Minister Ken Skates said that if the government did not pump the money into the airport it owns then it “would mean the “would mean the loss of the airport”.
The airport in the Vale of Glamorgan has seen almost no flights during the Coronavirus Pandemic but passenger numbers were already in decline due to the collapse of Thomas Cook and Flybe.
The Government bought the airport in 2013 for £52m and passenger numbers had started to rise as airlines regained confidence in the airport. It had attracted a high profile long-haul link to Doha with Qatar Airways, although it is still unclear whether this will return post=pandemic.
Wizz Air was also due to launch a small base at the airport this month also but this has now been delayed until May due to ongoing travel restrictions.
Making the announcement Mr Skates said: “The Welsh Government have agreed a financial package to provide support to Cardiff International Airport Limited (CIAL) in the medium term against a five-year plan for the rescue and restructure of the airport.
“This Government business support package satisfies the terms of the UK-EU Trade and Co-operation Agreement, in particular, the provisions around subsidies for the purposes of rescue and restructure.
“We have agreed on investment by way of a grant of up to £42.6m which will be given to enable Cardiff Airport to restructure its operations and secure its long term viability.
“Separately, as sole shareholders of Cardiff Airport, we have made the decision on a purely commercial basis to write off £42.6 million of the airport’s debt. This decision maximises the likelihood of recovery of Welsh Government loan investment and delivers the lowest lifetime cost option. It provides the best way forward for the Welsh Ministers as sole shareholders of the airport from a commercial perspective.
“We are also impairing the equity at this time as a prudent step to reflect the loss of value as a result of Covid which amounts to £46.3m. By taking this action we are confident that this will best protect the value of the public investment in the airport and ensure that it is sustainable into the future.”
With passenger numbers already in decline at the airport and the airport having lost money every year during Welsh Government ownership, questions have been asked about the use of public money to prop up the airport, which is essentially a tourist airport, when other key services are being cut.
Environmental campaigners have also suggested that investing in the airport is contrary to the Welsh Labour Governments’ declaration of a climate emergency.