£52 million price questioned

Cardiff Airport is back in public ownership after nearly 20 years in private hands Credit: ITV News Cymru Wales

For the Conservatives, it's a 'socialist vanity project'; for the Welsh Government it's a necessary step to secure Wales' international reputation. Perhaps the criticism that will cause ministers most concern is the reaction from Cardiff's more successful rival at Bristol.

We welcome the First Minister’s confirmation today that Cardiff Airport will be managed at arm’s length and on a commercial basis. However, the purchase price of £52 million paid by the Welsh Government - which is well above market value when compared to recent transactions involving UK airports - gives us concern that ongoing Government involvement and support is highly likely. Airports across the world are commercial businesses operating in highly competitive markets and the global trend is towards privatisation of these assets, not nationalisation. Bristol Airport has never been concerned about competition from Cardiff or other airports, provided that competition is on a level playing field without any form of state subsidy or government support.

The nationalisation of Cardiff Airport heightens our concern over the fairness of the Silk Commission’s recommendation to devolve Air Passenger Duty (APD) for direct long haul flights from Wales and the Welsh Government’s call for this tax to be scrapped. If it comes into force this proposal would give the Welsh Government the power to set the tax regime for a business of which it is the sole owner and beneficiary. In view of the serious implications for our business, Bristol Airport will continue to monitor this situation closely to ensure State Aid rules are complied with.

That suggestion that £52 million was too high a price for an airport that in Bristol's view is likely to depend on potentially unfair Welsh Government assistance is fuel for the political critics of the decision. The Conservatives have been particularly scathing.

This is a step towards some ideological outdated socialist dream where everything is controlled and run by the state. The role of government is to provide first class public services and create the conditions for economic growth, not to fritter away scarce public funds on buying airports. Carwyn Jones needs to explain how new ownership of the airport will make any difference to the way it is managed and reassure the public that this is not some socialist vanity project at their expense.”

Carwyn Jones' response is that the Welsh Government quite simply would not have been able to buy the airport without being able to demonstrate that the price was fair and that it could expand its routes and passenger numbers without breaking any rules.

We will indue course provide further detail of the due diligence process and the businesscase that has prepared the way for today’s transaction.The WelshGovernment is committed to developing a dynamic and forward-looking economicinfrastructure for Wales. CardiffAirport presents an opportunity to develop a vital facility for businesses,tourists and the public more widely.

The First Minister added that he trust Assembly Members will support his government's ambition. He needn't worry because although Labour don't have a majority in the Senedd, the airport takeover is supported by Plaid Cymru.

It is right in principle that the Welsh Government holds a stake in our vital infrastructure to ensure that it operates in the best interests of the Welsh economy. However, Plaid Cymru is keen to see the detail. There is no reason why a publicly-owned national airport for Wales could not be far more successful than the airport in its present state. It is now up to the Welsh Government to show that it has made the right decision, for the right reasons by getting the right results.

The Liberal Democrats are also taking the view that everything depends on the detail of the airport sale and the plans for its future.

We’ve had almost four months of the government talking about the airport but no detail on their plans to improve and expand services to, from or at the airport. We’ve had the sound bites from Carwyn, we now know the price but we now we need to see the substance and the government’s long term plans for attracting airlines, tourists and business travellers to Cardiff Airport. I wish the Government well in its attempts to turn the airport around, but I would have hoped by now we’d have some idea of what the government plans to do to improve the airport.