7 January

First Minister's Questions: Response to Paul Davies AM's comments about Cardiff Airport

Cardiff Airport has a positive impact on the Welsh economy as a strategic national asset, delivering a total GVA of £246m per year to the economy and sustaining 2,400 aviation related jobs.

Since coming under Welsh Government ownership, focus has been to build the long term sustainability of the business and strengthen our financial position.  During the last financial year (2018-19) we have seen a growth in commercial revenue by over 34% as a direct result of the improvements made to enhance the customer experience.

For the second year running we have returned a positive EBITDA (earnings before interest, tax, depreciation and amortization) which is a measure of a company's operating performance and the key metric of which airports are valued globally. Continued growth forecast for this current financial year.

During this period we have invested in our operations and prepared for taking over the operation of the St Athan airfield. We have increased our headcount by over 9% to meet the growing business demands and brought forward our commitment to pay at least the Real Living Wage to all Cardiff Airport employees.

In light of the continuing volatility and uncertainty in the global economy and specifically the aviation industry including recent airline failures, in line with normal business practice we have reviewed the life over which we measure our intangible assets and taken the prudent decision to write down the value of these assets.  This has resulted in an exceptional, one off charge of £9.3m which is reflected in our accounts for the financial year that ended March 2019.

Airports are viewed as strategic, long term investments by investors and tend to be held for periods of 25 to 50 years. Regional airports in particular require finance to develop, it is normal practice for this to be in the form of long term debt.  Within the UK it is common for airports and their holding companies to have significant levels of borrowing often in excess of £100m and in many cases more.

Since the Welsh Government’s acquisition of Cardiff Airport in 2013 passenger numbers have increased by over 60% and over 30% of passengers are visitors to the country.