9. Debate: Cardiff Airport

– in the Senedd on 10 March 2020.

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The following amendments have been selected: amendment 1 in the name of Darren Millar, and amendments 2 and 3 in the name of Caroline Jones.

Photo of Ann Jones Ann Jones Labour 3:46, 10 March 2020

I now move to item 9, which is a debate on Cardiff Airport and I call on the Minister for Economy, Transport and North Wales to move the motion—Ken Skates.


Motion NDM7290 Rebecca Evans

To propose that the National Assembly for Wales:

1. Recognises the economic and social importance to Wales of Cardiff International Airport.

2. Welcomes that Cardiff International Airport is now responsible for the operation of Anglesey Airport’s passenger terminal facility and recognises the important regional air link between north and south Wales.

3. Recognises that over 1700 people are employed at the Cardiff Airport site and the £250m of GVA benefit it brings to Wales’s economy.

4. Agrees that it is vital for Wales’s trading economy post-Brexit to support Cardiff Airport as part of a high quality, integrated and low carbon public transport system in Wales.

5. Notes the UK Government’s interventionist approach to rescuing Flybe but calls upon the UK Government to go further to boost competitiveness by supporting the cost of regulation at the UK’s smaller airports, as happens across Europe.

6. Calls upon the new UK Government to finally allow the devolution of Air Passenger Duty in full to Wales.


Motion moved.

Photo of Ken Skates Ken Skates Labour 3:46, 10 March 2020

Diolch, Dirprwy Lywydd. I'm proud of what the Welsh Government has done to support Cardiff Airport, a vital part of Wales's economic and transport infrastructure, and I'd like to begin my contribution today by making one very clear point. In 2013, the airport, had it continued under the existing commercial management, would have closed. It would have closed. Jobs would have been lost. We would have lost the main arterial air route into the south Wales, and businesses, exporters and travellers would have lost the opportunity to utilise an airport closer to their homes and premises than Bristol and Heathrow, and many other airports.

Since the Welsh Government stepped in to save the airport, we have invested in it, and delivered improvements to the terminal building and runway facilities. That investment has been recognised by the aviation industry and has led to a portfolio of airlines establishing new routes from Cardiff Airport to destinations around the world.

Cardiff Airport now directly supports more than 2,000 jobs and in 2018 delivered almost a £0.25 billion of gross value added to our economy. But the catalytic effect of the airport is even more significant, with economic analysis suggesting that Cardiff Airport is worth up to £2.4 billion to the UK economy. It leverages 5,500 supply-chain jobs and a total of 52,000 jobs in the wider economy. So, now is the time, I believe, whatever our political views, to come together to support this vital economic asset and strategic piece of transport infrastructure.

Now, in the early hours of last Wednesday, the devastating news of Flybe going into administration was announced. It's true that Flybe will impact Cardiff Airport in terms of passenger numbers. But I want to congratulate the airport team for moving rapidly to secure the Cardiff to Edinburgh route with Loganair. And I'm pleased to say, Dirprwy Lywydd, that discussions with other airlines are ongoing, and last week I had discussions with the Secretary of State for Wales and the UK aviation Minister. I've spoken on a number of occasions to the airport chief executive and chair to discuss how we can support discussions on route take-up; most recently, yesterday afternoon. And despite the loss of Flybe, the financial impact relates to just under 6 per cent of the airport's turnover. This is testament to the excellent planning and management at the airport.

Dirprwy Lywydd, I welcome scrutiny. It's right and proper that the National Assembly for Wales scrutinises the Welsh Government. It's right and proper also that we are scrutinised on our stewardship of public money and of the environment. It's also right and proper that we debate the future of the airport. However, Dirprwy Lywydd, it is not right and proper to talk down the airport. Can I make it clear that we are not wasting millions of pounds of taxpayers' money? We're investing in the long-term future of the airport in providing a commercial loan repayable, with interest, to the taxpayer. Due diligence has been taken and the support is in line with EU state-aid rules. And I wish to work collectively with Members to support Cardiff Airport and I would ask Members to reflect on this offer as this debate continues. Nick Ramsey.

Photo of Nick Ramsay Nick Ramsay Conservative 3:50, 10 March 2020

Thank you, Minister, for taking the intervention. As you know, as Chair of the Public Accounts Committee, which has been looking at this issue recently, we as a committee certainly have no interest in talking Wales down or being negative for negative's sake. You will know, however, that we have asked officials, in terms of those loans and those repayable loans—we accept that loans are necessary, but it is important that there is clarity on when those loans start to be paid back and the end point of that process as well. So, would you accept that there is an issue here that needs to be addressed, and, yes, you are right to invest in the airport, but would you agree that the public do need to have confidence that that process is not effectively a blank cheque?

Photo of Ken Skates Ken Skates Labour

Absolutely, I would. Absolutely, I would, and I'd say to the Member as well, I welcome PAC's interest in the airport. And in terms of when those loans should begin being repaid, it's obviously for the airport to judge what is in its best financial interests, and this answer has been given to, certainly, the Economy, Infrastructure and Skills Committee.

Now, before talking further about the specifics of Cardiff Airport itself, I think it's important that we actually place this debate in the right context that it deserves. And Dirprwy Lywydd, we are facing challenges on a global scale: our climate is changing rapidly; we're seeing the impact now that the coronavirus is having on the economy and on the people of this world; Brexit is fundamentally reshaping our trading and external relationships; and recently we've seen refusals for three major airport expansions at Heathrow, Stansted and Bristol—all on environmental grounds. So, all of this creates not only challenging market conditions for aviation, as demonstrated by the recent collapse of Flybe, but important questions about the role of aviation policy in Wales. And I believe that it's important to address this head on, to develop our understanding of the evidence base around the airport's carbon emissions, to look at how Cardiff Airport could become a UK centre of excellence for low-carbon aviation, and, of course, to understand the role and the potential of Cardiff Airport in our post-Brexit existence.

The Cardiff Airport master plan for 2040 offers an opportunity to address all of these challenges, including the potential for a sustainable transport interchange and also sustainable locally owned energy. Ownership of the airport gives the Welsh Government a unique opportunity to lead the way in developing low-carbon and technological solutions for the industry. And we are in discussions, I'm pleased to say, with universities and with industry partners who are keen to utilise the airport as an exciting test bed.

The strategic social importance of Cardiff Airport is demonstrated most by the connectivity created between north and south Wales. This link is important for both the social and economic connections between the north and south of our country. And the route, I'm pleased to say, has grown in passenger numbers under Eastern Airways, who were recently awarded the contract for a further four years. Moreover, Cardiff Airport is now responsible for the operation of Anglesey Airport's passenger terminal facility.

But turning back to Flybe, I'd like to say that our thoughts go to the employees and passengers who have been affected by its collapse. We do regret that the UK Government's failure to intervene in the Flybe situation has led to such devastating consequences. We consider this to be symptomatic of the negative policy position it takes in relation to regional airports and to regional connectivity across the United Kingdom. It is within the UK Government's gift to vary its interpretation of state-aid rules to align with the rest of Europe, and to remove the regulatory costs that burden smaller, regional airports. So, once again, I call on the UK Government to devolve air passenger duty to Wales, as it has done for Scotland and for Northern Ireland. The airport is a valuable, strategic national asset and one that we should all be immensely proud of.

Photo of Ann Jones Ann Jones Labour 3:54, 10 March 2020

Thank you. I have selected the three amendments to the motion, and I call on Russell George to move amendment 1, tabled in the name of Darren Millar. Russell.


Amendment 1—Darren Millar

Delete all and replace with:

To propose that the National Assembly for Wales:

1. Notes news that Flybe has entered administration and expresses concern about the potential adverse impact of this on the future of Cardiff Airport.

2. Calls on the Welsh Government to publish a comprehensive strategy for Cardiff Airport with the aim of returning it to the commercial sector at the earliest opportunity and at a profit to the Welsh taxpayer, and that the strategy should include plans to:

a) invest in the airport's capital infrastructure to enable the airport to diversify and generate new sources of revenue;

b) support route development, prioritising a direct flight link to the USA and one to Manchester given its status as a major hub in the north of England serving north Wales;

c) develop a new marketing strategy for the airport;

d) work with the UK Government to devolve and scrap Air Passenger Duty;

e) improve transport links to the airport to make the airport more accessible by investing in improved road, rail and public transport links.


Amendment 1 moved.

Photo of Russell George Russell George Conservative 3:54, 10 March 2020

Thank you, Deputy Presiding Officer. Can I thank the Government for bringing forward this debate today? I think this is an appropriate debate to have, and I also appreciate, when the Government tabled this debate, at that point, Flybe hadn't gone into administration, which makes it, of course, all the more important that we have this debate today. And like the Minister said, it's also right to pay tribute to the dedicated staff of Flybe, and also the loyal customers, of course. And I appreciate that there's still much concern and much work to do, and I'm pleased that the Minister's outlined a number of meetings that he had last week in terms of the support for further routes to and from the airport. I think that's to be welcomed.

I certainly hope that our Welsh Conservative amendments to this debate today are seen as constructive. I do believe that they are. They are our plan from these benches in terms of where we believe the direction of the airport should go. In doing that, I should also, Deputy Presiding Officer, move our amendments, put forward in the name of Darren Millar.

But I actually think that there's much that we can agree on between the Government's benches and our benches, and in fact between other Members as well. I think we've all got the same long-term aspirations for the airport. The Minister said in his opening comments that whatever our particular views are, we want to support the airport, and I agree with that. There's much that we can agree on. I think where the disagreement perhaps comes is how we get to the objectives that we both want to see.

I put on record, of course, that our view is that Cardiff Airport should be returned to private ownership. In saying that as well, it would be useful perhaps to have some clarification of the Government's position on that, because it's certainly—and I stand to be corrected—

Photo of Russell George Russell George Conservative

In a moment, yes. I stand to be corrected, but certainly the previous First Minister, I understood, did see Cardiff Airport being returned to private ownership, but I'm not sure what the Government's position is now.

There are two interventions now. I'll go for Mick first.

Photo of Mick Antoniw Mick Antoniw Labour

Thank you for taking the intervention in respect of literally your ideological views in respect of privatisation. But would you agree that the privatisation that occurred in 1995 of the airport turned out to be an absolute disaster?

Photo of Russell George Russell George Conservative

I'm happy to take an intervention from Carwyn Jones as well. [Laughter.] I'll answer that.

Photo of Carwyn Jones Carwyn Jones Labour

I'm grateful. Two brief point. First of all, just to remind you of course that the Conservative mayor of Tees valley has indeed bought Teeside airport and branded it as an airport for the people. I wonder how that fits with his argument. Secondly, just as a matter of information, what I said when I was formerly First Minister—I'm not now—is that in time there was scope to sell off shares in the airport but to keep 50 per cent plus one share in the hands of the Government in order to keep a controlling share.

Photo of Russell George Russell George Conservative 3:57, 10 March 2020

Well, thank you for that clarification. It would be useful to know from the Minister, at the end of this debate, if that remains the Government's position as well.

In terms of the other airport that Carwyn Jones mentioned, of course that was purchased for a fair price. I don't know the details of that particular airport, but what I will say is this: we, on these benches here, do believe that Cardiff Airport would be best run in private ownership. We don't believe that Governments are good—. They're not aviation experts and we believe that the airport is better run in private ownership. But I appreciate, as Mick Antoniw said, that there's a difference of philosophy in terms of where we stand on this. You can still support an airport without buying an airport, of course.

But let's also have an honest debate in this Chamber about where we're at as well. Previously the Government has talked about the increase in passenger numbers. Yes, it's great that the passenger numbers are growing, but let's remember that in 2007 passenger numbers were at 2.1 million and the Government's own plans and projections tell us that we'll hit that 2 million figure, which is an important figure in terms of the break-even point we're told, when the airport will return back to making a profit, we were told originally that that would be in 2021, now we're told that that will be in 2025. So, we've got to put into context some of these figures. There's often a lot of spin, I'm afraid, around some of the statistics that we see in terms of the airport.

Let's also be realistic about the financial position of the airport. Since it's been in Government ownership, there's been pre-tax losses that have been made every single year whilst it's been in the Government's ownership, and £18.5 million of pre-tax losses last year. Also, of course, in 2014 the net assets of the airport were worth £48 million and now they're worth—according to the balance sheet of the airport—£15.7 million. I appreciate what the Government Minister says in terms of the value of the airport in terms of other wider economic benefits, but let's also remember these statistics at the same time.

I appreciate that I'm running out of time, but I think I took an intervention. Am I allowed a couple more minutes?

Photo of Ann Jones Ann Jones Labour 3:59, 10 March 2020

No, no, you can finish your speech as quick as you can and I'll tell you when you've gone over time. Go on.

Photo of Russell George Russell George Conservative

Thank you. I was just looking for some guidance. Thank you, Deputy Presiding Officer

But, certainly in terms of our plan for the airport, we have a number of points that we would bring forward. First of all, we would invest in the airport's capital infrastructure to enable the airport to diversify and generate new sources of revenue. I think that's important. This airport, of course, could be a symbol of great prestige and a gateway to Wales, and I often agree with points that Carwyn Jones makes in terms of the perception of Wales having an airport. Even if that might not be serving the whole of Wales, there is a perception issue there, which I would entirely agree with. There's also the support that certainly a Welsh Conservative Government would bring in terms of prioritising direct flights to the USA and one to Manchester. Manchester is especially important, given its status as a hub in the north of England, also serving the north of Wales. We'd also develop a new marketing strategy for the airport. I think that's important as well, and also, to put it on the record, we would absolutely, as Welsh Conservatives, be seeking from the UK Government to devolve air passenger duty and, once it is devolved, to scrap it as well. So, I appreciate we're at a difference, odds, to the UK Government, but that's our position here as Welsh Conservatives. I think—[Interruption.] I can't— 

Photo of Russell George Russell George Conservative

—or I'd be happy to. And, finally, we'd also want to see improvements in terms of transport links to the airport in terms of rail, road and public transport as well. But we on these benches do believe there should be a fair return for the taxpayers' money, the investment. Each taxpayer in Wales paid £38.50 for that original investment in Cardiff Airport, and we'd want to see that, of course, returned to the Welsh taxpayer. 

Photo of Ann Jones Ann Jones Labour

I call on David Rowlands to move amendments 2 and 3, tabled in the name of Caroline Jones. David. 


Amendment 2—Caroline Jones

Add as new point at end of motion:

Looks to Cardiff International Airport to make annual profits at least at the operating level, i.e. before finance costs.


Amendment 3—Caroline Jones

Add as new point at end of motion:

Calls upon the Welsh Government to seek a private sector partner to help operate and take a minority stake in Cardiff International Airport within 5 years.


Amendments 2 and 3 moved.

Photo of David Rowlands David Rowlands UKIP 4:01, 10 March 2020

Diolch, Dirprwy Lywydd. Can I open by saying that the Brexit Party will be supporting the Government's motion? We will not be supporting the Conservative amendments, although there are a number that we would support, as we note the irony of their call for the Welsh Government to invest in the airport infrastructure, given their repeated opposition to the Government's past investment strategy for the airport. We would like to note here our past record in supporting the Welsh Government's decision to buy the airport, which undoubtedly secured its future. Quite apart from the airport's economic impact on Wales generally and on job creation for the region, we believe Cardiff Airport plays a crucial role in projecting Wales to the world. 

Whilst our first amendment seems to have been achieved, as this was confirmed by the airport's chairman, Roger Lewis, in the briefing session held by the airport officials last week, our second amendment calls for the Welsh Government to seek private investment within five years, but we wish to note here that this should be on a minority basis, with the Welsh Government keeping at least 51 per cent of the equity. We believe this would be the only way to protect the airport's survival long term. We also wish to acknowledge that recent events, such as the collapse of Thomas Cook and, most recently, Flybe, will have a short to medium-term effect on the airport's finances, as could the potential for a catastrophic effect ensuing from the coronavirus epidemic. One can only surmise that, had the airport remained in private hands, its very existence would have been in jeopardy. We should also recognise that there may be a short-term need for the Government to give further financial support to the airport should the coronavirus situation take a serious hold. However, we would hope that, in such an eventuality, the UK Government would commit to supporting the air industry in general. 

We also endorse the calls by the Government and the Conservatives for the UK to devolve air passenger duty. Their present stance is totally indefensible, given that this tax has, for a long time, been devolved to the Scottish and Northern Ireland Parliaments.

Finally, we issue a call for further investment by the Welsh Government to establish far better access to the airport, with a direct link from the M4, and even the possibility of a rail link. Such investment could dramatically affect the success of the airport. 

Photo of Mick Antoniw Mick Antoniw Labour 4:04, 10 March 2020

Can I just say that I've got a longstanding interest in the airport, because, when it was in public ownership, when it was owned by the three counties, I was a member of the airport committee at that time, as a councillor? I remember the annual reports, really, of public investment to actually build up the airport and to actually fund the first major international-length runway that enabled jumbo jets to land. Year on year, that airport expanded and, in actual fact, its passenger numbers were on a par at that time with Bristol. So, there is an ignominy to the fact that you had a publicly owned airport that was part of an integrated economic plan, that was serving the public and business within Wales, and then a bizarre ideological decision was taken by the Tory Government that it had to be sold off. 

I appreciate, when I put the intervention to Russell George that the privatisation was a disaster—. I appreciate that he has difficulty admitting that it was, but you know it was and I know it was an absolute disaster. In actual fact—

Photo of Mick Antoniw Mick Antoniw Labour

Yes, please, certainly.

Photo of Russell George Russell George Conservative

The point is that the Government—in fact, all Governments—could have done more to support the airport during that time, such as road links, public transport links, rail links. All Governments of all colours could have done more to support the airport when it was in private ownership, and perhaps we wouldn't have got to the position we have done now. 

Photo of Mick Antoniw Mick Antoniw Labour

Well, I'm glad to hear your support for investment in our airports, but you don't—[Interruption.] But you really don't answer the point that the privatisation was a disaster, just as the privatisation of the railway network has been a disaster, just as bus privatisation has been an absolute disaster.

In 2012—the last year that it was in private ownership—it actually suffered a loss in that year of almost 17 per cent in passenger numbers. It is absolutely right: we would not, in Wales now, have an international airport if the Tories had been running the country. We would also have lost 2,500 jobs, we would have lost the contribution of hundreds of millions of pounds to the Welsh economy, we would have lost a key component in the development of an aviation industry that's actually quite important within my constituency. So, the actual decision by Welsh Government—by a Labour Government—to step in and repair that damage was fundamentally important.

Now, when the airport was taken into public ownership, the Tory Member of the European Parliament for the south-west, Ashley Fox, criticised Welsh Government rescuing it, because it challenged Bristol Airport. So, you have the English Tories actually supporting their regional airport. You can only ever dream, can't you, of a Welsh Conservative Party supporting a Welsh airport and Welsh industry? Their total—[Interruption.] Their total subservience. And that is the reality of the situation—Bristol Airport has flourished at the expense of the privatisation of Cardiff Airport.

Now, we need to move on, because we have Qatar Airways, which has made a very significant impact on the airport, and, of course, the chief executive officer of Qatar Airways basically says it should be left in public ownership, because to put it into privatisation would put it at risk of hedge funds and the international markets. 

There's no doubt that the airport industry is going through a difficult time. There is no doubt we are still being disadvantaged in decision making by the UK Government, and I suspect the Tory influence over Bristol actually has an impact on that. But there is no doubt that, since we took it into public ownership, there has been a 60 per cent growth in passenger numbers in the airport. It now has a role within an economic plan. Investment in the airport is not only necessary but modest. The £38 million invested in Cardiff Airport, compared with the £500 million debts of Bristol Airport, I think stands by comparison, and I think we will need to invest further.

But the reality is that that investment or those loans that are made are at a commercial rate, because to do otherwise would be in breach of either EU rules or in breach of World Trade Organization state-aid rules. So, Deputy Llywydd, the airport has become a really important economic asset for us. It is also—. One has to say: what would be the status of Wales, of this country that we represent, if we did not have an international airport, if we could not bring major international figures—major sporting figures, economic figures and political figures—into our own airport, that we had to say, 'No, you have to divert via Bristol'?

Dirprwy Lywydd, the crux of the matter is this: the Tories almost destroyed our airport. We have rescued that airport. The airport now has a future. It is certainly a difficult time, but I know that it will survive, and it has to survive, because it has a Government that supports it and values it.

Photo of Nick Ramsay Nick Ramsay Conservative 4:09, 10 March 2020

It's a pleasure to contribute to this debate. I was a bit overeager earlier in that I made one of my substantive points, actually, to the Minister not long after he started speaking. He enthused me so much that he knows where I'm coming from on this.

Photo of Nick Ramsay Nick Ramsay Conservative 4:10, 10 March 2020

It's quite clear that an airport such as Cardiff is an important piece of not just Welsh transport infrastructure, but also of the UK transport infrastructure as well and, indeed, of course, as a link to other parts of the world and, more recently, to Qatar through the links made with that airline, of course, becoming a global hub as well. And the issue of funding is, I don't think, in doubt. Of course, an airport like that needs support and, of course, as Mick Antoniw said, commercial loans form a part of that, because, of course, with state-aid rules, those are going to have to be of a commercial nature.

The issue that the Public Accounts Committee has looked at in detail is the long-term sustainability of that type of funding, and what, importantly, would happen at a point in the future where those loans weren't available. If we just look in detail at the loans that have been provided, the airport has now fully drawn down the loan facility of £38 million. The most recent £21.2 million has, I believe, been consolidated with the existing facility, although the Minister might want to clarify that, as there was some questions raised about that during the recent committee meeting.

So, importantly, what is the future strategy for Cardiff Airport, and at what point are these loans no longer going to be available? I made the point earlier about a blank cheque, and it's important that the public have the confidence that, at some point in the future, either the airport will continue to be funded and that is part of the strategy, and the Welsh Government may want to say that is how we see it surviving in the future, or it will be able to stand on its own two feet. That's probably not the appropriate phrase in this context, but I think that's what the public look at, and that's what the Public Accounts Committee look at, in terms of the viability of this piece of infrastructure.

We're currently looking at another loan of a further £6.8 million, I believe. So, there is more money going towards the airport. We've only seen recently, with the consequences of Flybe, that, whatever strategy the Welsh Government develops, and however in the future it sees that vision for the airport developing, it has to be futureproofed against future shocks, such as the collapse of an airline. The collapse of an airline can have a totally disproportionate effect on the running and the financial viability of an airport, far more than in any other type of transport infrastructure or transport hub. We took evidence from Roger Lewis that confirmed that—that, actually, when it comes to the running of an airport, the potential catastrophic loss of one airline can have a major effect. 

We were reassured, I have to say, that Cardiff, unlike some other airports, actually isn't as dependent—I can see the Minister nodding. It's not as wholly dependent on one airline as others, and I think that that has shown where there really has been progress made with that airport. I know often Welsh Government seems to think that this side of the Chamber is just overtly negative, talking Wales down—I can see Mick Antoniw nodding; I'm going to turn that round in a minute—and not looking on the bright side, but, actually, I'm willing to accept as the Chair of the Public Accounts Committee that there have been some good changes made, and, at certain points in the past, that airport did not look viable, so things have moved on and there have been structures put in place. But it's important in the future that there is a vision for that airport that supports what the Welsh Government wants to do with it. 

Can I just mention air passenger duty? The former First Minister, who contributed earlier sitting in on this debate, used to like to talk, when he was First Minister, about the tools in the toolbox, along with the former finance Minister, and APD is clearly a potentially very important tool in that toolbox. I agree with other people who have spoken on all sides of the Chamber, including this one, that that should be devolved. It is nonsensical that other parts of the United Kingdom have access to that sort of devolution of taxation and the transport Minister here doesn't, and the finance Minister doesn't. That isn't fair, that isn't right, and we have supported you consistently in saying that that should be devolved. I think if the Welsh Government did have air passenger duty devolved to it, then it would at the very least open up the options available to you in supporting pieces of major infrastructure like Cardiff Airport. And, for the good of all of us, for the good of the Welsh Government, for the good of the public, for the good of all of us who contribute in these debates over many months, I think that in the future we want to get to a position where that airport, yes, is funded, but ultimately becomes sustainable so that Wales can have an airport that it can be proud of.

Photo of Helen Mary Jones Helen Mary Jones Plaid Cymru 4:15, 10 March 2020

I rise on this occasion to support the Government motion—and these benches will not be supporting any of the other opposition amendments—unusually for me. Some Members who don't know me as well as others will be very surprised to hear that I love a bit of consensus, me. It's been really good to see that there is an element of consensus around this debate. We all do agree that our nation and this part of our nation needs a viable airport; we may have differences about how we want that to be run in the long term. It's been really encouraging to see, Dirprwy Lywydd, that we have consensus about the devolution of air passenger duty.

We can't do without an airport. In the longer term, we all know that we need to reduce the amount of air travel that we have, but there is also clear, consistent academic evidence that regions without their own airport suffer from that. There is the practicality of people moving in and out, but there is also that message—and others have mentioned this—and needing to send out that message that Wales is open for business, that we are here. And I think we do have to remind ourselves of the history here: there's absolutely no doubt that we would have lost that airport if the Welsh Government hadn't stepped in. That's completely clear. And at risk of breaking down this consensus, I do completely agree with Mick Antoniw: privatising the airport was never the right thing to do; it was always going to be challenging, when it had such a close competitor in Bristol, to make it viable without an element of public support.

Now, on these benches, we are very relaxed about this major piece of infrastructure being in public ownership, because we are very well aware, as others are, that this is normal. In lots of other parts of the developed world, it is perfectly normal for Governments to own, support and run, albeit at arm's length, key pieces of infrastructure, because those Governments know that the markets cannot always be trusted to deliver for the people. Sometimes they do, but in this case, they clearly would not have done, and we would clearly have been without an airport.

I want to just touch briefly on the devolution of air passenger duty. As I've said, I'm really glad to hear the Conservative benches wholeheartedly supporting it. It is, as somebody said, indefensible and iniquitous that every other part of the UK has this tool that they are able to use in whichever way they see fit. And there lots of ways that it could be used: it could be used to attract new carriers; it could be used to penalise people who fly too often or who fly for unnecessary reasons. But we need to be making those decisions here. It is not appropriate.

Now, I suppose I'm a little bit concerned, given that our Conservative colleagues have told us they've been advocating this for a long time, that they appear to be being ignored at the other end of the M4, and I wonder if this is something to do with the previous Secretary of State for Wales's apparent obsession with cross-border economic regions. I wonder whether he was perhaps a little bit too interested in the long-term viability of Bristol Airport, not that we wish any ill to Bristol Airport, but if it's either/or, I know where I want to be putting our resources.

I am optimistic, though, given what's been said today, that with a new Secretary of State, with a very clear message from the Welsh Government, but also today from this Assembly, that we can send that message very clearly to the new Secretary of State and ask him to advocate for this position. The current situation is just not defensible. It isn't fair, it isn't just, and long term it won't work.

With regard to points 5 and 6 of the motion, I just want to say a little bit more about point 5. The Flybe situation was disappointing, and I want to express my gratitude to the Minister today, because he has kept us very much informed about the developments. When you heard that a quarter of the flights going out were Flybe flights, it was a moment of being really, really concerned. As others have said, our thoughts have got to be with those people who are at risk of losing their jobs, though I understand—and the Minister may be able to confirm this today—that some of those jobs, the ones in Cardiff Airport, have already been protected by other carriers; and the passengers for whom it was hugely disruptive—people who couldn't go to job interviews, people who couldn't go to family occasions. But, of course, those people might not have been able to go at all if we hadn't had an airport. But, I'm very grateful to the Minister for keeping us in touch.

It does beg the question as to whether or not the Westminster Government kept its promise to Flybe shareholders, but I think it's fair to say that this is a very challenging market. This is not the first regional carrier that has collapsed. What's really important is that we retain the viability of our airport. I was pleased to hear from the Minister that it's not as devastating as we thought it might have been.

So, we're happy today to support the Government in supporting the airport and to support the motion. We need to reduce, as I've said, our flying, but in order for that to be possible we need to have more effective regional connectivity. Until we have that, if we don't have our own airport, people will simply fly from elsewhere, so a thriving airport is vital to us all. We will support the Government motion today, and we will support them in continuing to support the airport. The Minister will, of course, expect us to scrutinise him rigorously as to how he does just that.

Photo of Jenny Rathbone Jenny Rathbone Labour 4:20, 10 March 2020

It's good to see that there's considerable unity around supporting our international airport, and I think it's good to hear the Chair of the Public Accounts Committee recognising some of the changes that have been made to make the airport viable. It's absolutely the case that, if the Welsh Government hadn’t taken it over in 2013, the airport would have closed. End of story.

We have to recognise that it's about 2,500 jobs directly or indirectly being maintained here in south Wales. In the difficult economic circumstances we find ourselves in, that's very important revenue. We know from the discussion we had with Cardiff Airport's senior executives on Monday last week that they are already earning more money than it costs to run the airport, and they have been doing so for the last three years. So that's a very important point, because were that not to be the case that obviously makes for a potentially very difficult situation.

We know that the tipping point is about 1.6/1.7 million passengers a year. So, obviously, we are in a dangerous situation at the moment as a result of coronavirus, which is obviously disrupting everything in terms of the world economy. But it is actually only £36.2 million, Nick Ramsay, that Cardiff Airport has drawn down so far of the possible £38 million—that's what we heard in the Public Accounts Committee. We need to place that £36.2 million commercial loan in the context of what other regional airports are carrying in the way of debt. We learnt last week that Liverpool has a debt of £102 million; Newcastle £367 million; Leeds Bradford £125 million; and Bristol Airport £590 million debt.

Photo of Nick Ramsay Nick Ramsay Conservative

Just on your previous point there, the statistic I've got in front of me is definitely that the Welsh Government has now fully drawn down that £38 million, but I'm willing to discuss that with you later. It may be that I've got the wrong end of the stick, but I think that that money has been drawn down.

Photo of Jenny Rathbone Jenny Rathbone Labour 4:23, 10 March 2020

Okay. I agree that £1 million or £2 million is a lot of money, but I think that the point is that they are still within the amount of money that's already been agreed with the Welsh Government, further to the collapse of Thomas Cook.

So, there's no doubt that the collapse of Thomas Cook, and indeed Flybe, and on top of that coronavirus, are delaying the timescale by which the company is able to repay the loan to the Welsh Government. And the company executives were perfectly frank about that, even though it was before we knew about the demise of Flybe. 

But for every company that fails in normal commercial circumstances, there is another who is a potential beneficiary. So, we've seen TUI increasing the number of flights out of Cardiff. We've seen some of the Flybe routes taken over by Loganair. There'll always be commercial companies who will see somebody else's pain as a business opportunity, and that's absolutely fine.

I agree with Mick Antoniw that the previous Secretary of State for Wales should more accurately have been described as the Secretary of State for Bristol and the south-west, because he seemed far more interested in that. Quite why the Member of Parliament for the Vale of Glamorgan hated his local airport so much, only he knows. Maybe the flight path went over his house. [Laughter.]

But there are many reasons why Cardiff is more likely to survive the current difficulties for all airlines across the world than many other regional airports in the UK; it's because there are several features of Cardiff's airport that make it a much better bet in the long term. One is the fantastically long runway that we have got, which is far longer than the runway in Bristol or Birmingham, which means that it's ideal for long-haul airlines. Whatever the climate change emergency, it is difficult to envisage that all of us who need to travel to the United States are going to go by boat. Some people are going to continue to need to go by plane. So, having this very long runway—positioned mainly over the sea and agricultural land, which means it's far less disruptive than an airport in a built-up area—means that it's ideal for future runways.

On top of that, it's got the relationship with the British Airways maintenance centre, and it has the capacity to become a centre for innovation. For example, we discussed autonomous pods that are operating at Heathrow, which could be used to connect Rhoose station with the airport terminal, which would overcome one of the weaknesses that Cardiff Airport has at the moment. So, I think that this is an airport with a future, and is a very good Welsh Government investment.

Photo of Rhianon Passmore Rhianon Passmore Labour

Thank you, Deputy Llywydd. It was reassuring to hear from the Minister that the recent and highly regrettable news that Flybe ceased trading on 4 March does not affect the overall viability of Cardiff Airport; but equally, aviation is indeed having a very difficult period, and we know that Brexit is playing its part in this.

But, the on the record doom-mongering from the Conservative Party opposite about the long-term future of the airport has proved to be unfounded, and it is unwelcome for the airport and those whose jobs rely on it. So, I also suggest that we do not talk Wales down. The day after the Flybe announcement, Cardiff Airport confirmed it had secured agreement with Loganair to step in and operate this crucial Cardiff to Edinburgh service starting on 23 March, so it's a shame that the party opposite did not welcome this. If they support the airport and they support Welsh infrastructure, it is my belief that they should.

It is also right, again, I think, to underscore here that Cardiff Airport is indeed an important piece of strategic transport infrastructure. It is a key economic asset for Wales, and as such its vitals are strong. Nearly 1.7 million passengers flew from Cardiff Airport in 2019. That's up 7 per cent on the year before, the busiest year since 2009, and up by 65 per cent since our Welsh Government involvement. Last year also saw the airport post a 34 per cent growth in commercial revenue. These are real facts.

There is much talk in this Chamber of Wales becoming a mature nation in its own right as a member of the United Kingdom family of nations. So, what self-respecting nation does not want or have its own airport servicing its capital city and the wider nation, and the 52,000 supply-chain jobs that go with it, including research and development? If we choose to shirk our national responsibilities to Wales, we would stand aside as regional English cities like Bristol and Exeter's airports grow. We are an aspirational and ambitious nation, and I know that the Welsh Labour Government will not shrink from standing up for Wales. It is vital for Wales's trading economy post Brexit to support Cardiff Airport as part of a high quality, integrated and low carbon public-transport system.

The Welsh Labour Government has also consistently called for air passenger duty to be devolved to Wales, and I'm glad that the Tories opposite now support it. I would ask them to take that message back to their UK masters. Independent expert analysis demonstrates clear economic benefits for Wales if air passenger duty is devolved, and obviously a subsequent decision taken by Welsh Ministers to reduce that air passenger duty. As the UK leaves the EU, the devolution of air passenger duty is a means by which the Welsh Government can promote the economic attractiveness of Wales, and growth in Wales in unison with the Welsh Government's existing economic policies, and is a key attraction for our investors. So, I'm pleased that there is now cross-party support across the Assembly for powers for air passenger duty to be made in Wales.

And I would also say—put it very simply, then—if Members do back Wales, then they will back the Welsh Government and Cardiff Airport. It is time that we all stand up for Wales, and it's time to end the talking down of Wales.

Photo of Ann Jones Ann Jones Labour 4:30, 10 March 2020

Can I now call on the Minister for Economy, Transport and North Wales to reply to the debate? Ken Skates.

Photo of Ken Skates Ken Skates Labour

Diolch, Dirprwy Llywydd. I really am grateful for all Members' contributions this afternoon, especially to those Members who are supporting our motion, and to those Members on the Conservative benches who are now backing the Welsh Government position against UK Government policy.

I do feel that it is most important that we recognise that it's our collective responsibility to support and promote the airport—not to run it down on social media or to use it as a political football. You would never, never, ever hear elected public servants running down John F. Kennedy airport or Charles de Gaulle airport, or any other of the world's publicly owned airports.

Let me be absolutely clear, we will not allow Cardiff Airport to fall out of the control of the public of Wales, and operating on their behalf, the Welsh Government. Our position today remains consistent with our position in 2013, in 2014, in 2015, right through to the present day. We are, of course, open to private sector investment in the airport, and the potential for the private sector to take a stake, but we as a Welsh Government took back control of that vitally important piece of infrastructure, and we will retain control on behalf of the people of Wales.

A question was asked of me by Russell George—a very important question about what aviation experts believe is in the best interests of the world's airports: whether they should be publicly owned or privately owned. Now, when we talk about experts, Donald Trump, the President of the United States, he likes to consider himself an expert in lots and lots and lots of things, but you don't hear him rushing to try to find buyers in the private sector for all of those publicly owned airports in the United States. And as Helen Mary Jones said, public ownership is the global norm. In fact, around 85 per cent of the world's airports that carry passengers are publicly owned.

Now, I did hear David Melding joking, I think, about David Rowlands not being a capitalist anymore because he's a supporter of the public ownership of the airport, but you wouldn’t accuse President Donald Trump or former New York Mayor, Rudy Giuliani, or any of the other right-wing supporters of public ownership of airports in the US of not being capitalists. You would not accuse Nicolas Sarkozy and you wouldn't have accused Jacques Chirac of being anti-capitalist for their support of public ownership of Charles de Gaulle and many, many other airports in France.

Now, at the start of this debate, I offered to work collectively with Members in this Chamber, and that still stands. But, please, do not use carefully selected statistics and present them in a way that's designed to skewer the future of the airport. And today, I think that statistic that is most often used by those who wish to talk down the airport was once again raised, and it concerns the loan—the investment—that's being made in the airport. But as Jenny Rathbone rightly identified, that relatively small amount of investment in Cardiff Airport pales into insignificance against some of the debt that many other airports have, including Bristol Airport that currently carries a debt burden of more than £0.5 billion.

Now, Nick Ramsay, I thought, made a vitally important point—that it's essential that we consider the impact of the collapse of any airlines when we consider supporting the airport with commercial loans. I can tell Members that, as part of our due diligence, we stress-tested the financial strength of the airport against the collapse of Flybe. Now, Cardiff Airport is not in the same position that many other small regional airports are in today as a consequence of Flybe's collapse—airports such as Southampton, where 95 per cent of traffic was provided by Flybe, or other airports that are in similar positions, such as Belfast or Exeter—and that's because of the diversification that's taken place at the airport in the last two years. It was interesting last week, Dirprwy Llywydd, that the BBC re-ran a story online from 2018. The headline was something along the lines of 'Collapse of Flybe would be devastating for Cardiff Airport'. That is not the case today, but it would have been the case in 2018. I am convinced that, had the Conservatives won the election in 2016 and sold off the airport after that election, then today, as a consequence of Flybe's collapse, the airport would have collapsed as well.

Photo of Helen Mary Jones Helen Mary Jones Plaid Cymru

I'm grateful to you for taking the intervention. You may wish to take this opportunity to share with the Chamber the news that you gave me about the Flybe jobs that have already been saved at the airport. Of course, that's no consolation to those employed in other airports who were not so fortunate, but I think it would be helpful to have that on the record and perhaps reassuring.

Photo of Ken Skates Ken Skates Labour

I think it's really important. Helen Mary Jones makes a really important point about the human impact of Flybe's collapse, and I am pleased to say that, as a consequence of Loganair intervening and taking up the Cardiff to Edinburgh route, they have prioritised jobs for Flybe staff and this includes at Cardiff Airport. I am also encouraged by very recent discussions that the airport is having with other airlines who also could step in and take over vitally important routes.

I'd just like to say that I am genuinely grateful to the Welsh Conservatives for their support of our position on air passenger duty and their support for the call for a route between Cardiff and Manchester to be established. It's ironic though because, of course, we asked the UK Government to promote a public service obligation from Cardiff to Manchester and they refused to do so, to the European Commission.

So, I ask for the support of all Members in calling on the UK Government to consider three vitally important measures in its review of regional connectivity. First, remove the regulatory cost burden on regional airports, as is done in Europe. Second, open up new public service obligation flights between the UK regions and also to Europe. Thirdly and finally, but vitally important, is air passenger duty: devolve APD to Wales so that we have control to deliver our policy objectives.

Photo of Ann Jones Ann Jones Labour 4:37, 10 March 2020

Thank you very much. The proposal is to agree amendment 1. Does any Member object? [Objection.] Okay. So we defer voting on this item until voting time.


Voting deferred until voting time.

Photo of Ann Jones Ann Jones Labour 4:37, 10 March 2020

Before we move to voting time and the Stage 3 debate on the Health and Social Care (Quality and Engagement) (Wales) Bill, I will suspend proceedings for 15 minutes. That's 1-5 minutes. The bell will be rung five minutes before we reconvene, but could I encourage Members to return to the Chamber promptly? So, a 15-minute break and the bell will be rung five minutes before we reconvene. So, the Plenary now stands adjourned.


Plenary was suspended at 16:38.

The Assembly reconvened at 16:59, with the Llywydd in the Chair.