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Statement on Welsh government purchase of Cardiff Airport

Created: 27th Feb 2013

Robert Sinclair, Chief Executive Officer at Bristol Airport, said:

“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.

“Furthermore, 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. No net benefit to passengers on either side of the Severn Bridge would result, but devolution of APD would simply redistribute passengers, distort a competitive market and damage Bristol Airport’s existing services to major European hubs, as well as seriously undermining the case for future links with the US and Middle East.

“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.

“At the same time, we view South Wales as part of our core catchment area and we will continue to work closely with our own airline partners to maintain and build a sustainable route network which provides connectivity for the South West and South Wales. We are also working with ground transport providers to improve surface access from all parts of our catchment area, as demonstrated by the recent announcement of a Greyhound service between Swansea, Cardiff, Newport, north Bristol and Bristol Airport. We believe this approach is already delivering significant benefit to people and businesses in Wales by providing access to over 100 destinations direct and many more via frequent services to international hubs.”

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