Thomas Cook

Part of 3. Topical Questions – in the Senedd at 3:19 pm on 25 September 2019.

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Photo of Ken Skates Ken Skates Labour 3:19, 25 September 2019

Can I thank Russell George for his questions and for joining other Members in this Chamber in thanking organisations and bodies such as the CAA for their work and efforts in recent days? I’m going to focus specifically on the issue of Cardiff international airport, which was the primary focus of Russell George’s questions.

In terms of the financial sustainability of the airport post collapse of Thomas Cook, it is indeed true that it will not have a major impact on the airport, and that is because, as part of the due diligence of the application process for the loan that we provided to Cardiff international airport, we modelled a number of scenarios. One of those scenarios included the impact that the collapse of an airline would have on the airport. The model that we took was a larger airline, and, therefore, the viability of the airport is very much intact, in spite of the collapse of Thomas Cook.

However, I think the Member raises an important point concerning the long-term ownership and sustainability of the airport, and that is something that I'll be bringing back to this Chamber in the autumn. It's quite incredible; we tend to think in the UK that airports as a default should be privately owned, but this is not the case globally. I think in total there are around 4,300 airports that have service scheduled flights, but only 14 per cent of those are not in public ownership. Even airports like JFK are owned by the public. So, it's actually the model globally for airports to be owned by the public, and that should be the same for Cardiff Airport, in my view. The airport is speaking on a very regular basis with alternative airlines, other airlines that it's trying to attract into the facility, and I am very confident, based on the very recent discussions that have taken place, that new airlines will be attracted and will be providing new routes from and to Cardiff Airport.

But if I could just say, there are two major challenges that airlines are facing right now, airlines that operate from a UK base. One concerns the spending power of UK citizens, which has reduced overseas because of the fall in the value of the pound, and therefore the difficulty in attracting UK citizens to go abroad. And then the second challenge that is facing us as a consequence of uncertainties around Brexit is the fall in the pound and the fact that fuel is priced in dollars, and therefore the cost of operating airlines that are based in the UK has risen. Therefore, the sector itself is clearly in a very fragile and precarious position.