Bristol Airport has been granted permission to take its legal challenge against the Welsh Government's £205m financial support package for Cardiff Airport to the Court of Appeal.
The airport's initial challenge was rejected following a two-day Competition Appeal Tribunal hearing in February. The tribunal ruled in favour of the Welsh Government on all grounds in a judgment handed down in June.
Legal Challenge History
Bristol Airport had argued that the subsidy for the Welsh Government-owned airport breached the Subsidy Control Act, legislation introduced after the UK left the EU and its state aid regime. Among its arguments was that taxpayers' money should not be used to prop up what it described as an ailing business.
It also claimed that the funding represented unprecedented state support for a UK airport and would put Bristol at a commercial disadvantage compared with its nearest rival.
Following the judgment, Bristol Airport, owned by Macquarie Asset Management, part of Australian financial services group Macquarie, sought permission to appeal. The Competition Appeal Tribunal rejected the appeal on all six grounds.
Appeal Granted
However, Bristol Airport has now been granted permission to take its case to the Court of Appeal. The order was made by Lord Justice Green, and the intention of the Court of Appeal is to list the appeal to be heard in Cardiff next year.
It is understood that the appeal was granted on all six points raised by Bristol's legal team, including the argument that Cardiff was an ailing business at the time of the subsidy announcement and any such support could only be applied for the purposes of rescue or restructuring, as well as indirect subsidies, like direct, to airlines are not permitted under the legislation.
While loss-making, the financial accounts of Cardiff Airport continue to be signed off by independent auditors with going concern status.
Potential Supreme Court Appeal
If the appeal outcome is favourable to Bristol, whether on all grounds or a number of them, the Welsh Government could in theory seek an appeal itself to the Supreme Court.
Commenting on the latest development, the Welsh Government said: “We note the Court of Appeal’s decision to allow Bristol Airport permission to appeal the Competition Appeal Tribunal ruling that our programme of public investment into Cardiff Airport is lawful and can continue on its current terms. The matter will now proceed to an appeal hearing. As this is live litigation, we cannot comment further.”
A Bristol Airport spokesman said: “We welcome that permission to appeal has been granted on all grounds. The £205m subsidy is unprecedented in UK aviation and comes on the back of £181m of taxpayers’ money that Cardiff Airport has already received.”
Subsidy Details
Before the latest subsidy package, the Welsh Government had provided £181m in support to Cardiff Airport. This included the £52m it paid to acquire it from Spanish company Abertis in 2013.
Most of the airport's repayable debt has since been converted into equity. The additional subsidy package, which the new Plaid Cymru administration in Cardiff Bay has committed to using in full after inheriting the option from the previous Labour administration, would take total Welsh Government support to nearly £400m.
More than £20m of the subsidy has already been allocated. The funding is intended to support investment in aircraft maintenance, repair and overhaul, general aviation and freight. Around £100m is also earmarked for subsidies to attract new airline operators.
The latest figures from the Civil Aviation Authority show that Bristol Airport handled nearly 11 million passengers in the 12 months to the end of August this year, compared with just over one million at loss-making Cardiff Airport. Cardiff's passenger numbers remain below the 1.6 million recorded before the Covid-19 pandemic. Around 20% of Bristol Airport's annual passengers are drawn from Wales.
