There is no doubt that Cardiff Airport has secured a major coup in attracting Qatar Airways into the region but with the airport hoping to hit 3 million passengers by 2025, Air Passenger Duty (APD) devolution has to happen.
The Qatar airways move into Cardiff baffled analysts across the globe with it being described as genius or madness depending on who you asked. One thing that is agreed upon is that for it to be a success it has to be price competitive to convince people from the South West region to use Cardiff Airport rather than London airports.
Running a Boeing 787 Dreamliner costs around £8,000 per hour and Qatar Airways plans to be doing this daily from Cardiff Airport which puts the figure for a flight between Cardiff and Doha as £65,000. At 100% load (which no airline achieves) puts the break-even figure at around £258 per seat. Factor APD into that and it becomes £333per seat (economy) and £414 per seat (other classes).
According to Qatar Airways CEO Akbar Al Baker, there are already deep concerns within the Qatar Airways board that there simply aren’t enough passengers to justify the route. Speaking at a trade mission in Qatar Mr Baker said: “We have to make sure where we operate, we’re operating commercially and that we make sure the route is developing very fast and with the right kind of people and being the right kind of yield”.
Speaking about choosing Cardiff over Bristol Mr Baker said that there was immense pressure from Welsh ministers, airport chiefs and diplomats.
Without Air Passenger Duty devolution, however, it’s difficult to see how the route can be competitive. Flybe has already cancelled its route between Cardiff and London this year citing Air Passenger duty as the barrier to making it profitable.
Cardiff Airport Chairman, Roger Lewis has recently been open about the prohibitive nature of the flying tax and Cardiff Airport Chief Executive, Deb Barber called it “a punitive tax that only serves to hinder Cardiff Airport’s ability to continue on this journey of growth” adding that “it should be scrapped at the earliest opportunity.”
The biggest barrier to Air Passenger Devolution for Wales and by proxy, the success of Cardiff Airport and Qatar Airways route, is Wales’ own MP, Alun Cairns. As Welsh Secretary, he has repeatedly denied Wales the same powers as Scotland and Northern Ireland and has, in fact, voted to increase the rate of the flying tax on every occasion. A situation made worse by the fact that as well as being Welsh Secretary he is also MP for the Vale of Glamorgan, home to Cardiff Airport.
At an event at the British Embassy in Doha, Mr Cairns said: “It’s an opportunity for inbound traffic but also outbound traffic so Cardiff becomes part of this global Britain that we’re developing.” – but it is exactly that “outbound traffic” that will be taxed under Air Passenger Duty rules.
Building on Qatar Airways route is key to the future plans for the airport which, according to Mr Lewis include a new terminal and 3 million passengers by 2025. Something that analysts say is unachievable without devolution of Air Passenger Duty.