Whitehall Warning Over Welsh Government Loans to Cardiff Airport

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The UK Government in Whitehall have raised questions over the Welsh Government’s loans to Cardiff Airport (owned by the Welsh Government) and the fact that they could breach EU guidelines over state-aid to airlines.

In what many are describing as a politicaly motivated move ahead of the Welsh Assembly elections, the Department of Transport have asked the Welsh Government for “assurances to the UK government that it is complying with European Union state aid rules on funding provided to airports or airline”.

The move comes as a leaked memo seen by the BBC sets out how £12m GBP is being used to provide marketing support for new Flybe routes from Cardiff Airport. FlyBe recently returned to Cardiff as a base after previously pulling out of the region.

The Welsh Government purchased Cardiff Airport in 2013 and it was loaned £10m GBP for improvements to its infrastructure and terminal. The Welsh Government also agreed a futher £13m GBP loan to develop new routes and if the memo seen by the BBC is genuine it would seem that almost all of that is being spent on FlyBe.

A Welsh Government spokesperson stated “As a pro-business government, the agreement of commercial loans with businesses is neither novel nor outside of the usual range of Welsh government practice. In this regard, Cardiff airport is being treated no differently to any other commercial organisation.”.

Cardiff Airport Managing Director Debra Barber added “Having taken independent legal advice in connection with these loans and their uses, we are confident there are no state aid issues”

No official allegations have been made to the EU regarding Cardiff Airport’s use of loans from the Welsh Government.

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