Bristol Airport has lost its appeal against the Welsh Government's plans to provide £205 million in subsidy support to rival Cardiff Airport over the next decade. The Competition Appeal Tribunal rejected the appeal, upholding an earlier judgment from April that dismissed Bristol's claims of state aid breaches.
Background of the Dispute
Bristol Airport, owned by Macquarie Asset Management, argued that the financial support for Cardiff Airport—acquired by the Welsh Government in 2013 for £52 million—violated state aid rules under the Subsidy Control Act. Bristol claimed the subsidy provided taxpayers' money to what it described as an ailing or failing business, putting its own operation at a commercial disadvantage against its closest competitor.
Original Judgment and Appeal
The original case was dismissed in April after a two-day hearing in Cardiff in February. Bristol Airport subsequently lodged an appeal on six grounds, including a claim that the tribunal failed to properly consider whether Cardiff Airport was ailing or insolvent at the time of the subsidy announcement.
The Competition Appeal Tribunal, chaired by Ben Tidswell, rejected all six grounds. In its ruling, the tribunal stated: "Bristol's challenge seems to miss the point that the failure of its original second ground of challenge under section 70 of the Subsidy Control Act, namely that if an organisation was ailing or insolvent, only rescue or restructuring aid could be given, means that the financial status of Cardiff Airport was not determinative of whether aid could be given."
The judgment further noted: "In relation to evidence about Cardiff Airport's health, the tribunal found that the existence of the ESCF (extended standard credit facility from the Welsh Government, provided in response to the pandemic to support its recovery) was the main reason why it was not ailing or failing at the time the subsidy was given. Given that the tribunal accepted that this was the correct counterfactual, it was largely dispositive of the question of whether Cardiff Airport was ailing or insolvent."
The tribunal described Bristol's arguments about disregarding the ESCF as "hopeless and have no prospect of success on appeal."
Next Steps and Legal Costs
Bristol Airport is now considering whether to take the case to the Court of Appeal. However, after two setbacks and the prospect of additional legal costs, it may decide to end its legal challenge. The Welsh Government has not disclosed its legal costs but will seek full financial recovery from Bristol Airport. Last October, former Economy Minister Rebecca Evans approved up to £2 million for the 2025-2026 financial year to commission specialist aviation legal and technical advice.
A Welsh Government spokesman said: "Until the litigation has concluded, it would not be appropriate to comment." A spokesman for Bristol Airport stated: "We are looking at next steps and keeping all of our options open at the current time."
Details of the Subsidy and Cardiff Airport's Performance
The Welsh Government's subsidy support, with an initial £20 million already drawn down, is designed to be equally split between attracting new airlines to the Rhoose-based airport and encouraging aviation training, maintenance, repair, and overhaul investment. The new Plaid Cymru Welsh Government intends to continue the subsidy plan set out by the previous Labour administration.
In the 12 months to April this year, Cardiff Airport welcomed just over one million passengers, still below its pre-pandemic level of 1.6 million. However, according to the Civil Aviation Authority, the airport recorded a 24% increase in passenger numbers in the first quarter of this year compared to Q1 2025, the second biggest rise of any UK airport. Under previous ownership (TBI), the airport reached a high of 2.3 million passengers in 2007.
Jon Bridge, chief executive of Cardiff Airport, said: "Welcoming more than one million passengers is a major milestone for Cardiff Airport and a clear sign of the growing demand for flights from Wales. To be recognised by the Civil Aviation Authority as the second fastest-growing airport in the UK is a fantastic achievement and reflects the hard work of our colleagues and partners, as well as the confidence passengers and airlines continue to place in Cardiff. We are focused on building on this momentum, expanding connectivity and delivering long-term benefits for Wales and the wider economy."
To date, the Welsh Government has provided around £200 million in financial support to Cardiff Airport, including the £52 million acquisition cost from Spanish firm Abertis. The majority of what was repayable debt has been converted into equity.
