Bristol Airport Launches Legal Challenge Over Cardiff's £205m Subsidy
Bristol Airport has initiated a significant legal challenge against the Welsh Government's plans to provide £205.2 million in financial support to Cardiff Airport over the next decade. The case, which will be heard by the Competition Appeal Tribunal at Cardiff Civil and Family Justice Centre, represents the first challenge under the UK's Subsidy Control Act 2022 concerning airport subsidies.
The Core of the Dispute
The legal action stems from Welsh Government disclosures made in 2024 outlining a decade-long support package for the Rhoose-based airport. Bristol Airport, which handled 10.8 million passengers in 2025 compared to Cardiff's just under one million, argues this unprecedented state support breaches post-EU state aid regulations and creates unfair commercial disadvantage.
Bristol's primary contention centres on whether Cardiff Airport qualifies as an "ailing or insolvent enterprise" under the Subsidy Control Act. The legislation requires additional rescue and restructuring steps before subsidies can be awarded to businesses in this category. Bristol will also challenge whether the funding meets conditions established in Section 28 of the Act, which imposes restrictions on subsidies to air carriers for route operations.
Cardiff Airport's Financial Position
Cardiff Airport's latest financial accounts reveal a complex picture. While revenues increased slightly to £19.8 million in the year ending March 2025, and the business posted a positive £5.7 million on a pre-Ebitda basis, this position changes when considering government support. Factoring in an £11.8 million Welsh Government Covid recovery grant pushes the Ebitda figure into negative territory at £5.57 million.
The airport's revenue streams show commercial income from retail, catering and car-parking represents the largest contribution at £12.6 million, while landing charges to airlines accounted for £6.2 million. Since the Welsh Government's £52 million acquisition from Spanish firm Abertis in 2013, cumulative losses have reached nearly £60 million, with significant loan elements converted to equity in the wholly state-owned business.
Economic Arguments and Wider Implications
The Welsh Government maintains that Cardiff Airport plays a vital economic role, with Grant Thornton assessment estimating a £220 million gross value-added impact through direct, indirect and induced effects. The administration has already incurred £2 million in legal costs defending its position and argues the airport supports approximately 300 direct employees and thousands more through supply chains.
Potential tribunal outcomes could range from complete approval to total rejection of the subsidy package, though experts suggest a mixed ruling is more likely. Specific elements such as direct airline subsidies might be deemed non-compliant, while investments in aviation maintenance, repair and overhaul (MRO) and freight infrastructure could be permitted.
Strategic Considerations and Future Scenarios
The case arrives as Cardiff Airport celebrates attracting its first transatlantic carrier, Canadian airline WestJet, which will launch Cardiff-Toronto services in May with Welsh Government financial support. Bristol Airport's master plan to 2040 includes runway extension plans for long-haul routes, adding complexity to competitive considerations.
Should the tribunal rule against the Welsh Government, already disbursed funds would require reimbursement, potentially impacting the WestJet agreement. A significantly unfavourable outcome might prompt radical restructuring, possibly bringing the airport under direct Welsh Government control as a department function, similar to pandemic-era measures taken with the Wales & Borders rail franchise.
Industry observers question whether subsidising airlines represents sound policy, particularly given previous experiences with collapsed carrier Flybe. Former board member Andrew Sargeant has criticised previous subsidy arrangements as excessive given Cardiff Airport's financial position at the time.
Broader Context and Collaborative Possibilities
The legal challenge unfolds against a backdrop of changing airport ownership, with Macquarie Asset Management recently acquiring majority control of Bristol Airport. This development raises questions about potential future collaboration between the two airports, possibly involving operational agreements with Cardiff focusing on freight, MRO and long-haul routes while Bristol concentrates on domestic and short-haul services.
The tribunal's decision, expected before the next Senedd elections though potentially delayed to avoid political influence claims, will establish important precedents for UK airport subsidies and state aid interpretation. Both parties have committed to abiding by the ruling, subject to appeal rights, with proceedings chaired by barrister Ben Tidswell supported by tribunal members Tim Frazer and John Alty.
