Welsh government buys Cardiff Airport for £52m

Carwyn Jones, the First Minister of Wales, has announced the purchase of Cardiff Airport by the Welsh government in a £52 million (€61 million; $79 million) deal. 

 

The deal follows a period of due diligence and negotiation with TBI, the airport’s previous owner. TBI is part of Spanish developer Abertis’s airports unit, having been acquired by Abertis Airports in 2005. It was advised on the sale by Clifford Chance.

 

A statement from the First Minister said it was “essential” that the airport’s “future is secured and that we develop high quality sustainable services”. 

 

The government has been critical of the airport’s performance, with passenger numbers slumping from a peak of 2 million in 2007 to just over 1 million in 2012. 

 

However, the government was quick to point out that it would not be running the airport. “It will be managed at arm’s length from government on a commercial basis and, over time, I expect to see a return to the public purse on the investment,” said Jones in a statement. 

 

He added that a chief executive of the airport would be announced “in due course”. In the meantime, Lord Rowe-Beddoe, a British politician in the House of Lords and former chairman of the Welsh Development Agency, has been appointed chairman of the airport’s board. 

 

It is understood that the board will ultimately look at the possibility of bringing in a commercial operator to run the airport.  

 

With the sale of Cardiff, TBI’s portfolio now numbers seven remaining airports: London Luton and Belfast International (UK); Stockholm Skavsta (Sweden); La Paz, Santa Cruz and Cochabamba (Bolivia); and Orlando Sanford (US). 

 

Last month, it was announced that the Bolivian government intended to nationalise the three airports owned by Abertis. President Evo Morales said the privatisation process had been “robbery” and “looting” and accused Abertis of making “exorbitant” profits. 

 

Abertis said it had made significant investments in the airports since it acquired them in 1997, including spending $12.6 million in capex and paying a total of $48 million in fees and tax to the Bolivian government from 2005 to 2012. It also said it was seeking $90 million in compensation from the government for alleged breaches of concession obligations.