Of course the WG will have patience. The reality is that CWL got hit by a triple whammy of events but it still has it's core sun routes operation and KLM still going. It'll take time to recover but I'm sure it will.

so let’s forget the charade of this being a commercial ‘arms length’ organisation - it isn’t. What happens through the winter ? More taxpayers money thrown at it ?

It depends on what the airports needs are i suppose. In the end I'm sure like many airport owners private and public the WG will have to in some way invest in the airport to keep it going or the airport will divert money intended for elsewhere to keep the business going, which also includes St Athan now and Anglesey handling.

This is utter , utter madness. The new finance director is on an advertised salary of between £85- £90,000 per annum plus an £8k car allowance.

I really despair how this is justified.

Challenging work adding up all those losses..................

I believe that the average pay for a finance director is £72000, a lot of companies will have thing's like commision and bonuses and share schemes and profit sharing schemes. So it's probable all the latter have been averaged out and added on to his salary.
Would be interesting to know what the finance director at Bristol is on!

I would say that was very cheap for an FD !

It is a company that had a £20.8 million turnover for 2018-19.

I would agree, and an FD would generally be qualified with ACA or similar, so degree level, and it certainly isn't a job for an accounts clerk!

The problem is that some people have no idea about salaries in management position, and frankly if Cardiff Airport has picked up an FD so cheaply, I just hope they're up to the job.

Two departures today as opposed to 30 exactly a year ago. The airport is truly up against the wall and will be for a long time to come. This appointment would have been acceptable last year ,

I feel if the public purse was not propping up the business, then this position is not tenable for the foreseeable future , there is not enough work for a Financial Director per se.

I agree that it is most unusual. Given the airport is owned by the Welsh Government, I would have expected this role and associated duties to have been soaked in to centralised teams. It's very unusual I'd say for them to have a direct appointment, unless they're gearing it up for private sale of course.

They run it as a separate commercial business. The WG are the major shareholders, its not a government department.

And we know why. Are you really blaming the airport management for Flybe and Thomas Cook collapse and a global pandemic?
You also need to realise that the company isn't just Cardiff Airport its also St Athan airfield and it's business park as well.
As for departures Exeter has 3 today, Norwich 2, Bournemouth 3, Southampton 8, Newquay 2 or 5 depends on Skybus, LBA 9, NCL 14 and DSA 10 according to FR24 most a lot lower than last year so CWL is not alone and yes will no doubt take a longer to recover than most of those airports.

No, but there is a link between airport performance and the impact of weak airlines going under.

Well unfortunately if Cardiff wants routes like Edinburgh and Dublin and Jersey in general it doesn't have much choice but to look to the weak airlines because the strong one Easyjet won't touch it because of their ops at Bristol.

PDX - u are a tad delusional. How can you say this is a commercial arm when it is being propped up left, right and centre by the WG ? The current management structure and costs is a joke. Please tell me how this ‘commercial’ organisation is reducing costs (permanently) and funding itself in the wake of a two thirds plus slump in business ? If I were a ‘commercial’ owner I would be seeking buyers to build Barrett or Wimpey homes (in the absence of any viable or public plans to at least make the business cash flow neutral) to realise an asset. the airport seems devoid of any strategy except the begging bowl to the WG !

i would be interested to hear your plans and thoughts to stop the airport burning cash in the next 2-4 years and a comparable ‘commercial’ business that would/could sustain such losses with little or no liquidity ?

maybe you know different to us how ‘commercial’ businesses are run.....,

isnt this supposed to be a business, not a plane spotters project ?

Controversial ? Just stating the facts...

I cannot agree with this. If I was signing a ten year deal that involved me supporting the airline (Flybe) for the beginning of the contract and make my profits at the end of the contract I would want to know what the strategy was for the airline for the next ten years including fleet planning and the resilience of the balance sheet to make sure that I could collect from them at the end of the contract. I don’t know whether they asked the question but they certainly didn’t get the answer.

and this is business - stuff happens. I would blame a management team that put all its eggs in a basket and didn’t have a risk management/register to mitigate against any ‘shocks’ - it’s not like TCX and BE weren’t on shaky grounds for an extended period of time.

I would expect the BRS FD to earn a lot more - a highly profitable business, run on true commercial reality with a substantially higher turnover. A £20m t/o business is a small business !

when I see a business plan to drastically take out cost with a coherent plan for the future I will get behind them -,whilst just relying on the Welsh taxpayer to subsidise them I will fight tooth and nail via my AM/FM/MP to hold them to account and their feet to the fire.

Just out of interest, I include an extract from a letter from the Government to the Senedd Public Accounts Committee.

‘In terms of the recently agreed extended commercial loan facility, I would like to reassure the Committee that a range of downside scenario models were included within the financial due diligence which informed our decision to award the loan – these scenarios included a “catastrophic event” resulting in significantly reduced traffic for an extended period, and a significant operator stopping its operations at CIAL.’

It shows that the Government were happy to lend on commercial terms even in the circumstances that we know find ourselves in.

interesting - but what if they have no means to repay such a loan ? Then what ? A slightly rhetorical question - I know what would happen in the ‘real’ world......

It is a business that they own and like any shareholders they can choose to invest in the business or not. They don't do the day to day running and it looks to me like they leave any strategic planning of where the business is going up to the management. As you consider the management a joke then surely you should be happy that there are changes a foot!
As for the future in the next 2 to 5 years, as I'm just a planespotter and not a business guru I'd be asking how can the airport diversify its business through St Athan and maximising the potential of the land it holds to replace the lost income from reduced passengers while looking to build those passenger numbers back up.
As for calling Redrow to build houses ask how would it look to Welsh and foreign business and to inbound tourism if Wales doesn't have an airport?

I'm curious to know what you think that the airport management should be doing to get the airport to profit in the next 2 to 5 years so it doesn't have to use loans from the WG?

Agree, Wales needs an airport. However it also needs to provide other essential services for residents and not an airport at any cost.

it also needs a focussed airport that is well run, on top of costs (especially when revenue falls of a cliff) and attempting to take some control of its own destiny (not blaming external factors).

if they can’t do this, can’t formulate a strategy and right size with the current climate then Wales will just have to be served from BRS, BHX and MAN.

if we are to subsidise heavily a £20m (small) business then I expect them to right size, slim down their senior management and other staff costs (minimal to reflect the size of the business) and reduce the burden to minimal on the Welsh taxpayer. I don’t believe a business of this size needs a Chairman, CEO, FD, Director of Ops, Head of HR, Head of Safety, Head of Commercial (!). to start with. This kind of structure might suit BRS and BHX but not this little airport on a £20m t/o. Last time I looked BRS t/o was around £85m and BHX £145m !

This approach has always baffled me - if the loan is on commercial terms, why borrow from WG, why not use a bank like the commercial business it purports to be? It's not like WG doesn't have other uses for the money

There's the rub, isn't it? If it was a commercial business, why would they be bothered? If it is an instrument of WG's industrial policy, say so.

As shareholder they can either convert the loans to equity or just defer them or issue a new loan to pay the other loan.

but if they have no income/profit after costs how do they pay any loan ? If they are vastly insolvent, where is this equity ?

That will never happen. No WG even a Tory one could consider Wales not having and airport and just be served from BRS, BHX and MAN.
As for the management there does seem to be quite a lot of them! So apart from cutting a few managers what else do you think they should be doing going forward?

Because they are government owned any commercial bank loan effects the WG block grant i believe.

because I suspect no commercial lender would touch them with a proverbial very long barge pole. Put it this way:-

you go to a lender and say I would like to borrow £x million for ongoing general expenses, but my outgoings are significantly higher than my incomings (I suspect in the case of CWL- in the absence of any mitigation) they are significantly higher, oh and I have these other ‘commercial’ loans (WG) I need to repay and the same lender also has a £52m interest in my other assets (WG).

oh and by the way I have no future visibility on any future income (we have had triple shocks you know - not our fault) and no real future strategy for either cost or income but we are important you know !

and I have this really fat employee costs and management structure - we are a proper airport you know.

I think I know what the answer would be......

Borrowing by the Welsh Government does not appear to affect its Westminster block grant as long as it keeps within its borrowing powers limit. There is a general provision to meet a current shortfall in receipts from devolved taxes, thus:

The current borrowing powers of the Welsh Ministers are set out in section 121 of the Government of Wales Act 2006 as amended by the Wales Acts 2014. They may borrow funds from the UK Government for the purpose of meeting a temporary excess of sums paid out of the Welsh Consolidated Fund over sums paid into that Fund, any amounts it appears to them are required by them for the purpose of providing a working balance in the Welsh Consolidated Fund and any amounts which in accordance with rules determined by the Treasury are required by the Welsh Ministers to meet current expenditure because of a shortfall in receipts from devolved taxes, or from income tax charged by virtue of a Welsh rate resolution, against forecast receipts.

In addition there is a power, inserted by the Wales Act 2014, to borrow money from the UK Government for capital expenditure. There is a total borrowing cap of £1 billion on this borrowing, of which no more than £150 million can be borrowed annually.

Commercial lenders can also be a source for the capital expenditure borrowing.

https://senedd.wales/laid%20document...12846%20-e.pdf

https://law.gov.wales/constitution-g...erview&lang=en

Interesting yet I'm pretty sure at one of the Senedd briefings I think it was the CFO Huw Lewis said that it effects the WG block grant.

PDX - believe it or not (and as a regular user) I would like to see the airport succeed.

what riles me is the current apparent lack of inaction, too heavy management and apparent lack (or thinking) of any future strategy.

without seeing their accounts it is difficult to say what I would do.

certainly strip all costs out to the absolute bare minimum to operate safely until business returns (and I don’t just mean furlough).

I flew through CWL 2 weeks ago (2 flights operating that day) and I saw the current MD selling coffee and the Ops Director nearby - if they have time to do this then they should be able to combine senior roles into a couple - at least temporarily.

then ruthlessly look at all operating costs.

As to the income side they need to offer aggressive deals to carriers to drive airport use and footfall.

Look to diversify to other airfield use options.

Maybe they are doing these things but as a publicly owned asset I expect them to tell us like a Plc would tell shareholders.

I would say that the majority of the roles are key roles that are required in any business. If the Airport can be run with a senior management team like this, but doesn't have the tier of middle management and unnecessary "manager" roles that many businesses have, including the likes of BRS and BHX, then i don't see what the problem is.
Without seeing an exact structure from top to bottom, we can't really make judgement on the setup. Also having a Management team that specify in the field they operate under brings better experience and knowledge. Aside from maybe Chairperson & MD/CEO, none of those roles are really linked in any way to be able to combine them.

Also don't forget we are still really in the unknown & unpredictable territory. Many services are in house and there have already been redundancies/reduced hours. Personally I really don't think they are sitting back, drinking coffee and watching tax payers money take off from an empty runway like some people on here make out. They have already diversified in many ways before Covid19 hit, this was ever since the WG bought it. There's only so much noticeable diversification that can be done when things keep going wrong like they are.

With regards to accountability they do make yearly report's to the Senedd and get scrutinsed by committee and had to do the same for the most recent loan.
Personally I think it says something about ethos if the management in a time of crisis is willing to pitch in at the coal face.
As for operating costs what can they cut? A lot of their costs come from regulation, the other costs is of course staff. CWL as far as I know hasn't cut any yet.
The new finance director is replacing Huw Lewis the CFO.
Airline wise it'll be interesting to see what happens over the next year with demand down, I'd have thought that they'd be trying to persuade TUI especially not to cut flights or based aircraft for 2021.

PDX - and that’s the rub of my argument - what are they doing to take cost out (yes staff including Senior Management) - someone needs to hold them and the WG to account as this is taxpayers money. In addition to the roles I mention above, last time I looked there were also non execs, Head of marketing, terminal manager and this is before we get to the front line people.

If you assume revenue is down c60% (probably more) in the current FY that means this is an £8m business with some days a single pax flight and on a good day, maybe 6. This will reduce significantly in a couple of months (as Winter scheds kick in).

How can this structure (and cost) be justified in the current business climate ?


I was being deliberately controversial about the MD serving coffee (but this is true) - the actions of this business do not appear to be one of a business in commercial distress and acting like a ‘normal’ commercial business to take immediate cost action.

Yes, some roles are regulatory but given low pax numbers (and no visibility of growth from anywhere) - the business, like any business, needs to right size. Where is the commercial oversight and scrutiny coming from ?

Aren’t the people of Wales entitled to ask these questions ? I just hope they have a plan as Furlough tapers off or I will be asking serious questions of my AM (who happens to also be FM) and opposition AMs as to accountability.

Well come winter TUI should be operating a daily flight except Wednesdays, KLM back to 3 daily, Qatar and Vueling should be operating 5 weekly flights each with Ryanair 1 weekly Malta. Eastern should be back with 10 weekly VLY. Doesn't seem like much but better than nothing.
When it comes to summer 2021 we will have to see what happens with airlines and by how much demand picks up.
Replacing the lost Flybe network does look like it'll be a challenge for Cardiff.
Loganair seem to have run a mile from Edinburgh and Glasgow for whatever reason.
Aer lingus obviously doesn't see CWL as a core route for Belfast and no doubt will be hoping to prop up its Dublin and Cork routes at Bristol with Welsh passengers rather than flying directly to Wales. Same with Ryanair on Dublin.
Blue Islands seem focused on Exeter and Southampton and may well be hoping Welsh passengers top up their Jersey route at Bristol as well.
Eastern might be the best option but at the moment they seem to be concerned with Southampton and Teesside.
As for scrutiny short of setting up a committee or panel or holding some sort of inquiry i don't see how the airport can get more scrutiny than it is getting now.
I think with CWL we are going to have to trust the management as its going to take a while for the airport to recover sadly.

i sincerely hope you are correct about the winter prospects - although I think that is very optimistic. However, imo, with my business perspective even that level of activity does not justify the very heavy cost and management my structure of this business.

i guess we’ll have to disagree on the airport management and strategy as you will probably have gathered, I don’t have trust and confidence in the commercial leadership of the airport. Time will tell.

That's whats onsale the last time I looked.

I think the last few months have demonstrated what is on sale and what actually flies can be quite different. TUI are still selling Spain, Canaries and Balearics for the end of this month - will they fly ?

Yep there is a possibility that some flights won't operate but that is completely out of the airports control. I think the last 6 months has shown that the airport is completely at the mercy of airlines.