Cardiff Airport posts £18.5m pre-tax loss
Welsh capital’s airport posts losses but grows turnover by £3m
Cardiff Airport has posted a pre-tax loss of £18.5m, nearly three times higher than the previous year in its 2018-2019 annual report.
The airport’s owners, the Welsh Government, said global economic factors such as climate change, uncertainty over Brexit and rising fuel prices had impacted the aviation sector during the period. The government took over the running of the airport in 2013.
But the airport’s turnover rose by nearly £3m to £20.8m and it also reported 15 months of continuous growth. The Welsh Government added that the airport contributed £250m to the economy.
Airport seeking opportunities to replace Thomas Cook
Chairman Roger Lewis said the collapse of the Thomas Cook in September had led to a "limited impact" on the 2019-2020 year with the loss of 16,000 passengers and warned the coming year would see a loss of approximately 150,000 passengers as a result of the operator going out of business. The airport was now seeking “opportunities to replace this operator.”
Lewis said the airline had attracted more passengers to the airport. The first year of Qatar Airways' flights to Doha had brought in 70,000 passengers during the 2018-2019 financial year and Flybe's business had also increased by 4 per cent. Package operator Tui had also introduced an additional 100,000 seats for summer 2019. Passenger numbers passed the 1.5 million mark in May 2018 and summer 2018 was the airport's busiest period in a decade.
Uncertainty impacts aviation sector
Mr Lewis said: "While we were very pleased to note substantial continued growth over the reporting period, we also saw increased signs of major global economic factors such as the ongoing uncertainty over Brexit and concomitant sterling weakness, climate change and rising fuel prices impacting on the aviation sector."
He said in the light of "continuing volatility" in the global economy, and Brexit and currency "uncertainty", the airport had taken the decision to write down the estimated value of the airport's intangible assets - things such as intellectual property and brand recognition - by £9.3m.
The airport said this was the main reason for the loss, although the write down is about half the pre-tax losses for the year.
The airport had seen a large rise in EBITDA (earnings before interest, tax, depreciation and amortisation) from £7,000 in 2018 to £77,000 in 2019. The report added that Cardiff Airport had "invested heavily" in its commercial operations at the end of the 2017-2018 financial year and was continuing to see the benefit of increased commercial returns from these operations. The improvements included increasing the size of the departure lounge and the departure terminal's food and shopping outlets, and offering a car park meet and greet service.
Headcount grows by 9 per cent
Huw Lewis, chief operating officer at the airport, said: "During this period we have invested in our operations and prepared for taking over the operation of the St Athan airfield.”
"We have increased our headcount by over 9 per cent to meet the growing business demands and brought forward our commitment to pay at least the real living wage to all Cardiff Airport employees."
A Welsh Government spokesman said: "Since our acquisition of Cardiff Airport passenger numbers have increased by 70 per cent. The airport contributes a quarter of a billion pounds to the Welsh economy every year and sustains around 2,400 aviation related jobs."