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Airport made PS1.7m loss before it was bought out; LOSS OF BMIBABY GIVEN AS REASON.

Byline: PETER LAW peter.law@walesonline.co.uk

CARDIFF Airport suffered an operating loss of almost PS1.7m last year, according to its latest set of accounts.

Accounts filed with Companies House show the operating loss for Cardiff International Airport Limited was PS1,694,000 for the year ending December 31, 2012.

Its loss was blamed on a drop in passenger numbers of 16%, largely due to the withdrawal of airline bmiBaby in 2011.

However, it is largely offset by a multi-million-pound tax credit.

The PS1.7m operating deficit was recorded just three months before the Welsh Government purchased the Rhoose terminal for PS52m from its Spanish owners Abertis.

The Welsh Conservatives yesterday said it raises questions over the value for money for taxpayers of the takeover.

The director's report says earnings before interest, tax, depreciation and amortisation (ebidta) fell by 61%, from PS2m in 2011 to PS798,000 last year.

It goes on to say there are signs passenger numbers will rise in 2013, with growth expected in low cost and charter flights.

Turnover dropped from PS16.8m in 2011 to PS14.8m in 2012, with administrative expenses only falling slightly from PS17.1m to PS16.5m.

However, the operating loss of PS1.69m was largely offset by a tax credit, resulting in an after-tax loss of PS151,000 for the financial year.

According to the accounts, the tax credit is the result of a settlement on issues relating to "prior year tax computations".

Net assets of the now publicly-owned company are valued at PS33.5m, compared with PS36.2m the previous year.

Welsh Conservatives leader Andrew RT Davies said: "We said at the time of purchase that PS52m sounded rather steep, and certainly a huge sum of money to suddenly pull out of the bag at the end of a financial year.

"Immediately after the purchase this view was endorsed by industry experts, some of whom questioned whether the Welsh Government had paid over the odds for what was a struggling airport.

"Now it has emerged that the company was operating at a huge annual loss in 2012, just weeks before the purchase was announced.

"Taxpayers will want to know whether the Welsh Government had made adequate investigations into the financial health of the airport before signing the deeds and whether this state of affairs was reflected in the asking price. I find it very hard to imagine that this worked out as value for money."

Mr Davies said the investment needs to "pay off" for taxpayers and a similar operating loss for 2013 would be "unacceptable".

The Liberal Democrats' business spokeswoman Eluned Parrott said: "Taxpayers deserve to get good value for money and they need an assurance that the Welsh Government has a plan so that the airport doesn't become a black hole into which Welsh taxpayers' cash gets thrown with no tangible level of return.

"It's now been nine months since the Welsh Government bought this airport and we have had no sign of it attracting any new flights to the airport, which is what the public and businesses want."

Cardiff Airport chief executive Jon Horne said he was optimistic about the future potential of the airport.

He said: "August figures show passenger numbers totalling 148,220 for the month, an increase of 14% over August 2012, continuing the trend of May, June and July. We have already announced increased services for both summer and winter 2013 and are working hard to get more airline capacity in place.

"We are confident we shall continue to make progress and remain focused on delivering more capacity and an improved route network for the people of Wales."

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Cardiff Airport, which has been in public hands since March
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Publication:Western Mail (Cardiff, Wales)
Date:Sep 26, 2013
Words:620
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