Thursday, 24 November 2011

The South’s economy risks being grounded

The importance of airports is increasingly in the news, most obviously the current debate concerning the establishment of a major new hub in the Thames Estuary. However there is an issue of concern far closer to home in the form of Cardiff International Airport, a facility with great economic potential but, like so much under Wales’ long-serving Labour governments, one that is undergoing notable decline and risks becoming a lost opportunity.

Statistics can often be interpreted in different ways, but it is hard not to conclude that figures associated with Cardiff Airport paint an increasingly gloomy picture. In the middle of the last decade, passenger numbers were 2 million; by 2010 they had fallen to 1.4 million. Between 2009 and 2010 alone the total freight handled at Cardiff Airport decreased by a staggering 84%. Bmibaby, one of the principal low-cost airlines, ceased operations in 2011, and Cardiff Airport’s direct routes are principally short-haul flights to Europe, with Paris and Amsterdam being the only European capitals visited. If we compare all this to Bristol Airport, the contrast (and Cardiff’s competitive disadvantage) is all the more glaring. Over the 2000-2010 period passenger numbers at Bristol grew from 2.1 million to 5.7 million, and its share of the UK passenger market grew from 1.2% to 2.7%. Bristol offers direct flights to Florida and Mexico and almost every European capital city and most major ones.
1.4 million people live within a 20-mile radius of Cardiff airport, and it is extremely disappointing to think that many would consider it easier to travel to Bristol or even to a London airport to catch a flight. Of course, a Catch-22 situation exists here: a limited choice of routes at Cardiff will deter increased passenger numbers, but low passenger levels will discourage airlines from opening new routes: a perpetual downward spiral. It is therefore tempting for the airport’s management to prefer tried-and-tested routes, many of which are to holiday destinations. Indeed, during 2010, Spain and the Canary Islands together accounted for 43% of all international air passenger traffic to and from Cardiff Airport. Of course there is nothing wrong with providing such routes, but the risk of relying on primarily recreationally focused air-traffic is that it likely to decrease during difficult economic times, as was Bmibaby’s reason for quitting Cardiff. We need to generate as many inbound passengers as outbound.
The First Minister has said that Wales should not simply expect foreign visitors and investment to come to us, but that we should reach out to them and encourage commercial relationships. No one would disagree with this aspiration, but we need to ask how exactly such foreign investment will get to Cardiff in the absence of suitable direct routes, and also what impression visitors will have of us when they arrive, especially the efficiency of any transport network that serves Cardiff and the wider region. Ultimately the airport’s management are responsible for relations with airlines, landing fees, and so on, but the Welsh Government can still play a role by making marketing money available to showcase Wales as an attractive business destination for foreign markets and airlines. Arguments may also exist for the provision of financial commitments from the Welsh Government to help underwrite any potential losses in the first few years while new direct routes seek to build up passenger numbers. However this would only be acceptable for routes with realistic long-term prospects and positive economic and investment impact for the region.
Discussions are apparently underway regarding a direct route between Cardiff and the municipality of Chongqing in China. China is predicted to become the world’s leading economy by 2050, perhaps even sooner, and so is a key growth economy and major foreign investor. However we should not completely focus our attention eastward.  By 2050, the US will be the next most prosperous world economy, with a healthier population demographic than China and a per capita income three times greater. With Bristol having lost its New York service in 2010, an opportunity exists for Cardiff to step in and attract two-way passenger traffic and commerce between Wales and North America, laying the foundations for a prosperous long-term air-link, as called for in our manifesto. Likewise, with Brazil, Mexico, Columbia, Argentina and Venezuela currently or soon to experience significant growth levels, the possibility exists for Cardiff to become a natural UK gateway to North, Central and South America. With new routes to our East and West, and improved commercial relationships as a result, so too can our local, regional and national economies take flight.