UK Regional Airports Subsidy Skirmish

On 20 June 2025, Bristol Airport filed an appeal at the Competition Appeal Tribunal (CAT) challenging a £205.2 million subsidy granted by the Welsh Government to Cardiff International Airport (Cardiff Airport).(1) Bristol Airport contends that the subsidy decision is unlawful and seeks to have it set aside, with any funds already disbursed repaid.(2)

Background to the Subsidy

In late 2023, the Welsh Government announced its intention to provide ongoing, scalable financial support to Cardiff Airport. The subsidy was formally announced on 22 July 2024 (3) and, following amendments made in response to Competition and Markets Authority advice,(4) it was awarded on 3 April 2025. The £205.2 million is to be paid in phases over 10 years, with stated objectives of the scheme being growing aviation and aerospace business at Cardiff Airport, stimulating associated regional economic activity, and enabling tourism, arts, and industries in Wales to flourish.

The Welsh Government has also owned Cardiff Airport since 2013 when it purchased it from its previous private sector owner following the losses to passenger volumes after 2008.

Bristol Airport's Challenge

Bristol Airport was identified by the Welsh Government's own impact assessment, as the airport most likely to be affected by the grant of the subsidy. Approximately 20% of Bristol Airport's passengers originate from Wales—a figure that exceeds Cardiff Airport’s total passenger numbers.

The appeal is based on four grounds:

(i) Failure to determine whether Cardiff Airport was at risk of insolvency, as required by the relevant legislation

(ii) Failure to assess whether the subsidy constituted rescue/restructuring aid and, consequently, failure to comply with additional legislative requirements

(iii) Incorrect application of the subsidy control principles, and

(iiii) Failure to consider whether elements of the subsidy might constitute aid to air carriers for route operations.

Procedural Timeline

The Welsh Government must file its defence by 26 September 2025, with the substantive hearing anticipated for early February 2026.(5)

Significance of this appeal

We highlight this case for four key reasons. First, this represents the first subsidy control appeal concerning the aviation sector since the Subsidy Control Act 2022 took effect in January 2023 (and the fourth in general). This makes it a significant test case for the new regime as to how the Subsidy Control Principles are applied in practice when public authorities, be it devolved, regional or local, provide financial assistance to regional airports.

Second, this case highlights risks where a public authority acts both as the subsidy provider and the main shareholder of the recipient. There might be some parallels to situations where a public authority proposes to grant a subsidy to a company which it owns.

Third, should the CAT uphold the subsidy, this could facilitate further investment and development at Cardiff Airport potentially encouraging some of Welsh-based users of neighbouring English airports to use the Cardiff Airport as an alternative.

Four, it is important to point out here that under current Welsh devolution rules, the regulation of distortive or harmful subsidies is a matter reserved for the UK government.(6) This means that the Welsh Government will not be able to introduce the legislation in the Senedd to allow the subsidy to go through, as it is outside of the scope of its powers.

We will continue to monitor develop developments in this case. Please contact TLT’s Competition, Regulatory and Trade team if you wish to discuss this further.