The Cardiff Airport subsidy control ruling

On 7 April 2026, the Competition Appeal Tribunal ruled in the high profile case of Bristol Airport v Welsh Ministers finding that the Welsh Government had satisfied the requirements of the Subsidy Control Act 2022 in awarding a grant worth £205.2 million to make extensive improvements to Cardiff International Airport.

Background

The UK's airport and aviation sector is estimated to contribute £32bn to the economy each year. The public sector has sought to support further growth in this sector by providing public funding towards the costs of upgrades to equipment, expansion projects and the development of green aviation technology.

In April 2025, the Welsh Government awarded a grant of £205.2m to Cardiff International Airport Limited for a range of improvements, including the construction of a new hangar village, improved cargo facilities and upgraded passenger services. Part of the funding was also earmarked to be used to incentivise airlines to open new routes at the airport.

The value of the subsidy was referred to the Competition and Markets Authority as a 'Subsidy of Particular Interest' by the Welsh Government and a report putting forward improvements which could be made to the Welsh Government's assessment of the Subsidy Control Principles was published on 2 October 2024.

This report noted that "several UK airports expressed concerns about distortions to competition and investment" including Bristol Airport, Birmingham Airport and Regional & City Airports (which operates airports in Exeter, the Solent, Bournemouth and Norwich).

On 22 July 2025, the Competition Appeal Tribunal published a Notice of Appeal submitted by Bristol Airport claiming the Welsh Government's decision breached the Subsidy Control Act 2022 on the following grounds:

a failure to identify that Cardiff Airport was an “ailing or insolvent enterprise” which would require additional steps (relating to rescue and / or restructuring) to be applied prior to the decision to award the subsidy;
a failure to satisfy Section 12(1) of the Subsidy Control Act 2022, which requires proper consideration of each of the Subsidy Control principles and there to be reasonable grounds to conclude that each of the principles is met; and
a failure to satisfy the conditions set out at Section 28 of the Subsidy Control Act 2022, which sets out a conditional prohibition for subsidies that are awarded to "air carriers for the operation of routes".

Bristol Airport requested a declaration from the Competition Appeal Tribunal that the decision made by the Welsh Government was unlawful and sought the recovery of any subsidy that has already been paid to the airport. The case was heard in February 2026 in a two-day hearing.

The Competition Appeal Tribunal decision in the Subsidy Control case of Bristol Airport v Welsh Ministers (2026)

The Competition Appeal Tribunal's decision primarily focussed upon the allegation made by Bristol Airport that the Welsh Government breached the Subsidy Control Act 2022 by not recognising the intervention as a rescue and / or restructuring measure and therefore failed to satisfy the requirements set out in Sections 19, 20 and 24 of the Subsidy Control Act 2022.

In approaching the issue, the Competition Appeal Tribunal reiterated the position set out in the Weis Case that Subsidy Control challenges constitute a form of judicial review and therefore:

the public authority decision-maker is obliged to take into consideration only relevant matters, and to exclude irrelevant matters;
in making the decision, reasonable steps must be made to consider the relevant information and to make the decision correctly; and
although the rationality of a decision may be challenged, this will be on the basis that the decision is outside the range of reasonable decisions open to the decision-maker and / or that there is a demonstrable flaw in the reasoning which led to it (for example, significant reliance has been placed on an irrelevant consideration, there was no evidence to support an important step in the reasoning, or the reasoning involved a serious logical or methodological error).

Rescue Subsidy

The Competition Appeal Tribunal firmly rejected Bristol Airport's argument that the Welsh Government should have treated the measure as a rescue and restructuring subsidy. In doing so, the Competition Appeal Tribunal took into account reports commissioned by the Welsh Government which supported the argument that the airport was a going concern.

The Competition Appeal Tribunal also rejected arguments that a pre-existing credit facility, worth £33m and provided by the Welsh Government ought to have been disregarded when evaluating Cardiff International Airport's solvency, pointing out that the focus of the Tribunal was the subsidy under review, not the compliance of any other award.

The Competition Appeal Tribunal also took the view that the requirements of Sections 19 and 20 of the Subsidy Control Act 2022 will only apply when the purpose of the intervention is to rescue or restructure an enterprise.

This position aligns with paragraph 5.38 of the Statutory Guidance, which states "there is no wider prohibition against giving subsidies that are not rescue or restructuring subsidies to ailing or insolvent enterprises".

However, this position will surprise those who remember the points made by Business Secretary Kwasi Kwarteng when the Subsidy Control regime was being designed. Unveiling the regime he said "encourage wasteful use of public money by propping up failing businesses", yet the protections appear rather easy to sidestep.

The position is also likely to cause further dissatisfaction within the European Commission, given that the EU State aid rules are much stricter in regard to support to undertakings in difficulty and there was an expectation that after Brexit there would be a common approach to restricting the financing of businesses in difficulty, following the negotiation of Article 367(3) of the EU-UK Trade and Cooperation Agreement in 2020.

Fundamentally, the Competition Appeal Tribunal concluded that the Welsh Government was entitled to decide that the subsidy to Cardiff International Airport constituted investment and development support, rather than rescue aid. In doing so the Competition Appeal Tribunal noted the characteristics of the support, including its multi-year structure, the link to growth objectives and the absence of a short-term emergency rationale all pointed away from a rescue aid classification.

Practitioners will need to give greater consideration to the purpose of their subsidies in light of this decision, especially in situations where the recipient is facing financial challenges. However, they will also need to be mindful that the Competition Appeal Tribunal is willing to look into the supporting documentation to verify the public authority's intention.

Application of the Subsidy Control Principles

Bristol Airport argued that the Welsh Government "failed in a number of respects properly to apply many of the Principles".

This was the first time the Competition Appeal Tribunal has been asked to review a Principles assessment. The Competition Appeal Tribunal took a methodical approach, recognising that Section 12 of the Subsidy Control Act 2022 requires each Subsidy Control Principle to be considered individually by the public authority, ahead of an overall assessment being undertaken to determine whether Section 12(1)(b) of the Subsidy Control Act 2022 has been fulfilled.

In doing so the focus was upon determining whether Bristol Airport had made a credible argument that the reasoning applied to the Principle was irrational.

In doing so, it stated that most judicial review "challenges fail simply because they do not in substance illustrate any irrationality but rather illustrate a difference of opinion about the weight to be given to matters which were obviously the subject of consideration by the Respondent. That is not a proper basis on which to mount a challenge".

In respect of Principle A, Bristol Airport submitted that the Welsh Government wrongly identified the purpose of the subsidy as "addressing the identified equity issues by growing the regional activity associated" with the airport "and maximising the potential agglomeration effects linked to wider aviation and aerospace sectors", whereas the "the real purpose, as disclosed by contemporaneous documents, was to preserve the existence of an airport in Wales". This argument was branded "unsustainable" given that even if there was a different public policy objective taken into consideration, there was no compelling evidence that these other considerations "displaced, or were intended to displace, the broader policy objectives identified" by the Welsh Government.

Similarly, in respect of Principle B, the argument was made that the subsidy offered was "disproportionately large" but such an argument fell short of demonstrating the Welsh Government "acted irrationally".

The same approach was applied to Bristol Airport's argument in respect of Principle G. Whilst Bristol Airport argued the Welsh Government's assessment was "over-simplistic and incorrect", the Competition Appeal Tribunal concluded that Bristol Airport's arguments amounted to "nothing more than disagreement with the conclusions" rather than the identification of irrationality in the decision-making process.

Practitioners working within the public sector can draw comfort from the Competition Appeal Tribunal's assessment of the Principles. Disagreement about how issues were factored into the assessment process or the weighting given to particular arguments within the Principles is insufficient, what the Competition Appeal Tribunal is looking for is evidence that no reasonable authority in the same position would have acted in the same way.

Air carriers

Bristol Airport argued Section 28 of the Subsidy Control Act 2022 had not been followed by the Welsh Government. The Competition Appeal Tribunal considered the scope of Section 28, concluding that this is only applicable where subsidies will be given directly to air carriers.

Therefore the Competition Appeal Tribunal rejected all the grounds brought by Bristol Airport, unanimously concluding that the Welsh Government had awarded the subsidy to Cardiff International Airport in compliance with the Subsidy Control Act 2022.

What is the significance of the Cardiff International Airport case?

The Cardiff Airport Case is the first Subsidy Control challenge relating to the aviation sector.

It is also the fourth Subsidy Control case heard by the Competition Appeal Tribunal so far. All the cases decided by the Competition Appeal Tribunal have been in favour of the public authority. This underlines the challenge of demonstrating that a public authority decision breaches judicial review principles. Despite the lack of success for those challenging decisions under Subsidy Control law so far, five cases have been listed in the Competition Appeal Tribunal since May 2025, with a further case due to be heard in the Court of Appeal.

The case is significant because of the points made around the rescue and restricting subsidies. It is likely to fuel calls for stronger rules to be introduced to ensure better protections are in place to prevent public funds being used to support businesses in difficulty, without a restructuring plan being put in place first.

It is also likely to raise questions about whether the regime needs to be updated to strike a better balance when it comes to challenges around the application of the Subsidy Control principles. When the regime was designed the Principles were presented as a key safeguard, but if the bar for challenge is raised too high, this will no longer be the case.

Finally, there is likely to scrutiny around the costs incurred in this case. The Competition Appeal Tribunal has been eager to ensure that the challenge regime is cheap and fast, but costs in cases have steadily increased.

Will the case make it more likely that airport and airline subsidies are challenged?

Had the decision gone in favour of Bristol Airport then it would have given greater confidence to challengers, especially those in the aviation sector. However that has not happened and therefore this decision is unlikely to spur more challenges to be brought.

That said, the aviation sector has been the source of many challenges in State aid law (in part due to the fierce competition within the sector, but also that investments are often of high value). Therefore it seems likely challenges in the aviation sector will emerge in the coming years.

Conclusion

The Competition Appeal Tribunal has dismissed a challenge by Bristol Airport claiming that the process to award a £205m package of public funding to Cardiff International Airport breached the Subsidy Control Act 2022. The Welsh Government will be relieved that its decision making processes have been found not to be deficient by the Competition Appeal Tribunal, but the case will amplify calls for the Subsidy Control Act 2022 to be updated so that the regime is more effective.

Alexander Rose leads Ward Hadaway's Subsidy Control team. The firm’s Subsidy Control experts have advised upon public funding initiatives to expand airports, successfully advised in Subsidy Control litigation and supported public authorities referring Subsidies of Particular Interest to the Competition and Markets Authority.