Aviation subsidies brought into the spotlight by the Cardiff Airport Subsidy Control case
4th February, 2026
On 9 February 2026, the Competition Appeal Tribunal will hear the UK's first Subsidy Control case relating to financial support to an airport.
Given there’s been over 25 challenges brought under the EU State aid regime relating to the aviation sector within the last seven years, many subsidy control practitioners have found it surprising that the first 1,000 days of the UK’s subsidy control regime have passed without a challenge being heard that relates to the public funding of either an airport or an airline. In this article, Alexander Rose looks into the case of Bristol Airport v Welsh Ministers and considers why there have been fewer challenges to the aviation sector than under the EU State aid regime.
Introduction
The UK’s aviation sector is estimated to contribute £32bn to the economy each year. Given its national importance, the public sector has actively sought to support the growth of this sector, including through the use of public funding. For example, in January 2026 the government announced that £43m of public funding will be made available to support the development of green aviation technology, whilst in December 2025 Luton Borough Council placed plans to expand passenger capacity at its wholly owned airport[1], from 19 million to 32 million per year, at the heart of its growth strategy.
The aviation sector has particular characteristics which make challenges under competition law more likely. This includes an intrinsically high cost base, a few dominant operators and intense, price-driven competition.
The Covid-19 shutdowns saw state support for the aviation sector soar – in the European Union over €34bn of State aid was set aside for the sector. Under EU State aid law such measures had to be approved by the European Commission. 26 of these measures have been challenged in the last seven years, primarily by one operator (Ryanair). Ten challenges have been successful.
Bristol Airport v Welsh Ministers (2026)
The case of Bristol Airport v Welsh Ministers (2026) stems from a subsidy package worth up to £205.2 million that was awarded by the Welsh Government to Cardiff International Airport Limited on 3 April 2025. It is anticipated that this subsidy will be used to cover the costs of upgrading Cardiff Airport, including through the construction of a hangar village, improved cargo facilities and upgraded passenger services. Part of the funding will be directed to airlines in the form of incentives to locate or expand operations at the airport.
The Welsh Government’s decision to award the subsidy was justified against the subsidy control Principles at Schedule 1 of the Subsidy Control Act 2022 and assessed against the prohibited categories set out at Part 2 of the Act.
The value of the subsidy necessitated a referral to the CMA under Section 52(1) of the Act. The CMA report highlighted a number of areas for improvement, but also articulated concerns raised by rival airport operators, 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 which alleged that the Welsh Government’s decision breached the Subsidy Control Act 2022 on the following grounds:
a) 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;
b) 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
c) 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 is seeking an order from the Competition Appeal Tribunal that declares the decision made by the Welsh Government to be unlawful and recovers any subsidy that has already been paid to the airport. The case is listed for a two day hearing beginning on Monday 9th February 2026.
Why is Bristol Airport v Welsh Ministers an important case for subsidy control practitioners?
The case of Bristol Airport v Welsh Ministers will see the Competition Appeal Tribunal scrutinise how a public authority has applied the subsidy control principles, whereas the first two cases (the Durham Case and the Weis Case) have focussed upon whether a subsidy was awarded. Whilst we know that Judicial Review principles will be applied, it remains to be seen the level of detail and the range of appropriate information which needs to be factored into the decision making in order to meet the requirements of Section 12(1) of the Subsidy Control Act 2022. It is also anticipated that the Competition Appeal Tribunal will clarify when an organisation should be classed as ‘ailing or insolvent’.
Finally, this is the first case where a measure that has been reviewed by the CMA has been challenged. It will be interesting to see the extent to which the Competition Appeal Tribunal aligns with the CMA’s assessment, but also the extent to which a public authority is expected to respond to the criticisms raised.
Why have there been fewer UK Subsidy Control aviation cases than under EU State aid law?
There are many good reasons why there have been fewer aviation cases in UK Subsidy Control law than EU State aid law.
The market within the UK is considerably smaller (the UK population is around 15% of the EU, so it stands to reason that the number of planes and airports is lower) and the subsidy control regime came into force after the Covid-19 pandemic, when the lion’s share of subsidies were awarded to the sector. Another major consideration is that there has yet to be a successful subsidy control challenge and therefore potential challengers might lack the confidence to bring a case until they can see that the regime can deliver in their favour. However, the corollary to this is that as the regime matures the likelihood of challenges in sectors such as aviation increases.
Conclusion
The public funding of airports and airlines can be delivered in line with the Subsidy Control requirements, but it requires care and attention to the relevant rules. The case of Bristol Airport v Welsh Ministers (2026) will be keenly watched by subsidy control practitioners and those involved in supporting the aviation sector in order to learn lessons that can be applied to future awards.
Ward Hadaway has a dedicated Public Funding unit that provides high quality legal advice to organisations administering public funds, but also blue chip businesses looking to access such finance. If we can assist you in regard to public funding, please do get in touch.
[1] London Luton Airport is owned by a subsidiary, London Rising
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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