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The Competition Appeal Tribunal's ("CAT") 7 April 2026 judgment in Bristol Airport Limited v Welsh Ministers provides important guidance on how the Subsidy Control Act 2022 (the "Act") operates where financial support is accepted to be a subsidy, and the dispute concerns how it should be assessed within the statutory framework.1
Background
Bristol Airport Limited ("Bristol Airport") challenged the Welsh Ministers' decision to provide £205 million to Cardiff International Airport Limited ("CIAL") for infrastructure investment and route development, forming part of a wider policy aimed at addressing economic disadvantage in South Wales. There was no dispute that the measure constituted a subsidy under the Act. The challenge instead focused on whether the subsidy should have been assessed under the Act's rescue and restructuring regime. The case was brought on four grounds, with Bristol Airport challenging: (1) the Welsh Ministers' inquiry into, and conclusion on, whether CIAL was "ailing or insolvent"; (2) the proper construction of sections 19 and 20 of the Act; (3) the Welsh Ministers' compliance with the statutory subsidy control principles; and (4) the Welsh Ministers' alleged failure to apply section 28 of the Act in relation to subsidies to air carriers.
Rescue and Restructuring Subsidies: Purpose Is Key
Sections 19 and 20 of the Act impose additional constraints on so‑called rescue and restructuring subsidies; namely, subsidies granted specifically to prevent the imminent failure of an enterprise or to restructure it so as to restore its long‑term viability. Those provisions apply only where the beneficiary is "ailing or insolvent" in the statutory sense, meaning that, without the subsidy, it would almost certainly exit the market in the short to medium term.
Bristol Airport argued that those provisions were engaged because CIAL was under commercial and financial pressure. The CAT rejected that analysis. It held that the rescue and restructuring regime is purpose‑based, not triggered by economic stress alone. A subsidy does not fall within sections 19 and 20 unless it is granted for the purpose of rescuing or restructuring an enterprise that meets the statutory definition of being "ailing or insolvent". This reflects the structure of the Act: the subsidy control framework is anchored in the Schedule 1 principles, which require subsidies to pursue a specific policy objective, to be proportionate, and to minimise distortions to competition and investment. The more restrictive rescue and restructuring rules apply only in the defined and limited circumstances identified by Parliament.
"Ailing or Insolvent": A High Statutory Threshold
The CAT also concluded that CIAL was not "ailing or insolvent" within the meaning of section 24 of the Act. Section 24 sets out a disjunctive test: an enterprise is "ailing or insolvent" if it meets any one of the following conditions: (a) it would almost certainly go out of business in the short to medium term without subsidies; (b) it is unable to pay its debts as they fall due; or (c) the value of its assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities. On the facts, CIAL retained access to alternative sources of liquidity and support, such that financial pressure alone was insufficient to meet the statutory test.
No Importation of EU State Aid Concepts
Bristol Airport relied on EU State aid concepts relating to "undertakings in difficulty". The CAT rejected the suggestion that those concepts could be transposed wholesale into the UK regime; concepts not reflected in the language or structure of the Act cannot be read into it. It emphasised that both the UK-EU Trade and Cooperation Agreement and the Act permit divergence from the EU model, and that Parliament had consciously rejected the EU's more prescriptive approach in favour of greater flexibility. Analysis must therefore remain rooted in the UK statutory framework.
High Bar for Challenge
Reaffirming Weis v Greater Manchester Combined Authority, the CAT stressed that its role is supervisory, not appellate.2 Where a public authority has engaged properly with the statutory scheme, taken advice and explained its reasoning, a challenge will succeed only on grounds of legal error, irrationality or procedural defect. Disagreement with evaluative judgment will rarely be sufficient.
Practical Takeaways
- Public authorities should be clear about the purpose of the subsidy and why the rescue and restructuring regime does not apply, where relevant.
- Subsidy beneficiaries can take comfort that commercial pressure does not automatically engage sections 19-20, though evidence of ongoing viability remains important.
- Challengers face a high hurdle: while EU State aid concepts may provide a point of reference, they cannot be transposed wholesale and will not prevail where the language or structure of the Act reflects a different legislative choice. Successful challenges will therefore require identifiable legal error rather than alternative economic characterisation.
Footnotes
1 Bristol Airport Ltd v Welsh Ministers [2026] CAT 30.
2 Weis v Greater Manchester Combined Authority [2025] CAT 41.
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