The Elite Ayrshire Business Circle

The Elite Ayrshire Business Circle

Thursday, 19 June 2014

South Ayrshire Council welcomes Scottish Government’s Prestwick Airport investment pledge

South Ayrshire Council Leader, Councillor Bill McIntosh, has welcomed the Deputy First Minister’s announcement that Prestwick Airport will now operate under public ownership on a commercial basis and will benefit from £10 million investment from the Scottish Government. 

Councillor McIntosh (pictured above) said the news that the airport can be returned to commercial viability supported the Council’s belief in the airport as a vital economic asset for south-west Scotland.

He added: “We now have a vision of a positive and successful future for Prestwick Airport and we are fully committed to supporting the work being undertaken by partners and stakeholders to achieve the ambitions we all have for this vital transport hub.

“The airport is essential to the local and national economy, with 1,400 people employed there and a further 3,200 jobs linked to the site. We completely agree that there is no overnight fix to get the airport to where it needs to be, but this is clearly a very positive – and very welcome – step forward. 

“This announcement marks the start of a renewed commercial focus for the airport, and getting the right people in post and having the right plans in place will be key elements for the business. 

“On that basis, we do support the decision to retain the name, Glasgow Prestwick Airport, for the commercial market and in recognition of the long and dynamic history of the airport. 

“We’ve always known that Prestwick is different from other airports, and we all want to see it performing as it should, which will help our people, businesses and economy achieve their full potential.

“In partnership with our colleagues in East and North Ayrshire Councils, we will continue to work closely with the Scottish Government and other stakeholders and ensure we play a full and active role in the development of the airport and the wider aerospace and engineering economy in Ayrshire.

“I’m confident that the vision of a bright future for Prestwick Airport is one that can – and will – be achieved, and I’ll be making sure this Council does everything in our power to make that happen.”

Earlier, Deputy First Minister Nicola Sturgeon (pictured above) announced that Prestwick Airport is to receive nearly £10m of investment from the Scottish Government,.

The funding will go towards operating costs, a repairs backlog and to make improvements to the terminal building.

Ms Sturgeon rejected calls to rename it Robert Burns Airport, saying this could cause confusion.

The Scottish Government bought the airport for £1 last year amid fears it would be forced to close.

Ms Sturgeon told Holyrood’s Infrastructure Committee that the airport would be operated under public ownership “on a commercial basis”.

She said the Scottish Government investment would be made “in the form of loan funding”.

She added that there was “no quick fix solution for Prestwick” and the airport may not be profitable for several years.

The airport had a pre-tax loss of £9.77m in its final full year under previous owners Infratil.

Ms Sturgeon is also the Scottish Government’s Infrastructure, Investment and Cities Secretary.

She said the airport would operate as a public corporation on a commercial basis at arms’ length from government.

She added that £5.5m had been provided already since acquisition. and the Scottish Government would be required “to provide a further £3m in operating support”.

There will be nearly £7m in capital investment - £4.5m for repairs and £2.4m to make improvements to the terminal building, including refurbishment of the duty-free area.

Lack of investment

Ms Sturgeon argued that Prestwick had suffered from a lack of investment and there was a “backlog of essential maintenance”.

The committee evidence session came after finance executive Romain Py completed a three-month review of the airport, including options for ownership, on behalf of the Scottish Government.

Ms Sturgeon described Prestwick as a “non-typical airport”, with only about half of its revenue dependant on passenger traffic.

She suggested that future revenue could come from freight and retail development.

The airport's executive directors would be tasked with developing commercial opportunities.

A business plan would include an assessment of a reduced Ryanair schedule for summer 2014 and passenger numbers will be monitored.

Ms Sturgeon ruled out renaming the airport after Robert Burns. A petition lodged with the Scottish Parliament by The Robert Burns World Federation earlier this year had called for a name change, with supporters arguing it would boost tourism.

The Deputy First Minister told the committee: “On balance I have concluded there are strong commercial reasons for retaining the Glasgow Prestwick airport name.”

She acknowledged the decision would disappoint some local people but the airport had to be marketed internationally.

She did not rule out a “Burns-related theme” for the airport.

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