Proving that running a regional airport can still be fraught with problems, it possibly comes as no surprise to learn that there are plans afoot for the Scottish government to buy Glasgow Prestwick Airport off the current New Zealand based owners, Infratil.
The airport has been available for sale since March, this being set against a background where annual losses are running in the region of £2 million.
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| Ryanair welcomes government intervention |
Having just announced the step, Deputy First Minister Nicola Sturgeon will now begin the nitty-gritty of negotiating with Infratil. Ryanair, which is a large user of Prestwick with 27 routes said that it welcomed the move, suggesting that a little bit of stability was required.
The minister informed MSPs that there had been no shortage of interest from the private sector, but none of the interested parties had been able to match Infratil’s requirements as far as a timescale was concerned. She also said that the Infratil board had been considering its options, one of which was to seek commercial discussions with a view to public sector ownership and the other being to close the airport.
Prior to making the announcement, Ms Sturgeon confirmed that ministers had "examined carefully" the implications and consequences of both options She declared that the closure of Prestwick would be a "serious and unwelcome development" for both the Ayrshire and the Scottish economies, with about 1,400 jobs linked directly or indirectly with the airport.
She said: "We believe Prestwick Airport can have a positive future. It will require investment and it will take time. However, we believe it can be returned to profitability. We also estimate that the cost of closure to the public purse would be very significant and this is an important factor in our decision."
Ms Sturgeon said that public ownership of airports was "a familiar concept", pointing out that the Scottish government already had responsibility for 11 airports through Highlands and Islands Airports Limited. She also argued that some other major UK airports - including Manchester, Stansted, Newcastle and Cardiff - were owned wholly or substantially by the public sector.
She added: "I can therefore advise parliament that the Scottish government has advised the current owners of our intention to commence a process towards acquisition of Prestwick Airport. Following the agreement of its board earlier today in Shanghai, we are entering into negotiations with Infratil for the potential acquisition of Prestwick Aviation Holdings Limited and its subsidiaries.
"Conclusion of this process will, of course, be subject to the Scottish government carrying out confirmatory due diligence. The terms of sale will be on a commercial basis and in accordance with the market economy investment principle."
She added that she was hopeful that the government could complete due diligence and detailed negotiations with Infratil on the terms of sale over a six-week period. In return, Infratil has agreed to make sure that the airport is kept fully open and operational while the process is ongoing.
The only scheduled passenger airline at Prestwick, Ryanair, said: "We welcome today's announcement, which gives certainty to the future development of Prestwick Airport. Ryanair remains committed to Prestwick, where we have a large route network and base maintenance presence."
The Scottish Conservatives were anxious to make sure that the Scottish government should make efforts to return the airport to private hands at the earliest possible opportunity. Transport spokesman Alex Johnstone MSP said: "It is going to take an enormous effort to get the airport back in to profit and make it sustainable for the future.
“That will involve a significant level of restructuring and the Scottish government has to have the courage to do what's necessary, rather than simply pouring money into something without accruing any benefit. It's also important that, even if this airport is publicly owned, it is managed and run by people whose job it is to manage and run airports."
Welcoming the announcement, Labour MP for Central Ayrshire Brian Donohoe said: "Major money is required to develop the airport which is why I have always said it should be given for a penny to a developer willing to spend the cash.
"I hope the Scottish government did not pay much more than that."
Pointing out that the airport’s performance had been "moribund" for about 10 years he said: "The actual income against the expenditure hasn't matched." Mr Donohoe added that, as a result, the airport's owner had not made "the necessary investment".
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