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Do ministers have a Plan B for Prestwick Airport?

  • More taxpayers’ money loaned to loss-making airport
  • Does government have a secret it needs to share?

The Scottish government is pouring another £10 million of taxpayers’ money into Prestwick Airport and says it expects eventually to get a return. I just don’t get it. Unless, of course, there is a Plan B that ministers are not sharing with the rest of us.

This is the second slug of cash loaned to the airport (effectively the government loaning the money to itself) since Holyrood bought the loss-making facility last year for £1 from New Zealand hedge fund Infratil.

Ministers insist the money is being loaned at commercial rates and that its support is within the European state aid rules.

Yet it is curious why ministers and civil servants believe they can do what the private sector has been unable to achieve at the Ayrshire airport over several years. Prestwick is not only unprofitable, it has been haemorrhaging passengers for years. Its only airline, Ryanair, is squeezing so tight on charges that Deputy First Minister Nicola Sturgeon admitted to the Holyrood parliament in June that the facility will not make a profit for several years and could lose more passengers.

Not only are the passenger numbers in decline, the cost of administering them is exorbitant.  Even before this latest investment, the government is expected to spend five times as much sending Scottish sunseekers to Benidorm and bringing them home again as it spends marketing Scotland.

The First Minister-designate said she expected revenue to rise from improvements to the retail offering. But with passenger numbers falling who will want to take extra retail space?

Prestwick was built at a time when a fuel-stop was required for transatlantic flights. Time and technology have overtaken this requirement. If airports were being planned now, no one would put one at Prestwick. Like it or not, small regional airports have had a tough time. Blackpool and Marston in Kent have both been forced to close.

In the past week Glasgow airport has been sold to a 50-50 partnership comprising Spanish firm Ferrovial (which formerly owned the entire share capital) and Australian investment bank Macquarie. They will be looking for a return on their £1 billion investment in Glasgow, Aberdeen and Southampton and will not allow taxpayer-assisted Prestwick to steal their business.

So where will the new traffic for Prestwick come from?

On the far of it the unprofitable facility is being kept on life-support simply for political reasons (to secure votes), unless there is a more reasonable and commercial explanation for why Finance Secretary John Swinney keeps sending bags of cash to Ayrshire?

One answer could be that it is one of six Scottish sites on a list of eight that the UK is considering as a space port. Should it win the nomination it would clearly give Prestwick an alternative purpose and some long-term security.

If this really is the Scottish government’s game – and no one would criticise it for having a viable plan  – then why not let us in on the secret? Until it does so, we’re left to think it is living on a prayer and throwing good money after bad.

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One Comment to Do ministers have a Plan B for Prestwick Airport?

  1. john drake says:

    Prestwick runway was not long enough to land the Space Shuttle but it may be able to facilitate Richard Branson’s Glalactica to pick up rich Scottish space traveler’s !
    Don’t forget its function as a military diversion airfield which may be required and be sponsored by the RAF, RAAF, USAF, USNAF, Nasa, and Nato!
    May be Nicola Stergeon wants it to be the Scottish Hub airport upon independence ?
    All the black project stuff is coming across to Macrahanish still !
    Engine repair work would be difficult without the runway.
    Are they to base privatised SAR at HMS Gannet ? Perhaps they can give William a proper job ?

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