Business

Scots ministers under fire for ‘botching’ Prestwick Airport sale

SCOTTISH ministers have been strongly criticised after the latest attempt to sell state-owned Prestwick Airport failed.

The Ayrshire airport will now remain state owned as it was taken off the market after the Scottish Government ended talks with a potential private buyer.

Scottish Labour said that serious questions had to be answered over the “botched deal”.

Glasgow Prestwick Airport Limited delivered an operating profit before exceptional items of £500,000 and is now to focus increasingly on cargo to maintain a revenue stream in light of pandemic pressures on travel.

Transport secretary Michael Matheson had announced a preferred bidder – believed to be a European investor – had been chosen to buy the airport in February.

And in March he said  said “good progress” is being made on the sale.

It came nearly four months after ministers tried to sell off Prestwick Airport again after a previous bid fell through because of coronavirus devastating the aviation industry.

The state-owned company behind the airport had been continuing to try and sell its entire shareholding in “a voluntary competitive process”.

HeraldScotland:

That followed the collapse of a previous year-long bid to sell Prestwick in September.

Scottish ministers paid £1 for the airport in 2013, taking it into public ownership to protect jobs and an economically important regional asset.

The Government has since loaned it more than £42m to stay afloat, with £33m written off. Opposition parties have said the money owed to the public purse must be repaid.

Prestwick airport chief executive Ian Forgie said “The future of the airport is significantly brighter now than it was five years ago. However, we are realistic that the short-term outlook remains tough with headwinds continuing to impact travel and global supply chains.

“The Scottish Government has restated its long-term commitment to return the Airport to the private sector and having carefully considered bids received under a recent sales process have decided not to proceed with a sale at this time.”

Prestwick Airport said the business had shown a steady improvement in performance since the 2016/2017 accounts when operating losses stood at £7.8m.

The airport said that their accounts show that the focus on the diversified nature of its operations has created a stronger business model for the airport, allowing it to adapt to the drop in passenger numbers due to the lockdown restrictions in 2020.

READ MORE: COP26 world leaders in valet-style plane trips as aircraft take 20-minute journeys from Glasgow to Prestwick

Mr Forgie said: “The last two years have been tough with a global pandemic impacting every part of our lives.

“During this time our staff, management and directors have worked hard to ensure that Glasgow Prestwick Airport continues to adapt to maintain operations throughout the period, whilst continuing to deliver the excellent service that we have become known for.

“We are therefore pleased to have been able to generate a small operating profit last year despite lockdowns and travel restrictions.

“Our financial performance is not simply reliant on passenger numbers, and we will continue to develop our diverse and distinctive range of services with a team that is agile and passionate about the success of the airport.

“I am pleased that the airport retains the confidence and support of our shareholder and with a new chairman and recently refreshed operating board we look forward to the airport continuing the progress of recent years by focussing on the development of new revenue opportunities and building on its strengths by providing a distinctive range of services”

Prestwick Airport was put up for sale in June, 2019.

In May, last year Mr Matheson said a preferred bidder had been found for the 365-hectare site, but the sale had been delayed by Covid.

The bidder then pulled out, leaving the airport on the Scottish Government’s books before a new potential buyer was found.

French firm Vinci, owner of Gatwick and Belfast International airports, declined to confirm that it had been in talks with the Scottish government over the purchase of Prestwick Airport.

Scottish Labour’s net zero, energy and transport spokesman Colin Smyth said: “The collapse of this botched deal has been a long time coming.

“Serious questions need to be asked about the Government’s handling of this sale. They agreed to the preferred bidder and the sale has collapsed on their watch.

“They have provided no explanation of what went wrong, failing to even confirm whether the bidder pulled out or the Government rejected a bid.

“Prestwick workers have been stuck in limbo for years waiting for this deal to materialise, only to get knocked back to square one and they deserve answers.

“Thousands of jobs are on the line – there is simply no room for the SNP’s usual incompetence. “We cannot abandon Prestwick and let it become yet another failed industrial intervention from the SNP.

“The SNP must show they have a plan to for the future of this vital strategic asset, and the tens of millions of taxpayer pounds invested in it.”

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