The Scottish Government has agreed to buy the ailing Prestwick airport in a move that should prevent nearly 1,400 job losses, The Scotsman has reported.
Taking the airport into public ownership was the only alternative, as its owners would otherwise have closed it after they failed to find a buyer, deputy first minister, Nicola Sturgeon, reportedly told the MSPs. The airport, which suffers £7 million a year in operating and building losses, is likely to be in state ownership for several years, Ms Sturgeon said, without disclosing the terms of the transaction.
Saving Scotland’s fourth busiest airport would require a ‘wide-ranging efficiency programme and disposal of surplus assets,’ she said. The airport provides around 300 jobs internally, and a further 1,100 jobs, including those in associated and nearby firms that depend on the airport.
Ms Sturgeon added: ‘The Scottish Government has advised the current owners of our intention to commence a process towards acquisition of Prestwick airport.’
Under the government plan, a ‘commercial partner’ will run the airport on behalf of ministers before it will be sold back to the private sector. According to Ms. Sturgeon, New Zealand-based owner, Infratil, which has owned the airport since 2001, would have shut the airport if it had not secured a sale to the public sector.
She was optimistic about the airport’s prospects, despite passenger traffic having dropped to half its peak of 2.4 million in 2006.
Ms Sturgeon said: ‘We believe Prestwick airport can have a positive future. It will require investment and it will take time. Over the next few weeks we will focus on due diligence, legal and commercial issues around public ownership and the development of a business plan that will allow Prestwick to thrive once again. I want to stress to staff and passengers booked to fly from Prestwick that in the meantime it is business as usual at the airport.’
Infratil chief executive, Marko Bogoievski, said that the airport had been put up for sale in March 2012 ‘as part of a process to refocus its investment profile’.
He said: ‘Recognising the importance of the airports to their local communities, Infratil’s preference has been to secure a new owner with the capacity to support their future success.
‘We believe a Scottish Government acquisition of Prestwick achieves that objective, and will work pro-actively with the Scottish Government over the next six weeks towards achieving completion of a transaction.’
A Transport Scotland spokesman said: ‘Once the Scottish Government has completed its due diligence and is content to proceed, it will negotiate a purchase price with Infratil that will aim to maximise the return for taxpayers’ investment.’