Prestwick Airport to be taken under the control of the Scottish Government

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  By Angela Haggerty
 
The Scottish Government will nationalise Glasgow Prestwick Airport, Deputy First Minister Nicola Sturgeon has announced.
 
The plans were revealed during a statement to the Scottish Parliament and Ms Sturgeon said the government would now enter into a six-week period of negotiations with current owners Infratil.

The company put the airport up for sale in March last year after struggling to make it profitable.  It has been running at an annual loss of £2m per year and passenger numbers have dropped from a 2.4 million high in 2007 to just over a million a year.

After failing to secure a way forward following talks with private investors, Ms Sturgeon announced the Scottish Government would step in to prevent the threat of closure which she said would be a “serious and unwelcome development”.

“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,” Ms Sturgeon told MSPs.

“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,” she continued. “The terms of sale will be on a commercial basis and in accordance with the market economy investment principle.”

The move was welcomed by low-cost airline Ryanair, which operates 27 routes from Prestwick, and the airport’s local MSP, John Scott, said the takeover was an opportunity to return the airport to profitability.

The news was more cautiously welcomed by Alex Johnstone MSP of the Scottish Conservatives, who said the airport – the fourth-largest in Scotland after Glasgow, Edinburgh and Aberdeen airports – should be returned to private ownership after a restructure and warned against “simply pouring money into something without accruing any benefit”.

However, Ms Sturgeon said the Scottish government already had some experience of airport ownership through its responsibility for 11 airports through Highlands and Islands Airports Limited but admitted the takeover would require a sustained financial commitment.

“We believe Prestwick Airport can have a positive future,” she said. “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.”

The airport generates around 1,400 jobs in the airport directly and indirectly in the Ayrshire area.  Ms Sturgeon said that ministers had “examined carefully” the consequences of a takeover bid and New Zealand-based Infratil has agreed to keep the airport open while talks are completed.