Scottish government ‘vindicated’ over Prestwick airport

Scottish government 'vindicated' over Prestwick airportThe Scottish government has been vindicated in its decision to take over Prestwick airport, according to a minister.

The comments came in response to a public spending watchdog report which said plans to sell the airport back to the private sector are viable but it could take “some years” to be achieved.

The airport was acquired for just £1 from owners Infratil in late 2013 amid fears it could close. Ministers have so far committed to provide £25.2 million in loan funding to the airport.

Audit Scotland said it could take almost a decade before Prestwick would be able to start repaying the money, the BBC reported.

The watchdog said that while the business case for the deal was based on “optimistic” passenger numbers, the government could still “reasonably expect a positive return” on the cash being loaned.

Ministers want to return the airport – which had been running at a loss – to profitability before selling it back to the private sector. Falling passenger numbers and a decline in cargo business meant it had been operating at a loss for a number of years.

The government has so far provided the airport with £9 million of loan funding and has committed to a further £16.2 million to the end of March next year, if required.

Audit Scotland said latest estimates had put the required total funding up to 2021-22 at £39.6 million.

The report said: “The Scottish government’s long-term aim is to sell Glasgow Prestwick airport back to the private sector once the airport is viable.

“Owing to the uncertainties around the future development opportunities, the Scottish government has not yet set a timetable for this.

“It is important that its plans for the airport include regular consideration of its ongoing financial viability and a well-defined exit strategy covering a variety of possible scenarios.

“The Scottish government recognises that the long-term opportunities could take some years to take effect if they are realised.”

Responding to the report, infrastructure secretary Keith Brown told the BBC: “Closure of Prestwick airport would have been devastating for Ayrshire and the action taken by the Scottish government has safeguarded 3,200 jobs and secured a vital infrastructure asset that contributes more than £61 million annually to the Scottish economy.

“Audit Scotland’s report vindicates the action taken by the Scottish government – it shows we made the right decision to step in and confirms that we followed the correct purchase process in a tight timescale, identifying and considering the risks before moving forward with the acquisition.

“The report confirms that the Scottish government is highly likely to generate a return on this investment that is higher than the interest rate that we are currently charging the airport.”

Sourced from Travel Weekly


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s