Prestwick Airport to be sold to Scottish Government for £1 – and other failing regional airports look to business parks and housing
Infratil, which currently owns Prestwick Airport, has said the airport is expected to be sold to the Scottish Government for £1. The sale is due to be completed by Wednesday, 20 November. Infratil said the airport’s value had been “fully impaired” – effectively written off – after Prestwick and sister airport Manston in Kent were collectively valued at £11 million in March. Infratil bought Prestwick from Stagecoach in 2001 for £33m. Manston is being sold to Stagecoach founder Ann Gloag for an expected £400,000. Scottish Ministers are taking over Prestwick airport, which is losing £7m a year, to avert its closure and safeguard 1,400 jobs, including 300 at the airport. Infratil described its investment in the airports to have been “unsuccessful for Infratil” and that while such regional airports looked like a good investment 5 years ago, they now are not as they are reliant on “robust air traffic growth driving demand.” Other failing airports are looking to create business parks on their land, and housing – to try and make money out of them.
PRESTWICK Airport is expected to be sold to the Scottish Government for £1, owner Infratil said today.
The sale of the loss-making Ayrshire airport is due to be completed by Wednesday, 20 November.
Infratil said the airport’s value had been “fully impaired” – effectively written off – after Prestwick and sister airport Manston in Kent were collectively valued at £11 million in March.
The firm bought Prestwick from Stagecoach in 2001 for £33m.
Ministers are taking over the airport, which is losing £7m a year, to avert its closure and safeguard 1,400 jobs, including 300 at the airport.
In a statement, the New Zealand firm said: “The Scottish Government notified Infratil of its intention to pursue an acquisition of Prestwick Airport by 20 November. It is expected that the sale price will be £1.”
Manston is being sold to Stagecoach founder Ann Gloag for an expected £400,000.
Infratil described its investment in the airports to have been “unsuccessful for Infratil”, which showed the potential for “game changing” events.
The firm said: “Five years ago, such airports were much sought after by investors, but the global financial crisis and onerous green taxes on airlines materially changed the prospects of ‘edge of city’ airports, which were reliant on robust air traffic growth driving demand.
“While the financial outcomes were very poor, Infratil has shown it is a responsible owner, even during very lean times.
“The airports were kept operational and will be sold in better condition than they were purchased.
“Best wishes are extended to the new owners and the management and staff who have done a great job through a trying period.”
Glasgow Prestwick Airport may be given to the Scottish Government for nothing
October 11, 2013
The owners of Glasgow Prestwick, New Zealand company Infratil, have suggested they may give away the airport for nothing. The Scottish government has announced it is negotiating to buy the unprofitable airport, and hopes to conclude detailed negotiations with the company by 20 November. Scottish government said it was the “only realistic alternative to closure”. In a statement on its website, the company said it did not expect any transaction “to give rise to material proceeds”. Prestwick was put up for sale last March after heavy annual losses. Several investors expressed interest but no offers were made. Infratil has also been trying to sell its other unprofitable UK airport, Manston. In May 2013, Infratil announced that it had written down the value of both airports to £11m. Infratil has agreed to ensure the airport is kept fully open and operational during the negotiation process. In 2012 Prestwick had around 1 million passengers, compared to 2.4 million at its peak in 2005.
Loss making airports sold for £1, but will to see them survive is out there
14th November 2013
LOSS-MAKING regional airports are changing hands for as little as £1 and surviving on bail-outs from taxpayers. Business Editor Andy Richardson looks at the race to keep the regions flying.
REGIONAL airports took a battering during the recession.
From Prestwick to Newquay passenger numbers plummeted after 2007 as airlines withdrew flights and consolidated services at the major hubs in response to a reduction in both leisure and business traffic.
The controversial UK flight tax Air Passenger Duty (APD) had a disproportionate effect on regional operations.
Larger regionals, such as Newcastle International, Leeds/Bradford and Manchester managed to weather the worst effects of the downturn, but Durham Tees Valley (DTV) was among the hardest hit, suffering a 77 per cent drop in passenger numbers.
It will record losses of about £4m this year, and owners Peel expect the operation will continue to haemorrhage cash unless its latest rescue bid takes off.
Peel has repeatedly insisted that it regards DTV as a long-term investment. Other regional operators have lost patience and cut their losses.
This week, New Zealand firm Infratil wrote-off the assets of its UK airports, Glasgow Prestwick and Manston in Kent.
The company said it had reduced the value of both sites from £14.5m a year ago to zero.
The announcement came as the Scottish government entered talks with Infratil over buying the unprofitable Prestwick operation.
Manston Airport is being bought for £1 by Ann Gloag, who co-founded the Stagecoach Group.
Prestwick, where Elvis Presley touched UK soil for the first and only time, in 1960, is also expected to be sold for £1.
Ministers hope to conclude negotiations with the company next week in a deal that will re-nationalise a piece of Scottish infrastructure that possesses strategic and economic significance.
Official figures predict that passenger numbers will recover slowly as the economy edges into recovery mode, prompting regional airports to look for other means of generating income.
The model that Peel is proposing at DTV, which incorporates a business park with housing, is becoming commonplace.
Peel has already launched similar plans at Robin Hood Airport near Doncaster, which includes a pub, offices, industrial buildings, along with new roads and footpaths.
Manchester’s proposal for an airport city is well underway.
Backed by investment from the Chinese government it will create more than 400,000 sq m of business space as well as a hotel, conference centre and shops.
Newcastle International’s masterplan aims to almost double passenger numbers, and create thousands of jobs by 2030 via two business parks.
Cambridge International has a scheme to build up to 1,500 homes on land adjacent to the airport, and Kent International has plans to develop a campus with student accommodation.
Southend Airport, backed by a £100m cash injection from owners the Stobart Group, is one of the few regional operations which has seen an increase in passenger numbers. Peel has insisted that a mixed use site is the best way forward for DTV, and that no Plan B is in reserve if its latest rescue bid fails to get off the ground.
Housing at heart of Durham Tees Valley Airport blueprint for future
14th November 2013
By Joe Willis, Regional Chief Reporter
A BLUEPRINT to secure the long-term future of Durham Tees ValleyAirport (DTVA) will be unveiled today – with the sale of land for housing at the heart of the rescue plan.
Bosses say the development of up to 400 homes would generate millions of pounds for investment back in the airport.
The money would be used to pay for nine new hangars, 9,600 sq m of office space and industrial units covering 16,820 sq m to expand the existing Northside Employment Park.
According to DTVA strategic planning director Peter Nears, author of the DTVA Master Plan 2020 and Beyond, rent from the new occupants would make the airport viable and protect existing scheduled flights to Aberdeen and Schiphol, in Holland.
“The airport has land assets, which provide the development opportunities we must pursue if we are to improve the whole DTVA operation.”
The 180-page plan could be used to convince the Government to approve funding towards the first phase of the long-awaited Southside industrial park after two previous bids for regional growth fund money failed.
Delivery of the plan would create up to 3,800 new jobs, plus a further 450 jobs during construction phases and add more than £348m to the regional economy, the airport claims.
As well as protecting existing routes, bosses say it could help secure new routes to other UK and European destinations.
The publication of the plan comes after DTVA confirmed the airport was cancelling the majority of its holiday charter services in a bid to cut costs – a move which will lead to an unconfirmed number of redundancies.
The plan proposes between 250 and 400 homes on land to the west and north of the terminal, including a field previously earmarked for a business park.
The housing would include areas of open space and children’s play areas on site.
The terminal building will be reduced in size and remodelled. An extension to St George’s Hotel is also proposed.
The two-month consultation begins today and runs until January 10.
Doris Jones, Darlington Borough Council member for Middleton St George, has immediately expressed concern about the houses.
She said developers had already targetted the village for more than 700 homes.
“People are fed up with developers wanting to build houses upon houses and no services to go with them and now the airport wants to build 400 more.
“The school can’t cope with one more child and the surgery is bursting at the seams.”
Stockton South MP James Wharton also spoke out last night criticising the consultation process, with no consultation event proposed outside Darlington or the airport.
However, Darlington MP Jenny Chapman welcomed the master plan.
“This wouldn’t have been anyone’s first choice as a way forward for the airport, however if we want to keep DTVA open we need to be flexible and we have to settle for a compromise,” she said.
Sedgefield MP, Phil Wilson said he would like to hear the views of his constituents.
But he added: “It would seem that Peel and DTVA have come up with a plan which would secure the future of the airport in the long to medium term with the potential of creating many more jobs in the area to complement those created in Newton Aycliffe by Hitachi.”
North East Chamber of Commerce chief executive, James Ramsbotham, also backed the rescue plan, describing it as “bold and ambitious”.
To view the master plan, visit dtva-master-plan.co.uk
Consultations events will be held at the St George Hotel at DTVA on November 21 and at the Dolphin Centre, in Darlington, on November 28. More events are planned, the airport said.