Desirability of Ryanair’s £650,000 Scottish Government subsidy questioned
The independent paper, the “Ferret” in Scotland reports that the Scottish government agency Scottish Enterprise gave more than £650,000 to Ryanair, the airline at the centre of a staffing dispute that has resulted in thousands of flights from Scottish airports being cancelled this winter. The grants were given to Ryanair in three parts, over the past 5 years. All three grants were to support Ryanair’s work at Prestwick, which is a struggling airport bought for almost nothing by the Scottish government. Environmental groups have questioned whether the grants were compatible with the Scottish Government’s “world leading” climate change targets. Despite the subsidy Ryanair is choosing to cut many routes this winter until March 2018. Neil Bibby MSP, Scottish Labour’s transport spokesperson, said: “As Ryanair is also in receipt of taxpayer support from the Scottish Government, the SNP has a particular responsibility to ensure that basic legal requirements are met and that the airline is held to the right standards. John Finnie MSP said: “Apart from lifeline routes to the islands, it’s hard to see how subsidising the aviation sector is compatible with the need to reduce CO2 emissions.”
Revealed: Ryanair’s £650,000 Scottish Government subsidy
By Jamie Mann (The Ferret)
October 1, 2017
Government agency Scottish Enterprise gave more than £650,000 to Ryanair, the airline at the centre of a staffing dispute that has resulted in thousands of flights from Scottish airports being cancelled this winter, The Ferret can reveal.
Figures obtained by The Ferret show that Scottish Enterprise (SE) – the Scottish Government’s economic development agency – gave a total of £653,523 in three grants to the firm over the last five years.
All three grants were to support Ryanair’s work at Prestwick, a company that announced a £1.1bn profit in May.
The extent of the subsidies prompted criticism from Scottish Labour who said the airline needs to “clean-up its act” over claims of poor treatment of its workers.
Environmental groups have questioned whether the government grants were compatible with the Scottish Government’s “world leading” climate change targets.
Despite the Scottish Government subsidy, a number of routes connecting with Scottish airports – including Stansted to Edinburgh and Glasgow, as well as Edinburgh to Szczecin, Glasgow to Las Palmas, and Hamburg to Edinburgh – will be suspended until March 2018.
Ryanair – Europe’s biggest airline – has narrowly avoided prosecution by the UK’s aviation watchdog after controversially scrapping these Scottish routes this winter.
Following the cancellations, the Civil Aviation Authority (CAA) announced it would consider taking enforcement action against the airline for not being clear with its customers over the compensation they were allowed to claim.
On Friday September 21, Ryanair notified its 715,000 passengers of their rights to compensation, just an hour before the CCA’s given deadline.
“Where we find that an airline is systematically flouting these rules, we will not hesitate to take action, to minimise the harm and detriment caused to passengers, as we have done with Ryanair in recent days”, CCA’s Chief Executive, Andrew Haines said in a statement.
“It appears that Ryanair has now capitulated. We will review their position in detail and monitor this situation to ensure that passengers get what they are entitled to in practice.”
The controversy along with news of Scottish taxpayer subsidies has prompted Scottish Labour to call on the SNP to hold Ryanair to account, and for the airline to “clean up its act.”
Neil Bibby MSP, Scottish Labour’s transport spokesperson, said: “As far as [the CCA] are concerned the company has not complied with the law and reports of cancellations and the exploitation of workers are greatly concerning.”
“Scottish Labour has previously raised concerns over SNP giveaways to companies like Amazon, which received taxpayer-funded grants while being criticised for poor workplace standards.
“As Ryanair is also in receipt of taxpayer support from the Scottish Government, the SNP has a particular responsibility to ensure that basic legal requirements are met and that the airline is held to the right standards.
“It is vital that money funnelled to private companies in grants is properly accounted for. And Ryanair needs to clean up its act.”
Aviation and huge public subsidies
News of the budget airline’s Scottish Enterprise grants comes just days after a report from the independent climate change advisory body called on the Scottish Government to do more to reduce transport emissions.
The Committee on Climate Change (CCC) report said that the Scottish Government required “firmer policies” if it were to meet the ambitious emissions reduction targets set out in the latest Draft Climate Change Plan.
“The balance of effort in the draft Climate Change Plan between the transport and buildings sectors is unrealistic”, read one of the CCC report’s key findings.
However, the Scottish Government told The Ferret that reducing emissions and subsidising airlines like Ryanair could be done “simultaneously”.
“Scotland is a global leader in tackling climate change, while also investing in jobs and economic development,” said a Scottish Government spokesperson.
“It is not only possible to do both simultaneously, it is imperative that we do. Scotland is well on track to meet our world-leading statutory emission target for 2020.”
The spokesperson added: “We are currently considering the responses to the public consultation on our proposed Climate Change Bill that will set even more ambitious targets for the reduction of greenhouse gas emissions and ensure that we meet our obligations under the Paris Accord.”
Ryanair boss Michael O’Leary has long claimed – despite scientific evidence to the contrary – that man-made climate change is “complete and utter rubbish.”
But John Finnie MSP, transport spokesperson for the Scottish Greens, questioned the compatibility of grants to Ryanair with the Scottish Government’s pledge to reduce emissions.
He said: “Shovelling public money into the pockets of an airline with such a bad reputation, not to mention the ignorant views of its owner, will enrage the vast majority of Scots who face poor bus services, overcrowded railways and under investment in cycling infrastructure.”
Instead, he argued that the Scottish Government should use tax payers cash to support other forms of transport. “It’s everyday transport that should be the focus of the government and its agencies, rather than expansion of the most polluting form of travel,” he stated.
“Apart from lifeline routes to the islands, it’s hard to see how subsidising the aviation sector is compatible with the need to reduce emissions.”
Environmental campaign groups also lined up to criticise the subsidies.
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Prestwick airport costs escalating
By Jeremy Watson (Times)
October 9 2017
Prestwick airport sucked in an additional £9.6 million of public money last year to keep it afloat, according to new figures. The total amount of taxpayers’ money given to the Ayrshire airport rose by more than 45%cent in that period from £21.3 million to £30.9 million. The Scottish government’s latest consolidated accounts reveal the amounts, which coincided with a financial year in which the business posted further losses of £9 million. Total losses for the airport in the past three financial years amount to £27.6 million. Bought for a nominal sum by the SNP government in November 2013, it is costing taxpayers almost £800,000 a month.
The most recent business plan expects total loans to reach £39.6 million by 2021 — almost double the initial estimate of £21.3 million — but most industry observers believe that additional funding will be required to keep the airport open until that date.
Murdo Fraser, Scottish Conservative finance spokesman, condemned the losses and increased cost to taxpayers. “Prestwick airport should not be a black hole into which the SNP government continues to plough taxpayers’ money,” he said.
A Transport Scotland spokesman said: “The funding given to Glasgow Prestwick airport is supporting employment that is vital to the local economy. As we made very clear at the start of the acquisition process, our investment in the airport is on a commercial basis in the form of loan funding. This attracts a market rate of interest in line with state aid rules.”
Prestwick hopes of becoming a “spaceport” boosted by deal with US company
The Scottish Government bought the loss-making airport for £1 in 2013, and is trying to find ways for it to make money. Prestwick now has hopes of becoming a “space hub” delivering small satellites and tourists into low-level orbit. The Scottish Government will provide a funding package, for 2 years, of £240,000 from South Ayrshire Council and Scottish Enterprise. This will cover “infrastructure, business development, energy reduction and supply chain development.” The Queen’s Speech in May confirmed aims to drive through the complex legislation needed to certify the safe operation of space vehicles through the Modern Transport Bill. The DfT is setting up a regulatory framework to license individual sites, with Prestwick and two other Scottish locations – Campbeltown on the west coast and Stornoway in the Western Isles – among those short-listed last year. There are hopes of jobs, if the project goes ahead. Prestwick has now signed a memorandum of understanding with California-based space launch vehicle designer XCOR Aerospace, and space plane design and operating company Orbital Access Limited, setting out an action plan. This would be a competitor to the Virgin Galactic sub-orbital passenger flights, taking 2 passengers at a time into an orbit of 350,000 feet for a short time, at immense cost
Prestwick Airport taxpayer bailout doubles to £40 million by 2021/22
Nicola Sturgeon has been accused of covering up the true cost to the taxpayer of buying Prestwick Airport after she kept secret the existence of a new estimate predicting it would almost double to £40 million. An Audit Scotland investigation into the purchase found that a revised business plan produced in May last year forecast that public loans to loss-making Prestwick would reach £39.6 million by 2021/22. Ms Sturgeon did not tell MSPs that the predicted cost had increased from the original estimate of £21.3 million when she gave evidence to a Holyrood inquiry the following month. She also did not reveal that the passenger forecasts for the first 5 years had been dramatically cut. Labour are complaining about the handling of the airport problem by the SNP. Prestwick was losing £800,000 per month, and passenger numbers had more than halved to 1.1 million between 2007 and 2013. It was on the market for 18 months but no private buyer emerged. The Scottish government bought it for £1 hoping to protect 3,200 jobs and safeguard a “strategic” asset. So far the government has handed over £9 million and have committed to provide a further £16.2 million by the end of March 2016.