Prestwick Airport’s government debt rises to £38.4m

Date added: 3 January, 2019

The debt owed by Prestwick Airport to the Scottish government has risen in the past year from £30m to £38.4m. That was while revenue rose through a doubling of income from refuelling aircraft.  Accounts show the holding company made a loss of £7.6m in the year to March, down from £8.6m the previous year. Revenue was up on the year from £13.6m to £18.2m – which includes £3m extra contribution from refuelling, and a rise of £300,000 in cargo earnings, reaching £2.8m. The debt reflects recent years of losses that have built up since Prestwick was saved from closure by a Scottish government takeover.  It has tried to add new routes, by business development activity and incentives through lowered landing fees – but this has resulted in only one additional route to Poland. The strategic report, filed with the accounts on 31 December, says that Brexit uncertainty has contributed to the difficulty of expanding the route network beyond Ryanair’s few flights.

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Prestwick Airport’s government debt rises to £38.4m

By Douglas FraserBusiness/economy editor, Scotland BBC
1 January 2019

The debt owed by Prestwick Airport to the Scottish government has risen in the past year from £30m to £38.4m.

That was while revenue rose through a doubling of funds from refuelling aircraft at the publicly-owned facility.

Accounts lodged with Companies House show the holding company made a loss of £7.6m in the year to March, down from £8.6m the previous year.

Revenue was up on the year from £13.6m to £18.2m.

That included a £3m extra contribution from refuelling, and a rise of £300,000 in cargo earnings, reaching £2.8m.

The debt reflects recent years of losses that have built up since the Ayrshire airport was saved from closure by a Scottish government takeover.

New routes

Under new leadership during the last financial year, there has been an effort to win new routes operating out of Prestwick, with business development activity and incentives through lowered landing fees.

But it has resulted in only one additional route linking with Poland.

The strategic report, filed with the accounts on 31 December, says that Brexit uncertainty has contributed to the difficulty of expanding the route network beyond Ryanair’s few flights.

It also says the Air Departure Tax level is a further deterrent.

The Scottish government has said it intends to halve that, having taken on the powers to adjust it, but it remains at the same levels set by Whitehall.

Directors say that management began a new effort to boost income and lower costs towards the end of last financial year, and that it should show better results in the next set of accounts.

Prestwick Airport is seen as a strategic economic asset, particularly for Ayrshire, which Scottish ministers want to see returned to the private sector once it has become profitable.

It employs 315 staff, 280 of them operational, with a payroll bill of £9.4m.

The accounts state that the top-paid director earns £126,000, down from £164,000 paid out in 2016-17.

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.”

https://www.thetimes.co.uk/article/prestwick-airport-costs-escalating-z3fsgx5zm

Prestwick hopes of becoming a “spaceport” boosted by deal with US company

July 13, 2016

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

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Prestwick Airport taxpayer bailout doubles to £40 million by 2021/22

 February 24, 2015

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.

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Posted: Thursday, January 3rd, 2019. Filed in General News, News about Airports, Recent News.