Airport bailout heading for £40m and ‘out of control’
● No profit until mid-2020s ● Space port hopes for future
The bailout of Prestwick Airport is “out of control” it has been claimed after ministers revealed it could reach £40 million next year.
Previous warnings had suggested it will not reach this level until 2021 as the Scottish Government seeks to secure a future for the Ayrshire facility which was bought over by taxpayers three years ago.
Ministers hope it can have a future as a space port and that the recent announcement on Heathrow’s new runway could offer opportunities for Prestwick as a maintenance hub.
The extent of public support for the airport was initially only expected to be £25m, but Audit Scotland warned last year this could reach £40m by 2021. Ministers now say it could hit this level in 2017/18.
Conservative North-east MSP Liam Kerr said: “These figures are further evidence that the costs regarding Prestwick Airport are starting to get out of control.
“The amount of public money being sunk into the airport is spiralling and taxpayers are getting increasingly fed up.
“It’s time the SNP government got a grip of the situation and started putting plans in place to return the airport to the private sector as soon as possible.”
0 Prestwick was bought by the Scottish Government for £1 in 2013
The latest Scottish Government consolidated accounts show Prestwick received £21.3m in loans up to March 31, 2016. The 2016/17 budget shows £9.3m going to the airport and now the draft 2017/18 budget shows it is in line for another £9.4m – meaning £40m in total from the public purse so far. Repayments on the loans are not scheduled to begin until the airport starts making a profit, which is expected to be in 2023.
The airport is heavily reliant on budget carrier Ryanair, but suffered a blow in 2014 when the Irish firm axed a number of Prestwick routes and opened a base at nearby Glasgow. Passenger growth of 10.2 per cent in the first five years after purchase was predicted by ministers, but public spending watchdog Audit Scotland warned in airport last year these were “optimistic”.
A Scottish Government spokesman said: “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. A report from Audit Scotland confirmed that we are highly likely to generate a return on our investment that is higher than the current rate of interest we are charging the airport.
“We have not set a limit on the overall loan funding we may have to provide to the airport. We plan to approve the amount of loan funding required in any one year through the approval of the airport’s business plan for that year.”