Troubled airport bailout to cost taxpayer £40m
LOSS- MAKING Prestwick Airport is to have its taxpayer bailout nearly doubled to £40 million, The Sunday Post can reveal.
Budget documents show SNP ministers have set aside £ 9.4m in loans for the nationalised airport for the year 2017/18.
This will take the amount of taxpayers’ money tied up in the Ayrshire airport – bought by the Scottish Government for just £ 1 three years ago to save it from closure – to £40m.
The haul is much more than the £ 25m of public loans originally proposed for the troubled airport, which has only four scheduled passenger flight departures on some days this winter.
And the rate of increased spending has sparked alarm as Audit
Scotland had previously calculated the extra £15m would be needed by 2021 – not 2018.
Meanwhile, The Sunday Post can also reveal Prestwick has paid out £660,000 in redundancy payments since 2014.
A string of senior staff, including former £142,000-a-year chief executive Iain Cochrane, left in this period as a new board tries to turn round a situation where the airport is not expected to turn a profit for another seven years.
Tory 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.”
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.
A Glasgow Prestwick Airport spokeswoman said the facility was “run on a commercial basis and there is an agreement in place with the Scottish Government for annual loan payments to support the work the airport is doing to return to a position of profitability and sustainability”.
A Scottish Government spokesman said: “We have been very clear from the outset that 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 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.”