Another £6m handout for ailing airport
SNP funding set to go on for years
‘Public purse could take a hit’
SNP ministers have been accused of handing an ‘open chequebook’ to failing Prestwick Airport after it was revealed it could rely on bailouts for years to come.
The Scottish Government expects to hand another £6million loan to the loss-making Ayrshire airport, taking total funding to more than £50million.
And a note in the annual accounts of the company revealed Transport Scotland has provided a written promise that it will continue to cover losses for ‘the foreseeable future’.
It comes as the latest financial figures for the airport, which was bought for £1 as part of a Government bailout in 2013, show no significant upturn in its performance. Despite this, the cost of the company’s directors rocketed by two thirds in one year.
Scottish Tory finance spokesman Murdo Fraser said: ‘The Scottish public want Prestwick to succeed, and are happy for the Scottish Government to support that ambition. But that goodwill does not translate to an open chequebook from the taxpayer for the airport to use.
‘It’s vital the SNP Government returns Prestwick to private hands at the earliest opportunity. If it fails, the longterm wellbeing of the facility will suffer and Scotland’s public purse will take a major hit.’
The accounts for TS Prestwick Holdco Ltd for the year to the end of March 2018 show a loss of £7.6million, down from £8.6million in the previous year.
It puts the total loan funding from Transport Scotland at £38.4million, with £6.5million to be provided this year and a further £6million next year.
Notes to the accounts state: ‘Transport Scotland has provided written confirmation to the directors that for at least 12 months and for the foreseeable future it will continue to make available such funds as are needed by the group to pay its liabilities and fund losses and capital expenditure.’ The notes added it ‘will not seek repayments of the amounts currently outstanding until the group is in the position to do so’.
The company said it would need to ‘effect a significant transformation of the airport... to ultimately repay the amounts outstanding’.
A report by independent auditor KPMG states the company would need ‘a significant transformation of its business to... repay the loan’.
Ryanair is the only airline offering scheduled passenger flights from Prestwick. During the 2017-18 financial year, passenger numbers rose by 4 per cent to 702,000.
Former Loganair boss Stewart Adams became chief executive last November in a year when five directors left their posts. The total cost of directors’ remuneration was £345,000 – up from £208,000 the year before.
Andrew Miller, non-executive chairman at Glasgow Prestwick Airport, said: ‘The business is definitely moving in the right direction. The new senior management team has developed a robust strategy to position Prestwick as a niche airport, with a strong focus on specialist cargo and aviation services.’
A Scottish Government spokesman said: ‘Prestwick is operated on a commercial basis and at arm’s length from the Scottish Government.’ He added: ‘It is our intention to return the airport to the private sector at the appropriate time.’
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