Prestwick Airport chiefs quit jobs
Bosses admit turnaround needed to boost revenue
TWO bosses at Glasgow Prestwick are to leave their jobs as part of a bid to revive the fortunes of the struggling airport.
Chief executive Iain Cochrane and chief commercial officer Graeme Sweenie will both leave by the end of next month.
The airport was bought by the Scottish Government for £1 in 2013, amid fears it might otherwise close.
TWO senior figures at the stateowned Glasgow Prestwick Airport are to quit their jobs as bosses admitted that a “radical turnaround” is needed if the struggling facility is to become a success.
Chief executive Iain Cochrane and chief commercial officer Graeme Sweenie will both have left the business by the end of next month, with a search already under way to find replacements.
Senior sources at the airport said that while the airport had been well run from an organisational perspective, a new strategic approach was needed to attract new business and address a multimillion-pound revenue gap that has threatened the airport’s future.
The replacements to Mr Cochrane and Mr Sweenie, who tendered their resignations following discussions with the airport’s board, will be tasked with “banging down the door” of potential clients, as they take a more pro-active approach to securing new income.
The airport, which is a vital part of the Ayrshire economy, was bought by the Scottish Government for just £1 in 2013 after it had been operating at a loss for several years, but has received millions of pounds in public cash in loans.
It is hoped that a management team with a new skill set will find success in attracting new airlines to Prestwick, with Ryanair currently the only commercial operator with regularly scheduled flights.
Bosses believe that new routes would attract customers in its immediate catchment area to the airport, who currently bypass the facility in favour of Glasgow and Edinburgh where a far greater selection of destinations are on offer.
Growing of its freight business is also seen as a priority.
Andrew Miller, the former chief operating officer of Air New Zealand who was appointed Prestwick chairman in November, said that a recently appointed team of non-executive directors would provide support to the management team until the positions were filled.
It is understood that board members believe replacements, who will be paid the market rate, will be in post within four to six months. Interim appointments will be considered in the coming weeks.
Mr Miller said: “The future of Glasgow Prestwick is likely to be quite different from the past.
“The business model needs to be both re-designed and delivered rapidly so that the airport can look forward to a profitable, sustainable future.
“The board believes that this fundamental re-positioning requires new vision, leadership and expertise in the executive team.
“I firmly believe Glasgow Prestwick Airport can return to prosperity, but there needs to be a radical turnaround in the business in order to achieve that.
“The board is totally determined to deliver for our staff, our customers, our stakeholders, the local community and the Scottish Government who have resolutely backed us to succeed. It will take time but we are committed to do whatever is necessary to deliver that sustainable future for the business.”
The Scottish Government has said that it wants Prestwick to return to private ownership, although it has been warned that the process could take years.
More than £25 million in public cash has been made available to the airport, which is being run on a commercial basis by an arms-length organisation, in loans. Audit Scotland has said the total bill may rise £40m by 2022.
Ministers have said the decision to buy the airport secured 3,200 jobs, with Prestwick worth more than £61m to the Scottish economy annually.
The airport, which was established in 1934, had been on the market for 18 months when ministers stepped in and bought it over.
A Scottish Government spokesman said: “The make-up of the management team is a matter for the board of Glasgow Prestwick Airport. The Scottish Government is committed to returning the airport to profitability and we are confident that the board will appoint a management team that will achieve this.”
‘‘ The board believes that this fundamental re-positioning requires new vision, leadership and expertise
WHEN Prestwick Airport was taken into public ownership in 2013, no-one was deceived as to the scale of the challenge ahead. Scotland’s largest commercial airfield, despite its “fog-free” status, its transport links, and its reputation as a centre of engineering excellence, was a very long way short of being viable. So it remains.
Edinburgh and Glasgow continue to attract passengers in record-breaking numbers. They fight hard, as they must, for freight traffic. Each airport has proved a magnet for low-cost and high-cost carriers alike while only Ryanair remains active in serving travellers to and from Prestwick. With Edinburgh handling 1.2 million passengers in July alone, as against a mere 69,613 at the Ayrshire airport in May, the argument seems settled.
Prestwick is distant from the days before the financial crisis when the airport enjoyed reasonable success in attracting budget-package holiday flights and handled a large volume of services for Ryanair, many of which have gravitated to Glasgow and Edinburgh.
The Scottish Government was right to buy Prestwick. Scotland is not over-endowed with air transport links or infrastructure. Prestwick’s long main runway, like its trains station and its ability to tolerate foul weather, cannot be matched by its rivals. Both the airport and its associated aerospace industries are major Ayrshire employers. The latter enterprises and their supply chains, particularly in the business of aircraft maintenance, repair and overhaul, are of fundamental importance to the Scottish economy.
Revenue is the key to Prestwick’s survival and future prosperity. Where is it to be found? The task for the new team replacing outgoing chief executive Iain Cochrane and chief commercial officer Graeme Sweenie will be to provide the answer before too much more time elapses.
Pre-tax losses at Prestwick have doubled and passenger traffic had fallen by nearly one third. Andrew Miller, Prestwick’s chairman, has signalled that the airport’s future will be quite different from its past. It is clear that he, and the Scottish Government, believe that a major turnaround will be vital to secure a future for Prestwick, avowedly and eventually in private hands.
The present situation is not sustainable, with fewer passenger numbers, mounting losses and loans from the taxpayer projected to increase to £25m by the end of March next year. What are the options for viability? Prestwick has a history as a freight hub and opportunities in this sector must be explored. If passengers are to be attracted it will require new routes to be opened up, potentially offering low-cost alternatives to what could be a captive market in west-central Scotland. A cut in air passenger duty when control of the levy is devolved to Holyrood might help, although any reduction would apply to all Scottish airports.
The departure of the two top executives is proof that the airport still has a long way to go to overcome its losses and secure its future. The skies are far from clear or turbulence free.