Company lined up to buy Prestwick Airport pulls out of deal

Ryanair plane at Prestwick airportThe airport in Prestwick has been in public ownership since 2013

BBC Scotland is reporting today that the company which had been selected to buy Prestwick Airport from the Scottish government has pulled out of the deal.

This is disastrous news for the SNP government who are already smarting from the failure of their decision to take over the Ferguson shipyard in Port Glasgow contract to build two ferries for Calmac. That blunder is about to cost taxpayers around £200 million.

Prestwick airport was taken into public ownership in 2013, after facing closure following heavy losses.

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Transport Secretary Michael Matheson, pictured right,  has told MSPs that the preferred bidder – who were never named  by Secret Scotland – “does not wish to complete the purchase”.

He indicated in a letter to Holyrood that the reason was linked to Covid-19’s impact on the aviation sector.

Mr Matheson said Scottish ministers would “reflect upon future options for the business”.

The Scottish Conservatives described the announcement as “disappointing … but not surprising”.

The party’s transport spokesman Graham Simpson said: “Scotland’s airports are in crisis as result of the pandemic. Thousands of jobs are dependent on all our airports succeeding and we need to see action now from the SNP.”

Scottish Labour’s Colin Smyth said the Scottish government should set out a clear plan for the running of the airport under public ownership if the sale of the airport at a fair price cannot be secured.

Ministers have regarded Prestwick Airport – where 300 people are employed directly with a further 1,400 jobs supported, as a strategic economic asset – particularly for Ayrshire.

The Scottish government announced in June last year its plan to sell the airport.

Mr Matheson later revealed that bids for the state-owned airport were still being considered, despite a 4 October deadline having passed.

Last December, Prestwick Airport reported a “major improvement” in its financial performance in the previous 12 months.

Accounts filed with Companies House showed the Scottish government-owned airport cut its operating losses from £3m to £1m.

At the start of last year, the debt owed by Prestwick Airport to the Scottish government had risen to £38.4m.

The debt reflected recent years of losses that built up after the Ayrshire airport was saved from closure by the government takeover.

The story behind the Prestwick Airport sale

Prestwick AirportImage copyrightPRESTWICK AIRPORT

The Scottish government bought Prestwick Airport for £1 in November 2013 after its former owner, Infratil, earmarked it for closure following heavy losses.

Ministers said at the time that the deal would help protect the airport and safeguard thousands of direct and indirect jobs.

The government has since invested tens of millions of pounds in an effort to turn around its fortunes, including applying to carry out horizontal space launches from its 2,986-metre concrete case runway.

The Irish-owned Ryanair remains the only scheduled passenger carrier at Prestwick but the airport is also used for transatlantic freight and for fuel stops.

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