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24/02/15 10:28

Transport Minister comments on Audit Scotland Prestwick Report

Renewed call for Air Passenger Duty transfer

In response to the Audit Scotland report on the Scottish Government’s acquisition of Glasgow Prestwick Airport, Cabinet Secretary for Infrastructure, Investment and Cities Keith Brown said:

“Closure of Prestwick Airport would have been devastating for Ayrshire and the action taken by the Scottish Government has safeguarded 3,200 jobs and secured a vital infrastructure asset that contributes more than £61 million annually to the Scottish economy.

“Audit Scotland’s report vindicates the action taken by the Scottish Government – it shows we made the right decision to step in and confirms that we followed the correct purchase process in a tight timescale, identifying and considering the risks before moving forward with the acquisition.

"We have been clear from the outset that our investment is on a commercial basis and will take the form of loan funding. This attracts a market rate of interest in line with state aid rules. The report confirms that the Scottish Government is highly likely to generate a return on this investment that is higher than the interest rate that we are currently charging the airport.

“We have never shied away from the fact that this is a long term investment. There is no quick fix to turn Prestwick Airport around, but there are real opportunities to improve in all areas of the business. It is a non-typical airport, where success is not predicated on passenger traffic or any one aspect alone. There are opportunities to capitalise on its other assets and related businesses, such as freight, maintenance repair and overhaul, fixed-base operations and property. The management team is working on a number of potential commercial opportunities at the moment which we hope will reach a positive conclusion. There is also the on-going process of the airport putting forward a bid for the UK Spaceport Programme – a game-changing prize we believe it’s in an excellent position to win.

“The service changes made by Ryanair are part of the normal revision process that airlines undertake to optimise their business. Ryanair has assured us of its continuing commitment to Glasgow Prestwick Airport and of its intention to actively consider growth options in the future. We look forward to working with them to make that happen.

“In respect to our future plans, the Audit Scotland report confirms that good governance arrangements are in place to monitor progress at the airport. The airport’s management team published their Strategic Vision document last year, outlining their plans and the development options to move the business forward. We have already given updates to Parliament through the Infrastructure and Capital Investment Committee and we will continue to do so as the business plan for the airport progresses.

“We are confident there is a place for Glasgow Prestwick Airport in the evolving and increasingly competitive Scottish aviation market, and are committed to making it the success we know it can be.”

In responding to the report, Mr Brown took the opportunity to step up calls for the transfer of Air Passenger Duty which he said would be game changing for Scotland’s airports.

Mr Brown added:

“We could, of course, do even more to help attract carriers to Glasgow Prestwick Airport – and Scotland’s other airports - by cutting rates of Air Passenger Duty (APD), something we do not currently have the power to do.

“Once APD is devolved, the Scottish Government is committed to reducing it by 50% within the term of the next parliament. We will provide further incentive by moving to abolish APD when public finances permit. These are major steps that could make a real difference for our airports and passengers.

“Devolving APD to Scotland as soon as possible is backed by leading aviation industry figures in Scotland and will help to unlock the country’s full economic potential, bringing more international flights to all of our airports as well as cutting costs for passengers.”