How HAS the SNP managed to lose £30m on airport they bought for a £1?

JONATHAN BROCKLEBANK: So how HAS the SNP managed to lose £30million of YOUR money on an airport they bought for only £1?

• It was once a thriving international package holiday hub and in recent years has been raking in vast sums from the US military

Fifty years ago, its departure hall was a sea of humanity on the move, a melee of snaking queues, mountainous luggage trolleys and giddy anticipation.

Prestwick had long been the only airport in Scotland hosting transatlantic flights but 1973 was the year airline tycoon Sir Freddie Laker launched a direct service from there to Toronto, massively undercutting his rivals.

A return ticket could be had for only £45 and the flights on his DC-10s included meals, onboard films and a free bar.

Suddenly North America was within reach as a holiday destination for tens of thousands of Scottish families and here, on the Ayrshire coast, was where the adventure began.

With its near two-mile runway – the longest commercial one north of Manchester – and consistently benign weather conditions, this was Scotland’s long-haul flight hub. It regularly welcomed jumbo jets. Concorde was an occasional visitor.

 Donald Trump flies out of Prestwick on Air Force One after his visit to Scotland in 2018

Thirty miles away, Glasgow Airport was the poor relation, handling domestic and European flights only, while Edinburgh Airport’s international routes were more limited still.

How astonishing the reversal of fortunes today as that hall stands virtually empty, almost every check-in desk closed.

Even at peak season, only a handful of flights leave from Prestwick on any given day – so few that, when a flight is called, the entire departure lounge often empties. In low season there are days when no passenger flights are scheduled to take off or land at all. That is down to Ryanair, for years now the last passenger airline standing at Prestwick.

It was this dramatic decline that prompted Prestwick’s last private owner, New Zealand-based Infratil, to cast around for a way to remove the loss-making airport from its books. Such was the urgency to offload it that, ultimately, it accepted an offer of only £1 from the Scottish Government.

That was in 2013, a year before the independence referendum, when the failure of the airport and the potential loss of thousands of jobs directly and indirectly supported by it would have presented Alex Salmond’s SNP with a political nightmare.

Since then, the Nationalists have shovelled more than £43million of taxpayer-funded loans into the asset and subsequently written down their total value to the level of £11.6million – a loss of more than £30million.

A decade on from its infamous purchase, what are the Scottish Government’s plans for Prestwick Airport besides throwing around public money ‘like confetti’, as former Scottish Liberal Democrat leader Willie Rennie now puts it?

No one seems to know – and that appears to include the Government.

Recently it emerged that, on top of the loan funding, ministers have spent more than £2.5million on professional fees relating to the sale of Glasgow Prestwick Airport, though no sale has been agreed and it remains moot whether the Scottish Government is even still minded to sell.

Little wonder that opposition politicians are calling out the culture of secrecy surrounding an asset many believe should not be in public ownership in the first place.

‘Governments are not really in the business of running airports,’ says Mr Rennie, who sees Prestwick as one of several examples of state interference by an administration with a poor track record of picking winners.

It was Mr Rennie’s party whose Freedom of Information inquiry revealed the scale of Scottish Government spending on professional fees relating to the potential sale. ­‘£2.5million in consultancy fees to not sell the airport is a huge sum of money and it’s the complete disregard for taxpayers’ money that really upsets people,’ he says.

‘People need to be treated with respect. We need to be told what the plan is. They need to be clear about [whether they are] selling this or not and how much they expect to get for it… because there has to be accountability. If there isn’t accountability, governments will just go on spending money with little regard to those who are footing the bill.’

The Scottish Conservatives want clarity too. The party’s transport spokesman Graham Simpson says: ‘It’s not on the market, so that is where we have this confusing ­situation. Do they want this airport in public hands or not?

‘If they don’t want it in public hands, then put it on the market and see what comes forward.’

The picture is further confused by the fact that dwindling passenger numbers do not tell the whole story of Prestwick’s fortunes.

During the pandemic in 2021 those numbers slumped to only 78,000 – compared with Edinburgh Airport’s three million – and, even in post-Covid times, the place has come to be viewed as an aviation backwater ­forlornly trading on the day in 1960 when its most famous arrival stepped onto the tarmac.

That was Sergeant Elvis Presley setting foot in the UK for the first and only time in his life in March that year when the military jet returning him to the US after his service in Germany stopped to refuel.

Even at peak season, only a handful of flights leave from Prestwick on any given day

More than six decades on, it seems that it is military pit-stops similar to this most celebrated one that now keep the airport afloat.

While its annual accounts do not go into detail about its arrangements with the US military, it is clear from spending records kept by the US Defence Logistics Agency that the Pentagon has paid Prestwick almost £70million for refuelling services over the past six years.

Its reliance on the airport has steadily increased in that time, with 927 refuelling orders coming in last year, generating £20.6million of revenue for Prestwick.

Decades after Canada disappeared from the arrivals and departures boards, military planes from there regularly use the facility too, along with Kuwait, the United Arab Emirates and India. In May last year reports in Canada suggested as many as 80 missions had been flown by Canadian military planes carrying ‘lethal and non-lethal’ aid for Ukraine, using Prestwick as a hub for the transfer of goods and refuelling.

It was also at Prestwick that Air Force One landed in 2018 during then-US President Donald Trump’s visit to Scotland. It is, after all, just a few miles from his Turnberry hotel.

Is this, then, the airport’s real raison d’etre today? If so, what are the implications of that for a sale and the prospect of any of the Scottish taxpayers’ loan being repaid?

Some have voiced concerns that such close links with the US military in particular may be a disincentive for buyers.

MSP Mr Rennie wonders whether the return to profitability brought about by the influx of ­military customers may now prove a disincentive for the Scottish Government to sell.

As for the SNP’s partners in government, the Greens, there is clear ­distaste for the fact a Scottish state-owned airport is facilitating overseas military activity.

‘For far too long the Pentagon has treated Prestwick like a US airbase,’ the party’s external affairs spokesman Ross Greer told the Scotsman newspaper last month. ‘We need far more transparency about these flights and where they are going. Our public assets should not be used as a springboard for the US military’s worldwide aggression. And we certainly shouldn’t have to rely on Pentagon figures to get even the most basic details about how many American military flights are landing.’

The calls for transparency, then, come even from the SNP’s power-sharing partners.

What is known is that there has been a series of approaches from potential buyers – all of which have fallen through. Though never confirmed, an early bidder was believed to be Glasgow Airport’s owner AGS Airports, but the deal collapsed in 2020 as the pandemic hit.

The owners of Leonardo da Vinci-Fiumicino Airport in Rome were reportedly the next preferred bidder but, according to sources, they wanted the taxpayer loans to be written off and hefty grants as part of the deal. Talks broke down.

It is understood the latest doomed bid was from a Swedish company operating in Britain as Aviation Alliance UK but the deal was scuppered after it emerged that major repairs were required to one of the two runways.

Again, the Scottish Government never confirmed the identity of the bidder but the then finance secretary Kate Forbes said in January 2022 the deal was ‘not adequate to secure value for the taxpayer’.

In the light of subsequent remarks by Scotland’s auditor- general Stephen Boyle, that ship has surely already sailed.

In January he told MSPs that the Government is sitting on a paper loss of £31.8million for its ten-year stewardship of Prestwick Airport and that interest of £7.4million which should have accrued on the £43.4 million of loans to the airport was now valued at nil. Mr Boyle said: ‘These are long-term commitments, taking many millions of pounds of public expenditure. And really, for any investment, whether it’s public sector or private sector, when you are investing that amount, it really goes back to the business case. What do you intend to achieve from that?’

Quite what the Scottish Government intended to achieve, besides avoiding the political embarrassment of an airport closing on its watch months before an independence referendum, remains something of a mystery.

Indeed, the intended role of the airport remains difficult to grasp too. Disquiet is already expressed by privately owned Scottish airports over the public funding of a competitor of theirs for passengers. According to Edinburgh Airport’s chief executive: ‘It fundamentally skews what should be a competitive and fair playing field.’

But how seriously is it trying to compete? Not very, says Mr Simpson, who argues that if it tried any harder to attract passengers away from Glasgow and Edinburgh airports it would be ‘entirely wrong’ for it to remain in public hands.

Perhaps a Prestwick Airport planespotter has the clearest insight of all as to what the facility is actually for.

Graeme Williamson, who photographs aircraft there most days, says it may be true that people most associate Prestwick with Ryanair but in fact the place is a planespotter’s paradise.

Elvis Presley at Prestwick Airport during his stopover visit to the UK on March 3, 1960

‘The Americans use Prestwick Airport on a near-daily basis,’ he says. ‘I was at Prestwick a few minutes ago and got an American C17 transport aircraft, a US Army Beechcraft and US Air Force ­Stratotankers, which come in very routinely. There are C-130 transport aircraft that come here from the US, we get Air Defender 2023s and A-10 Warthogs coming through … so for the US Air Force this ­airport is highly influential still because of its position as a refuelling hub.’

He adds: ‘The US Air Force is not the only one. We often get visits from the likes of the Royal Jordanian Air Force, the Israeli Air Force, who have Boeing 707s which are becoming a very rare aircraft. Prestwick is still a very important hub for many military operators and that has increased after Russia’s invasion of Ukraine.’

The airline Cargolux, meanwhile, regularly flies 747s carrying freight into Prestwick. Mr Williamson adds: ‘From the exterior, the terminal building looks like it was built in the 60s or 70s, which it was. When you walk in, it’s empty, so to the average person this will seem like something on the way out… but it’s wrong to assume that.’

There is no mention of behind- the-scenes military activity from the airport itself when questioned on its role in Scottish aviation.

In a statement to the Mail, it said: ‘The airport has been profitable for the last three years and will report a further successful year to March 23. The airport is a key enabler for the Ayrshire aerospace cluster, sustaining 300 direct and 4,000 indirect jobs, and Scottish ministers have confirmed they remain committed to supporting their long-term investment in the airport.

‘The airport has a diverse growth strategy focused on cargo, passenger, general aviation and property. Ryanair currently flies to 11 European destinations.’

The Scottish Government said the airport operates at arm’s length from ministers and the plan remained to return the business to the private sector ‘when the time and circumstances are right’.

The spokesman added: ‘The airport is currently profitable and the Scottish Government receives expressions of interest periodically regarding its purchase.’

For any sale, the spokesman said, ministers must be confident it ‘would not only represent value for the taxpayer but would put the business on a firm footing’.

For reasons the airport will say little about, its business footing is growing firmer. Value for the ­taxpayer is perhaps a much more distant prospect.

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