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Scottish government announces plans to buy Prestwick Airport

The Scottish government is to buy Prestwick airport, whose main claim to fame is as  the only place Elvis Presley officially ever stood on British soil, to prevent the closure of the unprofitable terminal located 30 miles southwest of Glasgow. It is unusual for a government to buy an airport, although the Welsh assembly recently bought Cardiff Airport.

The government plans to complete due diligence and the transfer of the airport with Infratil Ltd., Prestwick’s New Zealand-based owner, within six weeks, Deputy First Minister Nicola Sturgeon  announced . The infrastructure company put the site on Scotland’s west coast up for sale in March 2012 and failed to find a buyer.

While a sale price has yet to be finalized, Infratil doesn’t expect “material proceeds,” Chief Financial Officer Kevin Baker said in a telephone interview in Wellington today. “When you fail to make a sale to any private-sector parties, and the government agrees to take it back into public ownership, then you’re not in a strong position to negotiate a very favorable price,” he said.
The airport’s main business is freight traffic. Ryanair   , Europe’s biggest discount airline, is the sole scheduled operator to serve Prestwick, connecting it with 27 destinations . Scotland’s only rail-connected airport has struggled to attract other carriers, which prefer to use bases closer to Glasgow and Edinburgh .
Taking Prestwick into public ownership while seeking a long-term commercial investor will help protect 3,200 jobs directly and indirectly associated with the airport . It proved impossible to get a private investor to commit to buying Prestwick in a timespan acceptable to Infratil, she said.

Passenger numbers at Prestwick totaled 621,000 in the eight months through August . That compares with 6.6 million through Edinburgh airport and 4.9 million at Glasgow.

Prestwick’s terminal can handle 3 million passengers a year and the owners claim it could easily be expanded to accommodate 10 million . In the past  the base served as a trans-Atlantic gateway and staging post for U.S. aircraft during World War II.

Prestwick still has Scotland’s longest runways, and with a lower incidence of fog than any other airport in Britain is often used as a diversionary terminal when others are closed.

Baker said Infratil may have been forced to close the airport without a sale to the government. The company is also trying to sell Manston airport in the U.K., and in May 2013 announced it had written down the value of both airports to 11 million pounds .

Presley landed at Prestwick in 1960 on his way back to the U.S. from Germany after completing mandatory military service.

“There is a bar at the airport, in the departure lounge, called the Elvis lounge,” Baker said.

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