Bidders circle ‘Elvis airport’ a decade after the SNP bought it for £1
Prestwick has cost taxpayers millions since it was nationalised by the SNP in 2013. A consortium plans a bid, but can the Nats let go of Sturgeon-era stateism?
Elvis Presley meets fans at Prestwick airport in 1960 — his sole time on British soil
Saturday March 16 2024, 6.00pm, The Sunday Times
It was always going to be difficult keeping a lid on the arrival of Elvis Presley at a US military base in Prestwick, Ayrshire. “Where am I?” he asked as he stepped off the plane and into the biting wind that whipped off the Firth of Clyde.
March 3, 1960 was a momentous day for the screaming youngsters who engulfed the American singer as he set foot on British soil for the first and only time. For Presley, it was his last stop on his return from Germany after two years of military service. For Prestwick, it meant being immortalised in British trivia for its brief flirtation with The King.
Located 34 miles south of Glasgow, Prestwick has attracted further notoriety in recent years for housing Donald Trump’s private jets and helicopters, stationed at the airport to ferry him to the nearby
Turnberry golf course. It has not, however, earned a reputation for being a commercial success. Indeed, despite boasting the longest runway in the UK north of Manchester, welcoming as many as 2.5 million passengers annually and charging the US government tens of millions of pounds to refuel military planes, Scottish ministers had to step in and nationalise the loss-making airport in 2013. It has been a drain on British taxpayers ever since.
Donald Trump is a frequent visitor to Prestwick on his way to and from Turnberry golf course
This weekend it can be revealed a private takeover is in the offing — one that will hand Scottish first minister Humza Yousaf the chance to draw a line under more than £55 million of losses for the Treasury racked up since the airport was taken into public ownership by Nicola Sturgeon at a cost of just £1. Whether he will take the chance is as much a political question as it is an economic one.
Sturgeon, deputy first minister at the time, chose to nationalise Prestwick 11 years ago to save 300 jobs, plus 1,400 more among businesses associated with the airport. The logic was straightforward: the economic fallout would be greater than the £21.3 million needed to stabilise the airport’s finances before returning it to the private sector.
“I believe an opportunity now exists to return Prestwick airport to profitability and ultimately to private ownership,” Sturgeon said at the time.
Critics argued that this was little more than a power grab, neatly combining the SNP’s desire for a state-run economy with the airport being a symbol of nationalist pride. Whatever the rationale, Prestwick’s nationalisation quickly became embroiled in political mudslinging as it emerged that the SNP had sanctioned payments of almost £200,000 to the airport’s former directors.
A number of false dawns emerged in the years that followed. On several occasions, ministers claimed they were in talks with unnamed interested parties to take the airport private, only for negotiations to fizzle away.
Meanwhile, the Americans boasted they had secured hefty discounts from the Scottish government for the aviation fuel. “At Prestwick we have a negotiated rate, so we actually have a rate that’s significantly lower than the commercial rate,” US official Jonathan Hoffman told reporters in 2019. The discount is unknown — but it is unlikely to be small. In the past six years alone, the US Department of Defense has spent
almost £104 million on fuel at Prestwick, filings reveal: equivalent to about £50,000 worth of fuel a day.
It has also been revealed that the cost of bankrolling Prestwick since its nationalisation has ballooned to £55 million, and the interest on a government loan is costing more than £4 million a year.
So, all things being equal, officials are likely to take seriously an audacious takeover bid led by the airport’s former chairman and one of Canada’s biggest private equity funds.
Forsyth Black has quietly resigned his chairmanship of the airport and now heads the bid to buy it
Forsyth Black, the former chief executive of multinational airport refuelling company Menzies, quietly quit as Glasgow Prestwick chairman in February after little more than two years in the job. His resignation letter to Scottish ministers is understood to have included the reason for his departure: namely that he wanted to buy the airport in conjunction with Onex Corporation, the fund behind WestJet, Canada’s second-biggest airline. Black told officials that staying in post as chairman was a clear conflict of interest.
Oddly, the SNP-led administration north of the border has not disclosed Black’s interest, despite having disclosed previous offers to members of the Scottish parliament. Sources close to Black and Onex’s swoop say it includes a commitment to not cut jobs in the first three years of ownership and to keep running Prestwick as an airport — rather than building on it, for instance — for at least five years.
Scottish ministers will rightly be sceptical of the intentions of the airport’s Canadian-backed suitors. The airport covers 880 acres of land on the outskirts of Glasgow ripe for property development.
Prestwick offers significant advantages over Scotland’s two larger airports, Glasgow and Edinburgh. Its long runway means it can handle fully-laden large aircraft such as the Airbus A380 “superjumbo’; the airport already has a dedicated rail link into Glasgow; and it is rarely blighted by fog, unlike many competitors in the UK and Ireland.
Nicola Sturgeon was deputy first minister at the time of the airport’s nationalisation.
Black declined to comment this weekend on why he stepped down as Prestwick chairman. He was likewise tight-lipped on any plans he and his Canadian backers have for the airport. Onex has a pedigree in aviation, however, with its ownership of WestJet. It would not be ridiculous to assume that the carrier could establish Prestwick as a long-haul hub for flights that could head east to Asia.
Yousaf’s approach will be closely watched as a signal for how his administration intends to manage the Scottish economy. The Sturgeon administration was criticised for a raft of bungled economic policies, not least of which was spending more than £200 million to nationalise the Ferguson Marine shipyard.
The Scottish government responded this weekend: “As one of the most recent expressions of interest is linked to Forsyth Black, the then chairman of the board of the airport, it was mutually agreed that Mr Black should step back from the Board to ensure an independent and fair assessment can be made. The Scottish Parliament will be updated when appropriate.”
Yousaf must decide whether to distance himself from Sturgeon’s stateist tendencies, or continue in the same vein. Prestwick may be his proving ground.