The trouble is that as the size of that "loan", accumulates over time, PIK would paradoxically become an increasingly unattractive investment for a private concern since they would become liable to take on the debt.

Unless, of course, the loan is written off as a sweetener.........

But thank you for a an objective response. There's not enough of that around here.

ScotsSLF,

How many passengers does the airport handle per year?
What level of subvention has it needed?
Pax for 2015 from memory circa 600K, correct me if wrong.

Personally, I have no prejudice for PIK... Though given the pax numbers and the Scottish government investment, people are well within their rights to deem the facility unviable in terms of being a passenger airport.

I doubt many can give you the specific £ detail you want, but given 1 the competitive environment, FR will be getting a good deal, 2 the cost of running an passenger airport is far above the revenue generated from the pax numbers.

If PIK can carve a niche for itself as a cargo gateway or maintenance point, it could well survive. Though I'd suggest unless they can get the pax numbers up to and above 1.5m power annum, there is little case on a commercial basis for keeping a terminal open.... All of course based on my own experience etc on airport stuff.

Others worth less survive but these examples have other circumstances, like no based airline hence shorter days etc.

EI-BUD

S1E, I have to clarify you in regard to Globespan as I was very close to the organisation. We never intended to use PIK for our Operations we sent aircraft there only on 2 occasions that I can remember first was for an engine change in the Polar hangar (Now RYR) As I was involved in obtaining the finance for that hangar in the first place and we were only there for 1 night, the second time was when we diverted several aircraft there when GLA was bombed.

GSM relocated out of PIK to GLA soon after launch, but they most certainly flew out of PIK in their early days.

One 733 at EDI and one at PIK initially I think. That must have been before matkat was "close to the organisation " :-)

I had an office at PIK when GSM launched flights from PIK and I'm sure there were two 73-3s based there that summer. I had friends fly out to Rome and Malaga and I'm sure there may have also been flights to Nice and Barcelona also. This was during the era of the route development fund and Tranavia to Amsterdam and Germania to Berlin was also in evidence. Anyway that's all history now so better to debate the future than focus on the past

Fear of memory loss and intrigue got the better of me. Web searches found the following. "At first, the airline was based at Glasgow Prestwick Airport operating two Boeing 737s flying to Alicante, Barcelona, Malaga, Nice, Palma and Rome". Appears they lasted one summer before moving to GLA. Anyway, back to the future.

Back to the original thread. I am old enough to remember when PIK's long, fog-free runway was vital for transatlantic flights; the slightest mist at LHR and they would all set down at PIK until it cleared. Now we have ILS. But there is an argument for maintaining the runway.

It is also clear that PIK has created a viable ecosystem of air-related technology businesses. These will always tend to cluster, not just so that they can poach each other's staff, but also so that they can, from time to time,use each other's specialist expertise. Such businesses, high skill, high wage, are vital to the economy and need to be encouraged and supported. They will need the continued existence of the runway.

However it is not clear that they need the continued existence of scheduled services and the terminal to support them.

Can someone please check my maths, as either I'm calculating the numbers wrong, or Ryanair are getting one hell of a deal at PIK...

First off, if we refer to the following Scottish Government document regarding the purchase of PIK, we can see the following infographic:

Document: http://www.audit-scotland.gov.uk/doc...ck_airport.pdf

http://img.photobucket.com/albums/v3...17f74cfb90.png

Further down the page, we can also see a graph of income/expenses for the period:
Income: ..........10m
Expenses: .......15.4m
Profit/Loss: ......-5.4m

Now, using these figures, we can calculate the split of income per revenue stream:

Car Parking...........1.7m
Retail ...................1.2m
Passenger.............1m
Transport..............0.6m
Other aviation.......1.6m
Property...............2.2m
Freight.................1.7m

So - £1m revenue from passenger flights.

Now, this is for the financial period 1st April 2012 - 31st March 2013. According to the CAA, the movements during this period was as follows:

Passenger 7663
Freight 654

Aircraft only pay fees when landing, so if we divide that figure in half, then divide up that £1m, we get the following:

Revenue per pax flight (2 movements): £261

Next, if we look at the published fees for the airport as a reference, we can work out what they should be paying:

Document: http://www.glasgowprestwick.com/wp-c...ed-July-16.pdf

For a 737 with an MTOW of 79 tonnes, carrying a full load of 189 passengers, the fees should be:
Movement & Navigation fee:...£608
Passenger/Security Fees:.....£2,559
Total per movement:...........£3,167

That should give us a total of just under £10m on 0.55m departing passengers and 3831 arriving movements recorded for the period.

Ryanair are therefore getting a 90% discount on flights?

I'm not sure but doesn't it just mean that Ryanair are paying a total of £1.00 per passenger or thereabouts?

Nighthawk117,

Interesting post there and make a lot of sense. Understand your rationale, really shows the scale of the problem at PIK and hence the level of subsidy necessary from Scotland Gov.

The advertised rates are rarely what the airlines actually pay at airports. Given the very competitive market place of airports around Europe who want to attract airlines to place their aircraft, makes the challenge even greater for the likes of PIK, hence the low rates suggested. The airports mostly make their money from the car parking facilities and the retail outlets in their terminals....

You only pay fees on departing passengers, so half the passenger figure (assuming everyone who leaves, comes back). The airport is therefore making £2 per passenger.

However, as per the airports fees, they should be charging £13 per passenger

Yes, this is true. Most airport fee lists show that based aircraft receive a 30-50% discount, and new routes often benefit from discounted rates for the first 3 years also. There may also be other discounts negotiated by the airlines.

However, as per my calculations, Ryanair are receiving 90% discounts, which is a huge sum.

I've made a Freedom Of Information request to see if they will give a similar breakdown of the airports costs between passenger/freight/general expenses.

Based on the information above, GLA and EDI would probably have a case against PIK/The Scottish Government for distorting the market by the use of illegal state aid but I can't imagine either would want to bring such a case as they would probably have to then reveal the deals they do with airlines and would it really be worth it to p off Ryanair and the Scottish Government (or at least the SNP).

the current prices Ryanair are paying would probably have been agreed before the government took ownership of PIK. They will need to wait until the current deal expires before it can be re-negotiated.

That may be the case but in that case the point is that the deal was sub economic and the airport couldn't survive without State Aid which has distorted the market place.

The airport more or less broke even in 2007/08, when they were handling just under 2.5m passengers, and 30,000 tonnes of freight.

They either need to get back to this level, cut costs, or increase the revenue they gain from each passenger.

Unfortunately, those passenger numbers look unlikely, and Ryanair will fight hard to avoid raises in fees, so its down to growing cargo and cutting costs.

I must admit I don't expect anything dramatic to happen in the near or even distant future - PIK will just keep bumbling along with the support of the Scottish tax payer. The only possible exception would be if Nicola won an independence referendum and suddenly realise that an impoverished Scotland couldn't afford to keep subsidising PIK (and don't go all trollish on me - I am a Scot too).

Sorry, but any renegotiation will result in a negotiation downward. And yes, that is very probably the extent of the discount. I am surprised, I thought they may be paying zero....:ouch:

I am with WW. I see no dramatic shift in fortunes for PIK. I love the place, it is a fantastic facility, but wrong place, wrong time, and wrong everything. A great shame, but reality.

..... cue 'but its in the right place for fog free diversions'... yes so is Belfast and Manchester.

Belfast is very prone to fog, and Manchester is much more prone to it than Prestwick.