Scotland's Economy

Scotland needs Glasgow Prestwick Airport to succeed

Screen Shot 2015-03-02 at 18.08.21In 1992, political campaign strategist James Carville coined the phrase “it’s the economy, stupid”. He was trying to justify a vote for his struggling Presidential candidate, Bill Clinton. Prestwick Airport is in the news again and if you want to justify the Scottish Government’s purchase of the airport in 2013 for £1.00 then just tell yourself “it’s the people, stupid”.

Sure the decision was based on an economic case, it safeguarded 3,200 jobs and the airport’s contribution of more than £61m a year to Scotland’s economy so it would have been an economic disaster for the West of Scotland had it closed. We would also have lost a vital transportation asset that has a bright long term future. However, the case for saving the airport is best made when you think about the community served by this vital employment and business hub. Ayrshire’s economy was hard hit by the recession and for a generation before that by the de-industrialisation of Scotland.

Prestwick isn’t just another airport, it is a key foundation stone upon which the fragile Ayrshire economy can be rebuilt. If we had lost the airport it wouldn’t have been just a business that closed, we would have lost the employment cluster that surrounds it and the very fabric of the local community would have suffered long term damage.  Just ask the people who lived in the central belt industrial towns what happened to the communities that suffered from de-industrialisation: “Bathgate no more, Linwood no more, Methil no more” etc.

I spent my primary years in Prestwick where my father worked in production management at Scottish Aviation Ltd and my mother was an accountant for Scottish Express (flight) Catering. My gran worked in the airport shop and my sister’s first job was in the airport restaurant. My best friend’s dad was an air traffic controller, a profession into which one of his sons followed. That is what I mean when I say it’s about the people and for me, to think of Prestwick without an airport is just … unthinkable. When Governments make  interventions, such as the one to save Glasgow Prestwick Airport, they have to abandon private versus public sector ownership dogmas and look for longer term returns than the private sector. 3,200 jobs safeguarded is great, but that’s only half of the story – when the Scottish Government saved Prestwick Airport they safeguarded Ayrshire.

Audit Scotland’s report this week fully vindicated the move, stating that: “The Scottish Government’s long-term aim is to sell Glasgow Prestwick Airport back to the private sector once the airport is viable.”  The report said passenger numbers were lower than they hoped and that although “it could take almost a decade before Prestwick would be able to start repaying the money,” the Government could still “reasonably expect a positive return” on the cash being loaned”. This all tied in with what the First Minster Nicola Sturgeon said in 2014: “I’m not suggesting it will be easy. This will take a lot of time, effort and investment. We are potentially in it for the long haul.”

The opposition parties’ reaction was typically negative and missed the opportunity to say something like “here are our new and positive ideas for turning the airport around”.  That approach might actually have made them look fit for government, instead of fit to be an unemployment statistic after the General Election. Instead, opposition for opposition’s sake reared its depressing head as both the Liberals and Labour claimed the report proved that loan funding for the airport had nearly doubled to nearly £40m, and that the SNP had hidden this fact. But it wasn’t a fact, and for the second time in a week Labour got its sums wrong. The £40m is a potential figure, the amount set aside should it be needed, and different scenarios have different figures attached. This was confirmed by Transport Scotland who said: “The loan funding to Glasgow Prestwick Airport has not doubled, these figures are a projection of potential loan facilities that may be required subject to revision as and when commercial activities become realised.”

The Scottish Conservatives simply stuck to their private sector dogma their transport spokesman saying: “It’s essential the airport is returned to the private sector at the earliest possible opportunity.” However, the Tories have been in a unique position to help turn Prestwick airport around but have done nothing.  Scotland’s airports (Prestwick disproportionately) have been damaged by Westminster’s high Air Passenger Duty (APD) tax that is currently set for the whole of the UK. There is an undeniable case for the APD rate for London airports such as Heathrow being higher than for Scottish airports, and eve the Tories accept that.  A year ago the Conservatives said they would devolve APD, so why didn’t they do it immediately? That way Prestwick would be a year closer to their holy grail of re-privatisation.

Glasgow, Edinburgh and Aberdeen airports told the Smith Commission that APD costs Scotland two million passengers a year. From 2012 to 2016, APD will have cost the Scottish economy up to £210m in lost tourism spend. APD was a Smith Commission recommendation and included in the command paper, but the Calman Commission previously recommended devolving APD and it didn’t come – the same could happen again. Had Westminster allowed a Scottish APD cut, that would have stimulated direct flight and passenger numbers to Glasgow Prestwick, increasing overall tax revenues and employment through growth in overnight stays and tourism spend.

PrestwickA few years ago the airport was daubed with the terrible slogan “Pure Dead Brilliant” when I saw that it took me a few seconds to realise it wasn’t the work of a spray can vandal. But now Glasgow Prestwick can have a brilliant and prosperous future.  Good progress is being made and the much needed devolution of APD will mean that the airport’s management and the Scottish Government will be able to work without one hand tied behind their backs. The long-term vision for Glasgow Prestwick is that of a high-quality, high added value and leading aviation, aerospace and passenger and visitor hub.

Added to the strong bid to be the UK’s first spaceport, the excitements of the planned growth in the newly relaunched Prestwick Airshow (a key event from my youth) is making plans for up to 100,000 visitors on September this year.

I see life and excitement being breathed back into Ayrshire’s aerospace and international airport hub, and long may it continue.

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About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland Gordon ran a business strategy and social media, sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and Believe in Scotland.


  • The introduction of low cost transatlantic service could fed by flights from minor european airports transform the airports future viability, with its advantages of geographical location, no congestion ,low landing charges, favorable weather record.Removal of parking charges would. also increase usage. In the longer term a high speed maglev rail link between all three airports and two cities would be less expensive and more advantageous than a often proposed central scotland airport

  • How can anyone talk about Ayrshire or the Ayrshire Airport without mentioning the Ayrshire Poet? Somehow you managed it.

  • Gordon, I applaud your enthusiasm and commitment, but Prestwick has been a basket case for years. No private company in recent memory has been able to make it work and none would have sold it for £1 if they thought it had a future. The plain (sorry for the pun) truth is that it is no longer needed and sentimentality is a poor reason to save anything from closure. The unwillingness of airlines to form any sort of queue to fly from Prestwick proves they are not interested because they cannot make the sums add up.
    Of course there is an argument for safeguarding jobs and trading activity in the area but this only proves the government’s decision to buy it was political, not economic.
    In any case, closing Prestwick would not necessarily undermine jobs and businesses that surround it. Surely they could be sustained if greater efforts were made to build and invest in an aerospace corridor connecting Ayrshire, not with Prestwick, but with Glasgow airport and the greater Glasgow area.

    • Terry as my article points out APD is set for the best return across the whole of the UK and not for Prestwick or indeed for other regional airports around the UK. The Scottish Economy is held back by a lack of direct connectivity with nation we need to do business with and if we had the powers to set the appropriate APD and VAT on tourism levels for Scotland rather than what works for the London Suction machine then the overall tax take would go up in the medium term and jobs would be created. Simply saying lets just use Glasgow and Edinburgh is just a shrunken down copy of the lets all use London airports and overheat London and the south east. The demise of Prestwick is not as a result of natural market forces it is as a result of wrong headed policies that centralise everything around London and the South East as if there is no alternative thinking to be had.

      I do agree there needs to be more investment in aerospace industry and Prestwick is ideally placed to be the UK Spaceport and maybe the first vote that needs SNP support after the next election comes with APD devolution and Spaceport status as part of the deal.

      • Gordon – while I normally agree with you, there is no viable business case for PIK’s passenger terminal operation. It will never have sustainable passenger numbers or any airline willing to pay a workable rate. The SG didn’t know this when they were forced to act to save the entire airfield, campus jobs and surrounding high value businesses but the only way forward (Spaceport apart) is to close the terminal building to cut those costs, and concentrate on the rest of the aviation related services that it does so well and indeed is virtually free of competition in Scotland and beyond. Scheduled air cargo, outsized and ad-hoc air cargo, military staging, technical stops, crew training, manufacturing, etc. It has no place as a modern day passenger airport, APD or no APD. It would be entirely wrong to think the abolition of APD will cause a stamped of airlines to locate at PIK.

        Ryanair – PIK’s only remaining pax airline – are at GLA now and will grow there from now on, being as they are in it to make money. PIK is currently scheduled to host just 12 flights per week next winter. That is unsustainable. There’s no income from terminal shops and car parks when there are few passengers.

        GLA is now free to compete, and rightly so. Clearly it will flex its muscle with a better business case when any new airline business is on the West of Scotland horizon. PIK can’t compete on a commercial basis.

        Not closing the terminal and maintaining this “passenger ops at all costs” mentality will kill the entire airfield operation after we have spent millions on it. It needs a major change of direction.

        And finally, it is inevitable that the main runway will need resurfaced at some point and that will cost some £15-20m that has not been accounted for in any projections or business plans that I have seen.

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