Chamber and committees

We should consider the current economic environment. Airports and airlines have been through more than a little turbulence, if you will pardon the pun, particularly because of the Covid pandemic but also because of the other economic shocks of recent years.

I am hopeful that there will be continued interest in the airport, but I am not concerned about that, not least because the airport is in a good financial position and one that continues to improve. We are not a distressed seller and we will look at any expressions of interest based on the current strength of the asset.

That type of work will be critically important in Ayrshire and other regions that have a critical employer area—Prestwick airport is not just one employer; there are a number of employers on the site—and a local college working together to consider and answer skills demands. It is important that they have a strong relationship in order to address any skills gaps that might exist and ensure that there is aspiration among the young people going through the college system and an understanding that they have good careers prospects in their local area. It is really important for people to feel that their home is a place where they can continue to live and have successful careers, and that they can be proud of where they live.

I am pleased that that relationship is developing. I look to support it, not least given the review by Mr Withers on what we need to do to reshape our skills agenda. I refer members to my colleague Graeme Dey’s statement earlier this week on how we are taking that forward. I am very pleased to see that interaction and relationship developing.

We can do things around long-term activity that are contingent on the sale, but they will need to be balanced against ensuring that we secure a sale. It will obviously be in any new owner’s interests to ensure that the airport has a good relationship with the local community and that it has a positive economic story to tell about the jobs that they are creating. Having strong domestic and local supply chain networks will determine the overall success and profitability of the airport. I suspect that those will all be important considerations for a potential buyer, and we want to ensure that those areas are successful for the airport in the long term.

They will take first consideration and contact us if there is an expression of interest, and they will give us details about what has come forward. Obviously, that is predicated on an expression of interest going to them first. If it came to the Government, we would look to assess it, as well. The first port of call is through the board and the assessment process that comes through there.

I absolutely accept that point, and Mr MacDonald’s analysis is fair. Going back to Ms Tweed’s question, there are potential stipulations that we can put on a sale. I am not saying that that is what we are doing, but I am saying that to give assurance to Mr MacDonald. We hope that the work that the board and the management team are doing to ensure that the passenger airport’s operations become more profitable comes to fruition, so that Mr MacDonald’s fears are not realised. That will all be part of our consideration.

The other element that I wish to point out is that, although the airport is publicly owned, we do not own the airlines that operate within it. I know that Mr MacDonald understands that. The comparisons that he is making with some of the other elements are slightly different. It is about ensuring that the wider site continues to be a strategic asset and to operate in a successful manner. My team of officials and I are keen to ensure that the passenger airport also continues to improve its position.

Mr Macdonald obviously understands that the group position needs to be considered. Consideration of the passenger airport cannot be taken in isolation from the rest of the group and the income that is derived from that. I take the point, and the outstanding loan to the Scottish Government, which continues to be on commercial terms, will clearly be an issue of consideration for any potential buyer. I am not operating in the commercial world, but I suspect that the group’s overall position will make it an attractive proposition. I hope that the airport continues to develop in such a way that it becomes even more attractive in the commercial world.

That is a separate consideration when we decide on a planning application. I hope that Mr Whittle will respect that.

The £11 million valuation of the loan is subject to change. A revaluation of the airport is under way. I cannot pre-empt that but, if there is a more favourable financial position, the value of the loan on the Government’s books and the expectation of any return to be realised will change too.

We want to see the loan being returned as quickly as possible and we have set out that expectation to the current management and the board.

We set up SCAD on the back of an Audit Scotland recommendation to ensure that we effectively manage the strategic assets that are under our ownership. That has meant that there is greater involvement of senior officials in the operations of those businesses, and a close working relationship. As I reiterated to the convener, day-to-day operational decisions are commercial matters, but, clearly, having a close working relationship on strategic direction is very important. From a more practical, day-to-day perspective, I believe that there has been an improvement in the way in which we operate with our strategic assets. Colin Cook may wish to comment further.

With regard to the diversity of income that comes from the airport site, military flights and military income have been a factor for Prestwick airport for quite a considerable time—that has been a feature since the 1930s. That on-going diversity is, as Mr MacDonald’s questioning of senior management demonstrated, incredibly important to ensure the interrelationship between the physical airport, the passenger element, the military element and the wider business operation, which includes other businesses being located on the site.

To answer Mr Stewart’s question directly, there is, of course, on-going scrutiny and the on-going involvement of me and Colin Cook and his team. We have people observing on the operational board on a regular basis. To respond again to Mr Fraser’s question, the creation of SCAD has enhanced our scrutiny as it allows us to have an overview of the way in which all our assets—not just Glasgow Prestwick airport—operate, to ensure that we are stretching them in what they seek to develop through the site.

We have spoken about the opportunities that exist for the spaceport, the advent of sustainable aviation fuel and Prestwick airport’s strategic importance in the delivery of aviation fuel across the network. We need to ensure—as we are—that people continue to pedal fast so that the continued development happens at pace and the opportunities that they have before them are realised.