The failing Ayrshire airport serves no purpose other than to divert resources from a more apt, central hub solution, writes Michael Kelly
There is only one good reason for taking Prestwick airport into public ownership. And that’s to shut it down in an orderly manner. The decision to waste over £2 million of government money year after year funding its losses has met with little opposition. That’s yet another indication of how the referendum campaign is stifling debate on economic policy.
Prestwick hasn’t been a success for thirty years. Even before it lost its status as Scotland’s transatlantic gateway it struggled to attract flights and passengers. Even the dishonest change of name to Glasgow Prestwick hasn’t helped.
Now after months of owners Infratil trying to offload it, the Scottish Government has promised to turn round its fortunes with, of course, no coherent plan with which to achieve this objective.
Currently its losses are contained by the fact that Ryanair is still prepared to use it for passengers who think they are travelling to Scotland’s biggest city. If there is one airline which will exploit the government’s weakness in this situation it is the Irish-based carrier. Subsidies will have to soar or Ryanair will shift its hub to Glasgow Sumburgh.
Prestwick has now no strategic importance. Its excellent weather record and long runway have been overtaken by technology and the market. State control will not bring it back to life, although it is obvious why the SNP government took this decision. They are desperate to build a scenario where in an independent Scotland there are no nasty economic surprises. The sun always shines on a fully employed population sailing serenely to wealth on a black lake of oil wafted by winds strong enough only to turn the turbines of innumerable wind farms. Seeing significant local employers close down spoils the idyllic prospect when a Yes vote depends so crucially on the tranquil appearance of prosperity post-independence.
Yet Prestwick has no part in a sensible economic strategy for Scotland. Taking it into public ownership allows its closure to be effected in a way that would not concern a private company. It can be planned over a longer timescale putting in the proper mechanisms for dealing with those who lose jobs and seeking to attract businesses that that will provide alternative employment. The costs of doing that would be worth it to allow mitigation of the social effects of its loss to the local community. That may well be the plan which will only be revealed if we are daft enough to vote ourselves out of the UK.
It is claimed that the idea is to rejuvenate Prestwick with new investment to update facilities. That would be throwing good money after bad. The investment already there has not provided a return for decades. It is the only airport I‘ve been in where the departure board reads, “Next Flight – Wednesday”. Any attempts to attract new airlines and flights to Ayrshire can only be at the expense of Glasgow. The population of Central Scotland is too small to support three airports. Bluntly, there is just enough demand to make one viable international hub.
One can get some idea of the small size of the Scottish economy by looking at Manchester airport. It currently handles 20 milion passengers per year – more that Edinburgh and Glasgow combined – serving a catchment area larger than the population of Scotland. It is expecting to host direct flights to China this year and is planning an £800m airport city which will create some 16,000 jobs. Such numbers dictate that the long proposed Central Scotland airport was the correct solution all those decades ago, when a new airport near Falkirk – Skinflats International, it was dubbed – was mooted by economic strategists.
If Scotland is to have a multi-modal transport system fit for purpose in the 21st century, then only one airport hub of sufficient scale is required. A big airport would attract more direct flights avoiding the need for passengers to fly via London or Schiphol. It would also provide cheaper freight costs for Scotland’s high-value, low-bulk exports. If the market worked perfectly that would be the solution that emerged. However, the market is skewed by the vested interests supporting the three existing gateways. The current government’s interference has only further distorted that market and will block the sensible rationalisation of our airport resources.
It is further indication that the SNP has no stomach for difficult economic decisions. The message it gives out is that an SNP government will favour postponing tough choices and will continue subsidising any loss-making industry that threatens to shed jobs.
We’ve been here before. The refusal to manage change led to the sudden collapse of Scottish manufacturing in the 1980s when government help was mercilessly withdrawn. The nationalisation of Prestwick confirms that support for economic failure is policy, established in the foolish belief that oil revenues will allow such profligacy to continue indefinitely.
There are good reasons for nationalisation. The bungled Royal Mail sale shows how lucrative state-run businesses can be. Few would argue that the NHS would deliver better from private hands. Gordon Brown should have nationalised the banks to give voters control over bonuses. And how many commuters long for the return of British Rail? This nationalisation could work if it is used to refocus our aviation policy.
To give our industry a fighting chance, Scotland needs one effective international airport. In the current state our resources are fatally divided. Prestwick should be shut and support should be given to develop Edinburgh as our single hub – Edinburgh rather than Glasgow because it is the better performing of the two and there are good transport links between the cities.
But no party is going to debate that, much less advocate it, in the run up to this paralysing referendum. And so this economic hobble will continue to slow Scotland down as another opportunity to take the right long-term decision is ignored.