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Glasgow Prestwick Airport to be taken into public ownership Glasgow Prestwick Airport to be taken into public ownership
(34 minutes later)
Glasgow Prestwick Airport is being taken into public ownership, the Scottish government has announced. The Scottish government has confirmed that it plans to take Glasgow Prestwick Airport into public ownership.
The step was confirmed in a statement by Deputy First Minister Nicola Sturgeon in the Scottish Parliament.The step was confirmed in a statement by Deputy First Minister Nicola Sturgeon in the Scottish Parliament.
Brian Donohoe, Labour MP for Central Ayrshire, welcomed the move.
The airport, which was put up for sale last March by New Zealand-based owners Infratil, has been running annual losses of £2m.The airport, which was put up for sale last March by New Zealand-based owners Infratil, has been running annual losses of £2m.
Ministers will now enter detailed negotiations with Infratil on the terms of sale.
Ms Sturgeon told MSPs it had become clear no private investor was able to commit to buying Prestwick Airport on a timescale that was acceptable to Infratil.
She said the Infratil board had been considering its options, one of which was to seek commercial discussions with a view to public sector ownership and the other being to close the airport.
Airport jobs
Ms Sturgeon said ministers had "examined carefully" the implications and consequences of both options before making their decision.
She argued that the closure of Prestwick would be a "serious and unwelcome development" for the Ayrshire and the Scottish economies, with about 1,400 jobs linked directly or indirectly with the airport.
She said: "We believe Prestwick Airport can have a positive future.
"It will require investment and it will take time. However, we believe it can be returned to profitability.
"We also estimate that the cost of closure to the public purse would be very significant and this is an important factor in our decision."
She added: "I can therefore advise parliament that the Scottish government has advised the current owners of our intention to commence a process towards acquisition of Prestwick Airport.
"Following the agreement of its board earlier today in Shanghai, we are entering into negotiations with Infratil for the potential acquisition of Prestwick Aviation Holdings Limited and its subsidiaries.
"Conclusion of this process will, of course, be subject to the Scottish government carrying out confirmatory due diligence.
"The terms of sale will be on a commercial basis and in accordance with the market economy investment principle."
'Major money''Major money'
Mr Donohoe said: "This is a development which I welcome and we need now to ensure concentration is steered towards new routes and new airlines coming into the airport. She added that the government intended to complete due diligence and detailed negotiations with Infratil on the terms of sale over a six-week period.
"Major money is required to develop the airport which is why I have always said it should be given for a penny to a developer willing to spend the cash. Infratil has agreed that it will continue to ensure the airport is kept fully open and operational while the process is ongoing.
Welcoming the announcement, Labour MP for Central Ayrshire Brian Donohoe said: "Major money is required to develop the airport which is why I have always said it should be given for a penny to a developer willing to spend the cash.
"I hope the Scottish government did not pay much more than that.""I hope the Scottish government did not pay much more than that."
Speaking to BBC Scotland, he said the airport had been "moribund" for about 10 years.Speaking to BBC Scotland, he said the airport had been "moribund" for about 10 years.
"The actual income against the expenditure hasn't matched," he said."The actual income against the expenditure hasn't matched," he said.
Mr Donohoe added that, as a result, the airport's owner had not made "the necessary investment".Mr Donohoe added that, as a result, the airport's owner had not made "the necessary investment".