Glasgow Prestwick Airport: economic impact assessment

4. Wider impacts

The impact of GPA's services extends beyond the airport's core and secondary activities in the form of spillover effects, with significant implications for the Ayrshire region and Scotland as a whole. As detailed in Section 1.3, these encompass a range of effects.

These include: broader tourism, and training and apprenticeship impacts across the region, (including within the Prestwick Aerospace Campus), and the wider development initiatives undertaken by companies within the Aerospace Engineering and Aviation Cluster. These impacts have been assessed primarily through qualitative analysis within this section. This analysis is derived from literature review and stakeholder engagements, with the exception of tourism and training impacts, which have been estimated quantitatively.

This section first highlights the overall strategic economic and social impacts generated by GPA based on insights shared by representatives of South Ayrshire Council in case study 4. Followed by estimates of the broader tourism and training impacts generated from GPA’s wider impacts, before proceeding to qualitatively consider wider aerospace related clustering impacts.

Case Study 4: South Ayrshire Council - Economic and Social Impacts generated by GPA

GPA is recognised as a crucial economic driver across various sectors in the South Ayrshire region. Besides acting as a gateway to tourism, GPA’s strategic location and infrastructure attracts inward investment and business development into the local economy, stimulating economic activity in the region particularly, in the aerospace campus.

GPA supports the broader economic development and sustainability goals of the region through its involvement in various initiatives and projects. It actively participates in the Ayrshire Growth Deal, contributing to projects such as the Commercial Build programme and the Aerospace & Space Technology Applications Centre (ASTAC). These initiatives promote economic growth, foster innovation, and enhance the region's capabilities in aerospace-related sectors. GPA also supports Ayrshire College's efforts to gain CAA approved Part 145/147 accreditation, which would enhance the region's capabilities in aircraft maintenance and repair. It also supports pilot training programmes, offering valuable hands-on experience through access to its runway.

Additionally, it serves as a catalyst for the local tourism economy and as an essential hub for the region’s supply chain. In particular, GPA’s connectivity, both domestically and internationally, enhances the region's accessibility and facilitates trade and business travel. GPA’s hosting of events like the annual Air Show also promotes the region’s aviation heritage and capabilities, boosting tourism.

The Council also highlighted the risks associated with any potential changes in use or closure of GPA, including the impact foreign direct investment (FDI) opportunities, impeding accessibility, potentially affecting tourism numbers and undermining the local economy. Noting the impact of GPA's closure would extend beyond the local area, resonating throughout the wider Scottish economy and potentially tarnishing Scotland's reputation as a business-friendly destination.

4.1 Wider tourism impacts

GPA's presence in Scotland supports increased tourism in the area, with Ryanair operating as the exclusive carrier at the airport, offering competitive prices and direct access to destinations not available at other Scottish airports.^[43] Moreover, GPA is the only airport in Scotland with a dedicated railway station which further enhances its appeal to both inbound and outbound visitors. This tourism traffic contributes to wider economic benefits for the region of Scotland in the form of tourism spending and employment impacts in the sector.

A key driver of these tourism benefits in the local area is likely to be due to the presence of numerous golf courses across South Ayrshire, with five of the UK’s top 100 courses and three open Championship venues among them. According to the latest golf tourism report released in 2016,^[44] approximately two-thirds of golf visitors to the region were from the UK, while one-third came from overseas. The report also revealed that golf tourism contributed an economic value of £17.1 million to Ayrshire, supporting 437 jobs.^[45]

As presented in Table 4.1, tourism impacts have been estimated for three scenarios in addition to the baseline scenario, outlined in steps 1 to 3, in Appendix 2. These scenarios have been developed based on insights gathered during stakeholder interviews and an extensive literature review of passenger flows and expenditure patterns, which suggests the possibility of lower inbound travellers^[46] and shorter duration of visitors' stays than standard estimates provided by the latest 2019 South Ayrshire fact sheet from VisitScotland.^[47] In summary the following four scenarios have been presented:^[48]

• Baseline Scenario: assumes 20% of the total passengers travelling through GPA are inbound passengers and these inbound visitors spend on average 6.6 nights^[49] in Scotland, resulting in an estimated tourism impact of £61m.
• Scenario 1: assumes a higher estimate of inbound passengers (30%) resulting in a tourism impact of £91m.
• Scenario 2: assumes a lower estimate of inbound passengers (10%) resulting in a tourism impact of £30m.
• Scenario 3: assumes baseline estimate of inbound passengers (20%) and a shorter duration of visitors' stays (3.3 nights), presenting an estimated tourism impact of £30m.

If an equal likelihood is assigned to all four scenarios mentioned above, the average impact of GPA's tourist spending on the Scottish economy is estimated to be approximately £53m for FY 2022-23.

Table 4.1: Scenario analysis for tourism spending impacts, FY2022-23

Source: PwC based on data from SG, VisitScotland, International Passenger Survey, GPA Financial Statements and stakeholder engagements

4.1.2 Tourism-related employment impacts, FY2023

For tourism-related employment impacts, it is estimated that GPA supports an estimated 1,830 tourist-related jobs in the Scottish economy. This is based on tourist-job per visitor ratio of 0.02 for Scotland^[50] and is calculated as follows:

• Diagram titled “Figure 4.1: Calculating tourism-related employment.” It shows a formula:
• Employment support of 1,830 tourist-jobs equals
• Number of inbound visitors travelling through GPA of 91,525 multiplied by
• Scotland’s ratio of tourist-job per visitor of 0.02.
  The elements are displayed in coloured boxes: orange for employment support, pink for inbound visitors, and red for Scotland’s ratio.

To provide robustness in relation to these estimates, the following scenario analysis has been undertaken by adjusting the key inbound visitor numbers and tourist-job per visitor assumptions.

Table 4.2: Scenario analysis for tourism employment support, FY 2022-23

Source: PwC based on data from SG, VisitScotland, International Passenger Survey, GPA Financial Statements and stakeholder engagements

As presented in Table 4.2, three scenarios have been estimated in addition to the baseline scenario. In summary the following scenarios have been presented for the FY 2022-23 period:

• Baseline Scenario: assumes 20% of the total passengers travelling through GPA are inbound passengers, with a tourist-job per visitor ratio of 0.02, resulting in the support of approximately 1,830 tourism jobs in the region.
• Scenario 1: assumes a higher percentage of inbound passengers and the same tourist-job per visitor ratio, resulting in the support of around 2,746 tourism jobs in the region.
• Scenario 2: assumes a lower percentage of inbound passengers and the same tourist-job per visitor ratio, resulting in the support of around 915 tourism jobs in the region.

If an equal likelihood is assigned to all four scenarios mentioned above, the average tourist-job supported by GPA’s presence in the Scottish economy is estimated to be 1,830.

4.2 Wider training and apprenticeship impacts, FY 2022-23

The Ayrshire region faces a significant aviation-related skills gap, particularly in aerospace engineering, aircraft maintenance and air traffic control skills. The effects of the Covid-19 pandemic and Brexit on the labour market have further exacerbated this skills gap. In fact, this skills gap is not limited to Ayrshire alone, but pervades the wider aviation sector

across the UK. To address these challenges, the UK government published the Future Aviation Skills Strategy in 2023.^[52] This strategy sheds light on the numerous obstacles faced by the aviation sector in the UK, including the aforementioned skills gap, the drive towards achieving net zero emissions, and the ever-evolving technological landscape. Importantly, the strategy also puts forth recommendations on how to effectively tackle these issues.

As a key employer in the region, GPA and the surrounding aerospace related businesses play a key role in organising and supporting skills generation programmes and initiatives, including working in collaboration with local colleges, universities and local authorities to address this issue. These programmes and initiatives, (including apprenticeship programmes, a 1-year School-College Partnership Programme and 12-weeks Reskilling and Upskilling Programmes), not only provide immediate employment opportunities to trainees and apprentices but also help upskill and retrain individuals with technical skills, ultimately creating more full-time employment opportunities in the region.

This section provides an analysis of the quantitative direct and indirect employment impacts, generated by the training services offered at GPA and surrounding aerospace-related businesses within the Cluster. The analysis is supplemented by insights from stakeholder interviews. Two key categories of training impacts have been identified, as follows:

• 1. Direct training: Pilot training provided at GPA; and
• 2. Indirect training: Apprenticeship opportunities provided by MRO and other aerospace businesses adjacent to GPA.

4.2.1 Direct training impacts

GPA offers Private Pilot License (PPL) training at the on-site Prestwick Flight Centre that typically requires 45 hours of flight time to complete. Primary research highlighted that approximately 23 individuals completed this training in 2022-23.^[53] The potential employment impacts generated by this training in GVA terms for the year 2022-23 has been estimated by using a range of GVA per head data^[54] in Scotland. Firstly, for the Aerospace Sector for 2021 (of £43,179) and secondly, GVA per head for South Ayrshire (of £62,632) as presented in Figure 4.2 below. As in section 3.4, ONS CPI data has been applied to estimate GVA in 2023 terms generating GVA per head of between £49,270 and £70,585.

Diagram titled “Figure 4.2: Calculating direct employment impacts generated by training services.” It shows a formula:

• Direct employment impacts generated by training services equals
• GVA per head data multiplied by
• Number of individuals who complete PPL training at GPA.
  The elements are displayed in coloured boxes: orange for direct employment impacts, pink for GVA per head, and red for number of individuals.

This approach estimates that GPA generates GVA between £993,120 - £1.4m in 2021 terms and £1.1m to £1.6m in 2023 prices, through the training of pilots, assuming all trainees take up full time employment in Scotland in 2023, post completion of their PPL training.^[55]

4.2.2 Indirect training impacts

Additionally, as briefly explained in Section 3.2, MRO and related aerospace organisations based in the Aerospace Engineering and Aviation Cluster play an important role in providing training and skills development in the region. These businesses, alongside GPA, support this training in several ways, including by running dedicated apprenticeships, utilising access to the runway at GPA for training provision and collaboration with Ayrshire College for access to training materials. Furthermore, these businesses actively contribute to the college's Pre-apprenticeship Programme, which serves as a valuable pipeline for apprentices who are subsequently hired by local and regional aerospace companies. By directly employing apprentices from this programme, these businesses are not only supporting the initiative but are also establishing a clear pathway towards full-time employment. As a result, these training and apprenticeship programmes, mainly focused on aerospace engineering roles, help create high skilled and high value employment impacts in the local region over time.

In order to provide an indication of the estimated impacts from this investment in training and apprentices, the indirect apprenticeship impacts for the aerospace-related businesses in the Aerospace Engineering and Aviation Cluster in 2023 have been calculated. This calculation uses the following three-step process:

• 1. Number of apprentices has been estimated based on data collected as part of the stakeholder engagement process with four MRO and aerospace component organisations, providing an estimated number of 154 apprentices in 2023.
• 2. For cluster level impacts an assumption has been made that each of the remaining 15 aerospace-related organisations hire a minimum of 5 apprentices on an annual basis.^[56] Resulting in a total number of 229 apprentices employed in the Aerospace Engineering and Aviation Cluster in 2022-23.^[57]
• 3. The indirect employment impacts generated by these apprenticeships has been estimated by assuming an average annual salary of £15,000 paid to apprentices and trainees enrolled in aerospace-related programmes in the area. This assumption is based on research conducted by Skyway, an initiative from South Ayrshire Council’s Economy and Regeneration Service which aims to support individuals pursuing a career in the Aerospace and Space Industries.

Figure 4.3 below presents the steps to estimate the indirect employment impact generated by the total apprentices in the Cluster. An annual salary for year 1 apprentices of £15,000 is assumed which is applied to the total of 229 apprentices within the Cluster, generating an estimated indirect employment impact of £3.4m through these placements in 2022-23.

Diagram titled “Figure 4.3: Calculating indirect employment impacts generated by training services.” It shows a formula:

• Indirect employment impacts generated by training services equals
• Annual salary for apprentices in the Prestwick Aerospace Cluster multiplied by
• Number of apprentices hired in a given year in the Prestwick Aerospace Cluster.
  The elements are displayed in coloured boxes: orange for indirect employment impacts, pink for annual salary, and red for number of apprentices.

Case Study 4 provides a deeper insight into the skills gap in the region and the wider benefits generated by the training and apprenticeships provided within the Aerospace Engineering and Aviation Cluster at Prestwick.

Case Study 5: PAML - Skills development

PAML are heavily involved in skills generation and development in the local area through their training and apprenticeship programmes to help address skills shortages in the sector. As the lack of a skilled labour force is a key barrier to their future growth.

PAML offers several training and apprenticeship placements, including a 12-week training programme for aircraft mechanics. They currently have 72 apprentices across various departments, such as aircraft engineers and sheet metal workers. This apprenticeship programme is delivered in collaboration with Ayrshire College. PAML’s collaboration with GPA is crucial in delivering these programmes, particularly through its use of GPA’s training and aviation facilities.

PAML’s support in organising STEM events and airshows is also seen as important in encouraging skills development in the region. In summary, the provision of formal and informal training activities undertaken by PAML helps to generate immediate and future employment opportunities in the region.

4.3 Other Cluster Benefits

GPA also plays a substantial role in infrastructure development in the Ayrshire region, generating a “cluster effect”, where similar businesses congregate in close proximity to the airport. Drawing on qualitative insights gained through stakeholder engagement and desk based review of background literature, the following key categories of commercial activities have been identified:

• 1. Prestwick Aerospace Campus, encompassing companies within GPA's Cluster that engage in aircraft design, manufacturing, and maintenance.
• 2. Commercial spaces leased to both aviation-related and non-aviation companies.

This clustering stimulates aerospace and wider business innovation, knowledge and resource sharing as well as economic development within the region, as discussed further below.

4.3.1 Prestwick Aerospace Engineering and Aviation Cluster

GPA boasts the largest Aerospace Campus in Scotland^[58] in the form of the Prestwick Aerospace Campus, which is home to world leading advanced engineering companies. International businesses such as Spirit AeroSystems, BAE Systems, Woodward, GE Caledonian, Collins Aerospace all have operations at Prestwick accessing a small yet flexible and highly skilled aerospace and engineering workforce, with close links to further education providers. As previously noted in section 3.4, within GPA's Cluster, approximately 2,500 FTEs are employed (based on available data). The two largest employers in the Cluster are Spirit AeroSystems and GE Caledonian, employing around 1,074 and 780 FTEs respectively, collectively representing 74% of cluster employees. In addition to a designated Aerospace Enterprise Area, established engineering supply-chains and extensive road, rail, sea and air connections.

As the site owner, GPA plays a key role in enhancing partnership working across the Aerospace Campus, to add value to the constituent organisations via knowledge sharing and upskilling of the local workforce. With over 880 acres of vacant land, the airport is seeking to attract new aerospace and auxiliary service companies to the site, working closely with Scottish Enterprise, Ayrshire College and South Ayrshire Council to support further development of the Aerospace Campus on its site. This is further illustrated in the case studies below.

Case Study 6: Ayrshire College’s ASTAC initiatives^[59]

Ayrshire College intends to establish an Aerospace and Space Technology Application Centre (ASTAC) at GPA and its airport terminal, in close partnership with GPA and South Ayrshire Council, pending successful commercial negotiations with the airport. This centre aims to facilitate the development and production of new flight technologies in Scotland, leveraging the existing aerospace supply chain, launch platforms, satellite payloads, and academic and industrial research within the Cluster. Additionally, a Visitor and STEM Hub will be integrated to drive technological innovation and skill development, positioning Ayrshire and Scotland as hubs for Aerospace and Space Technology.

The purpose-built multi-occupancy building will serve as a central location for the expanding Cluster, providing essential training and research facilities to foster growth and support aerospace and space businesses in Scotland and the UK. Collaborating with local and national higher and further education institutions such as the University of Glasgow, University of Strathclyde, University of the West of Scotland, and Ayrshire College, ASTAC will address business development and training needs in the Aerospace and Space sector.

By working alongside existing research and innovation initiatives, ASTAC will enhance advanced manufacturing techniques, productivity, and the sustainability of businesses within the sector. Moreover, the inclusion of a visitor/STEM hub will offer educational opportunities for students to explore career paths in aerospace and space industries, while serving as an innovative training facility for the local labour market and educators. Despite minor delays, Ayrshire College remains confident in the progress of development plans for the centre and is actively seeking funding opportunities, including from the Ayrshire Growth Deal, to support this project.

Case Study 7: Growth plans of aerospace component and fuelling companies within the GPA cluster

GE Caledonian is primarily focused on expanding its existing site and noted the possibility of leveraging GPA's freight services and storage facilities to accommodate the resultant increase in activity. It is seeking to foster partnerships with stakeholders from the local government to enhance its competitiveness and capture a larger share of Gen X maintenance contracts. GE Caledonian aims to significantly scale up its shop visits service, aiming to reach approximately 300 annual visits in the long term, which represents an increase of over 25 -30% based on current levels.

BP is exploring avenues to enhance its provision of Sustainable Aviation Fuel (SAF) at GPA. SAF, a renewable alternative to fossil jet fuel, can reduce greenhouse gas emissions by up to 80% over its life cycle without requiring modifications to existing aircraft. BP is working on producing SAF through co-processing at existing refineries and constructing standalone units dedicated to SAF production, supporting the aviation sector's transition to a lower-carbon future.

A key tenant, HMS Gannet was also interviewed as part of the stakeholder engagement process conducted for this report. To showcase the diverse nature of services offered at GPA. Details regarding the activities and expansion plans of HMS Gannet, are provided in Case Study 8.

Case Study 8: HMS Gannet’s expansion plans

HMS Gannet, also known as RNAS Prestwick is a Royal Naval Search and Rescue Station and has been stationed at GPA since 1971. Positioned on the northern side of GPA, this site, previously leased, is now owned by the Ministry of Defence and functions as a forward operating base for the UK military.

Gannet's primary role is to support the protection of the UK’s nuclear deterrent. The site encompasses an aircraft dispersal area, two hangars, an office complex, accommodation block, and several ancillary buildings. Additionally, there is a dedicated helo landing spot for helicopters.

Functioning as a forward operating base, Gannet offers facilities and office space to visiting military units such as the US and the Canadian military to facilitate their training operations. The site can accommodate approximately 60 individuals. The selection of a site adjacent to GPA as Gannet's location is largely influenced by its proximity to HM Naval Base Clyde. Moreover, the 24/7 operations at GPA enable extensive training activities that utilise the airfield. Over time, Gannet's infrastructure at GPA has expanded significantly.

Hence, the GPA site and wider Prestwick Aerospace Campus offers numerous benefits within the region, including amongst others:

• International Business Presence: which not only boosts the prestige of the Ayrshire region but also encourages knowledge and resource sharing among industry leaders within the field of engineering.
• Skilled workforce: given the current and planned training initiatives available, providing skilled engineers who benefit from higher wages compared to local average wage in the area. The Aerospace Campus therefore increases disposable income in the region and stimulates consumer spending and economic growth.
• A supportive ecosystem: that encourages collaboration and innovation between businesses within the Cluster as well as public-private partnerships with Scottish Government, Scottish Enterprise, Ayrshire College and South Ayrshire Council.

4.3.2 Leasing commercial spaces

Leasing of commercial spaces to aviation and non-aviation related businesses in and surrounding GPA offers various benefits to the region, including but not limited to:

• Leasing of commercial and retail spaces within the GPA terminal site including up to 50 businesses covering over 17,242 square feet^[60]
• Increased business activity in the region given the wide variety of companies located within the Prestwick International Aerospace Park.
• Enhanced competitiveness of the region, positioning it as a favoured destination for both aviation-related and ancillary businesses.
• Greater tax revenues for the local government resulting from the expansion of companies within the airport's Cluster, enabling more resources to be directed towards public services and community welfare programmes.

Thus, beyond the core and secondary benefits outlined in Sections 2 and 3, GPA provides substantial wider benefits to the local area and the Scottish economy of which the tourism and training impacts have been quantified. This indicates that in FY 2023, GPA contributed to:

• Approximately £61m of tourism expenditure in the region which supports an estimated 1,830 tourism jobs across Scotland; and
• An estimated 23 pilots and 229 apprenticeships with an estimated direct economic impact of between £1m to £1.4m (in 2021 prices) and indirect economic impact of £3.4m respectively.