Glasgow Prestwick Airport: economic impact assessment
The purpose of this report is to provide the Scottish Government with an understanding of the economic, social, and wider value that Glasgow Prestwick Airport brings to the Ayrshire economy, Scotland and the UK and to communicate this value to key stakeholders.
Footnotes
1 Further local economic context has been provided by the Scottish Government in Appendix 3.
2 It is not appropriate to add the core, secondary, and wider benefits to calculate the total impact, as this may lead to double counting and an overestimation of the estimated impact.
3 Box 4: Based on discussions with on-site companies such as PAM, Storm Aviation, Spirit and GE Caledonian, it is noted that GPA is key to their continued presence in Scotland, which is at risk of being lost in the absence of the airport and its facilities. However this analysis has been conducted on a gross basis therefore the extent to which the benefits generated would not have occurred in the absence of GPA (i.e. the counterfactual) has not been considered as part of the quantified benefits.
*Employment cluster benefits are explored in detail in section 3.4 using FTE data provided by GPA. It is important to note that this impact has been estimated for those organisations for which employment data is available.
4 Implications of GPA’s operations in the context of the UK and Scotland’s decarbonisation strategy and targets has not formed part of this analysis. Although insights regarding the potential to develop Sustainable Aviation Fuel was identified via stakeholder engagement and is included within Section 4.
5 Multipliers are based on SG Input-Output Table data, 2019 for the Warehousing and support services for the transportation sector (SIC: 52).
6 Passengers, often abbreviated as PAX
8 GPA Financial Statements FY 2023
9 An area provided for the embarkation and disembarkation of passengers, the loading and unloading of cargo, fuelling, and for aircraft parking
10 For the purposes of the report, the Aerospace Engineering and Aviation Cluster (Cluster) is used to refer to companies located in close proximity to the GPA site. This includes Storm Aviation, GE Caledonian and Spirit AeroSystems (at the Prestwick Aerospace Campus, formerly known as the Prestwick International Aerospace Park) and surrounding sites in proximity to GPA (e.g. HMS Gannet).
12 The Ayrshire Regional Economic Strategy aims to overcome key challenges facing the local economy. These include: vulnerability to external shocks such as global inflationary pressures and geopolitical risks due to Ayrshire’s highly rural economy and having a high concentration of pre-existing deprivation and poverty, particularly in both North and East Ayrshire. By creating jobs in the region, upskilling the local population, improving accessibility to global markets and diversifying the region’s activities, GPA plays a key role in overcoming these challenges.
13 Ayrshire Growth Deal Document, Government of UK
14 While activities within the three categories may overlap, the above categorisation serves as a foundation for our impact assessment, which is detailed in Sections 2, 3, and 4.
15 Passengers, often abbreviated as PAX.
16 In consultation with SG analysts, SIC52: Warehousing and Support Activities for Transportation, has been selected as the UK SIC code for GPA’s activities as this sector includes Service Activities Incidental to Air Transportation (52:23) along with Cargo Handling for Air Transportation of Division 51 (52.24/2) and other airport-related operational activities.
17 Type 1 multipliers are based on SG Input-Output Table data, 2019 for the Warehousing and support services for the transportation sector (SIC: 52). See here
18 Ibid.
19 Stakeholders including Storm Aviation, GE Caledonian and Spirit Aerosystems are based in the Prestwick Aerospace Campus (also referenced in Section 1.2 of the report).
20 Data related to Spirit Aerosystems reflects the latest position as at May 2024, when this analysis was conducted. As such this report does not include consideration of recent announcements in July 2024 regarding the future of Spirit Aerosystems at Prestwick in the media https://www.bbc.co.uk/news/articles/ckdglkyqdewo
21 FY figures have been used instead of CY figures to ensure consistency in comparing the airport's financial performance.
22 This analysis is based on publicly available information regarding GPA’s core activities and as such provides a snapshot of the airport’s key aviation activities for the purposes of informing the economic impacts in Subsection 2.2.
23 FBO and Fuelling activities have been combined for the purposes of this report based on the complementarity of their customer base (e.g. military and executive organisations) per Table 1.1. However in considering volume and revenue data it is important to note that fuel commodity price is a key factor in driving revenue trends.
24 Computed based on data from the CAA's website.
* It is important to note that the GPA figure of 93% is based on FY data. For comparability, this figure drops to 88% for GPA, when the passenger year data is considered from the CAA website.
25 PwC analysis of IPA data on the split between international traveller numbers vs domestic passengers for Scottish airports (e.g. Aberdeen, Edinburgh, Glasgow, Inverness and GPA).
26 Global hold belly cargo capacity refers to the total volume or weight of cargo that can be transported in the lower deck or belly hold of passenger aircraft across the entire global airline industry. This capacity is a critical component of air freight logistics, as it supplements the cargo transported by dedicated freighter aircraft.
27 Scottish Government 2019 IO Table. Note: Due to large structural changes in 2020 following the Covid-19 pandemic, the latest 2020 tables would not be reflective of a normal economic environment. Hence, to proxy post-pandemic impact modelling, the 2019 IO multipliers have been used.
28 GVA multiplier is an economic metric used to assess the impact of a particular sector or activity on the broader economy. In this table, the metric is used to calculate the additional economic value added in indirect and induced terms, as a result of operations and spending at GPA.
29 Search and Rescue services at Prestwick, BBC News
30 This is based on our stakeholder engagement with Bristow Helicopters.
31 Economic Impact of Glasgow Prestwick Airport, York Aviation, 2012
32 Revenue generated from SAR services forms part of Aerodrome revenue in GPA’s financial accounts, 2022-23
33 Economic Impact of Glasgow Prestwick Airport, York Aviation, 2012
35 The number of FTEs employed and apprentices hired by MRO and aerospace component providers has been confirmed through data provided to GPA by organisations such as Storm Aviation, GE Caledonian and PAML. Later in this section, Table 3.2 highlights the total number of FTE and apprentices hired by aviation and non-aviation related organisations in 2023.
36 ScotRail, Transport Scotland
37 This total is based on the number of FTEs and apprentices in the table. It is noted that there are other businesses in the cluster for which data is not available.
39 This total number of apprentices and trainees is based on stakeholder interviews conducted for the purposes of this study. The economic impact of this is explored in detail in section 4.2 of the report
40 A range for GVA per head is calculated for indirect employment at the GPA site by using 2021 GVA per head for Scotland across the Aerospace Sector (£43,719), Retail Sector (£35,043) and Scotland (£53,357) for remaining (non- Aerospace and non-retail) organisations. Additionally, 2021, GVA per head for South Ayrshire for the Transport & Storage sector (£62,632), Retail sector (£27,985) and average GVA per head for South Ayrshire (£38,861) for remaining non-Aerospace and non-retail organisations has been applied from the Scottish Annual Business Statistics, 2021.
41 In addition to avoiding double counting by considering training and apprenticeship related impacts in Section 4, there is potential some of these employment impacts may form part of the indirect GVA impacts identified in Section 2 of this report. Therefore these results should be considered in gross and not additional terms per the limitations set out in Section 1.4.1.
42 ONS Regional GVA data for Warehouse and transport support activities (SIC 52) in Scotland is used to calculate the overall change between 2021 and 2023 price levels to estimate GVA added per head in 2023. OBR GDP deflator data is used to estimate the change of 12.7% between 2021 and 2023.
43 These include destinations such as Gran Canaria, Lanzarote and Murcia.
44 Golf Tourism, Visit Scotland
45 South Ayrshire Council Golf Strategy (2022 - 2032)
46 Inbound travellers refer to passengers visiting Scotland via GPA for leisure and tourism purposes, generating economic activity.
47 Ayrshire and Arran factsheet, Visit Scotland 2019
48 These assumptions are made because data is unavailable on the proportion of passengers travelling through GPA who are overseas visitors versus Scottish residents travelling abroad. As explained earlier in section 2.1.3, these assumptions also factor in how GPA primarily serves ‘sun-sea-sand’ destinations.
49 Average number of nights calculated using data from the International Passenger Survey 2023.
50 As per VisitScotland 2022
51 This is calculated by dividing the number of tourism jobs supported by overseas visitors of 69,358 (30% of total number of sustainable tourism jobs) by the number of visitors of 3.2m in Scotland, giving a ratio of 0.02.
52 Future Aviation Skills Strategy 2023, Government of United Kingdom
53 Stakeholder interview conducted with GPA Management
54 Per footnote 25.
55 The assumption that all trainees take up full time employment in Scotland, post completion of their PPL training is based on a combination of secondary research and stakeholder interviews. Shortage of trained pilots across the region and more widely across the country imply that there are opportunities for full time employment available for trainees post completion of their PPL training.
56 Stakeholder interviews revealed a range of apprentices (between 5 and 65) hired by organisations based in the Cluster. A conservative view of 5 apprentices hired by each of the remaining organisations in the Cluster has been applied.
57 It is recognised that the 79 apprentices figure in table 3.2 is limited to only a few organisations for which data is available. 229 apprentices are calculated based on an assumption made from our stakeholder interviews.
58 GPA Website Aerospace; GPA Aerospace Skyway.
59 Based on stakeholder engagement with the Ayrshire College and information from Ayrshire College's website
60 List of tenants provided by GPA, December 2024.
61 This is based on our stakeholder engagement with GPA and on research conducted by the UK’s Department of Transport in 2016,framework-economic-impact-of-airports.
62 Estimates of overseas residents’ visits and spending in the UK, International Passenger Survey, ONS
63 Expenditure data for all overseas visitors is used in the calculation to understand a well-rounded view of the tourism spend in Scotland facilitated by GPA. Additionally, pre-pandemic data from 2019 has been used and uplifted to 2023 data to gain a complete picture of tourism spending that was not impacted by the impacts of the pandemic.
64 ONS, Consumer Price Inflation
65 Unless otherwise stated or indicated by a footnote, local authority data is taken from Nomis and its connected ONS sources: https://www.nomisweb.co.uk/reports/lmp/la/1946157432/report.aspx
66 The Living Wage, as defined by the Living Wage Foundation for 2023, is £10.90 outside London. This is different to the UK Government’s National Living Wage of £10.42 for the same period.
67 Annual survey of hours and earnings: 2023 - gov.scot
68 Sub-Scotland Economic Statistics Database - gov.scot
69 Office of National Statistics, https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/regionalandsubregionalproductivityintheuk
70 SIMD (Scottish Index of Multiple Deprivation)
71 Office of National Statistics, https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/datasets/businessdemographyreferencetable
72 Government of Scotland,https://www.gov.scot/publications/business-enterprise-research-and-development-2019/
Contact
Email: SCADPMO@gov.scot