Glasgow Prestwick Airport Statement Brochure - 2024

Glasgow Prestwick Airport Stakeholder Statement 2024

Diverse Distinct Delivering

GPA Stakeholder Statement for the year ended 31 March 2024 This report serves not just as a financial record but as a testament to our collective efforts, resilience and strategic direction. At Prestwick, we understand the profound impact our operations have on various stakeholders, from our customers and employees to the communities we serve and the broader aviation industry. It will outline our financial performance, highlighting key achievements, challenges and our commitment to transparency and accountability.

2

About Us Glasgow Prestwick Airport, a unique and multifaceted organisation at the heart of Scotland’s largest cluster of Aerospace businesses. We stand out among commercial airports with our diverse array of services and unwavering commitment to excellence. GPA is not just your typical airport; we are a dynamic hub offering a wide range of services tailored to meet the needs of various stakeholders. From facilitating seamless passenger travel to handling essential cargo operations, from serving military needs to providing prime property rental

04

opportunities, we operate on multiple fronts to ensure our contribution to Scotland’s connectivity and economic growth remains unparalleled. As we navigate the complexities of the aviation industry, Glasgow Prestwick Airport remains steadfast in its mission to deliver excellence across all facets of business operations. With the support of our shareholder, the Scottish Government, and our dedicated team’s tireless efforts, the Airport will continue its legacy of innovation and service.

Contents 04

Strategic Pillars

06

Foreward from the Chair

08

Message from the CEO

12

Passengers

13

Aviation Services

14

Cargo

15

Property

16

Safety, Security and Quality

17

People and Culture

18

Stakeholder Engagement

19

Sustainability

20

Group Statements

3

Our Strategic Pillars

Customers & Growth To protect and grow our customer base by providing a diverse and distinctive range of services. e of services.

People & Culture To develop and invest in a team that is agile, passionate and focused on customers and operational excellence.

Stakeholder Engagement & Communication To build relationships among local, regional and national stakeholders as a recognisable and trustworthy catalyst for the development of the Ayrshire economy.

Sustainability To have a clear plan to be a sustainable airport and achieving net zero by 2045.

Health, Safety, Security & Quality To achieve the highest standards in health and safety, security and quality standards.

Land, Facilities & Assets To maximise the value from our assets, 860 acre site, facilities, working with customers and the community.

4

5

Foreward from the Chair

Willie Mackie I am very pleased to report another year of improving performance at Glasgow Prestwick Airport.

Market conditions remained challenging, however we have seen further tangible evidence that our strategic focus across the business is delivering positive trading results.

The team at Glasgow Prestwick Airport has worked extremely hard to retain our high standards of customer service which has undoubtedly contributed to this success. On behalf of the Board of Management I would like to extend my thanks to Ian Forgie CEO and the entire team for their relentless commitment and hard work.

During the year, our Chair, Forsyth Black, stepped down from the Board to recognise a potential conflict of interest and it was a great pleasure and honour for me to be invited to accept the role of Interim Chair. On behalf of the Board of Management I would like to thank Forsyth for his excellent contribution as Chair and his strong leadership during his term of office.

It has been very encouraging to see the continued strong demand for rental space across the Airport estate with the majority of tenants seeking to expand or build new facilities.

Our Cargo business continues to grow and remains one of the key pillars of our strategy for growth. The expertise of our experienced ground handlers has been matched by further investment by the Board in new equipment leveraging opportunities to move to a more efficient and sustainable fleet. We believe we can do more, and we are actively building our profile in China targeting the rapidly expanding e-commerce market, including the recruitment of a new business development resource based in the region.

The Airport is a key strategic asset for Scotland. It is also playing an increasing role in regional economic development for Ayrshire and the west of Scotland with strong collaborations across Ayrshire College, Ayrshire Chamber of Commerce, South Ayrshire Council and Scottish Enterprise.

Delivering and sustaining the highest standards of safety and security is one of the highest priorities for the Board of Management. Further investment was made during the year in improving the security of the airport site and the enhancement of early warning systems across key access areas.

6

The Airport successfully attracted an increasing number of private jet customers, and the Airport remains a popular choice for visiting dignitaries to Scotland. We have an ambition to create a new bespoke facility to accommodate the increasing demand for these services.

It is the Scottish Government’s stated intention to return the Airport to the private sector when the timing is right. The Board of Management and the Executive Team remain fully committed to maximising the potential of the Airport and to delivering the maximum return to our shareholder.

I am very proud of our continued achievements evidenced by these trading results, and I would like to thank my fellow board members for their passion and commitment in setting the highest standards of corporate governance. We look forward to building on this success in the year ahead.

Image to go here

7

Message from the CEO

Ian Forgie 2023/24 has been another successful year of growth for the Airport and although the aviation industry has had its challenges, the Group has performed well financially in the last two years and this year delivered a £3.2m operating profit (2023 - £2.1m).

The board and management continue to centre on the Group’s six strategic pillars and take up the opportunities for growth by leveraging the Airport’s strengths, diverse services and markets and distinct operations. Tangible opportunities exist in the future to build on this success and utilise the Airport’s existing assets and cost base and grow key business areas, notably Cargo, as well as invest in aircraft hangars to generate long term income.

The air cargo market started the financial year in an unnatural but expected decline in the early part of 2023 but steadily improved during the next 12 months and in March 24 had grown 8% year on year, primarily fuelled by the surging e-commerce sector and enhanced productivity from China. Whilst the primary beneficiaries were belly hold carriers it is expected that the demand for freighter capacity and imports from China into the UK will continue to rise in 2024/25.

Our long history of servicing military customers continues with most nations operating aircraft using our airfield and facilities, most notably the RAF, USAF and the Royal Canadian Air Force (RCAF) which last year celebrated its 80th anniversary of its connection with Prestwick. The Airport has a reputation for hosting and supporting key training events and last year we successfully supported a NATO training exercise held in Germany, which was a credit to our staff who delivered excellent operational service.

We continue to build on these relationships and supporting the UK’s defence capabilities in the future.

In the past year we have been able to improve and maintain a presence at all prominent events in the industry to create market awareness of our location, size and capability. The business has also continued to invest in new equipment with two new high loaders, a push back tug and aircraft de-icer added to the fleet in the last 12 months and we now have cold storage facilities to support perishable and pharmaceuticals along with new x-ray capabilities in our bonded warehouse facilities.

Building on the mode successfully employed by Cargolux and Air France and with an excellent handling reputation delivered from in house services, 24/7 availability and no slot restrictions, the Airport has proven it is able to service the whole of the UK market from Scotland.

8

Cargo Passenger

9

We continue to service our scheduled customers and are pleased to continue a long-term relationship with Ryanair with a new 5-year agreement for passenger services. Ryanair celebrated 30 years of flying from Prestwick having set up its first base in 1994. The Airport was recently awarded Ryanair’s top performing UK airport base by its passengers as well as achieving the highest rating for passenger assistance by the CAA. The Airport remains an important base for Ryanair with an Aircraft Maintenance, Repair and Overhaul facility onsite employing over 600 people.

The Airport has also seen an increase in demand for commercial property in recent years with occupancy of our lettable estate at over 98%. We continue to engage with and support strategic partners focused both on regional economic development and supporting the training and development of new aeronautical engineers. These highly skilled engineering roles are in high demand and there are plenty of opportunities at our tenant MRO companies and the other world class companies which make up the aerospace cluster surrounding the Airport. We also see opportunities for additional aircraft hangars and apron space, and we will continue to develop and utilise our 860 acre estate as part of our Master Plan.

Fuel supply remains a key service for all our customers, and we are pleased to have agreed a 10-year extension to our supply contract with our current partners BP who operate from our fuel farm. Transitioning to sustainable aviation fuel (SAF) is an important industry target and we welcome the introduction of the first steps in stimulating and establishing supply stock with 2% mandated sustainable aviation fuel (SAF) sales in the UK from January 2025. We are planning to establish the Airport as a key supply point for SAF in Scotland for those customers seeking to use higher blends. Sustainability is a key strategic pillar for the Airport, and we are on track to exceed our 2030 carbon reduction target of 50% with a projected 59% reduction in our Scope 1 and 2 emissions.

Our cost base continues to feel the pressures of the impact of a surge in energy and food prices in 2023 and inflation and interest rates peaked during the year with a resultant impact on costs impacting wages, electricity, maintenance and equipment costs. Although we were pleased to offer another substantial pay increase to our employees this year as part of a 2-year agreement, this adds additional pressures to our cost base challenges and future pay increases must continue to be grounded on affordability if we are to operate a sustainable business model.

10

It has been a long-term aim of the Scottish Government to return the Airport to the private sector and the board, the Scottish Government and their advisors are currently engaged in a process in testing the market.

Key Performance Statistics 23/24

22/23

21/22

Total Movements (‘000) Total Passengers (‘000) Total Freight (Metric Tonnes) Fuel Volumes (Million Litres)

27.8 523 11 46

20.1 459 13 44

19.2 118 18 36

£m

£m

£m

Revenue

54.1

58.1

35.0

Operating Profit Increase in fair value of Investment properties Financial expenses

3.2 1.3 (3.1)

2.1 0.5 (1.7)

1.9 0.4 (1.1)

Total Profit/(Loss) for Year

1.5

0.8

1.2

Overall, the Group returned a profit before tax of £1.5m. This continues the positive trajectory of the group over the last five years. Despite the ongoing economic pressures and the uncertainties of wars in Europe and Middle East and the outcome of a US election in November, the Board is confident that the Airport will be able to utilise its strengths and adapt to market changes.

We thank our customers and our employees for their passion, support and commitment to the Airport and look forward to the Airport continuing its long history, prospering and delivering strong value to the economy in Ayrshire and Scotland.

The full annual accounts can be viewed here

11

Passengers With a proud history spanning nearly 80 years, Glasgow Prestwick Airport continues to serve as a vital hub for passenger connections, while balancing a diverse mix of revenue streams.

Passenger services remain a cornerstone of our business, and we are committed to growing and enhancing our offerings.

2022-23 marked a significant year of post-Covid recovery, with passenger numbers rebounding to 75% of pre-pandemic levels. This positive trend continues,

12

reflecting our efforts to restore and expand our services.

We are delighted to announce a new winter route to Barcelona, offering even more travel options for our passengers.

Looking ahead to the summer season, we have an increased number of flights to our already popular destinations, providing greater flexibility and convenience.

Prestwick is known for its efficient, high-quality service, ensuring smooth and stress-free journeys. Our passenger handling team has

been consistently recognised for excellence, achieving top ratings in the CAA’s Accessibility Reports again this year.

As we look to the future, we are investing in improved food and retail options. Our goal is to ensure that Glasgow Prestwick remains the first choice for passengers, offering a seamless and enjoyable travel experience every step of the way.

Aviation Services Prestwick Aviation Services (“PAS”) is our Fixed Based Operator (“FBO”) managed by our inhouse handling team, specialising in supporting nonscheduled aircraft operations at the airport including military, trans-Atlantic tech stops, aircraft delivery ferry flights, executive jet charter and general aviation traffic.

As well as handling aircraft and providing fuel services we manage all aspects of the pilots’ and passengers’ needs from catering to accommodation and transport, and we work together with local businesses to make their visit to Prestwick a memorable experience.

The team continues to excel in handling military aircraft, with regular visits from the United States Air Force, Royal Air Force, as well as supporting various

other international forces and the MOD/Royal Navy operating out of HMS Gannet. We also continue to support the Royal Canadian Air Force “Air Task Force Prestwick” detachment with three based C130J aircraft as well as transient RCAF C17 & A310 and A330 aircraft. The relationship with Canada and Prestwick goes back 80 years and the bonds with the current generation are now firmly established at the Airport and in the Ayrshire community.

Our General Aviation business continues to attract a wide variety of customers and aircraft and we are very proud of the level of service we offer.

Ayrshire remains a popular destination to access Scotland with international visitors playing at the three nearby Open championship venues and enjoying easy, uncongested access to Glasgow. We also

regularly welcome business charters servicing industry in the local area, which operate yearround.

In July, Prestwick Aviation Services supported 138 private flights in conjunction with the 152nd Open Championship at Royal Troon Golf Course. Aircraft ranged from 4 seat helicopters to large executive jets such as the Bombadier Global 7500 and Gulfstream G650. Many high-profile golfers including The Open champion passed through the Executive House facility.

Work is underway to develop a new FBO building to enhance the offering to our customers.

The new building will increase our lounge capacity as well as create a world class facility for pilots and passengers.

13

Cargo Global demand for air cargo continues to grow across regions, largely driven by the strengthening global economy and lower interest rates.

Complications in ocean freight, such as the conflict in the Red Sea and industrial action at U.S. ports, have led to a shift from ocean freight.

While this shift is generally positive, the U.S.-Europe market is lagging behind other regions, impacting cargo volumes at Prestwick Airport. One of our scheduled carriers has cancelled a weekly service from Los Angeles that used to stop at Prestwick.

Carriers are now reallocating capacity from underperforming routes to the highly profitable Asian market, where demand for cross-border e-commerce is surging.

14

We are witnessing unprecedented demand for capacity from China and neighbouring countries, with freight rates for e-commerce more than doubling those of general cargo.

In response to this growing e-commerce boom and the ongoing shortage of airport capacity in the UK, we are focused on attracting e-commerce traffic to Glasgow Prestwick Airport.

After analysing this market, the Airport has formed a partnership with Royal Mail Group, a key lastmile delivery provider in the UK. Operational processes and equipment have been prepared, and we expect to handle the first e-commerce flights by mid November 2024. We believe this business will be transformative for the Airport.

As for other niche markets, the results have been mixed over the past year. Dangerous goods traffic remains stable and consistent, contributing strong revenue streams.

Event-related cargo has been positive, with promising future bookings. However, our cold storage facility has yet to generate significant traffic, and our border inspection post has seen only limited use, mainly for horse movements.

We are renewing marketing efforts to promote these services within the community.

Meanwhile, traffic from the oil and gas industry, as well as aerospace, remains steady, with regular charters and scheduled cargo passing through the airport.

Property Glasgow Prestwick Property offers tenants a diverse range of accommodation from office space to aircraft hangars and is therefore distinct from other commercial landlords operating in the local area.

Occupancy levels remain high with most properties tenanted and showing healthy levels of income growth. Key operational areas continue to be upgraded as part of GPA’s capital investment programme.

In the last 12 months we have completed some key improvements to our tenanted estate as well as operational

airport properties.

• Liberator House, which is home to 24 leased office spaces, has been refreshed internally and externally by redecoration.

• Search and Rescue have recently expanded on site with a new hangar building located adjacent to the existing helicopter hangar.

• GE Aerospace and Storm Aviation have expanded their presence on the estate with units at Bravo Freight Centre.

• Royal Mail Plc and BP have extended their leases at Alpha Freight.

New office tenants include Sharp Office Solutions, Church of Scotland, Ayrshire College and Edge Worldwide Logistics.

Work continues on GPA’s masterplan and plans have now been developed to deliver a new Fixed Base Operations facility to meet growing demand from military and VIP customers.

Locations have been identified to construct new MRO hangar space to meet local and national demand.

15

Safety, Security & Quality At Glasgow Prestwick Airport, maintaining a safe and secure environment for our employees, passengers, and airport users is at the heart of everything we do.

Our commitment to safety was highlighted during our recent successful Airport Operators Association (AOA) Health and Safety Week, where we hosted a series of informative sessions, hands-on training, and workshops. These initiatives provided our staff with the knowledge and skills to further enhance safety practices and ensure high standards of operational excellence.

As we continue to prioritise safety, we are also making significant advancements in our security infrastructure. In November, we will be installing next-generation security scanners,

16

further enhancing the safety and efficiency of our operations. These state-of-the-art systems will streamline the security process, providing a smoother and more secure experience for all airport users.

The Airport’s distinction lies in providing comprehensive frontline services—both above and below the wing. From kerbside to airside, our dedicated teams work tirelessly to ensure a safe, compliant, and adaptable environment that responds swiftly to our customers’ needs.

Our safety framework is supported by robust risk assessments and risk identification systems, regular external audits, and continuous oversight by our Safety & Assurance team and Safety & Security Committee. These

measures ensure we are constantly evaluating and improving our safety standards to meet and exceed regulatory requirements.

We set high standards—and we achieve them. In addition, several members of our team are CAA Approved Security Trainers, further underlining our expertise and dedication to upholding the highest standards in security training and implementation.

As we continue to invest in both people and technology, we look forward to building on this strong foundation and ensuring Glasgow Prestwick Airport remains a leader in safety, security, and service delivery.

People & Culture Our vision is to be a thriving and distinctive Airport, offering a diverse range of services. Our people are key to achieving this, and developing and investing in a team that is agile, passionate, and focused on customers and operational excellence is one of our strategic pillars.

Our team is passionate about the future of the Airport, ensuring our customers have the best experience by working together and embracing

innovation. We pride ourselves on developing and supporting staff to build rewarding careers in aviation by recognising internal talent.

Many of our senior team members began their careers at Glasgow Prestwick in entry-level operational roles and worked their way up. We continue to invest significantly in our people and structure, including internal promotions and new roles in key areas to support the Airport’s

growth strategy.

We maintain a high level of organisational health by embedding our values into everyday life and fostering continuous improvement. This ensures the highest levels of safety and compliance.

Our people and colleagues’ matter and make a difference.

17

Stakeholder Engagement Prestwick Airport is more than just a hub for air travel; it is a cornerstone of the Ayrshire community, with a rich history and a vital role in supporting economic growth and regional development.

The management team works closely with multiple stakeholders – from our own staff, customers and suppliers to tenants and aviation business large and small. The Airport currently supports over 4,000 jobs directly and indirectly encompassing a wide range of roles from aviation and logistics to retail and hospitality.

Additionally the Airport plays an important role in supporting national defence and rescue services.

18

Key partners include South Ayrshire Council, Ayrshire College and Scottish Enterprise and the Airport continues to play a a key role in facilitating pro-active dialogue across key sectors – STEM, Space and Aerospace and developing the regional economy of Ayrshire.

A number of exciting developments are underway or planned for the next 12 months.

Our vision will be realised with clear stakeholder communications and engagement. The Airport’s communications department has successfully launched an employee communications app which has ensured staff are kept abreast of plans and developments. A new website which has been designed to

improve the user experience will be launched shortly – an effective tool for keeping stakeholders well informed.

Earlier this year the Airport’s Executive Team hosted a visit from MSPs who sit on the Economy and Fair Works Committee, offering the politicians a first-hand insight into the diverse nature of the Airport’s business streams, and the vital role it plays in supporting the wider aerospace business cluster.

The elected representatives also heard directly from stakeholders, like Ryanair and Storm Aviation, about the issues impacting aviation.

Sustainability Sustainability is one of Glasgow Prestwick Airport’s six strategic pillars and we are targeting a 50% carbon reduction by 2030 and have committed to reach net zero by 2045.

rooftop and ground mounted solar projects and explore other green energy technologies and energy efficiency opportunities, to assist us in reaching our net zero goals.

We fell within scope of the Streamlined Energy Carbon Reporting (SECR) regulations for the first time, requiring mandatory reporting of direct carbon emissions in our FY24 Statutory Accounts.

Key projects include the development of an energy management platform and building management system, the installation of sensors in targeted buildings and equipment to provide an evidence based on current energy use.

We produced 1,887 tonnes of carbon dioxide equivalent (tCO2e) in FY24: 41% from electricity, 37% from gas and 21% from diesel consumption.

We are continuing to progress

approach underpins all our infrastructure upgrade projects.

There is an ongoing focus on improving employee awareness of environmental impacts and carbon emissions in the workplace and highlighting how they can reduce energy consumption, waste generation and water usage.

An employee Electric Vehicle scheme was introduced in December 2023, which has seen a strong uptake.

To deliver reduced carbon emissions and improved energy efficiency across our extensive buildings network, a fabric first 19

TS PRESTWICK HOLDCO LTD Group Statement of Comprehensive Income For the Year Ended 31 March 2024

Notes 3

Revenue Cost of Sales Gross Profit Administrative expenses

2024 £’000

2023 £’000

54,116 (46,931)

58,126 (53,318)

7,185

4,808

(3,990)

(2,720)

Operating profit

4

3,195

2,088

Finance costs Other gains and losses

8 9

(3,053) 1,328

(1,727) 475 836

10

1,470 1,470

836

Profit before taxation Income tax expense Profit and total comprehensive income for the year

-

TS PRESTWICK HOLDCO LTD Group Statement of Cash Flows For the Year Ended 31 March 2023

Cash flows from operating activities Cash generated from operations

Notes

2024 £’000 £’000

23

1,699

6,236

1,699

6,236

Net cash inflow from operating activities

£’000

2023 £’000

Investing activities Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment

20

(4,903)

(2,276) -

132

Net cash used in investing activities

(4,771)

(2,276)

Net decrease/increase in cash and cash equivalents

(3,072)

3,960

Cash and cash equivalents at beginning of year

19,631

15,671

Cash and cash equivalents at end of year

16,559

19,631

TS PRESTWICK HOLDCO LTD Group Statement of Financial Position As at 31 March 2024 2024 Notes

£’000

2023 £’000

Non-current assets Property, plant and Equipment

11

Investment property

12

11,420 16,343

7,596 15,015

27,763

22,611

393 7,095 16,559

314 3,979 19,631

24,047

23,924

20,197 43,400

16,385 43,400

63,597

59,785

(39,550)

(35,861)

868

875

(12,655)

(14,125

(12,655)

(14,125)

Current assets Inventories Trade and other receivables Cash and cash equivalents

Current liabilities Trade and other payables Borrowings

13 14

17 16

Net current liabilities Non-current liabilities Trade and other payables Net liabilities

17

Equity Retained earnings

21

Diverse • Distinct • Delivering