Losses increase at Prestwick Airport
Losses have increased slightly at the Scottish government-owned Glasgow Prestwick Airport over the past year.
The airport, which was bought by Scottish ministers for £1 in November 2013, returned a loss of £4.1m in 2014/15.
This was up from £3.9m the previous year.
Prestwick accepted it had been "another challenging year" but said there were "promising signs in a number of areas".
The annual reports from TS Prestwick Holdco Limited - the company set up up to acquire the airport on behalf of Scottish ministers - warned the loss of some Ryanair flights to Glasgow Airport could be "more severely felt" in the current financial year.
Pre-tax losses for 2014/15 stood at £8.9m - almost double the £4.6m loss before tax the previous year.
Return to profit
The airport's loan from the Scottish government has also increased, rising from £4.5m at the end of March 2014 to £10.8m at 31 March this year.
That could increase further, with ministers having budgeted for a total of up to £25m of loan cash for the airport by the end of 2015/16.
The Scottish government took the airport into public hands after former owner Infratil earmarked it for closure.
While the government hopes to return it to a profit before selling it back to the private sector, ministers have warned that could take time.
The annual report said there had been "positive signs in a number of areas" at Prestwick, including freight business and military activity.
But it added: "The largest driver of revenue is linked to passenger volumes and the associated passenger spend."
While it said load factors had increased, it added the number of flights has "seen an overall decline as total capacity has been reduced".
The report warned: "This will be more severely felt in the next financial year to 31 March 2016 following Ryanair's decision to open a base at Glasgow Airport from October 2014."
Airport chief executive Iain Cochrane said: "Following another challenging year the airport continues to work to turn around the financial performance and there are promising signs in a number of areas, though growing the passenger business remains a challenge whilst air passenger duty exists at its current level.
"The airport is a frontrunner in the process to become the first designated UK spaceport and is continually looking for opportunities to maximise both income and the broad scope and opportunity offered as a strategic national asset.
"The recent appointment of four high-calibre non-executive directors brings considerable new knowledge and experience to help drive the business forward."
A Scottish government spokesman said that by stepping in to save the airport, it had safeguarded 3,200 jobs and secured a vital infrastructure asset that contributes more than £61m annually to the Scottish economy.
He added: "These financial results are as we expected. As we made clear at the start of the acquisition process, this is a long-term investment. There is no quick fix to turn Glasgow Prestwick Airport around but there are real opportunities to improve in all areas of the business.
"Our investment is on a commercial basis and takes the form of loan funding. This attracts a market rate of interest in line with state aid rules. The recent Audit Scotland report confirmed that we are highly likely to generate a return on this investment."
Scottish Conservative transport spokesman Alex Johnstone said the latest figures were a "massive blow for Scotland's transport, business, infrastructure and tourism industries.
He added: "As one of Scotland's busiest airports, Prestwick should be thriving not operating at a loss.
"When it was announced that the airport was to be publicly owned, we issued an warning at the time, stating that it would take an enormous effort to get the airport back in to profit.
"The Scottish government needed to have the courage to do what was necessary, rather than simply pouring money into something without accruing any benefit."