The new kid on the block

TO SOME he is a visionary and the saviour of a major Scottish asset,

to others he is misguided, a loose cannon and, to borrow a phrase from

his native North America, a general pain in the butt. What is in no

doubt, however, is that Matthew Chance Hudson has made what promises to

be a lasting impact on the Scottish business scene. Depending on whom

you listen to, that impact will be remembered as one of enormous benefit

or irreparable damage to the economy and well-being of Ayrshire and the

country as a whole.

The 52-year-old Canadian is chief executive of Prestwick Airport as

well as chairman of three divisions of PIK Holdings which have been

created in the past two years. In the chair when the main board sits

down to discuss the issues of the day is Lord Younger of Prestwick,

former MP for Ayr, ex-Secretary of State for Defence and now chairman of

the Royal Bank of Scotland.

It was Younger, then representing the local constituency at

Westminster, who contacted Hudson in late 1990 and asked if he would be

interested in being involved in a consortium aiming to take over

Prestwick Airport from BAA plc.

The former state airport operating company had made it clear that

Prestwick, which had been suffering consistent heavy losses, was

available at the right price. As it was put by BAA at the time, ''there

is no for sale sign outside Prestwick but if someone wants to talk about

buying it then we are prepared to listen''. Transatlantic flights from

Prestwick -- the Government's Scottish Lowland Airports Policy dictated

that all such services must go from the Ayrshire facility -- had

dwindled over the years to just those operated by Northwest Airlines and

by Air Canada. Previously many major airlines, including British

Airways, had used Prestwick.

Both had remained loyal to Prestwick but within months of so-called

Open Skies being declared both had moved their operations to Glasgow

International Airport -- the growing airport which Hudson insists on

referring to disparagingly as Paisley or Abbotsinch.

It was no coincidence that the announcement by Transport Minister

Cecil Parkinson in March 1990 came at the same time as George Younger

announced that he was stepping down from Government. His influence on

Mrs Thatcher and the Cabinet had been obvious.

Some would argue that, over three years on, the decision has been

vindicated with British Airways, United and American joining Northwest

and Air Canada in the transatlantic trade from Glasgow.

At all events, Prestwick was struggling and in the years up to 1991

lost its parent company, Scottish Airports, many millions of pounds with

little sign of improvement. Something had to give and by the middle of

1991 letters of confidentiality had been signed between BAA and six

potential buyers of the airport.

One of the consortia involved Matthew Hudson, who had been in

semi-retirement restoring historic Blanefield House near Kirkoswald and

trying to improve a struggling golf game.

It emerged that Hudson had a $20m law suit outstanding against him

after a property development in Atlantic City, New Jersey, had gone

wrong. He was typically robust when dealing with the reporter

investigating the case, on the one hand giving his account of matters,

on the other warning of legal action if he were misrepresented.

Indeed that robust attitude was to continue and to lead to an often

uneasy relationship with Scottish journalists whom he perceived as only

there as a conduit for Prestwick success stories while at the same time

ignoring any slip-ups along the way.

That notwithstanding the consortium went from strength to strength as

both Hudson and Younger built a network of contacts which included

respected local businessmen and political figures.

As he puts it now: ''I got in touch with friends and contacts and

asked if they wanted to be involved. I warned them that they would

probably lose their money but every one of them expressed an interest

and most are still heavily involved.'' Months of delicate negotiations

followed and Hudson began to emerge as one of the strengths in the

consortium known as Ayrshire Community Airport Campaign (Acap). It was a

name which inspired community involvement and this remains a theme in

the airport's development.

Not just the community but the local authorities in the area stepped

behind Prestwick Airport offering politicial, moral and, ultimately,

financial support to the buyers.

In the end, though, it was the intervention of British Aerospace which

clinched the deal for Younger, Hudson and the rest of the backers. The

multinational company employs almost 2000 people at its Jetstream

Aircraft factory on the fringes of the airport and remains the biggest

single user of the runways through Jetstream proving flights and the

activities of the neighbouring BAe flying college.

There was support from Strathclyde Regional Council and Kyle and

Carrick District Council to the tune of over #1m and while figures were

at the time, and to a degree remain, confidential, it appears that the

BAe/Acap partnership paid little or no cash to BAA for the privilege of

taking over the airport.

Hudson and Younger must have been doing something right to attract the

support of hard-headed businessmen at BAe and to persuade similar types

at BAA to part with an asset which, while haemorrhaging money, was an

asset worth a lot more than was paid for it.

On April Fool's Day 1992 the ink was dry on all the agreements

involving BAe, PIK (the international call sign of Prestwick Airport)

and the local authorities and the airport was under new management.

More than two years on, with some if not all of the cynics at least

undergoing a rethink, things are starting to happen at the airport which

many said could not survive.

A SENIOR airline figure recently described Matthew Hudson, perhaps

understandably, as something of an enigma and expressed surprise that he

could so easily shrug off a lawsuit which continues to rumble on in the

courts.

Yet it is part of his persona -- this ability to surprise and even

shock the often staid Scottish business establishment. He likes to style

himself as the new kid on the block who has come along to shake up an

establishment which he views as too set in its ways and in need of

change. A kind of Richard Branson without the jumpers.

Along the way he has made enemies but has still managed to impress

senior figures in companies who have come along to help realise the

Prestwick dream. Significantly, also, he has won the hearts and minds of

politicians at local and national level.

Many would view his performance to date as a model of 1980s

Conservatism but he put Tory noses well out of joint in Kyle and Carrick

when he re-appointed Labour group leader and long-time Prestwick

champion Ian Welsh to the PIK board after the administration had sought

to replace him with an official from the legal department.

His recent performance at the Commons select committee discussing

important aviation agreements which affect passenger and cargo services

in and out of the UK incensed some senior figures in aviation but

prompted some MPs on the committee to single him out for praise and

promise action on many of the changes he seeks.

In a recent interview with The Herald he claimed little personal

responsibility for what has happened at Prestwick Airport yet still

managed in the course of a couple of hours to slip in the odd word or

three about how some of his vision has come true and of how he perceives

the future.

Instead he praises the ''crew'' -- the workforce which has now grown

to 160 despite some painful partings of the ways and a wage cut which he

intends to put right when profits improve in the coming months.

He says: ''There have been casualties along the way, people who did

not fit in with what we are trying to do here and that is too bad. Now

we have people here who, like me, want Prestwick to work and who are

working for a fine managing director in Paddy Healy.''

The appointment of Paddy Healy, former Commander of the nearby Navy

helicopter base of HMS Gannet, raised eyebrows in the aviation world. He

had given up promotion to a high level in the Navy to join PIK and it

appears has won over a workforce less used than others to the ways of HM

Armed Forces.

Hudson is unstinting in his praise of Healy and indeed plans to step

back in the coming months to leave the day-to-day running of the airport

to the Irishman. ''I am looking forward to spending more time with my

wife and children and working on that golf game again,'' he claims. We

shall wait and see.

The establishment figures he has been taking on most recently include

the Secretary of State for Defence Malcolm Rifkind who, through his MoD

legal advisers was prompted to gain an interdict against PIK to avoid

helicopters or equipment being impounded or interfered with as part of a

continuing dispute over rent and air navigation charges.

Hudson laughs heartily when he recalls the court case. ''The first we

knew was when a newspaper called us for reaction to this story. The

thought of Paddy and I wandering across to Gannet to slap holding orders

on helicopters was so crazy as to be laughable. Yet the dispute

continues because they are not willing to pay the going rate for their

rent or charges.'' There are also whispers that a similar row could

damage the happy relationship between PIK and British Aerospace whose

flying-college planes are the biggest users of the locally-run air

navigation services.

These services were taken over by PIK from the Civil Aviation

Authority -- another Hudson-led bucking of the old system -- when there

was failure to set new levels of charges which both parties found

acceptable.

A visit to Prestwick Airport this Fair Saturday, for argument's sake,

might be the most telling example yet of the Hudson effect. There will

be cargo planes which have circled the world to visit Prestwick,

holidaymakers will be heading on package flights to a host of

Mediterranean countries, a new rail station should be operating across

the road and improvements to the car parks and terminal are likely to be

completed. And, perhaps most importantly of all, a new daily Ryanair

scheduled flight will be taking off for Dublin.

By an interesting coincidence the major travel company operating as

part of the summer season is Direct Holidays, the firm started by

another thorn in the side of the travel establishment John Boyle. Could

this be the same John Boyle who a while with Air 2000 fought the court

case which led to a Government rethink on open skies for transatlantic

passengers? Hudson is not finished, though, and his current cause

celebre is open skies for freight. A laudable goal but one which may

well backfire as complete open skies would bring BAA and other airport

operators out from cover to woo international freight carriers into

Stansted and other destinations.

Better perhaps to ask the Government to stand up and be counted in its

aim to boost the Scottish economy and instead give operators the right

-- under so-called fifth freedoms -- to deliver and pick up cargo at

Prestwick and take it on into Europe and beyond.

Hudson called a news conference in February to unveil his vision of

the future -- a #25m multi-modal freight terminal to compete with the

best that the US or the Far East can boast.

Asked to sum up what he has done at Prestwick so far, Hudson pauses

only briefly. ''I came along and found an airport which had been

seriously assaulted if not nearly murdered.

''Since then with a bit of help I have chased out the town bullies and

can now leave the town in the safe hands of people who want to run it

peacefully and successfully.''