THE Scottish Government's planned sale of Prestwick Airport has fallen through because of coronavirus.

Transport Secretary Michael Matheson said the preferred private sector bidder had pulled out because of the impact of the pandemic on the aviation industry.

It means Prestwick, which has cost taxpayers ten of millions in failed loans since SNP ministers bought it for £1 in 2013 to save it from closure, remains on the Government’s books.

Mr Matheson said ministers would now "reflect upon future options for the business".

Mr Matheson announced in June 2019 that he had put the site up for sale with an indicative completion date of October.

At that point, the Government had already loaned Prestwick around £40m to keep it afloat, and it was unsure what, if anything, would be repaid by the buyer.

But in September last year, the Government admitted it had written off £33m of the loans,  which have now reached £42.4m. 

In May, Mr Matheson confirmed the pandemic had forced a delay in the sale, but talks with the unnamed preferred bidder were continuing.

But in a letter to Holyrood’s rural economy committee today, Mr Matheson said: “As the Committee is aware, Covid 19 has impacted on the aviation sector globally. 

“We have been advised that the company selected as Preferred Bidder does not wish to complete the purchase of the business at this time. 

“Scottish Ministers will reflect upon future options for the business.” 

When ministers put Prestwick on the market last year, it did so through TS Prestwick Holdco Ltd, the government owned company behind it.

Official documents said the firm was “exploring the sale of 100% of its shareholding in Prestwick Aviation Holdings Ltd”, which owns Glasgow Prestwick Airport (GPA), and that the preferred bidder would be whoever submitted “the most economically advantageous offer”.

Prestwick handles freight, passenger, and military flights, with its position on the coast meaning its two runways are generally fog-free.

The airport is also located on a significant land bank of 356 hectares, two-thirds of which are used for aviation activities.”

Its terminal building, originally constructed for four million passengers, has capacity for 18 check in desks, 10 gates and 12 stands. 

Around 20 miles north of Trump Turnberry, the airport was used by the US President  on his visit to the UK in 2018.

A US Congressional Committee last year launched an investigation into increased military spending at Prestwick since Mr Trump came to office.

Defence Logistics Agency records said the US military had made 629 fuel purchase orders at the airport totalling £9m since October 2017.

Military personnel were also reported to have stayed and golfed at Mr Trump’s hotel.

According to its latest public accounts, TS Prestwick Holdco Ltd had an operating loss of £1m in the year to April 2019.

Tory MSP Graham Simpson said: “It is disappointing that the preferred bidder for Prestwick Airport has pulled out but it’s not surprising.

“Scotland’s airports are in crisis as result of the pandemic.

“The SNP Government urgently needs to come up with a rescue plan for the entire aviation sector.

“They should start by allowing testing at airports in order to move towards a reduced quarantine period for passengers, which would improve the data we have, and improve confidence among passengers.

“We must also urgently hear from the SNP Transport Secretary how he intends to protect Prestwick.

“Thousands of jobs are dependent on all our airports succeeding and we need to see action now from the SNP.”

Labour MSP Colin Smyth added: "This latest setback comes at crunch time for Scotland's aviation sector.

"Thousands of workers in the sector - including at Prestwick - need assurance that the Scottish Government will take action to secure their futures with sector specific support and the urgent introduction of a testing regime at airports.

"When the sale of Prestwick was announced, I argued that it should not go ahead unless the buyer agrees to paying back the tens of millions of pounds loaned to the airport from the public purse. We must not allow a cut-price sale for the sake of the SNP Government washing its hands of the airport.

"Instead, the Government should set out a clear plan for the running of the airport under public ownership if the sale of the airport at a fair price can’t be secured.”

A spokesman for Glasgow Prestwick Airport said: “This is obviously very disappointing news. The coronavirus pandemic continues to have a devastating impact on global aviation, creating challenging circumstances for all businesses operating in the sector. 

“Glasgow Prestwick Airport remains in a strong financial position and is an important strategic asset for Scotland’s economy, providing vital international freight and aviation services.

“We will now take some time to consider appropriate next steps.”