A new airport.... South Yorkshire Airport City?

Doncaster Sheffield Airport Strategic Review Announcement​

Forums4airports discusses the latest press release from Doncaster Sheffield airport where the airport questions the future of the airport. The owners of the airport, the Peel Group have announced they are looking at their options as the group has decided the airport is no longer viable as an operational airport. Here's the press release:

"The Board of Doncaster Sheffield Airport (DSA) has begun a review of strategic options for the Airport. This review follows lengthy deliberations by the Board of DSA which has reluctantly concluded that aviation activity on the site may no longer be commercially viable.

DSA’s owner, the Peel Group, as the Airport’s principal funder, has reviewed the conclusions of the Board of DSA and commissioned external independent advice in order to evaluate and test the conclusions drawn, which concurs with the Board’s initial findings.

Since the Peel Group acquired the Airport site in 1999 and converted it into an international commercial airport, which opened in 2005, significant amounts have been invested in the terminal, the airfield and its operations, both in relation to the original conversion and subsequently to improve the facilities and infrastructure on offer to create an award winning airport.

However, despite growth in passenger numbers, DSA has never achieved the critical mass required to become profitable and this fundamental issue of a shortfall in passenger numbers is exacerbated by the announcement on 10 June 2022 of the unilateral withdrawal of the Wizz Air based aircraft, leaving the Airport with only one base carrier, namely TUI.

This challenge has been increased by other changes in the aviation market, the well-publicised impact of the COVID-19 pandemic and increasingly important environmental considerations. It has therefore been concluded that aviation activity may no longer be the use for the site which delivers the maximum economic and environmental benefit to the region. Against this backdrop, DSA and the Peel Group, will initiate a consultation and engagement programme with stakeholders on the future of the site and how best to maximise and capitalise on future economic growth opportunities for Doncaster and the wider Sheffield City Region.

The wider Peel Group is already delivering significant development and business opportunities on its adjoining GatewayEast development including the recent deal for over 400,000 sq ft logistics and advanced manufacturing development on site, creating hundreds of new jobs and delivering further economic investment in the region.

Robert Hough, Chairman of Peel Airports Group, which includes Doncaster Sheffield Airport, said: “It is a critical time for aviation globally. Despite pandemic related travel restrictions slowly drawing to a close, we are still facing ongoing obstacles and dynamic long-term threats to the future of the aviation industry. The actions by Wizz to sacrifice its base at Doncaster to shore up its business opportunities at other bases in the South of England are a significant blow for the Airport.

Now is the right time to review how DSA can best create future growth opportunities for Doncaster and for South Yorkshire. The Peel Group remains committed to delivering economic growth, job opportunities and prosperity for Doncaster and the wider region.”

DSA and the Peel Group pride themselves on being forward-thinking whilst prioritising the welfare of staff and customers alike. As such, no further public comments will be made whilst they undertake this engagement period with all stakeholders.
During the Strategic Review, the Airport will operate as normal. Therefore passengers who are due to travel to the airport, please arrive and check in as normal. If there are any disruptions with your flight, you will be contacted by your airline in good time.
For all press enquiries, please contact Charlotte Leach at [email protected]."

"Not great news for DSA or the region"

Should the government or local council foot the bill and provide a financial subsidy to keep the airport open, thoughts...?

 

Agenda for Airport Consultative Committee (Archived November 2022 - For Reference Only) on Wednesday 30 November 2022, 10.30 am

An interesting read.

 

Agenda for Airport Consultative Committee (Archived November 2022 - For Reference Only) on Wednesday 30 November 2022, 10.30 am

An interesting read.

Yes, very interesting. It seems that Peel still point an accusing finger at the Council for not helping when asked. It beggars belief that the Council now act as though they had no idea that closure was coming, and as though they had no part to play in this outcome .

The fact remains though that a privately run airport that's been there 17 years was having to seek public funding to help it survive despite all it's hangars, various flying clubs and aviation based organisations. That's never a good sign.

 

Yes, very interesting. It seems that Peel still point an accusing finger at the Council for not helping when asked. It beggars belief that the Council now act as though they had no idea that closure was coming, and as though they had no part to play in this outcome .

The fact remains though that a privately run airport that's been there 17 years was having to seek public funding to help it survive despite all it's hangars, various flying clubs and aviation based organisations. That's never a good sign.

I think interesting that they make it clear Wizzair had planned to base 3 (I had been told 5) aircraft and reneged on their commercial agreement. First time I’ve seen it written down and coming from the horses mouth. Also the implication that there are ‘other reasons’ the airport has failed to take-off but these are not mentioned. Also that 1800 passengers a day cross the Pennines to travel to or from Manchester. If that is both ways the that’s a total of 650,000 a year, so I assume he’s only talking about South Yorkshire air passengers as we know it’s about 2-3 million from Yorkshire and the Humber per year.

Post automatically merged: Dec 15, 2022

..and now the white crosses have appeared on the runway.

 

I think interesting that they make it clear Wizzair had planned to base 3 (I had been told 5) aircraft and reneged on their commercial agreement. First time I’ve seen it written down and coming from the horses mouth. Also the implication that there are ‘other reasons’ the airport has failed to take-off but these are not mentioned. Also that 1800 passengers a day cross the Pennines to travel to or from Manchester. If that is both ways the that’s a total of 650,000 a year, so I assume he’s only talking about South Yorkshire air passengers as we know it’s about 2-3 million from Yorkshire and the Humber per year.

Post automatically merged: Dec 15, 2022

..and now the white crosses have appeared on the runway.

Well they can't claim exclusivity on airlines that renege on their commercial agreements. It's happened here at LBA too - and DSA management happily nicked TUi and Flybe from LBA. But that's aviation. It's a cutthroat business. Live by the sword, die by the sword.

You have to wonder what would have happened had DSA not offered incentives to carriers to attract them. Would they have still gone there, or not? If they had, DSA would have made more money and perhaps might not have needed 2.5m passengers a year to break even. My feeling is though it was incentives that lured them in and if that becomes the norm, an airport has little future in the longer term. Every airline expects a discounted deal and it becomes the norm.

 

You have to wonder what would have happened had DSA not offered incentives to carriers to attract them.

The truth is that the vast majority of airports (except perhaps the likes of LHR, who have highly valuable slots) offer airlines incentives to start new services, which gradually reduce over time as the route grows. These incentives are just as likely to be offered by LBA as they are by DSA.

 

The truth is that the vast majority of airports (except perhaps the likes of LHR, who have highly valuable slots) offer airlines incentives to start new services, which gradually reduce over time as the route grows. These incentives are just as likely to be offered by LBA as they are by DSA.

Indeed, and If you read into what it says in the minutes, the agreement with Wizz was to base 3 aircraft and instead they reduced that to 1. So I suspect they would have received rebates/reduced rates with more aircraft based there and because they reduced their agreed numbers they were probably paying more. I think this is what the save DSA lot are twisting to show that Peel have been overcharging. But they probably don’t realise that this is an industry standard and I would bet that Swissport were also of a similar charging philosophy (which is out of Peels hands).. It has cost Peel up to £10.00 for each passenger that has passed through DSA. In order to be profitable from offering very low to no charges to airlines the numbers need to stack up. The ‘critical mass’ as Peel say is a minimum 2.5 mppa, they were unable to generate half of that consistently. I think it’s more the case of Peel charging too little to remain competitive rather than charging too much, and I genuinely believe the management and Peel when they say they are genuinely disappointed at having to close.

 

An interesting update from Mayor Ros Jones today. For me, the main part of her message was this:

‘…we need to be realistic in that any potential investor may be more inclined to wait until we CPO the site given the airport is now closed and the cost and timescales involved in getting it back into operation may well discourage a direct purchase from Peel’.

I think she was managing expectations here, and her aim was to gently put to bed the notion that DSA could reopen within the next couple of years.

However, it raises a question - if, as she says, no one is likely to buy an airport that is still largely intact and in good repair (with airspace and other important assets still intact) on the grounds that it would take too much time and money to restore, then why would it be more attractive after a couple of years of physical decay and the complete loss of important infrastructure and institutional memory? The only thing I can think of that might offset that extra cost, to a potential investor, would be public money.

I imagine Peel’s hope is that, set against expanding timelines and large potential costs to public finances, the prospect of high tech industrial development on the site might start to seem quite appealing after a while.

 

An interesting update from Mayor Ros Jones today. For me, the main part of her message was this:

‘…we need to be realistic in that any potential investor may be more inclined to wait until we CPO the site given the airport is now closed and the cost and timescales involved in getting it back into operation may well discourage a direct purchase from Peel’.

I think she was managing expectations here, and her aim was to gently put to bed the notion that DSA could reopen within the next couple of years.

However, it raises a question - if, as she says, no one is likely to buy an airport that is still largely intact and in good repair (with airspace and other important assets still intact) on the grounds that it would take too much time and money to restore, then why would it be more attractive after a couple of years of physical decay and the complete loss of important infrastructure and institutional memory? The only thing I can think of that might offset that extra cost, to a potential investor, would be public money.

I imagine Peel’s hope is that, set against expanding timelines and large potential costs to public finances, the prospect of high tech industrial development on the site might start to seem quite appealing after a while.

I struggle to see how she has gained a mandate from local business to continue pursuing this when the airport has never been able to suitably service any regional industry requirements for route connectivity. Again, seems to me like everybody is basing this on Peel mismanaging the airport to the extent that airlines of the type wouldn’t operate from DSA. We already know they had offered hugely attractive packages to KLM to no avail. The link I posted the other day confirms that BMIr attempted to gain PSO funding to set up an FRA route but that didn’t materialise. We also know that attempts to link the airport to Belfast failed to be sustainable.

This appears to be based solely on the fact that airports are a pretty scarce resource and the view of how can a new city actually be a city without an airport.

I still think it’s too early to call on the talks with the UAE based consortium. I don’t think Ros Jones is privy to those, and this is to appease the people who are probably relentlessly sending her emails and DM’s to try find out what’s going on. I also don’t think there is even a remote chance that the CPO will be successful unless there is good will from Peel. I also still haven’t seen an independent specialist review of the airport, have DMBC/SYMCA commissioned one?

 

I struggle to see how she has gained a mandate from local business to continue pursuing this when the airport has never been able to suitably service any regional industry requirements for route connectivity. Again, seems to me like everybody is basing this on Peel mismanaging the airport to the extent that airlines of the type wouldn’t operate from DSA. We already know they had offered hugely attractive packages to KLM to no avail. The link I posted the other day confirms that BMIr attempted to gain PSO funding to set up an FRA route but that didn’t materialise. We also know that attempts to link the airport to Belfast failed to be sustainable.

This appears to be based solely on the fact that airports are a pretty scarce resource and the view of how can a new city actually be a city without an airport.

I still think it’s too early to call on the talks with the UAE based consortium. I don’t think Ros Jones is privy to those, and this is to appease the people who are probably relentlessly sending her emails and DM’s to try find out what’s going on. I also don’t think there is even a remote chance that the CPO will be successful unless there is good will from Peel. I also still haven’t seen an independent specialist review of the airport, have DMBC/SYMCA commissioned one?

I agree pug - CPO will be highly unlikely to succeed - even if it were the Council will be treading upon very thin legal ice if they intend to sell on to a third party! I suppose if they were to retain ownership of the site and hire an operator to run it that might be OK from a legal point of view - but I would imagine totally impractical and would bleed the piggy bank dry!

 

I agree pug - CPO will be highly unlikely to succeed - even if it were the Council will be treading upon very thin legal ice if they intend to sell on to a third party! I suppose if they were to retain ownership of the site and hire an operator to run it that might be OK from a legal point of view - but I would imagine totally impractical and would bleed the piggy bank dry!

They will themselves be subject to a Judicial Review should they spend too much pursuing this. I think they’re just applying pressure in any way they can to make Peel more inclined to sell it as an airport to the supposed interested consortium, Peel will already know that there will be challenges to anything they try to do with the site that is not Airport related. Other than this, there’s not a lot the council can do and they will be well aware of the legal grey areas and public liability involved.

My previous point is, BBC calculated that DSA contributed 0.3% to the South Yorkshire annual GDP. How much would a tech park/scaled up employment zone contribute? If anything higher than 0.3% (and I suspect such plans would be) then there really is no argument. The airport did not provide business friendly connectivity, it never has been able to retain any service that could. Its freight operation was overshadowed by EMA. I would actually be more interested in how much MAN and EMA contribute to the South Yorkshire economy as that would be an more insightful benchmark and would most likely throw cold water on the economic argument for having this airport.

Things are quiet now due to Christmas and I suspect we will be hearing more in the coming weeks.

Post automatically merged: Dec 29, 2022

I can’t edit now but in my previous post I said 0.3%. The actual figure is even less, 0.03%!

 

It has been a lot quieter in the media these past few weeks. I think the story has run its course so unless Peel do a 'U turn', the land the airport is on will be used for something else.

 

According to a post on the Pprune Forum, the ILS transmitters at DSA have now been removed.

 

According to a post on the Pprune Forum, the ILS transmitters at DSA have now been removed.

Same person also claims that the land the approach lights occupy is leased, which would suggest they will be the next to go if the airport isn’t sold. It might be the only sign we get in the near future that a sale hasn’t been forthcoming as they are under no obligation to release that information.

 

If you wanted to sell it as an airport, for the best price, then I cannot for the life of me imagine why you would be uninstalling navaids and ATC equipment, as reinstating these things would take a lot of time and money, and would reduce the sale price accordingly. Which says to me that Peel has no intention of selling.

 

If you wanted to sell it as an airport, for the best price, then I cannot for the life of me imagine why you would be uninstalling navaids and ATC equipment, as reinstating these things would take a lot of time and money, and would reduce the sale price accordingly. Which says to me that Peel has no intention of selling.

It’s just been corrected on PPrune, by a typically unreliable poster, that the ILS transmitters are still in place. I don’t see why they would have been removed so swiftly so I do remain skeptical of the original claims. However they will be situated on leased land outside of the airport boundary so like the approach lights, these would be the first things to go I would expect.

 

I find it very interesting that it has gone very quiet (I don't use any social media) on the progress of the proposed sale. It could be that the potential buyers are going through due diligence, or it could be something completely different.
Anyone heard anything on social media?

 

I find it very interesting that it has gone very quiet (I don't use any social media) on the progress of the proposed sale. It could be that the potential buyers are going through due diligence, or it could be something completely different.
Anyone heard anything on social media?

If there is still a buyer, Due Diligence can take quite a while, especially for something as big and complex as an airport, and actually seeing first hand the figures could scare off potential buyers. Clearly, these investors need to be absolutely convinced that they can succeed in doing what Peel failed to do. Attract, and retain airlines. And, make a profit. The running cost alone of keeping an airport operational could put off many investors.

 

I find it very interesting that it has gone very quiet (I don't use any social media) on the progress of the proposed sale. It could be that the potential buyers are going through due diligence, or it could be something completely different.
Anyone heard anything on social media?

Nothing, the last internal rumour that was posted on PPrune was that there is an agreement to sell in principle and this was subject to due diligence on both sides, this was a few weeks ago. Peel are keen to ensure no Russian money involved according to the person posting it.

The one and only public statement from the ‘UAE based consortium’ was that leaked to the Times at the beginning of last month. Even then details of who exactly is involved are sketchy at best. I’m wondering whether a UAE based investor would be best placed to run an U.K. airport, particularly when it is well known that the aviation industry in the UAE is heavily subsidised by the Government, that just doesn’t exist in the U.K.

We can be sure that Peel will not want to sell to someone who, after five years of running an unviable airport, then decide to repurpose the land and themselves make their fortunes in redeveloping it. I would expect that anyone wanting to open it as an airport would at least want some memorandum of understanding from a sufficient number of airlines and operators that should they open DSA again, there would be a good chance of them flying from there. If that cannot be reached it is simply far too much of a risk to anyone.

Peel are under no obligation to update anyone as to the status of the discussions or even whether they are still ongoing. I think that suits them quite well, as the Council will be forced to keep off their backs. Might not be until Feb or March before we hear anything more concrete, if at all.

Post automatically merged: Jan 6, 2023

Ros Jones has issued an update. Nothing new, still putting procedures in place to pursue a CPO which ‘could take two years’. Interested buyers still in talks apparently but again that is recycled from the previous statement she made. PM has apparently ‘encouraged Peel to accept the offer that’s on the table’, which basically means nothing.

 

DONCASTER SHEFFIELD AIRPORT LIMITED filing history - Find and update company information - GOV.UK

DONCASTER SHEFFIELD AIRPORT LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

I attempted to post a direct link yesterday to the filing that was made by Doncaster Sheffield Airport Ltd on 30th December as this has more detail from the Strategic Review as a précis. Not really things we haven’t heard before but it does provide more detail on how they concluded that there was no viable future for aviation on the site.

They mention Wizzair U.K., they were surprised and disappointed that Wizz decided to pull the base in breach of contract and as we now know there was an agreement to base 3 aircraft. I still believe the commercial agreement would have provided incentives to base more aircraft, regardless they obviously didn’t foresee that there would be sufficient volume to maintain a profitable operation so pulled the plug.

Issues with freight also mentioned, namely the fact that EMA has been established over decades and it is not viable to speculatively build the facilities required to attract a based operation.

I think overall, whatever you think of Peel they have got this spot on. I just wish they had considered this when it was put to them 20 years ago!

Post automatically merged: Jan 9, 2023

Also to add, the report states that the leasehold on the land will terminate in May this year, so I expect if a sale is not forthcoming this is when we will see the infrastructure decommissioned and/or sold off.

 

Totally agree. I've read the financial statements and certainly eye opening details. With the closure, they have used this financial results statement to disclose a lot of information that otherwise wouldn't be published.
What's more is the share capital by Peel into DSA. That will give you an idea of what it would take before talks could progress towards a completion.
Looking at it as just the DSA airport business the value is relatively small. Could it be this that the Mayors have said have been over market value offers made.
It is the freehold price that is eye wateringly high. So I'd presume that any interested parties would be wanting to buy the full freehold when buying the airport, rather than on a lease. So very very deep pockets required.
I don't have any hopes of it ever reopening. I think that the publication of these results has drilled the final nail into the coffin.

So could the local authorities really afford to purchase it even if through a CPO. Would it be even deemed wise for soo much public funds to be used.
My gut feeling is that it is only a matter of time that we hear that talks have faded away and failed, especially after seeing the financial report.