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...?

 

I don’t think the price of replacement equipment cabins will be that much in the grand scheme of things. It’s more that they have become dilapidated and infested in the last two years, presumably through neglect. Which poses a question as to the condition of the other buildings on the site - what other nasty surprises are waiting to be found?

Yes, I'm not sure why those little cabins are even newsworthy. Wait till they start work on the terminal building. I suspect the only thing still useable there is the shell, and even that was looking a bit worse for wear last time I saw it!

 

There’s an interview doing the rounds with Foster on BBC Radio Sheffield asking about airlines and destinations. Not only did he basically act like a politician avoiding the actual answer, but he clearly has a very poor grasp on the industry. It’s incredibly cringe worthy and judging by the comments, people have seen straight through it.

He used the term “Sun and Bucket” numerous times and then said something about long haul, but I’m not actually sure what he said as it was a bit of a word salad around speaking to major airlines or not speaking to them?

If this is the guy fronting up the project, who can’t grasp simple industry terminology correctly (Bucket and Spade not Sun and Bucket) and comes up with new countries like Kazerbaijan, then they are in more trouble than I thought.

 

There’s an interview doing the rounds with Foster on BBC Radio Sheffield asking about airlines and destinations. Not only did he basically act like a politician avoiding the actual answer, but he clearly has a very poor grasp on the industry. It’s incredibly cringe worthy and judging by the comments, people have seen straight through it.

He used the term “Sun and Bucket” numerous times and then said something about long haul, but I’m not actually sure what he said as it was a bit of a word salad around speaking to major airlines or not speaking to them?

If this is the guy fronting up the project, who can’t grasp simple industry terminology correctly (Bucket and Spade not Sun and Bucket) and comes up with new countries like Kazerbaijan, then they are in more trouble than I thought.

Hence Grant Thorntons comments re the capability of the FlyDSA management team…..To get credibility in the industry and especially with target airlines they should have hired someone who had experience and was known not some career civil servant. Also what has happened to Munich airport group??

 

Hence Grant Thorntons comments re the capability of the FlyDSA management team…..To get credibility in the industry and especially with target airlines they should have hired someone who had experience and was known not some career civil servant. Also what has happened to Munich airport group??

Having just watched the video I’m really hoping he’s not leading discussions with airlines. Have they not appointed a commercial director/manager/head yet? He clearly has no airlines lined up there for sure.

MAI is a strange one. They’re either still retained to complete some back room consultancy or they’ve parted company. I find it strange that their ‘Global Reach’ that CDC used to promote DSAs reopening isn’t even featured on the website for FlyDoncaster, let alone having a prominent place on said website. MAI have either requested no mention on there or they are no longer involved.

 

Having just watched the video I’m really hoping he’s not leading discussions with airlines. Have they not appointed a commercial director/manager/head yet? He clearly has no airlines lined up there for sure.

MAI is a strange one. They’re either still retained to complete some back room consultancy or they’ve parted company. I find it strange that their ‘Global Reach’ that CDC used to promote DSAs reopening isn’t even featured on the website for FlyDoncaster, let alone having a prominent place on said website. MAI have either requested no mention on there or they are no longer involved.

MAI probably don't want to be associated with it. They might value their reputation more than the fees!

 

MAI probably don't want to be associated with it. They might value their reputation more than the fees!

I’ve just seen that there’s another survey but this time on the DSA website, it does say it’s been initiated by their strategic partners MAI..

Airport seeks views from future passengers

Airport seeks views from future passengers

www.flydsa.com

These things are usually a poor gauge of demand, often on thing of a wish list rather than solid ticket tracing data which shows what the local market looks like and whether there is enough high yielding traffic. It’s also a sign that they don’t seem to know their market either.

 

I’ve just seen that there’s another survey but this time on the DSA website, it does say it’s been initiated by their strategic partners MAI..

Airport seeks views from future passengers

Airport seeks views from future passengers

www.flydsa.com

These things are usually a poor gauge of demand, often on thing of a wish list rather than solid ticket tracing data which shows what the local market looks like and whether there is enough high yielding traffic. It’s also a sign that they don’t seem to know their market either.

"Christian Foster, Director for airport operator FlyDoncaster Ltd said: “We’re in discussion with a number of airlines and while we’ve proven the wider need and appetite for this airport reopening, this survey takes things to the next level in terms of understanding customer priorities.”"

Proven the wider need and appetite?!

That's funny.

 

"Christian Foster, Director for airport operator FlyDoncaster Ltd said: “We’re in discussion with a number of airlines and while we’ve proven the wider need and appetite for this airport reopening, this survey takes things to the next level in terms of understanding customer priorities.”"

Proven the wider need and appetite?!

That's funny.

"Christian Foster, Director for airport operator FlyDoncaster Ltd said: “We’re in discussion with a number of airlines and while we’ve proven the wider need and appetite for this airport reopening, this survey takes things to the next level in terms of understanding customer priorities.”"

Proven the wider need and appetite?!

That's funny.

It’s tragic. Christian Foster is way out of his depth. Microsoft Forms is not high level market research. MAI will be laughing their socks off, I’m pretty much certain that MAI and other consultants have now realised that they can’t advise and have any real impact on the public sector leaders and the constant requirement to be spinning to the public that they just say ‘yes’ and take the pay at the end of the day/week/month. It would explain why MAI won’t even have their name featured on the website.

So when were discussing market research what airports usually do is invest heavily in proper analytical modelling tools. I’m taking things like Sabre, Cirium and OAG. These cost £££ in annual licences though, and they need people who actually know what they’re doing to operate them. But instead of this FlyDoncaster launch a terrible Microsoft Teams survey with poor leading questions. This isn’t amateur stuff, this is GCSE coursework level research. I also know for a fact that airlines do have these systems, they do know where their passengers live, where they travel to, how often and how much they tend to pay when they do. The apparent lack of any real investment into this is truly shocking, it’s almost as if they honestly think that just getting the airport open is enough and the airlines will simply flock there. In fact I fully believe that’s the mindset driving this, hence having Christian Foster as project director. They’ve got a lot of operational specialists, but operational specialists are silo workers, they don’t understand commercial aspects in any useful depth. That’s what they think it’s a sure win too, because they really don’t get it.

I understand Grant Thornton commence their onsite audit this month. The result of that could finally, if the council have failed to satisfy their concerns, lead to formal notices like a Public Interest Report or Statutory Recommendation.

 

Having just watched the video I’m really hoping he’s not leading discussions with airlines. Have they not appointed a commercial director/manager/head yet? He clearly has no airlines lined up there for sure.

MAI is a strange one. They’re either still retained to complete some back room consultancy or they’ve parted company. I find it strange that their ‘Global Reach’ that CDC used to promote DSAs reopening isn’t even featured on the website for FlyDoncaster, let alone having a prominent place on said website. MAI have either requested no mention on there or they are no longer involved.

You mean the Head of Aviation, he doesn't have any airlines experience

 

You mean the Head of Aviation, he doesn't have any airlines experience

Not sure who the head of aviation is, but I was referring to Foster. Who is the head of aviation?

 

Not sure who the head of aviation is, but I was referring to Foster. Who is the head of aviation?

Gary Winterman, the one who scraped a few thousand tonnes of cargo in covid but has no direct airline experience

 

Gary Winterman, the one who scraped a few thousand tonnes of cargo in covid but has no direct airline experience

He’s just head of GA and Cargo. He netted PPE contracts as they were cheap and EMA etc didn’t want them. However as European found recently, building a business on a flash of the pan government back handed is not sustainable.

 

I understand Grant Thornton commence their onsite audit this month. The result of that could finally, if the council have failed to satisfy their concerns, lead to formal notices like a Public Interest Report or Statutory Recommendation.

Doesn't matter does it. They'll just say "noted" and carry on regardless.

It seems to be a universal feature of these local government lanyard-wearer types that they always think they know best...

 

Doesn't matter does it. They'll just say "noted" and carry on regardless.

It seems to be a universal feature of these local government lanyard-wearer types that they always think they know best...

They will, in fact the doubling down of the board - where the council effectively get to mark their own homework by allowing the boss of the S151 officer to stay on the board - will have been a result of CDC consulting lawyers to ensure what they’re doing is legal so they can throw it back to Grant Thornton.

Grant Thornton on the other hand may be quite keen to avoid scrutiny following some oversights in other local authorities that resulted in bankruptcy. Birmingham, Croydon and Nottingham with Robin Hood Energy (interesting name given this topic) are all tied in some ways to Grant Thornton who were criticised for not being critical enough. They may be keen to avoid this now by taking a more aggressive stance against council mismanagement leading to financial disasters!

 

They will, in fact the doubling down of the board - where the council effectively get to mark their own homework by allowing the boss of the S151 officer to stay on the board - will have been a result of CDC consulting lawyers to ensure what they’re doing is legal so they can throw it back to Grant Thornton.

To what end though? All concerned must surely know by now that this is a financial suicide mission. We've got Coppard scouring the globe, again, desperately trying to find some glimmer of interest in this crazy project, and already he's pretending that vague talk of "Chinese investors" and "defence opportunities" is somehow good news.

I simply don't understand why they're so hell bent on doing this. OK so it's giving a bunch of middle-managers something they can "manage", but that's the kind of Soviet-era lunacy that has no place in the 21st century.

 

To what end though? All concerned must surely know by now that this is a financial suicide mission. We've got Coppard scouring the globe, again, desperately trying to find some glimmer of interest in this crazy project, and already he's pretending that vague talk of "Chinese investors" and "defence opportunities" is somehow good news.

I don't simply don't understand why they're so hell bent on doing this. OK so it's giving a bunch of middle-managers something they can "manage", but that's the kind of Soviet-era lunacy that has no place in the 21st century.

Because a city region the size of Sheffield deserves its own airport and the airport has the longest runway in Europe or something. Thats why. Local pride prevails, political promises made. To cancel now would destroy Labour in Doncaster and hand it over to Deform. They are playing a dangerous game financially and politically, because when the airport does fail it will be on their heads anyway. Some might say they’ve backed themselves into a corners.

Christian Foster is way out of his depth but he’s been appointed because they see the airport as a strip of tarmac not the commercial entity that needs to operate in a cut throat, low margin industry. They seriously believe that just reporting it will result in the airlines arriving sufficient to make it work. They really are that deluded, but so are the people supporting it too so hence they’re backed into a corner with it.

Regarding the loan, I understand that even with preferential rates, the actual cost to the taxpayer for the £57 million borrowing will be £96.4 million once the £39.4 million in interest is factored in. Servicing this debt will drain around £4.5m–£5 million per year. When you add that to the £5 million annual lease rent due by 2029, plus whatever top-slice turnover Peel grabs, you are looking at a fixed cost increase of over £10 million compared to the old operating model. If the airport replicates its historical losses, we could easily see it bleeding £20 million every single year. This is an astronomical burden for a council whose £51 million education deficit lands on the main balance sheet in 2028 when the statutory override ends, especially when they are already overspending their day-to-day budget by £1.2 million.

 

Because a city region the size of Sheffield deserves its own airport and the airport has the longest runway in Europe or something. Thats why. Local pride prevails, political promises made. To cancel now would destroy Labour in Doncaster and hand it over to Deform. They are playing a dangerous game financially and politically, because when the airport does fail it will be on their heads anyway. Some might say they’ve backed themselves into a corners.

Christian Foster is way out of his depth but he’s been appointed because they see the airport as a strip of tarmac not the commercial entity that needs to operate in a cut throat, low margin industry. They seriously believe that just reporting it will result in the airlines arriving sufficient to make it work. They really are that deluded, but so are the people supporting it too so hence they’re backed into a corner with it.

Regarding the loan, I understand that even with preferential rates, the actual cost to the taxpayer for the £57 million borrowing will be £96.4 million once the £39.4 million in interest is factored in. Servicing this debt will drain around £4.5m–£5 million per year. When you add that to the £5 million annual lease rent due by 2029, plus whatever top-slice turnover Peel grabs, you are looking at a fixed cost increase of over £10 million compared to the old operating model. If the airport replicates its historical losses, we could easily see it bleeding £20 million every single year. This is an astronomical burden for a council whose £51 million education deficit lands on the main balance sheet in 2028 when the statutory override ends, especially when they are already overspending their day-to-day budget by £1.2 million.

So we circle back to the arithmetic we were discussing before Reform mysteriously decided that it was perfectly OK to carry on with this mad superspaff. I'm not sure how far the crazy hiring spree has progressed but if it's reached the threatened level of 200 then you can easily see circa £10m/year just in staff costs - maybe more. Over the ten year envelope that's >£100m straight away.

I know you disagree with me, but I'm not convinced they can actually afford to get it open, even if they had the competence.

 

So we circle back to the arithmetic we were discussing before Reform mysteriously decided that it was perfectly OK to carry on with this mad superspaff. I'm not sure how far the crazy hiring spree has progressed but if it's reached the threatened level of 200 then you can easily see circa £10m/year just in staff costs - maybe more. Over the ten year envelope that's >£100m straight away.

I know you disagree with me, but I'm not convinced they can actually afford to get it open, even if they had the competence.

I genuinely don’t know whether they can or not. They’re proving to be highly incompetent, certainly outwardly. Like I say, they have appointed specialists but these people, with all the best will in the world, tend to be silo workers. They’re very good with their technical specialism but don’t necessarily understand the commercial aspect. Who is holding Christian Foster to account? A board of directors made up of fellow greasy pole climbers from the council? Certainly not MAI who have apparently recommended they create a Microsoft Forms survey for market research purposes, that tells me how much effort MAI are putting in!

So I do think behind the scenes they may have priced up the equipment, they may be in a position financially to get the airport compliant and up and running, but they certainly do not appear, even with Gainshare approval, to have enough to sustain operations. If the annual losses are around £20million, over ten years that far exceeds the amount they’ve committed to it, and certainly far exceeds the amount they claim it will lose over the next 9 years by more than double.

So with that in mind there’s no wonder Coppard is travelling the globe with his collection bucket!

 

What’s your take on them recruiting nine trainee ATCOs? Isn’t this quite a significant risk? I understand failure rate can be very high when pursuing certain ratings, up to 50% in some cases. Is this accurate? If so in your opinion have they inadvertently, in the pursuit of political capital, potentially exposed themselves to a risk of a shortfall? I do know they’ll be forced to offer very good training rates to Jet2 etc as per previous to keep the controllers in practice and get them signed off. Further hidden costs.

Nine ab-initios is… a lot. The training they will need usually amounts to about two years of ratings courses and unit instruction to get them qualified in Tower and Radar, however with nine of them it will be slower than that - a unit like this can usually only accommodate a maximum of five trainees at a time. You’re correct about failure rates - although the risk of failure during unit training is generally much lower at quieter units, the main risk is during the initial ratings courses at the ATC college.

My question is who is going to train them, and on what traffic? There is a photo that has been published by CDC of eight new ATC team members wearing orange high-viz, none of them are the nine ab-initios. I think it’s fair to assume that these eight represent the full complement of the department (so far). Of the eight: one is the head of department; three are assistants; one is an air traffic engineer and one I don’t recognise, but Google suggests he has been working as a surveyor before now. There are two experienced air traffic controllers. They’re going to need many more than that.

 

Nine ab-initios is… a lot. The training they will need usually amounts to about two years of ratings courses and unit instruction to get them qualified in Tower and Radar, however with nine of them it will be slower than that - a unit like this can usually only accommodate a maximum of five trainees at a time. You’re correct about failure rates - although the risk of failure during unit training is generally much lower at quieter units, the main risk is during the initial ratings courses at the ATC college.

My question is who is going to train them, and on what traffic? There is a photo that has been published by CDC of eight new ATC team members wearing orange high-viz, none of them are the nine ab-initios. I think it’s fair to assume that these eight represent the full complement of the department (so far). Of the eight: one is the head of department; three are assistants; one is an air traffic engineer and one I don’t recognise, but Google suggests he has been working as a surveyor before now. There are two experienced air traffic controllers. They’re going to need many more than that.

Interesting. I wonder whether these trainees have been bonded? It’s a nice ticket to a higher salary elsewhere one the free training is complete and they’re fully rated! It seems the intention is for them to be handling cargo and base training flights within 12 to 18 months to allow each trainee to be signed off. We will likely see jet2 there amongst others, but only in the circuit. I’m sure this will be used to misinform though as it’s a good photo opportunity isn’t it, much like the 2Excel 727 visit to ‘test the runway’.