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...?

 

on going negotiations about lease at doncaster airport OC mentions in the YP.
i thought that was agreed in 2024?

Yes it was - although what is in it has not been made public other than the cost of £363m over 125 years. It might seem that OC is not happy with the amount CDC negotiated - or maybe the terms terms within it especially if there is a 'performance' clause which with the information he has gleaned he deems is unachievable and wants to re-negotiate

@pug @White Heather 2m PAX by 2051, it won't turn a profit, even though the business case says it would.

Certainly seems it will need lots of other revenue streams. 2m pax by 2051 is not exactly going to set the world alight. Haven't read anything yet but perhaps the freight prediction is more optimistic - although with EMA in the vicinity one would think not on the face of it. There's a a pretty big overhead to cover and they will need to take care how they spend the money - using public money to subsidise/attract airlines is going to be under scrutiny by a number of airports - not just those close by.

 

@pug @White Heather 2m PAX by 2051, it won't turn a profit, even though the business case says it would.

Not a chance of profit with just 2m. LBA has over double that now and leaving aside investments in the terminal, it doesnt make a huge amount of profit. The thing is, the more passengers and flights you get, the more staff and equipment and investment you need and so it takes some years before there's any real profit. Didn't Peel say that DSA needed 3m annually just to break even? Sounds sbout right..

 

Not a chance of profit with just 2m. LBA has over double that now and leaving aside investments in the terminal, it doesnt more a huge amount of profit. The thing is, the more passengers and flights you get, the more staff and equipment and investment you need and so it takes some years before there's any real profit. Didn't Peel say that DSA needed 3m annually just to break even? Sounds sbout right..

I’d like to see the papers in full before I judge properly but for context I think Peel were expecting 1.8m with a four aircraft TUI base and 3 aircraft Wizzair base. not impossible of course but improbable? Well it depends who they manage to get in and whether the routes are supported with this time when they weren’t before. They’ll certainly struggle to access the capital and funding that will probably be necessary to support airlines to establish at DSA and retain the level of services necessary. 2m will not break even using the low cost model, so one assumes they will need to have a more sustainable aeronautical charging structure.

Mention of one risk being the terms of the lease and as expected it does have performance targets in there. ‘Positive’ discussions ongoing to change this. Another is that the airline partnerships don’t materialise. This won’t become apparent until the money has been spent, which given the fact they appear to be ignoring previous is my main contention with the whole scheme, because what if Peel were right?

Like @GolfFox has said the risk of legal challenge is the immediate threat in my view. Coppard is clearly confident this has been mitigated.

 

https://governance.southyorkshire-ca.gov.uk/documents/s19142/17.%20South%20Yorkshire%20Airport%20City.pdf

It's quite a good read and as folk on here thought SYMCA have re-engineered the Business Case after their Consultants found, as expected, lots of holes in the CDC case.
Some of the report for discussion is quite objective in highlighting these issues and it seems that the forecast for pax. has been downgraded with as posted already only 2m pax by 2051. The report highlights that only the higher rate projections will render the project 'affordable' within the budget envelope.
I interpret some of the Gateway East stuff as speculative and although critical 'Risk' sections are redacted my gut feeling-and being objective - is that SYMCA will be sticking their necks out when they approve this. Based on their plan to displace airlines from other airports on one hand but a pax projection of only 2m (base) and 2.6m (high) by 2051 seems to suggest limited success.

 

2m by 2051? is there any point? lets reopen and lose money so a few hundred people are happy, hurray!

 

2m by 2051? is there any point? lets reopen and lose money so a few hundred people are happy, hurray!

Well the document suggests Peel had targets for passenger numbers at 2031 and 2036 which are in the process of renegotiation which the document calls ‘positive’ with amendments agreed ‘in principle’. It’s suggestive of Peel wanting to see a return on their original investment which they couldn’t achieve themselves and are giving the Council benefit of the doubt. It still seems that performance targets will form part of the agreement though these will be lower than initially agreed. It’s not overtly mentioned by it looks like the figures might still be higher than what the airport was handling previously. I expect there will be more conditions in there with regards freight too.

There appears to be a lot of goodwill from Peel here.

It also seems that they’ve accepted that MAI perhaps don’t have the necessary U.K. market awareness and so I wouldn’t be surprised to see them either take a back seat and/or another contractor brought in.

 

The penny has dropped in CDC that maybe.. just maybe.. Peel have been right all along. I bet Peel are rubbing their hands. Go on CDC lets see you run this airport better then Peel did. I highly highly doubt it. The decrease / renegotiation in pax figures says a lot.

 

The SYMCA is going to make a decision! So trumpet the social media posts.
I don’t think in its history the SYMCA board has made a decision in the meeting. Things are decided well away from the public gaze, but let’s not spoil the theatre. What an exciting denouement to the whole DSA saga would it be if during the meeting located at the airport the leaders voted no to its funding?

The redacted papers are published here (page 327 on)

LinkedIn

This link will take you to a page that’s not on LinkedIn

lnkd.in

I, and others, have questioned the secrecy surrounding the decision and the assumptions and methodology that was producing such a strong case for investment. This paper answers some of those questions, but most of the economic case is still considered too commercially sensitive for publication.

The original question posed was does the reopening of DSA meet the requirements of being sustainable?

Economics

This project had a much vaunted BCR rate of 9, that was as unrealistic as it always sounded.

"The wider benefit cost ratio as presented in the FBC stood at 9.3, representing excellent value for money... Work undertaken by the MCA, and further tested externally, concludes that a range between 0.9 and 3.3 and a central forecast of 2 represents a more prudent view.

….the original FBC was overly optimistic in its assumptions on the pace at which commercial flights could be returned and the scale of revenue growth from increases in commercial flights and freight over time. Expenditure assumptions were also considered to be overly optimistic."

Equity

This was always going to be complex, with much touted jobs and supposed trickle down effect on the wider economy, however the Equality Impact Assessment is clear on the risks

"The project presents a dual landscape of opportunity and risk. While it offers substantial economic and social benefits, particularly for communities facing socioeconomic disadvantage, the potential for disproportionate negative impacts related to environmental health and safety cannot be understated."

Environment

Finally we see an attempt to quantify the environmental impact of the project.

The modelling of emissions relies on the airport simply displacing traffic from others and a SAF uptake and technology deployment that are widely regarded as unrealistic. There is no attempt to quantify the non-CO2 effects of aviation, and still with all this there is a net increase.

Also mentioned, but not quantified are the effects on local air quality, noise and human health, water consumption and treatment, waste management, and biodiversity.

All this is immaterial, the decision will be made with suitable fanfare, those that make it will likely not be around to see the damage it will do. Having only read the material available to the general public I can’t see how anyone in good conscience can still think this is a good idea, for any other reason than short term self-serving gain.

Another LinkedIn post so apologies for the lack of a link. This is from a former SYMCA advisor. Interesting take on it and the blatant intention to ‘displace’ flights from other airports clearly constitutes an attempt at market distortion.

 

Yaaaaaaaaawwwwwwwwnnnnnnn!

 

Calendar news, Oliver

 

Calendar news, Oliver

That is terrible reporting. It’s basically saying the £160m and the rest is justified because a small hotel in Bawtry and an independent travel agent might stand to gain from it.

 

That is terrible reporting. It’s basically saying the £160m and the rest is justified because a small hotel in Bawtry and an independent travel agent might stand to gain from it.

Well, the travel agents said the airport will be profitable this time, so who are we to argue and on a report I heard yesterday, said there will be hundreds of thousands of jobs created. Why didn’t we do this before….oh hang on…

 

When this get declared reopen on the 9th, there is still nearly 2 years of the airport laying dormant of pax flights with no real source of income. no airlines have committed being son far away.. now what?.. responsible use of cash from CDC.. ha.

 

When this get declared reopen on the 9th, there is still nearly 2 years of the airport laying dormant of pax flights with no real source of income. no airlines have committed being son far away.. now what?.. responsible use of cash from CDC.. ha.

Not only that but the YP are reporting an additional £210million of investment required in infrastructure around the airport, much of which will be public investment.

 

when would an airline make a annoucement that they intend to fly from DSA?

a pole as told me wizz air is cancelling flights from LBA to Gdansk after october.
they have offered him a flight from luton.

 

when would an airline make a annoucement that they intend to fly from DSA?

a pole as told me wizz air is cancelling flights from LBA to Gdansk after october.
they have offered him a flight from luton.

I would think it will be quite a while yet. Ryanair seem to be going after WIZZ in the Polish market quite aggressively - I believe they are doing 4 x weekly over the winter. Maybe it's something to do with that or maybe not. Might be an option for your friend if they don't fancy the trail down to LTN.

 

when would an airline make a annoucement that they intend to fly from DSA?

a pole as told me wizz air is cancelling flights from LBA to Gdansk after october.
they have offered him a flight from luton.

Yes, they are, due to competition from Ryanair/Buzz probably, who operate 4 times weekly. It doesnt mean Wizz will return to DSA, especially while they still have over 40 aircraft grounded - with the situation not forecast to be fully resolved until 2030. Certainly the Wizz flights to Romania are doing very well but they seem to be losing the battle with Ryanair on Polish routes. Incidentally, Wizz have pulled LBA -Gdansk despite the route seeing a 45% increase in passengers in June between them and Ryanair.

 

when would an airline make a annoucement that they intend to fly from DSA?

a pole as told me wizz air is cancelling flights from LBA to Gdansk after october.
they have offered him a flight from luton.

No airlines has 2028 on sale.. never mind Summer 2027.. sounds more like kicking the can down the road.

 

when would an airline make a annoucement that they intend to fly from DSA?

a pole as told me wizz air is cancelling flights from LBA to Gdansk after october.
they have offered him a flight from luton.

Don’t read anything into that route ending. Wizzair are having their own challenges currently and it’s absolutely not a sign that they’re eyeing up an airport that may or may not be capable of handing passengers in three years time. As it stands they’re just trying to survive and will probably go back to a core business model which may or may not result in some of their ops getting purchased by another airline.

Sign of the times. Consolidation all the way. If anyone thinks this bodes well for DSA then they need to give their head a bang.

 

a quote form OC

That’s why I have consulted with experts, airlines and even those sceptical of reopening DSA. All to make sure this is the right deal for the future of South Yorkshire.

so some airlines must have said they intend to fly from DSA, or he would not have ok the project