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...?

 

Is DSA within the South Yorkshire Mayor regional authority's area? I believe transport comes under it so maybe Peel want a repeat of what they did at Teesside?

Possibly, seems Central Gvt are suggesting that as an option. Whereas the Mayor appears to be against this, favouring private ownership. Peel would likely be happy either offloading it at a huge cost, or building on it. Question is, how much of the estate is owned by Doncaster Airport Ltd? Be even harder to break even if it loses the surrounding land to offset costs..!

 

They decided to close Teeside, but the council stepped in and its still open.

And just lost another £12m. Teesside is already becoming a drain on regional resources.

 

And just lost another £12m. Teesside is already becoming a drain on regional resources.

Correct, but my point was that any decision Peel might take to withdraw from the airport wouldnt necessarily result in its closure.

 

Correct, but my point was that any decision Peel might take to withdraw from the airport wouldnt necessarily result in its closure.

Well, they own it. They can do what they like with it and set what they consider to be the market price if the council's opt to buy, but even the South Yorkshire Mayor seems to understand that the cost of purchase would be huge, and little prospect of making any profit for years to come. On top of that, running an airport costs millions each year, with regular need to upgrade equipment at the whim of Government.

Its no good the councils buying it and then doing what Peel did, offering silly deals to grab airlines from neighbouring airports as they did with Tui and Flybe from LBA, only for them to leave when the contract ends as Flybe did. They would end up throwing good money after bad. Can the LAs really afford this?

Right now, almost peak season, DSA seems to have around 15 scheduled departures most days. Nowhere near enough. LBA averages 50.

Quite frankly, despite my love of aviation, and sadness for the loss of an airport, the potential benefits to South Yorkshire of the airport are, in my view, outweighed by the benefits of carefully selected industry on the site, which should generate even more jobs for the area than DSA has ever done. Yes, the region should have an airport, but not at all costs.

 

The reason why Peel are heading down the closure option rather than a sale option is that no airport operator would ever consider purchasing an airport without the airport already achieving or close to achieving critical mass for the foreseeable future.

It's my belief that there aren't too many airports serving the Yorkshire region but one airport in particular has been allowed to expand too much beyond it's natural boundary thus to the detriment of neighbouring airports and ultimately the regions those airports serve.

MPs of both the main parties playing political games have now exacerbated this problem further by successfully manipulating the outcome of an approved planning consent for a new terminal building for Leeds Bradford Airport. Inevitably without adequate facilities to the East of the Pennines will only lead to a further economic shift of busonesses away from the Yorkshire region to regions that do support those businesses.

I agree to an extent Aviador, but I think simple airline economics have played a large part too - MAN is in some cases a victim of its own success, but it’s location is such that it been able to grow somewhat organically in line with demand.

I do think local politics has played a part in this current situation - Peel have been given carte blanche by regional development agencies and local authorities as the idealists realise that it’s central location and ample space, not to mention the ‘long runway’ suggest that it is the perfect Yorkshire airport for growth. I think this has played a part in the hostility for plans to build the new terminal at LBA, certainly get it over in East Yorkshire from councillors saying DSA is the future.

These councillors are clearly naive when it comes to airport/airline economics and market drivers. Sadly it’s come at a huge cost.

 

Well, they own it. They can do what they like with it and set what they consider to be the market price if the council's opt to buy, but even the South Yorkshire Mayor seems to understand that the cost of purchase would be huge, and little prospect of making any profit for years to come. On top of that, running an airport costs millions each year, with regular need to upgrade equipment at the whim of Government.

Its no good the councils buying it and then doing what Peel did, offering silly deals to grab airlines from neighbouring airports as they did with Tui and Flybe from LBA, only for them to leave when the contract ends as Flybe did. They would end up throwing good money after bad. Can the LAs really afford this?

Right now, almost peak season, DSA seems to have around 15 scheduled departures most days. Nowhere near enough. LBA averages 50.

Quite frankly, despite my love of aviation, and sadness for the loss of an airport, the potential benefits to South Yorkshire of the airport are, in my view, outweighed by the benefits of carefully selected industry on the site, which should generate even more jobs for the area than DSA has ever done. Yes, the region should have an airport, but not at all costs.

Im just speculating that if its happened once (at Teesside) despite all the arguments against it, it could happen again.

 

Very sad news! My fear is that it will become a housing development with retail/industrial units attached. With no growth as an airport in the foreseeable future, Peel are probably going to look for the quickest way to recoup their investment. Also, how will it affect Vulcan XH558?

Kevin

Can we be sure that this wasn't the intention from the outset bearing in mind that Peel are land and property developers? Peel are very good at extracting money from public bodies which eventually enhance their investments. Once those grants have been received it becomes virtually impossible to argue that the grants had been sought with an ulterior motive. Just a thought.

 

Can we be sure that this wasn't the intention from the outset bearing in mind that Peel are land and property developers? Peel are very good at extracting money from public bodies which eventually enhance their investments. Once those grants have been received it becomes virtually impossible to argue that the grants had been sought with an ulterior motive. Just a thought.

It can’t be certain, but I feel they had genuine intentions when they got involved in airports. It’s just that their ambition - to hit MAG hard - failed once the established airports started realising the importance of getting on the low-cost bandwagon.

I think they’ve built DSA safe in the knowledge that they could always make more from alternative uses of the site, but I don’t believe that they have genuinely had this plan in mind all along, it’s just been in their back pocket in case it didn’t work out. It is why I’ve always been against vast public funding being directed their way though, because all most of it has done is ultimately increased their land value. The various authorities appear to have failed to put safeguards in place to stop this previously, given all the worry at the moment from DMBC/SYM I suspect that they do not have much authority over land use either.

 

They decided to close Teeside, but the council stepped in and its still open.

I suspect that the council are subsidising it to a substantial degree with only 5 or 6 airline flights a day including the odd TUI and Ryanair. They are trying hard but I worry that the 'natives' will become restless at the amount of money being expended.

 

I suspect that the council are subsidising it to a substantial degree with only 5 or 6 airline flights a day including the odd TUI and Ryanair. They are trying hard but I worry that the 'natives' will become restless at the amount of money being expended.

Losing £12million a year apparently, and that site is on a much smaller scale with more ancillary revenue potential.

It’s actually quite concerning at the thought of how much money would be required to keep DSA afloat, not to mention any necessary CAPEX required to handle any growth, assuming a new owner were somehow successful in attracting new airlines. The planned building work at DSA was stopped when Wizz pulled out, believe that was funded by a grant from local government.

 

Losing £12million a year apparently, and that site is on a much smaller scale with more ancillary revenue potential.

It’s actually quite concerning at the thought of how much money would be required to keep DSA afloat, not to mention any necessary CAPEX necessary to handle any growth assuming a new owner were somehow successful in attracting new airlines. The planned building work at DSA was stopped when Wizz pulled out, believe that was funded by a grant from local government.

I agree the financial case for keeping it open doesnt stack up but neither did the case for Teeside. Furthermore in the case of DSA central government seem to want it to stay open so who knows maybe there will be more subsidies available.

 

I agree the financial case for keeping it open doesnt stack up but neither did the case for Teeside. Furthermore in the case of DSA central government seem to want it to stay open so who knows maybe there will be more subsidies available.

There will certainly be pressure to keep it going. Whether it’s just delaying the inevitable remains to be seen.

 

It can’t be certain, but I feel they had genuine intentions when they got involved in airports. It’s just that their ambition - to hit MAG hard - failed once the established airports started realising the importance of getting on the low-cost bandwagon.

I think they’ve built DSA safe in the knowledge that they could always make more from alternative uses of the site, but I don’t believe that they have genuinely had this plan in mind all along, it’s just been in their back pocket in case it didn’t work out. It is why I’ve always been against vast public funding being directed their way though, because all most of it has done is ultimately increased their land value. The various authorities appear to have failed to put safeguards in place to stop this previously, given all the worry at the moment from DMBC/SYM I suspect that they do not have much authority over land use either.

I don't know the area well, but I believe the site is close to the M18 and a railway line, so there must be some value in its location, also it has a pretty long runway I understand. I think it inconceivable that Peel would commit to building an airport there if they didn't believe in the project from the outset.

 

I don't know the area well, but I believe the site is close to the M18 and a railway line, so there must be some value in its location, also it has a pretty long runway I understand. I think it inconceivable that Peel would commit to building an airport there if they didn't believe in the project from the outset.

I think the fact that a lot of effort and money went in to getting the airport up to commercial standards, including excellent landing and nav aids, amongst other things, suggests they took the project seriously. My point is that the risk has always been backed up by the knowledge that for whatever reason it didn’t work out (and remember, they were told by numerous industry experts that it would struggle) that they could recoup their losses from alternative uses of the site. I cannot think of any other organisation that would have developed it as an airport!

 

I think the fact that a lot of effort and money went in to getting the airport up to commercial standards, including excellent landing and nav aids, amongst other things, suggests they took the project seriously. My point is that the risk has always been backed up by the knowledge that for whatever reason it didn’t work out (and remember, they were told by numerous industry experts that it would struggle) that they could recoup their losses from alternative uses of the site. I cannot think of any other organisation that would have developed it as an airport!

If that's the case, they must have thought it was worth it, if theres a standby option there.

 

Many ifs and buts are being expressed concerning Peel's motives and it is true that none of us can, with certainty, dispute any of the comments made except possibly to add a further comment that Peel seem to have a bit of history when it comes to airports. Think Sheffield, MME and now DSA.

 

The LA's can take over at great expense, but it still doesn't change the fact that enough people do not want to use it on a regular basis.

"Supply & Demand", for the people of South Yorkshire and surrounding area, there is too much supply and not enough demand.

 

The LA's can take over at great expense, but it still doesn't change the fact that enough people do not want to use it on a regular basis.

"Supply & Demand", for the people of South Yorkshire and surrounding area, there is too much supply and not enough demand.

It seems the chalice has been passed to Oliver Coppard, devolved powers highlighted. Lose lose situation for him really, he’s clearly well aware of the scale of investment and ongoing financial support required just to keep the place as is. However he will also have a vast number of constituents who would be upset (to say the least) to see the airport close.

I think this needs some open and transparent scrutiny, as I’m fed up of hearing how DSA contributes to the wider economy when in reality it’s business is heavily reliant on the bucket and spade customers. If Peel really have been deterring airlines from operating from there, then Oliver Coppard and the other stakeholders involved need to find evidence to prove this, as this would solidify a case for taking over ownership. If, as some of us suspect on here, the problem is due to a lack of demand and unviable high risk for airlines to use DSA, then this also needs to be made public.

 

The Teesside Mayor paid £40m for Teesside Airport and they are now injecting a further £20m into it to cover losses of £12m which the Mayor says is due to Covid. He claims the airport has a bright future. We shall see. Frankly I don't think their losses are entirely down to Covid. It wasn't Covid that led to airlines fighting it out on routes that barely sustain one operator.

This is indicative of the minimum Peel would want for DSA and I strongly suspect it would be much more than £40m for DSA which probably covers a larger area. Does the Mayor have these sort of funds to burn ? It's a lot if money to NOT be available for other projects in South Yorkshire.

 

The Teesside Mayor paid £40m for Teesside Airport and they are now injecting a further £20m into it to cover losses of £12m which the Mayor says is due to Covid. He claims the airport has a bright future. We shall see. Frankly I don't think their losses are entirely down to Covid. It wasn't Covid that led to airlines fighting it out on routes that barely sustain one operator.

This is indicative of the minimum Peel would want for DSA and I strongly suspect it would be much more than £40m for DSA which probably covers a larger area. Does the Mayor have these sort of funds to burn ? It's a lot if money to NOT be available for other projects in South Yorkshire.

Believe Eastern were effectively bought in to operate the LHR and others, soon as Loganair came in (presumably on the same sweeteners) Eastern dropped out completely. Ryanair are back, but at what cost to the airport? Either way, the overheads have to be smaller than DSA, so if either one was to become profitable in the foreseeable future I would put money on Teesside being the one. However, it comes back again to critical mass. Humberside is profitable with barely any passenger flights…. Doncaster must be prostituting itself out to TUI and Wizz.. How many cars do the yneed parked and duty free sold to cover the costs?