Doncaster Sheffield Airport Strategic Review Announcement

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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...?
 
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Interesting how this has slightly different wording to the current story going around from the Mirror stating "Now the Mayor’s Office and Labour-run Doncaster Council are on the verge of agreeing a deal with Peel Group to take on a 100-year lease on the site - which could see flights taking off again within two years.", whereas this states "CDC is willing to taken on a 100-year lease on the site, but Peel hasn't accepted the proposal thus far". I tend to believe the latter, with the mirror statement perhaps being politicians trying to score points. Same with the authority negotiating with 15 private sector firms, this probably means they have emailed 15 firms, and speaking to a couple in my opinion.
Completely agree. all I see and read is all if buts and maybes.. I don't expect anything less from them though.
 
Completely agree. all I see and read is all if buts and maybes.. I don't expect anything less from them though.
Whilst there are, it is believed that Vinci may be one of the interested parties. So there may be some credible bidders. Question is whether the terms will in any way be beneficial to the Council. My guess is they will be getting squeezed both ends by Peel over the lease and a budding operator over required subsidies. Peel will not want to be in a position which would see them losing out on the land, so will be driving a hard bargain with any lease agreement heavily in their favour. They are within their right to do so, given the proven lack of viability they talk about.

Electioneering pure had simple.
 
Well no, but just because that’s par for the course with these thing. A long list of 15 firms looking at an investment will inevitably get whittled down. I suspect you’ll end up with 2 or 3 serious bidders who then get into the real details of trying to strike a deal
 
Well no, but just because that’s par for the course with these thing. A long list of 15 firms looking at an investment will inevitably get whittled down. I suspect you’ll end up with 2 or 3 serious bidders who then get into the real details of trying to strike a deal
Well the whole idea was to get a number of them then whittle those down after the end of the initial tender phase which closes 25th this month. So this part of it all depends on who the serious bidders are and whether they have the credibility to rebuild the airport in this fiercely competitive market. If they have submitted bids from 2 or 3 highly credible operators then it’s completely different from the same number of bids from outliers who may not have the credentials required.

I expect that this will determine how amenable Peel will be to agreeing a long term lease with the Council. The two things in the Councils favour being the amount it’s probably costing to keep the place closed, and how it may impact on their developments at ‘Gateway East’.
 
Ros Jones has released a couple of updates this week. One to stop misinformation spreading (finger pointing at a certain local MP and his followers I expect) and a second one today updating with nothing to update. We are supposed to take away that this is positive.

I have no doubt MP selfie stick Nick will be sticking his ore in at some point today, as I think there is a briefing. To be honest, I’m not surprised there’s nothing to report as the bid period doesn’t close til Wednesday, but why bother releasing an update and then deleting comments resulting from said update that are asking pertinent questions? Very odd.

I have absolutely no doubt that this weeks formal announcement by LBA regarding the £100million investment project is going to have a knock on to the work they are doing in South Yorkshire to attract a genuine bidder and to get Peel to agree to a lease. We shall see what transpired today.
 
To be honest I am surprised that Ms Jones has made a statement at all. If you are in the middle of a public sector procurement process you risk breaking rules, and having to re-start the procedure. Perhaps this is her reason for talking about misinformation, what she perhaps is trying to do is stop people (MPs etc) who should know better on commenting whilst there is a procurement process ongoing. According to the Free Press newspaper She has today stated “We are currently going through a procurement exercise to obtain an airport operator, of which we have had significant interest, the first phase will close next week at which point we will evaluate the submissions.”. She should not be commenting on how much or little interest they have, until they publicly release a short list via a contract notice. Then again, why does this not surprise me 🙄
 
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To be honest I am surprised that Ms Jones has made a statement at all. If you are in the middle of a public sector procurement process you risk breaking rules, and having to re-start the procedure. Perhaps this is her reason for talking about misinformation, what she perhaps is trying to do is stop people (MPs etc) who should know better on commenting whilst there is a procurement process ongoing. According to the Free Press newspaper She has today stated “We are currently going through a procurement exercise to obtain an airport operator, of which we have had significant interest, the first phase will close next week at which point we will evaluate the submissions.”. She should not be commenting on how much or little interest they have, until they publicly release a short list via a contract notice. Then again, why does this not surprise me 🙄
Perhaps because the interest hasn’t really materialised as expected. Although to be fair to them they haven’t actually started the tender phase yet, this period is to receive bids ahead of the tender process which will see the interested parties whittled down to a couple (I think) and then obviously the official announcement which is to be expected in March according to most recent statements from Ros Jones. But this all hangs on whether Peel are receptive and willing to be a bit more generous in their terms.
 
Perhaps because the interest hasn’t really materialised as expected. Although to be fair to them they haven’t actually started the tender phase yet, this period is to receive bids ahead of the tender process which will see the interested parties whittled down to a couple (I think) and then obviously the official announcement which is to be expected in March according to most recent statements from Ros Jones. But this all hangs on whether Peel are receptive and willing to be a bit more generous in their terms.
Ah I’m wrong then, I thought the process had started. So this is probably an Expression of interest period, or perhaps a PQQ stage (with the later procurement rules would be in force).

Thanks for pointing this out.
 
Ah I’m wrong then, I thought the process had started. So this is probably an Expression of interest period, or perhaps a PQQ stage (with the later procurement rules would be in force).

Thanks for pointing this out.
It’s just my take on it and I’m not involved so of course might we’ll be wide of the mark but my understanding was that they went to gauge market interest some months ago, they then commenced an official bidding process which closes on 25th this month. This would then be I assume when the procurement/tender process begins? Or is the official request for bids a part of the procurement/tender process?

Depending on who you believe, there were 15 expressions of interest but the number that have submitted a bid falls much shorter than that. This is why I said previously that the key to the success of this phase is who those bidders are.

From the information made public it would appear Peel are instilling confidence that they are amenable to agreeing a lease, in fact it’s been suggested that they have ordered a bit of a spring clean of the site ahead of some surveying work so they probably do want to negotiate the best deal they can on it, as the group acting on behalf of the Council may drive a hard bargain if the cost of reinstating equipment escalate (which I expect it will) and I do believe Peel will want to lease it if they can as they probably don’t have any solid alternative plans for the site.
 
It’s just my take on it and I’m not involved so of course might we’ll be wide of the mark but my understanding was that they went to gauge market interest some months ago, they then commenced an official bidding process which closes on 25th this month. This would then be I assume when the procurement/tender process begins? Or is the official request for bids a part of the procurement/tender process?

Depending on who you believe, there were 15 expressions of interest but the number that have submitted a bid falls much shorter than that. This is why I said previously that the key to the success of this phase is who those bidders are.

From the information made public it would appear Peel are instilling confidence that they are amenable to agreeing a lease, in fact it’s been suggested that they have ordered a bit of a spring clean of the site ahead of some surveying work so they probably do want to negotiate the best deal they can on it, as the group acting on behalf of the Council may drive a hard bargain if the cost of reinstating equipment escalate (which I expect it will) and I do believe Peel will want to lease it if they can as they probably don’t have any solid alternative plans for the site.
It’s something I have some knowledge in, so decided to have a look.I can confirm the procurement process has started as such, with a formal notice for expressions of interest to participate (selection questionnaire / PQQ) by 25th October, then Invitation to Tender issued 15th November. Details as follows:

Contract to Reopen, Operate and Develop Doncaster Sheffield Airport (DSA)

The City of Doncaster Council (the Council) require a provider to Reopen, Operate and Develop Doncaster Sheffield Airport (DSA) for a period of 50 years.

The Council require interested parties to sign a Non-Disclosure Agreement (NDA), once agreed and signed providers will be directly invited to the project where the procurement documents can be downloaded

Value excluding VAT: £100,000,000

Duration in months:600

Information about the limits on the number of candidates to be invited​

Envisaged minimum number: 3

Maximum number: 4

Objective criteria for choosing the limited number of candidates:

The objective criteria will evaluate the economic and financial standing and the professional and technical ability of the applicants as well as the suitability of those applicants to pursue the services. These are more fully set out in the procurement documents.

Time limit for receipt of tenders or requests to participate​

Date​

25 October 2023

Estimated date of dispatch of invitations to tender or to participate to selected candidates​

15 November 2023

It’s just my take on it and I’m not involved so of course might we’ll be wide of the mark but my understanding was that they went to gauge market interest some months ago, they then commenced an official bidding process which closes on 25th this month. This would then be I assume when the procurement/tender process begins? Or is the official request for bids a part of the procurement/tender process?

Depending on who you believe, there were 15 expressions of interest but the number that have submitted a bid falls much shorter than that. This is why I said previously that the key to the success of this phase is who those bidders are.

From the information made public it would appear Peel are instilling confidence that they are amenable to agreeing a lease, in fact it’s been suggested that they have ordered a bit of a spring clean of the site ahead of some surveying work so they probably do want to negotiate the best deal they can on it, as the group acting on behalf of the Council may drive a hard bargain if the cost of reinstating equipment escalate (which I expect it will) and I do believe Peel will want to lease it if they can as they probably don’t have any solid alternative plans for the site.
Interestingly the other day when I was driving past the austerfield side of the runway I noticed plenty of lights on and what looked like some activity, so they could indeed be doing a spring clean.

without seeing the document (need to sign an nda so unlikely), we don’t know the details, but generally and simplistically one looks at the value and divides it by the number of years, to calculate the annual value the contract, so in this case £2m per annum, so assume this maybe the annual subsidy? either way they have £100m to play with over 50 years.
 
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It’s something I have some knowledge in, so decided to have a look.I can confirm the procurement process has started as such, with a formal notice for expressions of interest to participate (selection questionnaire / PQQ) by 25th October, then Invitation to Tender issued 15th November. Details as follows:

Contract to Reopen, Operate and Develop Doncaster Sheffield Airport (DSA)

The City of Doncaster Council (the Council) require a provider to Reopen, Operate and Develop Doncaster Sheffield Airport (DSA) for a period of 50 years.

The Council require interested parties to sign a Non-Disclosure Agreement (NDA), once agreed and signed providers will be directly invited to the project where the procurement documents can be downloaded

Value excluding VAT: £100,000,000

Duration in months:600

Information about the limits on the number of candidates to be invited​

Envisaged minimum number: 3

Maximum number: 4

Objective criteria for choosing the limited number of candidates:

The objective criteria will evaluate the economic and financial standing and the professional and technical ability of the applicants as well as the suitability of those applicants to pursue the services. These are more fully set out in the procurement documents.

Time limit for receipt of tenders or requests to participate​

Date​

25 October 2023

Estimated date of dispatch of invitations to tender or to participate to selected candidates​

15 November 2023


Interestingly the other day when I was driving past the austerfield side of the runway I noticed plenty of lights on and what looked like some activity, so they could indeed be doing a spring clean.

without seeing the document (need to sign an nda so unlikely), we don’t know the details, but generally and simplistically one looks at the value and divides it by the number of years, to calculate the annual value the contract, so in this case £2m per annum, so assume this maybe the annual subsidy? either way they have £100m to play with over 50 years.
Interesting, thank you for your insight.

With the value of the contract being £100million, I appreciate you’ve broken this down to an effective £2million per year subsidy over the length of the contract. However, do you think that this £100m is inclusive of the costs of reopening and the ongoing subsidy of 6-24 months as outlined in the document released last month? What I mean is is this a case of the council rebuild it, subsidise it for a set period of up to 2 years and then it’s up to the successful bidder to cover the costs and investment required thereafter? Or is the contract of £100m not inclusive of the capital investment necessary to turn it back into a working airport? If the former then it doesn’t seem very much given Peel will still ultimately own it.
 
Interesting, thank you for your insight.

With the value of the contract being £100million, I appreciate you’ve broken this down to an effective £2million per year subsidy over the length of the contract. However, do you think that this £100m is inclusive of the costs of reopening and the ongoing subsidy of 6-24 months as outlined in the document released last month? What I mean is is this a case of the council rebuild it, subsidise it for a set period of up to 2 years and then it’s up to the successful bidder to cover the costs and investment required thereafter? Or is the contract of £100m not inclusive of the capital investment necessary to turn it back into a working airport? If the former then it doesn’t seem very much given Peel will still ultimately own it.
Good point, It’s hard to know without seeing documents, but if we speculate, the procurement title states “Contract to Reopen, Operate and Develop Doncaster Sheffield Airport (DSA)”. Does the wording Reopen = Build? It appears that way, but it’s a shame the wording is so vague.

Either way it does not appear a huge amount of capital for a 50 year period. One would expect clauses in the contract stating some sort of KPI’s to run the contract, penalties for underperformance and a potentially a share mechanism on profits for the council to claw back some of its risk / investment should things be going well. This will be a costly procurement exercise for the bidders, but they will not be able to claim any expenses, there will be no guarantee that the procurement exercise will be awarded and can be cancelled at any time.
 
Good point, It’s hard to know without seeing documents, but if we speculate, the procurement title states “Contract to Reopen, Operate and Develop Doncaster Sheffield Airport (DSA)”. Does the wording Reopen = Build? It appears that way, but it’s a shame the wording is so vague.

Either way it does not appear a huge amount of capital for a 50 year period. One would expect clauses in the contract stating some sort of KPI’s to run the contract, penalties for underperformance and a potentially a share mechanism on profits for the council to claw back some of its risk / investment should things be going well. This will be a costly procurement exercise for the bidders, but they will not be able to claim any expenses, there will be no guarantee that the procurement exercise will be awarded and can be cancelled at any time.
Interesting. Assuming it is as simple as that (which I’m sure isn’t the case but it’s probably not far off) then on face value it doesn’t look like there would be any winners here at all. The Council want to bring an airport into operation presumably using government/SYMCA funding to then let a private sector operator run it at a cost to the operator for 50 years with ultimate land owners Peel seemingly valuing the land at £150m short of what they invested into it.

Think Peel might be letting the Council make their own mistakes here.
 
Not much to report at the moment whilst the council officials and Peel continue discussions and the tender process is continuing. It’s not stopped MP Nick armed with selfie stick releasing his usual statements against the Council/SYMCA. No briefing today, next weeks is cancelled but in its place will be a written statement.

Oliver Coppard was recently interviewed by I believe BBC Radio Sheffield where he was quite damning of Peel and clearly stating that they purposefully ran the airport into the ground both through agendas to redevelop the site and also through blatant incompetence. Appreciate he’s not involved in the lease talks, but it hardly engenders feelings of goodwill.
 
Not much to report at the moment whilst the council officials and Peel continue discussions and the tender process is continuing. It’s not stopped MP Nick armed with selfie stick releasing his usual statements against the Council/SYMCA. No briefing today, next weeks is cancelled but in its place will be a written statement.

Oliver Coppard was recently interviewed by I believe BBC Radio Sheffield where he was quite damning of Peel and clearly stating that they purposefully ran the airport into the ground both through agendas to redevelop the site and also through blatant incompetence. Appreciate he’s not involved in the lease talks, but it hardly engenders feelings of goodwill.
The politics down there is something else! I wonder what Mr Coppard actually knows - might appear that he has been reading too much propaganda. Maybe Peel did start to run the airport down when it finally became clear to them they were on a complete loser, who knows, - as for blatant incompetence they actually employed some top people in the industry so I'm by no means certain about that one!!
 
The politics down there is something else! I wonder what Mr Coppard actually knows - might appear that he has been reading too much propaganda. Maybe Peel did start to run the airport down when it finally became clear to them they were on a complete loser, who knows, - as for blatant incompetence they actually employed some top people in the industry so I'm by no means certain about that one!!
They certainly did initially, for at least the first 12 years you had people with credentials and experience heading it up. Of course you could argue that Peel weren’t generous enough with funding the venture but then the evidence would prove otherwise, I’m thinking FlyDSA arena, various airline subsidies etc.. Of course that’s on top of actually building it and juggling the finances around to keep it afloat in spite of heavy losses. Can’t imagine a more experienced airport operator being willing to do this. It has been alleged that Peel misled Vantage into believing that there was an airline agreement nearing completion when they sold the group to them, but that cannot be corroborated. What is clear is that they sold it back to Peel.

It’s misinformed public opinion driving this, nothing more. Just have to see whether any of the bidders actually stay the course.
 
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