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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H
I can't help thinking they might be in for a shock when it comes to re-instatement costs. Just as an example,.installing the new (now required) security scanning equipment and body scanners will use up several million if the Capital allocation. . Purchasing Fire Fighting equipment a few more million . Re- instating the ILS and landing lights, a good few more million. And I'm sure the list of wants and needs will be a long one, quickly using up any allocation. They literally can't afford to miss out anything in their calculations as airport costs have a habit of being significant.

I remain unconvinced that the benefit to the wider region is anywhere near what they claim and I'm sure there would be some disquiet in Sheffield, Barnsley etc. if money they could have used is allocated to Doncaster instead to pour into a project that at best, is high risk. I can't help thinking that Government will be all over this like a rash if the Mayor submits a bid that uses the money in this way.
Not to mention £20,000 each time the runway needs de-icing which is a big sum especially if you're only opening for one or two movements.
 
Not to mention £20,000 each time the runway needs de-icing which is a big sum especially if you're only opening for one or two movements.
Yes, I thought of that too. Just didn't include it in my comments. But LBA will have spent around £100k earlier this week de-icing the runway and despite that, still had to wait for help from the sun. It's these regular running costs that can cripple an airport that's operating with relatively few commercial flights, but I suspect such costs are easily overlooked when considering how much it will be to open and operate a new airport.
 
Apparently DSA has its own microclimate and this doesn’t suffer from such meteorological issues as LBA does, according to other social media outlets anyway.
Selective memory loss is their problem.

Given DSAs incredibly long runway, de- icing it will inevitably cost a lot more than the £20k for LBAs 'short' 2.2km long runway. Perhaps they couldn't afford to de-ice it a few years back when the DSA runway was closed several days due to snow and ice?
 
Selective memory loss is their problem.

Given DSAs incredibly long runway, de- icing it will inevitably cost a lot more than the £20k for LBAs 'short' 2.2km long runway. Perhaps they couldn't afford to de-ice it a few years back when the DSA runway was closed several days due to snow and ice?
No that was Peel not wanting to spend money because they wanted to get rid of all the business there after spending £250million+ to attract it, so they could close it and allow it to sit doing nothing and lose more money on it.
 
Well the amount of squabbling and public spats between South Yorkshire politicians on Social Media channels has reached new levels this weekend! I’m sure potential investors in the airport will be watching on with interest and questioning if the really could trust any of them and if they would want to risk their reputations being tarnished by being dragged into it.
 
Well the amount of squabbling and public spats between South Yorkshire politicians on Social Media channels has reached new levels this weekend! I’m sure potential investors in the airport will be watching on with interest and questioning if the really could trust any of them and if they would want to risk their reputations being tarnished by being dragged into it.

Whilst I agree it doesn’t look great, I doubt any of those in the running will be that phased, in fact I’d be surprised if they’re aware of it as it’s quite petty lower level stuff. All they will care about is whether the money is available to them and whether there is any stakeholder interest to see it reopen.

MP Nick is a bit of a lunatic and he knows it, hence the under hand stabs at the MCA and CDC attempts at reopening the place. Where I think OC falls down is in this point about using this £30million for the railway link to reopen the airport instead, which is of course not part of the agreement. Whether we agree or not, that cash is allocated for a railway link and that’s it. Just how Government funding works. I sense some concern about putting everything into DSA at the expense of all other projects in the region that require funding.

I still think they’ll push ahead, they’ve effectively backed themselves into a corner. I do wonder whether they are approaching the bidders asking for them to invest too? Or perhaps even Peel to still have some oversight in order to draw down on private sector funding. It’s all open to conjecture unless you’ve seen the full business case, which of course is subject to commercial sensitivity.

EDIT: Oliver Coppard has since released a statement on social media claiming that they are still going to fund the airports reopening costs, but basically without the extra £30million promised towards funding the rail connection then other projects requiring funding in Doncaster will lose out. So there we are, the first time it’s actually been written down by OC and CDC that they are putting the reopening of the airport over and above other projects. Judicial Review required.
 
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Whilst I agree it doesn’t look great, I doubt any of those in the running will be that phased, in fact I’d be surprised if they’re aware of it as it’s quite petty lower level stuff. All they will care about is whether the money is available to them and whether there is any stakeholder interest to see it reopen.

MP Nick is a bit of a lunatic and he knows it, hence the under hand stabs at the MCA and CDC attempts at reopening the place. Where I think OC falls down is in this point about using this £30million for the railway link to reopen the airport instead, which is of course not part of the agreement. Whether we agree or not, that cash is allocated for a railway link and that’s it. Just how Government funding works. I sense some concern about putting everything into DSA at the expense of all other projects in the region that require funding.

I still think they’ll push ahead, they’ve effectively backed themselves into a corner. I do wonder whether they are approaching the bidders asking for them to invest too? Or perhaps even Peel to still have some oversight in order to draw down on private sector funding. It’s all open to conjecture unless you’ve seen the full business case, which of course is subject to commercial sensitivity.

EDIT: Oliver Coppard has since released a statement on social media claiming that they are still going to fund the airports reopening costs, but basically without the extra £30million promised towards funding the rail connection then other projects requiring funding in Doncaster will lose out. So there we are, the first time it’s actually been written down by OC and CDC that they are putting the reopening of the airport over and above other projects. Judicial Review required.
Agree it is low level whilst it remains on Social media, however those involved in opening the airport aren’t sensible enough to leave it there especially when elections are around. You then end up with articles like this - https://www.bbc.co.uk/news/uk-engla...h&at_campaign=Social_Flow&at_ptr_name=twitter
 
The Minister is correct to block the use of the £30m to re-open the airport. That money was secured for a specific project, one that is no longer viable. Therefore the money goes back into the 'pot'. We can't have a situation where bidders can just redirect funds to another project without going through the full bidding process. Frankly OC is at best naive if he thinks that the Government would allow that. It's Government funding for a specific project, not OCs money to use as he sees fit.
 
The Minister is correct to block the use of the £30m to re-open the airport. That money was secured for a specific project, one that is no longer viable. Therefore the money goes back into the 'pot'. We can't have a situation where bidders can just redirect funds to another project without going through the full bidding process. Frankly OC is at best naive if he thinks that the Government would allow that. It's Government funding for a specific project, not OCs money to use as he sees fit.
I think that £30million was an empty promise anyway as they knew how unlikely it was for the airport to remain open or reopen within the qualifying time scale. This is a case of six of one half dozen of the other with regards the political squabbling.

I think everyone knows my view, and that is that it’s a failed business that the local authority has no business in diverting funding away from other projects on the promise of significant economic return that just appears to have been plucked out of thin air and has also changed!
 
Free PressThe row has gone a bit more public now

Doncaste chamber has published an article in response and are putting a positive spin on things, they certainly are making it sound like it is going ahead
I'm beginning to think it might well happen, but at what cost ? What services that are struggling for funding are going to find they are being overlooked whilst the council throw huge sums at the airport . It's their arrogance that gets me. They really seem to believe Peel deliberately ran the airport down and that a resurrected DSA is going to be raking the money in. I've said it before but this is a vanity project. City status seems to have gone to the councils head. If it does open again, and if it fails again, there needs to be a public inquiry into the decisions taken chasing this dream.
 
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I'm beginning to think it might well happen, but at what cost ? What services that are struggling for funding are going to find they are being overlooked whilst the council throw huge sums at the airport . It's their arrogance that gets me. They really seem to believe Peel deliberately ran the airport down and that a resurrected DSA is going to be raking the money in. I've said it before but this is a vanity project. City status seems to have gone to the councils head and Oliver Coppard is using this as a means to grab votes. If it does open again, and if it fails again, there needs to be a public inquiry into the decisions taken chasing this dream.
I think the best hope of it does go ahead is that the operator appointed to run it has a long term vision for the site and has the relationships with airlines required to get them to the table and consider using DSA.

They will be aware that there is minimal long term financial support, and I’m not sure what legal obligations will be in place to make sure the operator continues their tenure for the 50 years of the contract (if that’s what it is), as they will after a maximum of 2 years be effectively expected to go it alone and presumably cover the costs and the lease payments to Peel.

Do wonder how much involvement the Chamber of Commerce have had at any level where they will know how well the talks are progressing outside of the updates from Mayors Jones and Coppard? Are they really privy to anything more than we are?
 
I think the best hope of it does go ahead is that the operator appointed to run it has a long term vision for the site and has the relationships with airlines required to get them to the table and consider using DSA.

They will be aware that there is minimal long term financial support, and I’m not sure what legal obligations will be in place to make sure the operator continues their tenure for the 50 years of the contract (if that’s what it is), as they will after a maximum of 2 years be effectively expected to go it alone and presumably cover the costs and the lease payments to Peel.

Do wonder how much involvement the Chamber of Commerce have had at any level where they will know how well the talks are progressing outside of the updates from Mayors Jones and Coppard? Are they really privy to anything more than we are?
The issue is though, even if the operator did entice airlines in, they're doing nothing that Peel didn't already do. They attracted various airlines most of whom left as soon as the discounted fee period ended, because the loads were not sustainable. No airline is going to sign up without a get out option after a couple of years. If they dont make money, they'll be gone. Are UK airlines going to be convinced enough to try DSA a second time? They're a cautious lot!
 
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The issue is though, even if the operator did entice airlines in, they're doing nothing that Peel didn't already do. They attracted various airlines most of whom left as soon as the discounted fee period ended, because the loads were not sustainable. No airline is going to sign up without a get out option after a couple of years. If they dont make money, they'll be gone. Are UK airlines going to be convinced enough to try DSA a second time? They're a cautious lot!
I think we know that, I’d like to believe that if the appointed operator follows through with a commitment to running the place they will have some tangible interest before doing so. If not, then I don’t think they’ll enter into an agreement unless they have an easy get out, in which case the MCA and CDC will have spent a lot of money on something that Peel will have overall right to once again put a stop to.

Bet there’s a lot of legal fine detail scrutiny being employed on both sides currently. Overall though it will always go in Peels favour.
 
in which case the MCA and CDC will have spent a lot of money on something that Peel will have overall right to once again put a stop to.
Once a lease has been entered into between Peel and the council, then they only way it comes back to Peel is:

- at the end of the lease (unlikely in the short term if talk of a 50+ year lease is true)
- breach of lease agreement by the council (eg failure to pay the rent)
- if there is a lease break built in (the most likely scenario)

Other than that, hard to see how Peel could legally step in and exercise a right to take back the land. Under a lease agreement the council will have to pay the rent to Peel regardless of whether the airport operator makes a go of it or not.
 
And Peel will set the lease at a level where they are making money. It is the dumb council who will be on the hook and carrying all the risk. I will point to my previous prediction :)

 
Once a lease has been entered into between Peel and the council, then they only way it comes back to Peel is:

- at the end of the lease (unlikely in the short term if talk of a 50+ year lease is true)
- breach of lease agreement by the council (eg failure to pay the rent)
- if there is a lease break built in (the most likely scenario)

Other than that, hard to see how Peel could legally step in and exercise a right to take back the land. Under a lease agreement the council will have to pay the rent to Peel regardless of whether the airport operator makes a go of it or not.
I have seen mention of a break clause, and of Peel being able to audit to ensure it is being run correctly and in line with the agreement. Course that’s likely to be conjecture but I find it hard to believe they would happily enter a 50-100 year lease agreement without such a clause and they will undoubtably willingly use it should, as we expect, the results the Council expect to see from the reopened airport fail to materialise.

Karfa is probably not far off the mark in his assessment. The Council and MCA are pushing ahead because they cannot be seen to not be doing so, and because they are genuinely naive in their belief that Peel have mismanaged the airport to such an extent that it never ‘took off’ and also that there is demand for international and intercontinental flights so much that there is a tangible impact on the economy.

There will undoubtably be exciting plans and renders created by interested operators showing what the Council ‘could win’, but they will come to zero when the subsidies run out and the operator backs out leaving the leaseholder wide open.
 
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