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...?

 

They had moved equity around the group as much as possible. In the end they were forced to approach SYMCA for either a loan or equity in the business in return for £20million. This was rebuffed by SYMCA under Dan Jarvis, SYMCA have been quick to remove the meeting minutes from their website however, wonder why. The request for public support was prior to Wizzair UK announcing plans to close their base at DSA though, when it was believed they had finally found that elusive airline partner who would deliver tangible growth and a route to profitability. When they pulled out, and having explored all opportunities with other airlines, the decision was made to close. Hence being unable to accept any further public money because the business had just taken a significant knock which meant it was no longer viable.

surely you do not think a company with £1.8 billion cannot find £20 million!

 

surely you do not think a company with £1.8 billion cannot find £20 million!

It is not a company but a group of companies. One company in the group (DSA Ltd) was a perennial loss maker, there is only so long a parent company can legally keep such an operation afloat. This is not just a Peel phenomena. Where they to do this for a lot of their companies they wouldn’t have £1.8bn for very long.

You also forget that they are asset rich but relatively cash poor. Besides which, they probably offered equity to gauge the level of support, turns out there wasn’t very much until they decided to close it.

 

This is a very interesting debate.
The one question I would like to ask is "What happens if the airport is reopened and the new operator pulls out after a couple of years"
I would imagine that any operator would have a clause in their contract that they can withdraw if "the numbers don't add up"
I think that this is an important question that the council should have investigated seeing they are convinced the airport will reopen.

 

I think the bigger issue is going to be the "once bitten, twice shy" scenario for the airlines. Perhaps except TUI and they alone will not generate enough. Flybe tried the same thing for a 2nd time and look what happened. Does anyone really need to say any more

 

This is a very interesting debate.
The one question I would like to ask is "What happens if the airport is reopened and the new operator pulls out after a couple of years"
I would imagine that any operator would have a clause in their contract that they can withdraw if "the numbers don't add up"
I think that this is an important question that the council should have investigated seeing they are convinced the airport will reopen.

Would expect such detail to already be in the terms. What will be interesting to see is the length of time they expect the airport to become profitable and how much of the estate is available to the operator.

Development land will be key to maximising revenue, period to profitability key if the operator is expected to burden the losses or the council. Council did mention a period of subsidy, up to 2 years in the last Cabinet meeting in the autumn. Could this be increased to 5 years? They will be working to get that detail right as it will need to be to protect the tax payer, otherwise there will be no cash.

I do genuinely hope that if they are successful in reopening it, that they are also successful in generating demand to allow the airport to grow organically as Peel had intended. I speak as a passenger who would much prefer to use DSA than any other airport (barring HUY of course, but we know scope is limited there), but they will face significant challenges and basing the viability on Peel being inept is in my view clutching at straws in the face of reality.

 

Development land will be key to maximising revenue, that i think is the most important.
the development around the airport, as been non-stop since it closed, including the biggest new hotel project in the north of england.
developers rate doncaster the 2nd best place to build in the north after leeds.

Doncaster once again named in fDi European Cities and Regions of the Future

The fDi European Cities and Region of the Future competition has named Doncaster as one of the top 5 Small European Cities of the Future for the third year in a row.

www.businessdoncaster.co.uk

the FDI put in the top 5 cities in europe to invest in

there is not another airport in uk where you could develop the area as much , and 4 minutes from a motorway , and 8 minutes fron iport.

 

Pug were i cannot agree with you , if DSA was such a white elephant, you would expect a fire sale, not wanting to sell at a profit.
any business be it wilko, thomas cook, debnenhams, etc.. would have bitten the doncasters hand off, to cover losses for 13 months while a buyer was found.
and the administrater would more than happy for that to happen.
why do you think peel did not want to sell, just to cover their investments?

 

Peel would have seen this site as loss-making in the short to medium term and profitable in the long term due its development potential. Because the losses became unsustainable, its value as an airport was very low. Its value as a development site is considerable.
Having invested a huge amount in the venture, Peel would naturally not have been interested in any bids based on its negligible value as an airport.

 

Pug were i cannot agree with you , if DSA was such a white elephant, you would expect a fire sale, not wanting to sell at a profit.
any business be it wilko, thomas cook, debnenhams, etc.. would have bitten the doncasters hand off, to cover losses for 13 months while a buyer was found.
and the administrater would more than happy for that to happen.
why do you think peel did not want to sell, just to cover their investments?

No, the reason for building it was to generate growth for the entire estate east of the M18. The airport being an anchor point that if successful would have been a catalyst for future development (Gateway East etc). However, what they did not bet on was the lack of stakeholder support. They had most U.K. airlines sign up to the proposals to build the place, but actually in reality the whole thing was based on a fallacy of build it and they will come. Airlines either dipped their toes in and decided there wasn’t sufficient support, or they just went elsewhere entirely. When airlines did attempt to set up there they generally weren’t very well supported by the travelling public, some of the easyjet routes were sub 50% load factors!

As Cruzeiro alludes, there will have been no fire sale because they didn’t need to. No other airport operator was interested in buying it! Vantage purchased the airports arm and lost £50million in the process. When Wizz pulled out, and after exploring all avenues, then it was decided to close. Peel took the risk where others wouldn’t, but it was always on the proviso that they could recover their losses if it didn’t work out.

What you have now is a stalemate. Peel obviously keen to let the council play around with it whilst earning rent off the property (and no doubt political favour to bolster their Gateway East project), and the risk isn’t theirs any more. Eventually, if/when the airport once again becomes a burden, it will be Peels to do what they like with it. Hence my belief that it will eventually be turned over for housing as there is a dire shortage of that.

Dont be fooled into believing Peel didn’t want it to work. They made available significant subsidies and the airport was one of the cheapest for aviation charges in the country. They reportedly sponsored Flybe to the tune of £1million per year as part of project blackbird and they still left, they gave away freebies to easyjet and Ryanair, easyjet didn’t even base at DSA in spite of having no operation in Yorkshire, however they do appear to be making inroads at LBA. Dont also be fooled into thinking what happens at LBA and EMA doesn’t affect DSA, there is significant catchment overlap, DSA catchment is relatively sparsely populated when compared to the other two. It absolutely does have a negative impact and significantly reduces the airports competitiveness and bargaining power.

Whoever takes it on, if they agree to, will have a monumental challenge on their hands. Hence waiting to see the details as and when they appear.

 

DSA catchment area 6.2 million within 60 minutes
LBA catchment area5.9 million within 60 minutes

 

DSA catchment area 6.2 million within 60 minutes
LBA catchment area5.9 million within 60 minutes

Your point being? Most of those 6.2million within an hour are actually closer to MAN, EMA and of course LBA. What is the core catchment of DSA? Have a look you might be surprised. In fact just study a map, LBA is relatively central in West Yorkshire with a population of 2.5 million on its doorstep. Doncaster has a population of around 300,000 and isn’t the most economically prosperous city in the U.K.

If the catchment area works like that, why did Aer Arrann and Stobart Air go out with as few as single figures? Why did Easyjet fail to establish? Why did Ryanair open one of their largest U.K. bases at EMA and then open another one at LBA and pull out of DSA? Why did KLM not move despite 3 attempts to get them to? I could go on…

You’re taking a very simplistic approach to a complex topic, seems you’ve been reading too much of Mark Chadwick’s nonsense.

 

it will be Peels to do what they like with it. Hence my belief that it will eventually be turned over for housing as there is a dire shortage of that.

that is a no,
SYC as got the area as article 4, peel have only just lost a high court case against another local authrority to build a huge project, they will no want that to happen again.

 

it will be Peels to do what they like with it. Hence my belief that it will eventually be turned over for housing as there is a dire shortage of that.

that is a no,
SYC as got the area as article 4, peel have only just lost a high court case against another local authrority to build a huge project, they will no want that to happen again.

You’re being very naive. The council, should the airport fail and Peel put in an application for redevelopment, would have no grounds for blocking it based on then wanting it to be an airport.

 

and the 125 year lease?

the council are not using their own money,

 

and the 125 year lease?

the council are not using their own money,

What about it? Do you really think the Council would tie themselves to 125 year lease without get outs, same with Peel. There will be exit clauses, otherwise the risk would be far too much.

If Gainshare isn’t the councils money, who’s is it?

 

peel will not be the only delveloper at DSA , Panattoni will be doing major projects.

 

peel will not be the only delveloper at DSA , Panattoni will be doing major projects.

Thought Doncaster had enough warehouses?

 

not according to the developers, and they are the biggest in europe. they have already started construction at DSA. as i said before that is one of the few advantages it as over LBA , links and massive landbanks ( that will not have local opposition like LBA as had)

Panattoni Doncaster 420 - Panattoni UK

Panattoni Doncaster 420 location masterplan media contact the agents The largest spec built unit in South Yorkshire 418,276 sq ft – Available Now At 418,276 sq ft, Panattoni Doncaster 420 is one of the largest spec-built units in the North. With direct access to the national motorway network...

panattoni.co.uk

at the airport, development will be the future for DSA whatever the doomongers think

 

not according to the developers, and they are the biggest in europe. they have already started construction at DSA. as i said before that is one of the few advantages it as over LBA , links and massive landbanks ( that will not have local opposition like LBA as had)

What are you on about? The warehouses would be built airport or no airport, in fact the 420 development is already built. Isn’t the argument for keeping the airport that Doncaster has enough warehouses, missed the point again LBA opposition has failed, as it’s undertaking a £100million+ investment in the terminal and more to create new aircraft parking stands, plus a move from one of the incumbent airlines to use larger aircraft (to be announced!) which will increase capacity further.

DSA can have its warehouses, but to assume it’ll pick up business from other airports that are full is another fallacy.

Just to give you an idea of what they’re up against.

LBA - £100million investment into the terminal which will double the capacity. Further investment in 10 new aircraft stands, 2 to be created this year. Total parking capacity increase of 33%.

EMA - £120million into extending the passenger terminal including improved security aligning with new regulations. They have recently completed another freight integrator facility to compliment the existing one built by DHL.

MAN - £1billion investment in the airport terminal, demolishing the existing T1 and extending T2, significantly increasing capacity.

The reason DSA wasn’t expanded in the same way (excepting the investment of £40million into more departure gates due to the Wizzair base that never really happened) was because it was operating at way below capacity. The building of a freight integrator facility was deemed non viable due to the proximity of EMA.

As I said in my post yesterday, nothing is impossible. However, 17 years of operating shows what the potential of the airport truly is. How the Council can justify investing such a large amount of Gainshare on this one project, based purely on the unfounded assumption that it was mismanaged, is mind boggling.

 

not according to the developers, and they are the biggest in europe. they have already started construction at DSA. as i said before that is one of the few advantages it as over LBA , links and massive landbanks ( that will not have local opposition like LBA as had)

Panattoni Doncaster 420 - Panattoni UK

Panattoni Doncaster 420 location masterplan media contact the agents The largest spec built unit in South Yorkshire 418,276 sq ft – Available Now At 418,276 sq ft, Panattoni Doncaster 420 is one of the largest spec-built units in the North. With direct access to the national motorway network...

panattoni.co.uk

at the airport, development will be the future for DSA whatever the doomongers think

yes, it is a shame so much of the land is now being kept as a useless and pointless airport, land which could be used instead for development for businesses providing goods and services people actually want.

it will be Peels to do what they like with it. Hence my belief that it will eventually be turned over for housing as there is a dire shortage of that.

absolutely. just a shame we have to go through this whole wasteful nonsense on the way