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...?

 

Doubt it will be RAF Scampton which is a pity as XH558 was part of 27 (Dumbo) Squadron

 

Peel appear to have ignored demands to extend the consultation period to the year end and have extended it only until mid September to allow time for meaningful options and proposals to be put forward. They say that so far there have been none. The Mayor is blaming Peel for them failing to set out what they want to do. Personally that seems pretty obvious to me!!

Anyway, it's clear that not much, if any progress has been made and the two sides are not exactly getting on. Peel have given no indication publicly as to how much they would demand to sell DSA, which is surely the key question. That figure could halt any attempt by the mayor to buy the airport in its tracks and more than likely dissuede any other airport operator too given the losses the airport has made for the last 17 years.

It all feels a bit like cat and mouse to me. Meanwhile, mid September is just 6 weeks from the end of the summer season AND the potential closure date, AND neither TUi nor Wizz Europe know whether they're coming or going. And nor do their customers! How long I wonder before they make a decision that might make a bad situation worse?

 

in the meantime what about potential customers. If things are uncertain surely they will hold back from booking, also what plans do Wizzair and TUi do for the winter programme. It may be sensible, especially for Wizzair to make a clean break and end all flights from Oct 31, maybe some moving to nearby airports who do not have flights to Warsaw, Bucharest .

 

in the meantime what about potential customers. If things are uncertain surely they will hold back from booking, also what plans do Wizzair and TUi do for the winter programme. It may be sensible, especially for Wizzair to make a clean break and end all flights from Oct 31, maybe some moving to nearby airports who do not have flights to Warsaw, Bucharest .

Well that's basically what I meant in my last paragraph. Neither airline knows if the airport will be operational for their winter programme. Behind the scenes they must surely be discussing alternative options already in case of closure. They need clarity and fast!!

 

I think something else that must be in both Peel’s and the Airlines minds is the well documented and expected recession. So on top of the on going cost of living rises that can’t be filling any party with confidence. It is not currently a good position for DSA. Whilst no one ever wants a recession, in a weird sort of way this may benefit the travel industry in the fact it will help infrastructure level up with demand. That should mean a much more robust industry once we come out of recession

 

Peel appear to have ignored demands to extend the consultation period to the year end and have extended it only until mid September to allow time for meaningful options and proposals to be put forward. They say that so far there have been none. The Mayor is blaming Peel for them failing to set out what they want to do. Personally that seems pretty obvious to me!!

Anyway, it's clear that not much, if any progress has been made and the two sides are not exactly getting on. Peel have given no indication publicly as to how much they would demand to sell DSA, which is surely the key question. That figure could halt any attempt by the mayor to buy the airport in its tracks and more than likely dissuede any other airport operator too given the losses the airport has made for the last 17 years.

It all feels a bit like cat and mouse to me. Meanwhile, mid September is just 6 weeks from the end of the summer season AND the potential closure date, AND neither TUi nor Wizz Europe know whether they're coming or going. And nor do their customers! How long I wonder before they make a decision that might make a bad situation worse?

I think if it was any other company (that isn’t primarily a land development operation) that owned it, there may be a bit more room for negotiation. Typically if there were hard rules on land use stipulating aviation purposes for 100 years, there may be an argument for taking over a loss making business for a nominal sum given the debt that must have been accrued on the business. I suspect this is currently offset by other Peel interests, though I’m no accountant so I’m not sure what the legalities are on cross subsidy in this case. Peel will be subject to external audits which would ensure that all activity is legal - if perhaps at times apparently unethical on the surface - so there really isn’t much that can be done if Peel refuse to sell.

I notice that Oliver Coppard has appointed an external organisation to complete a full viability study on the airport, I’m not sure this can be completed before the 16th September, but it may come to some preliminary findings prior to this date. Either way, nobody is going to come out of this well I feel.

 

I have tried to refrain from being cynical, but I feel that Peel have already decided that they are "Shutting up shop" at the end of October. This latest concession is just paying lip service to the local politicians.
I think the Mayor is living in cloud cuckoo land if he thinks he will be able to buy it - Peel will make sure of that with the price they want.

 

Interesting that TUI have axed EDI-MLB and EDI-CUN for S23 when you bear in mind the aircraft is the DSA aircraft

 

I have tried to refrain from being cynical, but I feel that Peel have already decided that they are "Shutting up shop" at the end of October. This latest concession is just paying lip service to the local politicians.
I think the Mayor is living in cloud cuckoo land if he thinks he will be able to buy it - Peel will make sure of that with the price they want.

I think Oliver Coppard has handled this pretty well when compared to some of the MP’s that have parachuted themselves in armed with cameras and multiple daily updates on social media. He’s held strong on his public announcements that there has to be viability in the business whether it be publicly owned or ideally in the hands of another private sector investor. He has been backed into a corner by these MP’s though, and has been set up to fail. Peel have not made a price public, they have determined their own lack of viability. I fail to see how any other company would reach a different conclusion short of the scenario which happened in Teesside, and putting the usual political stuff aside, it’s clear that project is failing too.. Difference is that Teesside purchase was probably much smaller in price than the tag Peel would probably place on DSA.

 

I think Oliver Coppard has handled this pretty well when compared to some of the MP’s that have parachuted themselves in armed with cameras and multiple daily updates on social media. He’s held strong on his public announcements that there has to be viability in the business whether it be publicly owned or ideally in the hands of another private sector investor. He has been backed into a corner by these MP’s though, and has been set up to fail. Peel have not made a price public, they have determined their own lack of viability. I fail to see how any other company would reach a different conclusion short of the scenario which happened in Teesside, and putting the usual political stuff aside, it’s clear that project is failing too.. Difference is that Teesside purchase was probably much smaller in price than the tag Peel would probably place on DSA.

Peels price wont be based on the value of the airport and the airport business, it will be based in their perceived value of a large area of prime flat land, close to a motorway link road and in an industrial heartland, and it's potential for development. That value would dwarf the value of the airport's value as a going concern (though a loss making one). If Peel sold out for any less they may have their share holders to answer to. They are, after all, an investment company as are the owners of many airports. They buy them to grow the business and sell at a profit, and if they can't grow them, as with DSA, well, they will find another way to sell at a profit.

It's hard to see this mystical private airport operator that Coppard refers to coming in and paying what should be a huge amount to buy an airport that has never made a profit in 17 years, has lost all but two if it's based airline operators and is clearly now in danger of losing what's left if only due to the ongoing uncertainty surrounding DSAs future, particularly at a time when the entire industry is struggling. I too think that Peel have been very thoughtful about the best time to take this action in order to ensure the best and most profitable outcome for them. They will point to the fact that circa 800 jobs will be lost, but far more than that can be generated through the right development of the land, which, let's face it, is perfect for warehousing and light industrial use.

It's all very sad really.

 

Peels price wont be based on the value of the airport and the airport business, it will be based in their perceived value of a large area of prime flat land, close to a motorway link road and in an industrial heartland, and it's potential for development. That value would dwarf the value of the airport's value as a going concern (though a loss making one). If Peel sold out for any less they may have their share holders to answer to. They are, after all, an investment company as are the owners of many airports. They buy them to grow the business and sell at a profit, and if they can't grow them, as with DSA, well, they will find another way to sell at a profit.

It's hard to see this mystical private airport operator that Coppard refers to coming in and paying what should be a huge amount to buy an airport that has never made a profit in 17 years, has lost all but two if it's based airline operators and is clearly now in danger of losing what's left if only due to the ongoing uncertainty surrounding DSAs future, particularly at a time when the entire industry is struggling. I too think that Peel have been very thoughtful about the best time to take this action in order to ensure the best and most profitable outcome for them. They will point to the fact that circa 800 jobs will be lost, but far more than that can be generated through the right development of the land, which, let's face it, is perfect for warehousing and light industrial use.

It's all very sad really.

True, but the overwhelming legacy will be the nonsense that Peel have been charging too much for airlines to land. It may be the case now, as it suits their agenda, but for 17 years they have had a dedicated team of development people trying to entice new airline partners and failing at pretty much every step to gain sustainable growth. I don’t believe these people will ever see the light even if someone was to shine it in their faces.

What I hope, if DSA does close, is that the remaining airports in the Yorkshire and Humber region regain the lost passengers and continue to grow sustainably.

 

What I hope, if DSA does close, is that the remaining airports in the Yorkshire and Humber region regain the lost passengers and continue to grow sustainably.

What is to stop WizzAir ending all flights from DSA maybe at the end of September and transferring some if not all to HUY and LBA?
If they do nothing and DSA does close other airlines may step in, Ryanair from LBA , BlueAir to Bucharest from HUY or LBA.
I see that Wizzair are planning expansion further east, Saudi Arabia for example... they may conclude that serving Yorkshire is a waste of time and pull out altogether never mind what DSA does. AS for TUi -who knows.........!

 

Whatever any airline chooses to do at the moment is a huge gamble. The sooner we have complete stability again the better for everyone. Let’s hope the recession is short lived and whilst subsequently giving infrastructure the time it needs to catch up with demand, we all get back to knowing exactly where we are and sustainable growth can once again come about

 

Doncaster Sheffield Airport would be a good base for an expanded air freight business - Yorkshire Post Letters

From: Paul Brown, Bents Green Road, Sheffield.

www.yorkshirepost.co.uk

 

I think @pug posted something which answers Paul Browns comment in the Yorkshire Post article in that "DSA is the answer to the problem that doesn't exsist". Is there really any point in throwing millions more into developing cargo facilities at the airport when there is a huge cargo operation only a few miles down the road at East Midlands Airport.

In a make-believe world we would lift DSA and plonk it somewhere in South East Leeds somewhere close to the M62 and M1 but sadly this make-believe world doesn't exsist.

 

Threatened DSA closure brought up in PMQs. Whether that results in anything of substance...

 

Substance = money. Lots of it.
Peel will want just that. A huge amount of cash equivalent to the value of the nice flat land for a mix of light industry and housing - and with a nice road link outside.
In the current situation, with Government facing up to spending billions to hold back energy costs, it's impossible to see Government help or intervention. It's equally impossible to see the South Yorkshire Mayor funding a purchase, or finding a buyer of DSA as a going concern after 17 years of losses and a steady stream of airlines turning their back as soon as the subsidies stop, and DSAs running costs are going to increase dramatically now as a result of energy costs, exacerbating their losses, particularly over the quiet winter months.
It's sad for those employed there and the airports resident operators. Yorkshire Light Aircraft must be wondering now if leaving LBA for DSA was a good move after all, as they may soon be looking for another home.

 

REGIONAL LEADERS MAKE NEW OFFER FOR FUTURE OF DONCASTER SHEFFIELD AIRPORT

 

Good luck to whoever it is. I doubt it will pay dividends given the history of the airport unless they have more money than sense.

 

Good luck to whoever it is. I doubt it will pay dividends given the history of the airport unless they have more money than sense.

Sounds to me like they’re calling Peels bluff. Hard to trust Peel press releases currently, but under the shroud of ‘commercial sensitivity’ all we get in the public domain is noise.

Find it hard to believe that a consortium of private investors are currently chomping at the bit to get their hands on it, as it’s not really clear whether Peel are willing to sell, and if so what would be for sale. I feel Peel would make it very difficult to put together a viable business proposal given they probably own a fair bit of the hinterland that does not come under Doncaster Airport Ltd direct ownership.

In my view, this is a push to extend the consultation period yet further and no firm offers have been made. After all, Oliver Coppard is correct when he says the timeframe as laid out by Peel is barely long enough to sell a house, let alone complete all the feasibility and financial viability studies before even making an offer for an airport.