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...?

 

It’s laughable some of the comments on Twitter Facebook etc with people saying that LBA should close and ops move to DSA without realising they don’t even have enough space to park all the based Jet2 aircraft never mind the 3 Ryanair’s and also the nightstopping KLM and Flybe and also their TUI based units.

True but most people haven't a clue, it's also laughable what Aviador states above to say close DSA and let LBA serve the Yorkshire region as it never has and never will be an airport the masses from South Yorkshire use nobody in South Yorkshire cares about LBA to be honest and why should they it's not Yorkshire's airport is it it serves the area of Yorkshire it's in predominantly and always will.

DSA closes some people will use LBA yeah however many others will just use Manchester as they always have whilst others will use EMA as they always have exactly like before DSA was built or since it's been built a term I'd use lightly in the same sentence as Peel as they simply built it to fail it like they have in a massive way over the last few years.

 

And that’s your opinion however I don’t know how you would know that apparently no one uses LBA from South Yorkshire I can only assume you’re saying that out of spite.

Yes people will use MAN but I’m sure people will use LBA also as you forget to mention that Wizz have moved most of their services to LBA in which I’m sure those that were booked at DSA will be transferred to the LBA flights.

 

nobody in South Yorkshire cares about LBA to be honest and why should they it's not Yorkshire's airport is it it serves the area of Yorkshire it's in predominantly and always will.

Actually we get quite a few people who use LBA from the South Yorkshire Area. So your claim that it’s not Yorkshires airport is totally nonsense. And let’s be honest when DSA does close who is Yorkshires Airport then? Because there’s only 1 main one. Because there’s only 2 and LBAs the busier one. We also get a fair few from the East Yorkshire and even Lancashire.

It depends on many things. Prices, choice of destination Ect past experiences.

 

I think we need to be careful this doesn’t develop into a war of words over LBA and DSA, especially when people are about to lose their jobs. But the one overriding circumstance is LBA is successful and profitable - DSA isn’t. So harsh as it may be that is the end of the discussion in my eyes

 

I think we need to be careful this doesn’t develop into a war of words over LBA and DSA, especially when people are about to lose their jobs. But the one overriding circumstance is LBA is successful and profitable - DSA isn’t. So harsh as it may be that is the end of the discussion in my eyes

I echo your sentiments, it’s not nice by any stretch but Anne-Marie Trevelyan was right (for once) when she said it’s a commercial matter.

Does sound like there are some interested parties, but would need some good will from Peel to be explored. CPO would be hugely expensive as the land will be valued based on its development potential. The planning officers will only be able to put barriers up for so long, eventually the promise of jobs (where have we heard that before?), and investment which will ultimately result in greater rates into the local authority coffers will win out.

It’s a silly argument to make suggesting that people in South Yorkshire don’t care about LBA, they still use it in great numbers. The South Yorkshire passenger has great choice in airports really, sadly it worked out against DSA.

 

The fact of the matter is Peel thought DSA would become the airport of choice, not just for South Yorkshire but for the entire Yorkshire region. TUI thought the same and even spent millions advertising in the Leeds area. Peel and TUI were both wrong. Jet2 came along and proved LBA was the airport of choice for the majority of people in the region. The rest continued to choose Manchester or East Midlands. We should embrace that and support the airports the public wish to use.

 

LBA only adopted the Yorkshire's Airport theme in response to DSAs claims that they would, within 10 years, displace LBA as Yorkshire's number one airport. It was a tit for tat response to a somewhat ridiculous claim made by Peel Holdings as it turned out.

 

Where I live on the East Coast, HUY is the nearest, then DSA and then LBA. So why have I flown 3 times from LBA this year? Choice - Destination, Airline, customer service.

 

Apparently Peel have agreed to enter discussions with interested parties, but are still pushing on with plans to close.. Not sure if this is further lip service.

 

Apparently Peel have agreed to enter discussions with interested parties, but are still pushing on with plans to close.. Not sure if this is further lip service.

Apparently, there are 3 'interested parties', all of whom would need to conduct detailed investigations of the business, and due diligence before even making an offer. Peel must be reluctant to delay their closure plans just on the off chance that one of these groups will make an acceptable offer, which is of course what the Mayor is offering payment for them to do. Peel will know what their books look like and what financial incentives they offered airlines to fly there. Perhaps they are confident that these finances will put off potential airport operators, especially when they learn how much Peel value the airport land at for redevelopment. Peel are not going to sell at less than the market value.

IF the airport was saved at the 11th hour, there are claims by local Councillors etc. that the airlines (Wizz and TUi) would stay. Both are now selling flights from other airports and, no doubt, attracting bookings from people who want to fly from those airports, not from DSA. So for the airlines, it's going to be a big PR mess to switch back to DSA having already announced the transfer of flights and having put them on sale. Wizz must also have signed a contract to operate into LBA from the 31st October so unless there is an 'escape clause' in their contract they could end up with a claim from LBA for breach of contract.

For me, looking from the outside, it feels as though things have all gone too far for Peel to put closure on hold. Recent NOTAMs seem to have effectively closed the airport to all but based and scheduled traffic already. Some of their staff must already be leaving and finding alternative work, and who can blame them? They need certainty just like the airlines. It seems that any saving of DSA might well mean starting again from scratch. I wonder if any prospective new owners are up for that?

 

True but most people haven't a clue, it's also laughable what Aviador states above to say close DSA and let LBA serve the Yorkshire region as it never has and never will be an airport the masses from South Yorkshire use nobody in South Yorkshire cares about LBA to be honest and why should they it's not Yorkshire's airport is it it serves the area of Yorkshire it's in predominantly and always will.

DSA closes some people will use LBA yeah however many others will just use Manchester as they always have whilst others will use EMA as they always have exactly like before DSA was built or since it's been built a term I'd use lightly in the same sentence as Peel as they simply built it to fail it like they have in a massive way over the last few years.

That’s a bold statement!
I would wager that more people from South Yorkshire use LBA than they do Doncaster.
Remember Doncaster’s numbers also include people from West Yorkshire and other surrounding areas also

 

That’s a bold statement!
I would wager that more people from South Yorkshire use LBA than they do Doncaster.
Remember Doncaster’s numbers also include people from West Yorkshire and other surrounding areas also

I think it attracts a not small number from East Yorkshire too.. So does DSA. I saw that TUI in Pontefract have been pushing sales on the HUY PMI on social media, encouraging people to use that instead.

 

Apparently Peel have agreed to enter discussions with interested parties, but are still pushing on with plans to close.. Not sure if this is further lip service.

Indeed. Personally I don't think it will change the overall outcome, it could perhaps be argued that this move sits comfortably with Peel's agenda. I guess the old adage is true, everything is for sale at the right price, this will be an opportunity for Peel to test if any of these bidders will come anywhere close to what figure they have in mind, which I am sure is a significant sum well above the market value, let alone a buyer taking on the debt which if my memory serves is in the region of £200m. Peel have stated they are still working towards closure as being their primary option, opening negotiations allows Peel to demonstrate they are acting in good faith and following due process in negotiating with potential buyers particularly if they conclude closure is the only option. I would assume all negotiations will be under NDA and out of earshot of the local politicians, it neatly counts down the clock to the closure date before they need to make their intentions known in public. Peel control the beginning, middle and end of the process on their terms and the announcement of their final intention.

Equally it also takes some of the pressure off the DfT with the continued noise from from Ros Jones and the band of late to the party Labour MP's regarding instigating the CCA, falling in line with Anne-Marie Trevelyans statement that this needs to be a local commercially driven solution.

At the end of this, assuming Peel continue with closure, it will be interesting to see whether Doncaster Council will indeed launch a CPA as stated by Ros Jones in her statement last Thursday or was this just a veiled threat (much like the judicial review statement). She may have interest now from the market to buy DSA, but will they still be there in a couple of years when this process concludes, especially since Peel will have stripped the airfield of whatever it can and the airlines are long gone. Perhaps she'll start the process to save face, but quietly drop it several months down the line when it is no longer news worthy.

An interesting couple of weeks ahead.

 

Although it is perhaps not appropriate to comment on the Compulsory Purchase 'threat' without expert knowledge of a complex system on one hand, I am not sure that the current situation would meet the test for a Compulsory Purchase order. It does I believe apply to 'land' and as such might only be possible after the airport (a business) closes - if indeed it does. Assuming it does, once the airport infrastructure is stripped out by Peel and sold on, the cost of reinstating the Regulatory requirements will be very significant indeed for a cash strapped (?) Council. The applicant would need to provide a 'compelling' case that any such proposal was in the public interest and that any loss suffered by the owner of the land was proportional to the benefit to the public as a whole. I would imagine that the lawyers would have a field day between them arguing those points and would likely take a long time and an eye-watering cost to settle one way or the other. Selling it as a 'going concern' (or a not going so well concern) is in itself likely to take a long time as mentioned by 'Empire' and will require very substantial 'due diligence' work by the potential purchaser. Whatever happens I doubt even if the airport is 'saved' it will not re-open from scratch for a long time as in the short term Peel have stated that they are going ahead with the closure plans.

 

Doncasters closure will be LBAs gain, but let not lose sight of the fact that Yorkshire will be the looser. As a county we are going from 5 based Tui aircraft to none. Although routes are preserved with 'W' operations it is based aircraft that make the maximum contribution to the economy.

 

I thought there were 4 based aircraft this summer.

 

Doncasters closure will be LBAs gain, but let not lose sight of the fact that Yorkshire will be the looser. As a county we are going from 5 based Tui aircraft to none. Although routes are preserved with 'W' operations it is based aircraft that make the maximum contribution to the economy.

Well let's hope that situation changes once the terminal is developed and apron extended at LBA

According to the BBC, Peel Holdings have told the South Yorkshire Mayor and Doncaster Mayor that they would require at least £20m of public money to fund keeping the airport open for two more years whilst new owners are found (or not found as the case may be). It stated that £7m had been offered to Peel so only around 35% of what Peel would want.

It's difficult to see how the two Mayor's could justify handing over £20m - money they won't ever get back - in the hope that a new buyer is found, AND that this new buyer can make a success of it. Doing so would seem somewhat reckless given they could be just tossing it down the drain.

 

I thought there were 4 based aircraft this summer.

OK then, 4

 

Well let's hope that situation changes once the terminal is developed and apron extended at LBA

According to the BBC, Peel Holdings have told the South Yorkshire Mayor and Doncaster Mayor that they would require at least £20m of public money to fund keeping the airport open for two more years whilst new owners are found (or not found as the case may be). It stated that £7m had been offered to Peel so only around 35% of what Peel would want.

It's difficult to see how the two Mayor's could justify handing over £20m - money they won't ever get back - in the hope that a new buyer is found, AND that this new buyer can make a success of it. Doing so would seem somewhat reckless given they could be just tossing it down the drain.

Even in the unlikely event the airport was to be kept open, the two former airline stakeholders are nolonger there. They are unlikely to be willing to return to the airport when the airports viability remains in serious doubt now and for the foreseeable future. The problem remains, "the airport is the answer to the problem that doesn't exsist."

 

£20m of public money to fund keeping the airport open for two more years whilst new owners are found (or not found as the case may be). It stated that £7m had been offered to Peel so only around 35% of what Peel would want.

Reading the article the council would give £7m for a year however if they were to double that for 2 yrs that would be £14m still 7m short.

Personally wouldn’t see peel agreeing to that!