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...?

 

I'd be surprised that if the council would be able to justify taking on the financial risks of actually operating the airport. Considering the set-up costs and the likelihood of significant operating losses there's a real risk of it becoming an uncapped drain on the public purse. Perhaps they will take on a lease and then sub-lease that to an airport operating company who will carry the commercial risk and take the benefits if it works out. In that way, Peel get some return on the land, the council can justifiably claim to have 'saved' the airport and we all get to see whether the issue was in fact Peel's ownership., or something more fundamental with the location of the airport itself. A very complex deal to put together, but not unfeasible.

 

I honestly can't see how it could possibly re-open soon. Even if a deal is done, it cannot re-open until:

All required infrastructure and equipment is back in place, tested, and operational;

All ATC staff are recruited and back in place - and who would now give up a steady ATC job elsewhere to go to DSA after what has happened? It's a big gamble;

All fire staff are recruited and operational;

All ground handling staff (Swissport) are recruited and trained up - and they can't get the staff they need at other airports;.

All other airport staff are recruited and in the case of airside staff, fully trained up - and that can't happen until they've all got Government Security Clearance;.

Then of course there's the lack of airlines. TUI may go back but they won't relocate this year's flights as that would result in thousands of compensation payments. 2025 maybe, at best. Wizz have indicated they are staying at LBA because most of their customers live in that catchment area. It's hard to see those airlines who tried DSA in the past and failed, going back and taking that risk again. So that might rule out the likes of easyJet and Ryanair. And let's not forget that Peel indicated an annual passenger throughput of 2.5m was needed to break even due to the costs of running an airport of that size and area. They never got past 1.5m or thereabouts in the 17 years it was open.

Frankly, the whole situation is nuts.

 

Everyone was sad to see DSA close but it has and the airlines have gone !
I cannot see Tui or Wizz returning to DSA.
Seems a waste of money even trying to re-open ?

 

I agree with everything you have all said, as you know I’ve bee. Quite vocal about the airport over the years. However, the Council really do want to reopen the airport, Peel do not seem to know what to do with the site. Seems to me like there may be a deal to suit all parties in the making. Whether it will ever reopen is another matter, and if it does reopen how long it stays open will also remain to be seen. The risk of closure will be a constant with Peel continuing to own the site. I do not believe the council will have consulted airlines and freight operators, I question their aviation consultants given the recent pursuit of the CAA - anyone who has any knowledge would know that the CAA are tasked with Safety and regulations and have no power to save the airport.

 

I'd be surprised that if the council would be able to justify taking on the financial risks of actually operating the airport. Considering the set-up costs and the likelihood of significant operating losses there's a real risk of it becoming an uncapped drain on the public purse. Perhaps they will take on a lease and then sub-lease that to an airport operating company who will carry the commercial risk and take the benefits if it works out. In that way, Peel get some return on the land, the council can justifiably claim to have 'saved' the airport and we all get to see whether the issue was in fact Peel's ownership., or something more fundamental with the location of the airport itself. A very complex deal to put together, but not unfeasible.

I think that was the plan to sub-let to an operator who would be be responsible for returning the airport to operational status and who would bear the cost. In view of the fact that the cost is likely to be be significant and any path to viability very risky and probably long, I would not be taking it on if I were such an operator! Peel probably will be happy to get some cash into the piggy bank. There's some excitement on one of the campaign sites so there may well be a deal nearly done but as suggested in other posts that's probably the easy bit in view of what would need to follow.

 

I think that was the plan to sub-let to an operator who would be be responsible for returning the airport to operational status and who would bear the cost. In view of the fact that the cost is likely to be be significant and any path to viability very risky and probably long, I would not be taking it on if I were such an operator! Peel probably will be happy to get some cash into the piggy bank. There's some excitement on one of the campaign sites so there may well be a deal nearly done but as suggested in other posts that's probably the easy bit in view of what would need to follow.

I’m looking forward to finding out just who they have appointed/found to operate it. They must have done this, as if they haven’t then the talks with Peel wouldn’t progress. There is no way Peel would agree to just letting it to the Council with no solid business plan to actually make it work.

Huge risk for anyone public or private sector, whoever takes it on will need a significant financial incentive to do so. The tax payer in South Yorkshire may change their minds when it becomes apparent that they are subsidising a loss leader.

 

My guess, some consortium of companies you have never heard of before - possibly registered overseas - who will take lots of subsidies from the council, and then fold in a year's time having claimed they did their best

Also Peel will make sure any lease of the site to this consortium is guaranteed by the council, who instead of being reluctant to agree will agree to this condition thinking they are helping.

Shall I draw a diagram for you to work out which party will end up losing out of all of this or have you worked it out already? If you have worked it out, you can consider yourself to have more sense than the council

 

My guess, some consortium of companies you have never heard of before - possibly registered overseas - who will take lots of subsidies from the council, and then fold in a year's time having claimed they did their best

Also Peel will make sure any lease of the site to this consortium is guaranteed by the council, who instead of being reluctant to agree will agree to this condition thinking they are helping.

Shall I draw a diagram for you to work out which party will end up losing out of all of this or have you worked it out already? If you have worked it out, you can consider yourself to have more sense than the council

All in the name of ‘could be’. It could be a major economic generator. It could be a major airport with flights across the globe. It could be a huge employer which acts as a catalyst for growth of the Doncaster region. Or it could be a money drain and massive flop.

Seems that the tail is wagging this dog. People say Peel mismanaged it, they charged too much, they wanted it for development land. Much like people say they have had enough of experts..

 

It isn’t a major airport or aviation company. The idea that Peel somehow didn’t know what they were doing or deliberately wanted it fail is a myth. 17 years they tried to make this work - I am sure if you were asked to make an airport fail you could easily do it within a few years

The council is so desperate to make this work they are resorting to draconian powers against Peel, and talking to any charlatan who will pretend they can turn it around. Every business wanting to invest in the area will now reconsidering based on the councils actions.

I am sorry to be blunt, but this is a failed business. No business plan exists which will change that however much money the council spaff up against the wall. The airlines that used to be there won’t come back even if it reopens. I am sorry to all those who lost jobs - albeit if you work in aviation and are losing a job this is probably the best time for it to happen not that it would be a great comfort. The sane approach would be to allow Peel to get on with redeveloping the land in to something which will provide jobs in the area.

 

I’m looking forward to finding out just who they have appointed/found to operate it. They must have done this, as if they haven’t then the talks with Peel wouldn’t progress. There is no way Peel would agree to just letting it to the Council with no solid business plan to actually make it work.

Not sure. If the lease agreement is between the council and peel, then the council will have pay rent to Peel irrespective of what the council then go on and do. If Peel's strategy was to find an operator to make a success of the airport, they would presumably just engage with an operator directly and bypass the council altogether. The only reason the council are involved is because Peel don't think the future of the land is best utilised as an airport but the council are going to make them jump through years of legal hoops to get planning permission for what they want to do (logistics park etc). So rather than waste time and money on that stuff, just get the council to pay £xM a year for the land on say a 5 year lease and leave them to it.

Then after, say 5 years

- Airport is a roaring success and Peel are the able to put it on the market for £xxxM
- Airport is not a success, council can walk away from the lease explaining they have tried, but have to accept market forces etc etc. They now intend to support Peel with exploring alternative uses.

It probably works for Peel and the council. It just needs an operator to come in and take on running it. What's in it for them is the most difficult thing to work out. They get to run an airport without having to fork out the up front costs of buying one. But its hard to see how they'd generate an operating profit in the first few years. Maybe the council would be prepared to underwrite those losses. Who knows?

 

I’m not sure on the details of such commercial lease contracts but I expect that there would be clauses in place which allow Peel to inspect the running of the business on the site as part of the lease agreement. Like you say, it’s unlikely that they will make any agreement that is to result in a net loss to themselves, so ground rent for a start will be required.

What they may be doing is working with the council to show they are doing all they can ahead of a CPO which will make such a move by Council much easier to challenge. It will indeed be the responsibility of the Council to find a partner to run the airport, and this is why I’m interested to find out who this is. There may be an element of the Council employing delay tactics here, whilst they are in discussions with Peel it is likely they will be able to exert some influence, no matter how small.

Do wonder what approach Peel are taking to this. Are they guiding the Council and laying out the fundamental issues with the airport to the Council in the interests of transparency?

Looks like the £3.1 million being applied for to SYMCA is being sourced from the loan repayment from DSA Ltd to SYMCA. I believe the meeting to request this is next Monday.

 

I’m not sure on the details of such commercial lease contracts but I expect that there would be clauses in place which allow Peel to inspect the running of the business on the site as part of the lease agreement. Like you say, it’s unlikely that they will make any agreement that is to result in a net loss to themselves, so ground rent for a start will be required.

What they may be doing is working with the council to show they are doing all they can ahead of a CPO which will make such a move by Council much easier to challenge. It will indeed be the responsibility of the Council to find a partner to run the airport, and this is why I’m interested to find out who this is. There may be an element of the Council employing delay tactics here, whilst they are in discussions with Peel it is likely they will be able to exert some influence, no matter how small.

Do wonder what approach Peel are taking to this. Are they guiding the Council and laying out the fundamental issues with the airport to the Council in the interests of transparency?

Looks like the £3.1 million being applied for to SYMCA is being sourced from the loan repayment from DSA Ltd to SYMCA. I believe the meeting to request this is next Monday.

Doncaster Sheffield Airport rescue bid funding agreed by mayor

Legal action is "our last, best hope" of saving Doncaster Sheffield Airport, says Oliver Coppard.

www.bbc.com

Further to my last post, looks like the vote to approve the £3.1million is to be today. SYMCA leader already alluded ti his intention to support this move so would expect this is voted in favour.

I do wonder though, given this money is supposedly to be used to fund a feasibility study, as to why there isn’t currently a feasibility study considering the fact that DCC are supposedly currently in talks with Peel regarding a possible lease agreement. How can they enter into these talks without a feasibility study having been completed? I suppose a CPO would require a solid business case as this will be under intense scrutiny even before it went through the legal processes, significant risk of it getting thrown out at a very early stage if it’s not water tight.

EDIT: This has been approved, so there is now a total of £6.2 million committed to the scheme so far, this does not take into account any other resources and costs already allocated/incurred in the past 11 months.

 

Doncaster Sheffield Airport rescue bid funding agreed by mayor

Legal action is "our last, best hope" of saving Doncaster Sheffield Airport, says Oliver Coppard.

www.bbc.com

Further to my last post, looks like the vote to approve the £3.1million is to be today. SYMCA leader already alluded ti his intention to support this move so would expect this is voted in favour.

I do wonder though, given this money is supposedly to be used to fund a feasibility study, as to why there isn’t currently a feasibility study considering the fact that DCC are supposedly currently in talks with Peel regarding a possible lease agreement. How can they enter into these talks without a feasibility study having been completed? I suppose a CPO would require a solid business case as this will be under intense scrutiny even before it went through the legal processes, significant risk of it getting thrown out at a very early stage if it’s not water tight.

EDIT: This has been approved, so there is now a total of £6.2 million committed to the scheme so far, this does not take into account any other resources and costs already allocated/incurred in the past 11 months.

Further Edit:

South Yorkshire Mayor Oliver Coppard has pledged to fund the purchase of the airport should a CPO be successful, this is in addition to granting the funding requested by Doncaster City Council (£6.2 million in total, £3.1 from SYMCA) to fund a feasibility study.

https://southyorkshire-ca.gov.uk/new...Xj9l71LN2CFnPs

No mention yet of how much they are willing to stump up for the airport, presumably this would be based on their value of the land as an airport only which I assume would be challenged all the way by Peel L&P.

 

Further Edit:

South Yorkshire Mayor Oliver Coppard has pledged to fund the purchase of the airport should a CPO be successful, this is in addition to granting the funding requested by Doncaster City Council (£6.2 million in total, £3.1 from SYMCA) to fund a feasibility study.

https://southyorkshire-ca.gov.uk/new...Xj9l71LN2CFnPs

You really can`t fix stupid can you?

 

You really can`t fix stupid can you?

I don’t know what to make of it at the moment. Coppard has been relatively quiet on the subject since the airport closed. I do wonder whether there is an element of electioneering going on. Coppard has in fairness until now applied a fairly realistic approach to the situation, preferring the airport to be purchased by the private sector and reopened that way. Clearly Peel aren’t selling, and I have my doubts about the lease discussions too. CPO is high risk, the case needs to be water tight. I expect that any in depth feasibility study will uncover this fact. Perhaps Coppard is fairly confident it won’t get very far in the CPO process so in the interests of being seen to be doing something… Stranger things have happened but I fail to see how CPO of a failed business to reopen it as it was before is in any way a good use of resources.

 

I don’t know what to make of it at the moment. Coppard has been relatively quiet on the subject since the airport closed. I do wonder whether there is an element of electioneering going on. Coppard has in fairness until now applied a fairly realistic approach to the situation, preferring the airport to be purchased by the private sector and reopened that way. Clearly Peel aren’t selling, and I have my doubts about the lease discussions too. CPO is high risk, the case needs to be water tight. I expect that any in depth feasibility study will uncover this fact. Perhaps Coppard is fairly confident it won’t get very far in the CPO process so in the interests of being seen to be doing something… Stranger things have happened but I fail to see how CPO of a failed business to reopen it as it was before is in any way a good use of resources.

GIven there dont seem to be any objections to the speculative spending of this money from South Yorkshire voters you could accept that this is electioneering tactic. Hes just giving the people what they want.

 

GIven there dont seem to be any objections to the speculative spending of this money from South Yorkshire voters you could accept that this is electioneering tactic. Hes just giving the people what they want.

Telling people what they want to hear is more appropriate way to describe it I think.

He knows that his predecessor refused to enter into a loan/equity agreement with Peel over the airport last year due to the lack of ability to provide evidence that it was possible to turn the facility into a profitable venture. Why is he not saying this publicly? How can they offer the loan (which I understand is how an outright purchase following a CPO will be funded) when a feasibility study hasn’t even been completed?

Electioneering perhaps, but much like other stuff in the last few years, Brexit being the significant example, sometimes you have to tell your electorate that their beliefs are fundamentally wrong.

Think we will start to see more scrutiny and backlash once more information is made public, I would expect a CPO process would need to be public anyway.

 

Mayors update today. Nothing new really, still talking about a ‘long term lease’ but rehashing old ground saying there are interested buyers but peel are reluctant to sell. These interested buyers presumably waiting for a CPO to gain the land for rock bottom price, which obviously Peel will fight. Ros Jones wants this to be her legacy. My take is this is an advert to not invest in Doncaster.

We shall await the fully costed business case that is apparently costing £6.2 million to create.

 

The interested buyers are so interested that they are letting DCC spend the £6.2m doing the costed business plan, which is very generous of the buyers I think

 

The interested buyers are so interested that they are letting DCC spend the £6.2m doing the costed business plan, which is very generous of the buyers I think

I like to think that our local and national public service leaders aren’t really out of touch, there’s just a lot of stuff that goes on that we don’t know about etc, perhaps I’m just optimistic.

In this instance however, it’s getting to the point of embarrassment.