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...?

 

Nick Fletcher MP has posted his usual weekly update, this time saying there’s been an advanced briefing ahead of the Cabinet meeting - as you would expect he’s used it as an opportunity to point score and dig the knife in, but I take that as a positive (at least from what he may have been told today) as he brought up the ‘fact’ that DSA would have still been open had the loan of £20million been approved. Obviously loath to actually be seen to support the council and Mayor. Sign of ineffective leadership qualities and overall competence in role, but I’ll leave the politics there.

I expect the proposals put in front of the cabinet (if there are to be some next week) will be given unanimous support, doing otherwise would be political suicide. This is not going to go away any time soon.

No it's not going away but neither is it going anywhere either

 

No it's not going away but neither is it going anywhere either

I wouldn’t be too sure. Best case is that the Council have agreed terms with Peel on a leasehold of the site for x number of years. Council then no doubt offering support packages to unnamed private sector operator with industry experience to run a reopened airport but with very little burden of risk placed on themselves. Council will source funding via one mechanism or another, most likely SYMCA pot. Nobody will challenge it due to the strength of public opinion. Airport reopens and continues to be an airport in spite of mounting losses in the hope that one day there may be an industry wide shift which improves the fortunes of DSA. Meanwhile, Peel will have a clause which allows the lease to be terminated under certain circumstances, most likely an inability to generate a specified level of traffic.

I cannot see any scenario in which this will not need significant money from the public sector to keep it going. I also cannot see it being challenged on a local level due to the aforementioned risk of political suicide. Everyone is snookered here at this moment.

 

The problem is that the support is very small vociferous minority in the Doncaster area who want their fortnight in Majorca to continue from where they want....They are a minority, very, but as you say they've all snookered themselves completely, and if you're right, they will end up completely beholden to Peel who can play them every which way...

Just shows the paucity of talent in the local authority gene pool.... Stupid is as stupid does

 

The problem is that the support is very small vociferous minority in the Doncaster area who want their fortnight in Majorca to continue from where they want....They are a minority, very, but as you say they've all snookered themselves completely, and if you're right, they will end up completely beholden to Peel who can play them every which way...

Just shows the paucity of talent in the local authority gene pool.... Stupid is as stupid does

I wouldn’t say stupidity en-mass, more poorly informed consumers who are, after all, looking for the best outcome for themselves. There might not be enough of them to sustain a major international airport, but given the level of knowledge most person on the street has regarding aviation and airports then I would say that locally at least it’s enough to sway political opinion in The Donny area. I don’t think people of Sheffield are all that bothered though in the main.

Horse will bolt before the stable door is closed either way. Council can’t win, neither can SYMCA.

On a personal level, if they can attract the airlines they think they can attract, and crucially if they can keep them there, they will have my unwavering support. Be nice to cut my commute to minutes.

 

I wouldn’t say stupidity en-mass, more poorly informed consumers who are, after all, looking for the best outcome for themselves. There might not be enough of them to sustain a major international airport, but given the level of knowledge most person on the street has regarding aviation and airports then I would say that locally at least it’s enough to sway political opinion in The Donny area. I don’t think people of Sheffield are all that bothered though in the main.

Horse will bolt before the stable door is closed either way. Council can’t win, neither can SYMCA.

On a personal level, if they can attract the airlines they think they can attract, and crucially if they can keep them there, they will have my unwavering support. Be nice to cut my commute to minutes.

I'll qualify my comment re stupid, it was aimed solely at those in Local government

 

BBC News - Mayor to update on rescue bid for Doncaster Sheffield Airport

Mayor to update on rescue bid for Doncaster Sheffield Airport

Ros Jones says a meeting will hear about new steps being taken to save Doncaster Sheffield Airport.

www.bbc.co.uk

 

Is it “new” steps because the original ones failed?

 

𝐀𝐧 𝐚𝐢𝐫𝐩𝐨𝐫𝐭 𝐢𝐧 𝐃𝐨𝐧𝐜𝐚𝐬𝐭𝐞𝐫 𝐢𝐬 𝐚 𝐯𝐢𝐚𝐛𝐥𝐞 𝐩𝐫𝐨𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧 – 𝐂𝐢𝐭𝐲 𝐨𝐟 𝐃𝐨𝐧𝐜𝐚𝐬𝐭𝐞𝐫 𝐂𝐨𝐮𝐧𝐜𝐢𝐥’𝐬 𝐂𝐚𝐛𝐢𝐧𝐞𝐭 𝐭𝐨 𝐛𝐞 𝐭𝐨𝐥𝐝.

Next week, City of Doncaster Council (CDC) Cabinet will hear updates on several strands of work looking at the viability of a reopened airport, its economic and growth potential as well as its investment opportunities.

Doncaster Sheffield Airport (DSA) has the potential to be successfully reopened and offer a range of positives including thousands of jobs in aviation, leisure and retail for the City of Doncaster and South Yorkshire.

Detailed assessments of the financial, business and investment calibre of what is now known as South Yorkshire Airport City – the programme which aims to reopen the airport – show that:

The airport has the potential to be successfully reopened and could be profitable within five years of reopening
It could attract up to two million passengers a year within a decade, which is considerably higher than the annual passenger numbers achieved prior to its closure
It could bring almost 5,000 direct jobs as well as creating up to 11,500 jobs in the wider economy
The net economic benefits of reopening the airport could be up to £1.5 billion within the first three decades of operating
Reopening the airport offers the most favourable balance between economic cost and benefit and is the preferred option
A series of meetings have taken place between CDC and the current landowners, to acquire a lease of DSA. In addition, the council will be making arrangements to source an operator to run and develop the site. This process would take several months to complete and aims to be concluded by Spring 2024.

Informally, the council began this process over the summer to run the airport if the lease is agreed. The market test showed that there was strong interest from multiple parties. Part of these deliberations will include discussions on costs associated with getting the airport reopened and operational again.

The report notes that the council has also been preparing a Compulsory Purchase Order (CPO) to regain the site as an option of last resort if a lease is not agreed. Any CPO process would require lease negotiations to have been fully explored and exhausted first before being able to progress with a CPO.

The extra-ordinary meeting has been called for September 20 where Cabinet will be asked to note the work to date and support the relevant approvals required to progress the programme of works necessary to re-open our airport.

Mayor Ros Jones said: “Saving the airport is critically important for Doncaster and South Yorkshire. I know the amount of support there is in our city and across the region. I am looking forward to discussing progress to date with Cabinet members and hearing about next steps. I am hopeful that I will soon be able to share some good news about a lease agreement for the site. I know council staff have been working extremely hard since the announcement of the strategic review in July 2022 and indeed over the summer period to get us in as good a position as possible to have a fighting chance of saving our airport.”

 

I disagree. Lessons have clearly not been learned from the past at all on this matter

 

May I suggest a possible scenario?

The council will say that the airport will be leased from Peel, an operator is prepared to take it, BUT the outlay to get the airport operational is far too much. Hence Peel and operator being blamed.

Sorry, I'm getting bored with this soap opera.

 

Quite clearly nothing has changed so there is nothing "new" to actually report at this meeting then! Soap Opera is a good term for it all

 

I’m trying to understand whether the cabinet meeting next week is to gain support to progress, is that how others read it?

I’d like to know how they’ve concluded that the airport could be profitable in five years and be handling 2 million passengers a year within a decade. Note also the dubious employment and economic impact figures.

What is not clear is whether Peel have become more amenable to a lease agreement. Mentioned is the plan to have private sector operator/partners appointed by Spring 2024, is this a pre-requisite to get Peel to the table? A leasehold agreement will not come cheap, has to be assumed that the council are offering to underwrite these costs for a private company to run it, otherwise why would any commercial enterprise even touch it?

 

The airport has the potential to be successfully reopened and could be profitable within five years of reopening
It could attract up to two million passengers a year within a decade, which is considerably higher than the annual passenger numbers achieved prior to its closure
It could bring almost 5,000 direct jobs as well as creating up to 11,500 jobs in the wider economy
The net economic benefits of reopening the airport could be up to £1.5 billion within the first three decades of operating

Generally speaking airports don't make money if they are handling less than about 4mppa if they are following a low cost airline model. Liverpool is a perfect example of that. So unless Doncaster council thinks they can attract multiple full service airlines then they don't expect to make any money.

Attracting 2mppa in a decade seems far fetched considering the length of time Peel had to do the same unsuccessfully.

It is widely accepted that for every 1mppa an airport supports around 1000 jobs on the airport site. The figures released by Doncaster council don't stack up if they only expect the airport to be handling 2mppa in a decade but expect the airport to support "almost 5000 jobs".

The economic benefits are harder to determine but obviously if they can make the airport work then the area could attract inward investment but even that isn't a certainty.

#SouthYorkshireShamblesAirport

 

Informally, the council began this process over the summer to run the airport if the lease is agreed. The market test showed that there was strong interest from multiple parties. Part of these deliberations will include discussions on costs associated with getting the airport reopened and operational again.

I’ll bet there was strong interest! These parties will be interested in running the airport for a flat fee, bearing none of the risk of failure. They’ll get their fee, the airlines will get their subsidies, Peel will get their rent.

The taxpayer will get the losses.

 

I’ll bet there was strong interest! These parties will be interested in running the airport for a flat fee, bearing none of the risk of failure. They’ll get their fee, the airlines will get their subsidies, Peel will get their rent.

The taxpayer will get the losses.

..and when the losses are untenable?

 

..and when the losses are untenable?

The clowns who caused it will pretend it's all worth it and carry on regardless, knowing that whatever they do down there, they'll get by reelected...win win as they see it...sadky

 

..and when the losses are untenable?

I think Peel will be happy to be the bad guy in this situation and make it clear how they have concluded fundamental lack of viability. They will be the ones the discuss this fact with any private sector operator I expect, and of course they will take the blame for sticking a spanner in. But like radar has said, it will ultimately be the tax payer who shoulders the cost of this, not Peel and not an ‘experienced operator’. I expect it will be negotiated on a basis of bonuses should certain targets be reached.

‘Lessons have been learned’ is open to interpretation, but I believe the reference is of how they perceive Peel to have either mishandled or made incorrect decisions in the past. They’re relying on a lay of what ifs.

 

I don’t think the local politicians are clowns, I’m sure they have a very clear idea of the risks and of the likelihood of success, but they are hostage to local pride - a big, important city like Doncaster should have its own airport, after all.

Their political opponents probably have an equally clear view of the situation, but there’s political capital to be made by holding the other party’s feet to the fire. No-one dares tell the truth.

 

I don’t think the local politicians are clowns, I’m sure they have a very clear idea of the risks and of the likelihood of success, but they are hostage to local pride - a big, important city like Doncaster should have its own airport, after all.

Their political opponents probably have an equally clear view of the situation, but there’s political capital to be made by holding the other party’s feet to the fire. No-one dares tell the truth.

I’m not sure, as if this was the case they are setting themselves up to unravel down the line. I agree there is a huge element of political pressure here, the people of Doncaster want their airport back. But it’s going to come at a cost and there are no guarantees, and at some point those costs will have to be made public.

With Birmingham Council going bankrupt, it’s a cautionary note to councils who appear all to happy to deviate from core authority obligations.

 

So profitable in 5 years and 2m pax within a decade they say?

Peel stated the airport needed 2.5m passengers a year just to break even. If that's the case how on Earth do they think they will be profitable in 5 years? Or even after a decade if they only have 2m passengers?

And what's happened to the claims it could handle 10m passengers? By when? 2050?

I still can't help but think that this will all end in tears and a public inquiry into the council's failure to look after the public funds of Doncaster . I still find it funny that down in Donny there's no howls of protest from environmentalist groups about the possible re-opening of an airport bringing all those nasty emissions at a time when we should all travel by bike, yet 35 miles up the road, LBA cant sneeze without an outcry from them, always encouraged by the BBC.