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 didn't say that Peel waited. I was saying that Peel whilst doing the review will have been aware that number of airports for sale/ coming up for sale. So the likelihood of buyers would have been slim.

I was saying that the way the Mayors have gone on with things, that delays meant the bidding process has fallen right into the centre of a saturated market with numerous airports up for sale. Which puts DSA down the pecking order for investors. Purchase would be better for investors than a lease deal.

Why the Mayors never put in an offer to buy the airport from Peel in the early days of the saga, would have been more helpful to the reopening cause than the way they have gone about it.

See what you’re saying, but I think it’s just a case of being unlucky depending on how you view it.

The Mayors didn’t want to buy it, in the early days Oliver Coppard was quite clear in stating that he believed the best people to run airports were the private sector. He did go to market and encouraged an interested Middle Eastern conglomerate (of questionable authenticity) to submit an official bid to Peel for the airport. I understand the amount offered fell well short of what Peel deemed reasonable. Also, it sounds like the people making the offer were not exactly reputable and backed out when asked to prove the source of their finance as part of due diligence. Of course we then heard that any prospective buyer might wait to get it cheaper following CPO. All old news anyway as it’s now about lease.

I don’t think it was tactical on the part of Peel. I don’t think they’d prefer to keep it closed should a suitable solution present itself where they either sell the whole lot off or bring someone else in to run it and see a return on their investment with positive implications for their Gateway East development.

Peel are a ruthless property owner/developer and their MO is at times questionable, but I think it’s unreasonable to vilify them here. They put the cash in, they had the vision where others didn’t. It now hasn’t worked out, much like Teesside, but in this instance far more money is at stake.

 

Oliver Coppard has had a reply regarding reallocation of £30m City Region Sustainable Transport Settlements. I enclose Oliver’s comments below from his FB page. I’m not sure if he is gently starting to hint to the general public a lack of funding? Perhaps the reality of the real costs are coming to light in the procurement process now? This is different to what the Doncaster Chamber have been pushing, stating it is looking very positive that a deal is nearly made for operator and lease!!

Facebook link

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So after two months, Mark Harper has now formally said no to our request to use the £30 million of so-called ‘CRSTS’ money to reopen DSA. CRSTS is the funding we get from government to build transport infrastructure. Officials at the Department for Transport have told us that the ‘CRSTS Objectives’ do not include reopening airports. We were asking for flexibility on those rules, to use money already allocated to South Yorkshire differently, so we didn’t lose it.

But Mark has now said no; seemingly confirmation that the £1.45 billion CRSTS money notionally allocated to South Yorkshire’s transport priorities cannot be used to reopen our airport. Mark has made clear that he is not prepared to allow us more flexibility in that funding, despite the airport being one of our most vital transport priorities.

Asking for that greater flexibility was the right thing to do.

And yet the Conservative MPs in South Yorkshire and beyond have been celebrating Mark Harper’s decision. Indeed it seems they lobbied him to make that decision. I simply cannot understand local MPs working to deny more funding coming into the places they represent.

Let me be clear: I will *always* challenge the government for more funding, more flexibility, and more freedoms for South Yorkshire.

I am doing everything I can to reopen DSA. And even if the government or some of our MPs are not prepared to help South Yorkshire in that mission, I will use every tool at our disposal to do just that because this is my home and South Yorkshire always has been, and always will be, my priority.”

 

Oliver Coppard has had a reply regarding reallocation of £30m City Region Sustainable Transport Settlements. I enclose Oliver’s comments below from his FB page. I’m not sure if he is gently starting to hint to the general public a lack of funding? Perhaps the reality of the real costs are coming to light in the procurement process now? This is different to what the Doncaster Chamber have been pushing, stating it is looking very positive that a deal is nearly made for operator and lease!!

“
So after two months, Mark Harper has now formally said no to our request to use the £30 million of so-called ‘CRSTS’ money to reopen DSA. CRSTS is the funding we get from government to build transport infrastructure. Officials at the Department for Transport have told us that the ‘CRSTS Objectives’ do not include reopening airports. We were asking for flexibility on those rules, to use money already allocated to South Yorkshire differently, so we didn’t lose it.

But Mark has now said no; seemingly confirmation that the £1.45 billion CRSTS money notionally allocated to South Yorkshire’s transport priorities cannot be used to reopen our airport. Mark has made clear that he is not prepared to allow us more flexibility in that funding, despite the airport being one of our most vital transport priorities.

Asking for that greater flexibility was the right thing to do.

And yet the Conservative MPs in South Yorkshire and beyond have been celebrating Mark Harper’s decision. Indeed it seems they lobbied him to make that decision. I simply cannot understand local MPs working to deny more funding coming into the places they represent.

Let me be clear: I will *always* challenge the government for more funding, more flexibility, and more freedoms for South Yorkshire.

I am doing everything I can to reopen DSA. And even if the government or some of our MPs are not prepared to help South Yorkshire in that mission, I will use every tool at our disposal to do just that because this is my home and South Yorkshire always has been, and always will be, my priority.”

The press have spun a positive that people are running with. ‘£30million available to reopen DSA’ is basically the headline. Like most things with this debacle, this is misleading.

The truth is that Mark Harper has referred Oliver Coppard to the Gainshare pot which is valued at £900million over a 30 year period, that being £30million per year available for SYMCA to apply for to invest in projects with the MCA remit. As we already know, this project will be competing with numerous others in the South Yorkshire region to be allocated funding.

Oliver Coppard still alludes to having the cash to reopen DSA, it’s not clear how much is being allocated to the project or whether he is still committed to the project after this confirmation that the further £30million CRSTS funding cannot be repurposed. No updates as yet from the office of Ros Jones and there has been no new information offered up from them in months despite sporadic social media updates.

Believe the Full Outline Business Case was supposed to have been submitted to SYMCA in January, not sure if that has happened.

 

So basically, Coppard can apply for and if successful use the £30m for DSA but if he does, it will leave nothing at all for the numerous other regional priorities? All eggs in the DSA basket.

A decision he will have to live with if he gets it wrong.

 

So basically, Coppard can apply for and if successful use the £30m for DSA but if he does, it will leave nothing at all for the numerous other regional priorities? All eggs in the DSA basket.

A decision he will have to live with if he gets it wrong.

I think this pot totally £900million over 30 years is the one we discussed a few pages back. It might be that the cash is available in tranches and averages 30 over 30. There was I recall a pot of over £100million allocated for MCA projects. It’s that pot I expect the funding will come from.

 

I think this pot totally £900million over 30 years is the one we discussed a few pages back. It might be that the cash is available in tranches and averages 30 over 30. There was I recall a pot of over £100million allocated for MCA projects. It’s that pot I expect the funding will come from.

The proposal is that the LA can borrow against the future £30m tranches to bring forward the budget should it need to spend more then £30m to reopen the airport (which it will). This was the basis upon which Teesside airport was funded, however the financial environment is a lot different now and the costs of finance far higher…..I also would expect the draw on the LA Gainshare funding to be far higher than it was for Teesside and therefore the impact of all this spend on the airport on any other potential infrastructure projects in SY far higher.

 

The proposal is that the LA can borrow against the future £30m tranches to bring forward the budget should it need to spend more then £30m to reopen the airport (which it will). This was the basis upon which Teesside airport was funded, however the financial environment is a lot different now and the costs of finance far higher…..I also would expect the draw on the LA Gainshare funding to be far higher than it was for Teesside and therefore the impact of all this spend on the airport on any other potential infrastructure projects in SY far higher.

Thanks for your clarity on the situation. So not only will it be costly longer term in interest on borrowing but also the currently Government writing cheques on behalf of the next Government?

I think the case of Teesside airport is comparable in mechanism of funding only, the costs are likely to be staggeringly higher and therefore will require a much larger passenger/cargo/movement base to be able to pay itself back.

 

Thanks for your clarity on the situation. So not only will it be costly longer term in interest on borrowing but also the currently Government writing cheques on behalf of the next Government?

I think the case of Teesside airport is comparable in mechanism of funding only, the costs are likely to be staggeringly higher and therefore will require a much larger passenger/cargo/movement base to be able to pay itself back.

Agreed, suspect this is why OC is trying to access the CRSTS pot to reduce the cost of servicing debt. As said before potential operators will be watching this with interest particularly if questions are starting to arise about funding which could leave them commercially exposed.

Also what’s actually been budgeted for “regional activity” which the airport would fall under isn‘t £30m pa it’s actually £6m pa. The rest of the budget has been divided between Sheffield, Barnsley, Doncaster and Rotherham Councils for their own respective projects….https://democracy.sheffield.gov.uk/documents/s60599/8%20-%20Gainshare%20funding%20strategies.pdf

 

Agreed, suspect this is why OC is trying to access the CRSTS pot to reduce the cost of servicing debt. As said before potential operators will be watching this with interest particularly if questions are starting to arise about funding which could leave them commercially exposed.

Also what’s actually been budgeted for “regional activity” which the airport would fall under isn‘t £30m pa it’s actually £6m pa. The rest of the budget has been divided between Sheffield, Barnsley, Doncaster and Rotherham Councils for their own respective projects….https://democracy.sheffield.gov.uk/documents/s60599/8%20-%20Gainshare%20funding%20strategies.pdf

So in short they don’t appear to have the money available. Also, the very public bickering isn’t really doing their cause favours as, along with concern about where the money is coming from and how much is available, a private sector operator may not be keen on the political environment within which the airport operates.

 

So in short they don’t appear to have the money available. Also, the very public bickering isn’t really doing their cause favours as, along with concern about where the money is coming from and how much is available, a private sector operator may not be keen on the political environment within which the airport operates.

It’s seems the only way they would have the money available would be to take the budgets away from the City Councils, however it would seem they’ve already a list of projects they want to get on with……

 

Interesting is that among all these comments flowing from the Politicians, Peel are keeping quiet.

 

Interesting is that among all these comments flowing from the Politicians, Peel are keeping quiet.

Peel are more knowledgeable about how the aviation industry works than Doncaster council.

 

Peel are more knowledgeable about how the aviation industry works than Doncaster council.

So of course will the prospective 'investors/operators' - certainly one of the names I've seen mentioned will and are surely not going to risk a financial millstone around their neck. For fear of repeating myself, I still cannot get my head around how an 'investor' who doesn't own the site will be prepared to spend large amounts of their own money. Assume if a lease deal is done, it will have to start ticking before or when whoever takes possession of the site, so I suppose it will be costing whoever is paying for a considerable period before the site is able to open.

 

So of course will the prospective 'investors/operators' - certainly one of the names I've seen mentioned will and are surely not going to risk a financial millstone around their neck. For fear of repeating myself, I still cannot get my head around how an 'investor' who doesn't own the site will be prepared to spend large amounts of their own money. Assume if a lease deal is done, it will have to start ticking before or when whoever takes possession of the site, so I suppose it will be costing whoever is paying for a considerable period before the site is able to open.

Might be why it’s taken so long to thrash out an agreement with Peel, they’ll want to get it up and running pretty quickly after reaching an arrangement, so they’re not effectively paying for a load of dormant land. I’ve seen recent pictures of the site and it will take a lot of cleaning up, that’s before they even have to reinstate certain infrastructure.

Notice Mark Harper has now effectively u-turned on the refusal to allow the £30million from the CSTRS 1 pot and has suggested Oliver Coppard formally apply. Caveat being that it has to satisfy the rules of CSTRS, namely that it’s for sustainable transport (hence the rail link) and I do not believe the airport would qualify. Regardless, OC will probably push ahead anyway.

A former member of the DSA Comsultative Committee has stated that the Gainshare money will divert funding from other schemes in need and doesn’t feel it’s an appropriate use of that cash. Not sure what alternatives he’s suggesting but be hasn’t been clear on that. He has also stated that the idea is to borrow against Gainshare which I think is massively risky given the interest, it’ll simply never pay off.

Interestingly an independent consultant has stated that the airport is unlikely to make any ground, have to spend a lot of money to get close to profitability. Not going to happen.

 

Might be why it’s taken so long to thrash out an agreement with Peel, they’ll want to get it up and running pretty quickly after reaching an arrangement, so they’re not effectively paying for a load of dormant land. I’ve seen recent pictures of the site and it will take a lot of cleaning up, that’s before they even have to reinstate certain infrastructure.

Notice Mark Harper has now effectively u-turned on the refusal to allow the £30million from the CSTRS 1 pot and has suggested Oliver Coppard formally apply. Caveat being that it has to satisfy the rules of CSTRS, namely that it’s for sustainable transport (hence the rail link) and I do not believe the airport would qualify. Regardless, OC will probably push ahead anyway.

A former member of the DSA Comsultative Committee has stated that the Gainshare money will divert funding from other schemes in need and doesn’t feel it’s an appropriate use of that cash. Not sure what alternatives he’s suggesting but be hasn’t been clear on that. He has also stated that the idea is to borrow against Gainshare which I think is massively risky given the interest, it’ll simply never pay off.

Interestingly an independent consultant has stated that the airport is unlikely to make any ground, have to spend a lot of money to get close to profitability. Not going to happen.

OC will have to submit a full Business Case if he formally applies for that £30m. Good luck with that. He should know the process.

It all seems like political posturing procrastination to me. If it doesn't happen, I wonder if he will claim he did all he could and blame the Government for it's intransigence.

 

Think that's been the case all along tbh. Just end up saying"we tried everything but in the end no one could make the figures work". All for short term political gain. There is a reason DSA is closed and that's because it's unviable. Yes it has a lot of advantages over LBA when it comes to infrastructure but the one overriding factor is location meaning not enough pax and airlines. This is in no way a direct slur at anyone supporting DSA just staring fact

 

OC will have to submit a full Business Case if he formally applies for that £30m. Good luck with that. I suspect he knows that it won't look good and that's why he's trying to avoid it by just having the rail line money reallocated. He must know the process but seems to be trying to circumvent it, and in so doing is just wasting time.

It all seems like political posturing and deliberate procrastination to me so that if it doesn't happen, he can claim he did all he could and blame the Government for it's intransigence.

I think there’s back covering going on from all sides of this. To be fair though this latest back and forth was a result of an FOI which was to determine whether any formal approach had been made to the DfT to gain clarity on funding. So what Mark Harpers office have done is follow up with a hastily written letter to clear up the position, which has seen to be picked up by the press as a further commitment by Government to support the project, when in reality it outlines the process OC must go through to attempt to re-route that funding. Hence the caveat of having to be within the guidelines, which I don’t think an airport is.

Same with gainshare. Harpers office (along with MP Nick) has spun it to make it look like the region is to gain close to £1bn, but they don’t just write a cheque to SYMCA for that amount. As discussed it appears in tranches of £30million per year and this is to cover more than one project. Like has been said previously on here, they would effectively borrow against the committed gainshare which just increases the cost of the whole thing further.

They really have to have some certainty that this is going to work for it to even be entertained. Wonder how many bidders have been taken forward to the final stage and whether there are any at all in the final run.

I think there’s back covering going on from all sides of this. To be fair though this latest back and forth was a result of an FOI which was to determine whether any formal approach had been made to the DfT to gain clarity on funding. So what Mark Harpers office have done is follow up with a hastily written letter to clear up the position, which has seen to be picked up by the press as a further commitment by Government to support the project, when in reality it outlines the process OC must go through to attempt to re-route that funding. Hence the caveat of having to be within the guidelines, which I don’t think an airport is.
Same with gainshare. Harpers office (along with MP Nick) has spun it to make it look like the region is to gain close to £1bn, but they don’t just write a cheque to SYMCA for that amount. As discussed it appears in tranches of £30million per year and this is to cover more than one project. Like has been said previously on here, they would effectively borrow against the committed gainshare which just increases the cost of the whole thing further.
They really have to have some certainty that this is going to work for it to even be entertained. Wonder how many bidders have been taken forward to the final stage and whether there are any at all in the final run.

https://southyorkshire-ca.gov.uk/news/article/2b1a1a33-b81d-421b-a9d1-d9e86547d585?fbclid=IwAR1lXGAkb-vD4uD2E6Tx-6YHIDNFBQ3InNLFdUIJqeeRcgChMn-5PNk9mZ4_aem_AVrXNyE65AXdngNSKMUUkXvXbeR5yNRmKJdIb7JIvdeiZQgAs5cIHTnKrflpQT2G0tY

The above has been released this lunch time. So next week the OBC will go to the MCA board for approval, should this be approved (as I have no doubt will happen) a FOBC will be submitted. £138m available to Doncaster over the next 26 years. So they must have some confidence that the initial costs will not be so steep as to swallow that up in one go? Otherwise they’ll be raising debt against a significant chunk of that money on something that is as we have said probably a hundred times a failed business! The mind boggles.

 

The gift that just keeps on giving, Mr Coppard has been asked about whether a reopened DSA fire service will be brought into South Yorkshire Fire and Rescue. ‘Not to my knowledge but Happy to get into that discussion in due course’ was the response.

I know he’s not likely to know the full ins and outs but that is something you can shut down instantly if you have any awareness. Imagine the airport fire crew leaving the airfield to deal with a chip pan fire in Rossington!

Again, this is a significant cost that cannot simply be outsourced to the local fire service!

 

The gift that just keeps on giving, Mr Coppard has been asked about whether a reopened DSA fire service will be brought into South Yorkshire Fire and Rescue. ‘Not to my knowledge but Happy to get into that discussion in due course’ was the response.

I know he’s not likely to know the full ins and outs but that is something you can shut down instantly if you have any awareness. Imagine the airport fire crew leaving the airfield to deal with a chip pan fire in Rossington!

Again, this is a significant cost that cannot simply be outsourced to the local fire service!

Hasn't got a clue.

 

With all the noise about the airport being mismanaged by Peel Group, and the agenda being driven by a determination that an experienced private operator should be given a chance to operate it, think it appropriate to remind people that the airport was also owned and operated for a short time by Vantage group.

Home - Vantage

We Make Airports Better

www.vantageairportgroup.com

Doncaster Sheffield Airport - Vantage

We Make Airports Better

www.vantageairportgroup.com

Peel buys back shares in Robin Hood Airport | TheBusinessDesk.com

PEEL Group has re-acquired Vantage's shares in Robin Hood Doncaster Sheffield Airport.

www.thebusinessdesk.com

This is an important factor that should not be forgotten about by the people currently trying to reopen it. Vantage offloaded Teesside first in 2011 after having acquired the three Peel airports in 2010, it then offloaded DSA in 2013 to retain ownership of the only successful airport in the U.K. portfolio, LPL. They then sold LPL back to Peel in 2014 but retained the ATS management contract. Passenger numbers actually stagnated at DSA under Vantage ownership, before growing again under Peel.