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 think I read on earlier posts that the £138m came in instalments over 20 years?? If that's correct then year 1 instalment = approx £6.9m is unlikely to scratch the surface - so presumably there will need to be loans taken out against Gainshare although I have not much idea how it works?? I think any delay (if there is one) will involve intense negotiations - as suggested - as to who pays for and owns what, bearing in mind Peel will still own the site and fixed infrastructure and probably any additions to the fixed infrastructure and what amount of subsidy is available and for how long to de-risk the project for the 'operator'. Not something agreed quickly I'm sure!

Correct, my understanding is that they will be borrowing against the gainshare pot in total, not entirely sure how it works. Presumably subject to interest too?. I expect the Council to be keen on finding an investor who will match funding so that they don’t have to use so much of a sizeable chunk of their Gainshare allocation. I do not believe there will be an appetite to allocate it all to this project, be a bit crazy to do so. I also do not believe it will cost £138m to reinstate everything, I’m certain it will be much less than that.

This process could drag on for quite some time.

 

Not sure why all my last post deleted whilst editing however in reply to the above

Personal view two totally different situations DSA and LBA regarding mayors, politics are politics and I ain't getting involved the only losers are the majority of voters whoever is in charge.

re rabbitfoot - Might be wrong but sure the last update suggested an update late spring which could be taken two ways I assume, May or June suppose it depends on when you think spring runs, depends on if they are working on astronomical spring times or meteorological spring times??? for me it's got to be the later spring runs ending May 31st???

Should we assume they are struggling to find the right operator the one that can make the place a success??

I’ve been involved in contractual negotiations with the public sector and believe me they are painful and never run to plan!
In the case of DSA given the council have given an indication of their commercials, are now having to pay out money on the lease and expressed their absolute desperation to get a deal done to open the airport they’ve significantly weekend their negotiation position.
It’s likely that the potential operators will be taking advantage of this situation to maximise their commercial position and de-risk the deal as much as possible. Given they won’t have this leverage again over the Council and the fact there look to be only 2 operators in the running I suspect from an operator perspective getting the right deal done overrides any timetable the Council may have.

 

I’ve been involved in contractual negotiations with the public sector and believe me they are painful and never run to plan!
In the case of DSA given the council have given an indication of their commercials, are now having to pay out money on the lease and expressed their absolute desperation to get a deal done to open the airport they’ve significantly weekend their negotiation position.
It’s likely that the potential operators will be taking advantage of this situation to maximise their commercial position and de-risk the deal as much as possible. Given they won’t have this leverage again over the Council and the fact there look to be only 2 operators in the running I suspect from an operator perspective getting the right deal done overrides any timetable the Council may have.

Yes, I think you could be right and the public political announcements may only serve to weaken the councils bargaining power. We know Peel were always going to agree to the lease, they don’t really know what else to do with the site otherwise they’d have submitted alternative proposals a long time ago. SYMCA also appear to have removed any mention of the loan agreement from their minutes after Oliver Coppard wrongly accused Peel of withholding information at the time of approaching them with loan/equity proposals. Could have stopped all this by just investing £20million

Hearing from people fairly close to the situation (but away from all the social media populism) that popularity may be waning slightly. Could all change of course if more positive announcements are made in the next couple of weeks.

 

I have no inside info, but to me RCA look a good fit for DSA. They are a profitable outfit despite managing what at face value are small uk airports (Exeter, Bournmouth, Norwich). Their strength clearly is in making money from aviation related activity as opposed to just commercial passenger traffic. DSA ticking over at 0.5m to 1m passengers (easily achievable if TUI return) seems to be completely in RCA’s wheelhouse.

 

I have no inside info, but to me RCA look a good fit for DSA. They are a profitable outfit despite managing what at face value are small uk airports (Exeter, Bournmouth, Norwich). Their strength clearly is in making money from aviation related activity as opposed to just commercial passenger traffic. DSA ticking over at 0.5m to 1m passengers (easily achievable if TUI return) seems to be completely in RCA’s wheelhouse.

Makes complete sense, it does I think depend upon how much land is available to them to develop aviation and non aviation revenues. They’ll expect some tie in with Gateway East I suspect. In the case of NWI and BOH, they have large industrial estates attached which must help the bottom line.

 

Makes complete sense, it does I think depend upon how much land is available to them to develop aviation and non aviation revenues. They’ll expect some tie in with Gateway East I suspect. In the case of NWI and BOH, they have large industrial estates attached which must help the bottom line.

When interviewed on Look North last week, and when challenged about DSA's viability, Oliver Coppard specifically mentioned 'aviation related industries'. There was noticeably less emphasis on passenger throughput which at the time made me wonder if there's been a subtle shift and maybe a realisation that they will need a lot more than TUi to make DSA work. Perhaps that's a message coming from the potential airport operators together with a healthy dose of realism.

 

"Healthy dose of realism"? You are talking about Politicians, who rarely show that in the mutterings.

 

When interviewed on Look North last week, and when challenged about DSA's viability, Oliver Coppard specifically mentioned 'aviation related industries'. There was noticeably less emphasis on passenger throughput which at the time made me wonder if there's been a subtle shift and maybe a realisation that they will need a lot more than TUi to make DSA work. Perhaps that's a message coming from the potential airport operators together with a healthy dose of realism.

They will have assurances that 2Excel would return as soon as they possibly can, whether the airfield is licensed or not. There are rumours they wanted to take over an extra hangar.. Certainly though, they won’t be able to justify the passenger ops with the same levels of services as before with just TUI, the operation was too large. I would expect some more restrictive operating hours than the full service H24 as in the previous guise. Very interested to see who if anyone has agreed to take it on and what they actually intend on doing with it.

 

"Healthy dose of realism"? You are talking about Politicians, who rarely show that in the mutterings.

The healthy dose of realism I am referring to is from the potential operators TO the politicians. As you say, most politicians wouldn't know realism if it smacked them in the face .

 

The healthy dose of realism I am referring to is from the potential operators TO the politicians. As you say, most politicians wouldn't know realism if it smacked them in the face .

To be fair to Coppard, in politics there seems to be an assumption that you must be a jack of all trades. He’s unlikely to be privy to the details behind the discussions, not because of any confidentiality reasons but because he’s probably busy with many other projects. Therefore, when pressed on such matters he’ll only be able to trot out the usual narrative without very much background knowledge. I know there has been some redaction of information pertaining to SYMCA dealings with Peel under Dan Jarvis though like I’ve said previously..

I personally believe the CDC want to announce something pronto, but I reckon their timescales have gone to pot due to various reasons, partly probably because the operators they wanted have most likely pulled out, and the remaining bidders might be driving a hard bargain.

 

Didn’t Airlander want to move to Doncaster? That would certainly be an aviation industry not reliant on passengers. Look, I am going to wish any operator a success, especially if they have realised they can’t make it work purely on pax alone - that is a very limited market for DSA

 

Didn’t Airlander want to move to Doncaster? That would certainly be an aviation industry not reliant on passengers. Look, I am going to wish any operator a success, especially if they have realised they can’t make it work purely on pax alone - that is a very limited market for DSA

The Mayor mentioned Airlander so it seems they are pinning hopes partly on them.

 

Perhaps the Mayor airships the ground they walk on!!!!!

 

Didn’t Airlander want to move to Doncaster? That would certainly be an aviation industry not reliant on passengers. Look, I am going to wish any operator a success, especially if they have realised they can’t make it work purely on pax alone - that is a very limited market for DSA

they have started work on a site in doncaster for airlander, it is about twenty miles from the airport, in north doncaster.

 

For what appears should be such a commercially sensitive situation plenty of whispers that if the airport does reappear and come back from the dead that passenger operations will be more limited than before.

Ok it's not rocket science that airlines wouldn't be banging the door down to be involved but the thought that TUI would appear happy to commit with little or no interest from elsewhere does seem a little odd. TUI would surely need some real assurance that they weren't setting up to see the place fail 5 years down the line and run apart from themselves and 2 Excel as a ghost airport.

Same could be said for 2 Excel. Seems a hell of a risky proposition that any right minded business would be staying well clear of these are reputable companies who we are talking about.

 

the key to it airport the being a sucess is the land around the airport, there is planning consent for over 4 million sqft already in place, that is roughly 1300 warehouses at 3000 sqft a warehouse.

 

To be fair to Coppard, in politics there seems to be an assumption that you must be a jack of all trades. He’s unlikely to be privy to the details behind the discussions, not because of any confidentiality reasons but because he’s probably busy with many other projects. Therefore, when pressed on such matters he’ll only be able to trot out the usual narrative without very much background knowledge. I know there has been some redaction of information pertaining to SYMCA dealings with Peel under Dan Jarvis though like I’ve said previously..

I personally believe the CDC want to announce something pronto, but I reckon their timescales have gone to pot due to various reasons, partly probably because the operators they wanted have most likely pulled out, and the remaining bidders might be driving a hard bargain.

Ah - I heard (but third hand so probably shouldn't post it) that the Operator that they really wanted left the process a while ago.

the key to it airport the being a sucess is the land around the airport, there is planning consent for over 4 million sqft already in place, that is roughly 1300 warehouses at 3000 sqft a warehouse.

Do you know if any of this is Peel's land or other private owners or perhaps Council owned??

The Mayor mentioned Airlander so it seems they are pinning hopes partly on them.

Whilst it would have made sense in one respect for Airlander to base at the airport, as rabbitfoot has mentioned they are using a site a few miles away. Perhaps they needed to get on with the job and didn't have the time to wait - especially in case DSA were to fall through.

 

the key to it airport the being a sucess is the land around the airport, there is planning consent for over 4 million sqft already in place, that is roughly 1300 warehouses at 3000 sqft a warehouse.

I'm not convinced it is. Airports are an attractive location for any business, but it doesn't have to be associated with the airport to make it a success. Just about every airport in the country has some form of business park nearby but it's not these businesses that make those airports successful .

 

For what appears should be such a commercially sensitive situation plenty of whispers that if the airport does reappear and come back from the dead that passenger operations will be more limited than before.

Ok it's not rocket science that airlines wouldn't be banging the door down to be involved but the thought that TUI would appear happy to commit with little or no interest from elsewhere does seem a little odd. TUI would surely need some real assurance that they weren't setting up to see the place fail 5 years down the line and run apart from themselves and 2 Excel as a ghost airport.

Same could be said for 2 Excel. Seems a hell of a risky proposition that any right minded business would be staying well clear of these are reputable companies who we are talking about.

In respect of TUI it does seem a risk if they are already filling their DSA displaced aircraft at EMA and MAN why pull them out to fill them (hopefully) with the additional cost of a base at a 'new' location. That's if the 'return' actually means a base. I suppose the attraction is that once again they would likely have no competition and there is a demonstrated local market. If it all works, maybe a few 'W' legs to start even though perhaps a bit inefficient?? Keeps the locals happy but many more revenue streams required to sustain the airport.

 

Do you know if any of this is Peel's land or other private owners or perhaps Council owned??

the last one built was the 420 , and they got the land from peel. the ownership around the airport involves all 3, the land either side of the great yorkshire way ,peel does not have an interest