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...?

 

All very relevant reasons why DSA failed and lets remember, since it closed, LBA, Man and EMA are all investing huge sums of money developing their airports with more flights and more capacity, so even harder for a re opened DSA to survive

They are taking a micro regional view of this. We aren’t talking about a new Tesco or Asda here, they have to be able to round up enough people to fly to a much wider range of destinations, some at high frequency, every single day. There are not enough people nearby, and they would need to appeal to an audience much wider than just South Yorkshire/Humber. Again, the more populous areas have bigger airports. Huge barriers to entry.

They might be able to influence on price if they have £millions to offer in subsidy, but I wonder how much really is available and whether that would spike challenges from competitor airports over anti-competitive rules.

 

The key two words in all of this are critical and mass. And without stating the obvious as a passenger airport they don't exist together. Now DSA may have a part to play in some form of aviation form but it's certainly not what the DSA pro-league are clearly hoping for. The sooner this is realised the better for everyone concerned. The closing happened for a reason. Has anything really changed? NO

 

The key two words in all of this are critical and mass. And without stating the obvious as a passenger airport they don't exist together. Now DSA may have a part to play in some form of aviation form but it's certainly not what the DSA pro-league are clearly hoping for. The sooner this is realised the better for everyone concerned. The closing happened for a reason. Has anything really changed? NO

Well they’re also talking about freight, and some people claiming to be topped off would say that the new operator is big in the freight business. Well that’s great but are they going to pay for the freight handling facilities required to turn it into a serious contender?

The new UPS facility at EMA cost £138million alone! As we understand it currently that’s the entire amount available to CDC for DSA.

Whatever happens I sense they’ll need a lot more than what they’ve got to make it a success if that’s what they see as a successful outcome,

Perhaps we will all be proven wrong and there’ll be loads of Middle Eastern money pumped into it. Still skeptical.

 

They are taking a micro regional view of this. We aren’t talking about a new Tesco or Asda here, they have to be able to round up enough people to fly to a much wider range of destinations, some at high frequency, every single day. There are not enough people nearby, and they would need to appeal to an audience much wider than just South Yorkshire/Humber. Again, the more populous areas have bigger airports. Huge barriers to entry.

They might be able to influence on price if they have £millions to offer in subsidy, but I wonder how much really is available and whether that would spike challenges from competitor airports over anti-competitive rules.

Not only that, but I wonder how it would be before local and national politicians would start to pick up on CDC subsidising the airport, just to be able to offer airlines cheaper than market rate slots to keep DSA going regardless of profitability? Especially if as expected local councils get squeezed more and more as the current government tries to balance the books, and improve funding for essential services. I can see the green lobby and beyond leaping on this and causing a real political storm. Railway subsidies from central government cause a lot of angst in many political circles, so offering the aviation industry local council subsidies for holiday flights would light fires all around the political sphere.

Of course CDC could justify these subsidies if they could quickly make DSA work and run into profit, although from previous posts in this thread they seem to be quickly rolling back expectations as to when DSA might ever give them a return. I know at one point they saw a 10 year plan as being realistic even though Peel got nowhere near in 17 years, but now they are seemingly dialling that back to many more decades. After all they've got 125 years to make it work, right? Hmmmm.....

 

Perhaps DSA should stand for Doubtful Sustainability Achievements

 

Frankly, I cannot imagine many airlines taking the bait and operating out of DSA even if mega subsidies are on offer, unless they are long term which in any case would be financial suicide for the airport business. All the airlines that have operated at DSA in the past (other than TUi, and perhaps Wizz Hungary) found that once subsidies were withdrawn, operations at DSA were nowhere near viable, so they left.

The only thing that's really changed in UK aviation since then is that the Manchester Airports Group (MAG) has invested heavily in all their airports, notably MAN and EMA, with STN to come, whilst LBA are also extending and enhancing terminal facilities as part of expansion plans which aim to increase annual passenger throughput from 4m to 7m by 2030. So why would airlines think that the situation would be any different in the future when the subsidies offered to them end? It makes no sense commercially. It's a huge risk that they simply don't need to take . Once bitten and all that.

It's also worth remembering that there are far fewer airlines operating today than there were when DSA Mk1 first opened and they are far more careful about what they do and where they operate to.

 

Frankly, I cannot imagine many airlines taking the bait and operating out of DSA even if mega subsidies are on offer, unless they are long term which in any case would be financial suicide for the airport business. All the airlines that have operated at DSA in the past (other than TUi, and perhaps Wizz Hungary) found that once subsidies were withdrawn, operations at DSA were nowhere near viable, so they left.

The only thing that's really changed in UK aviation since then is that the Manchester Airports Group (MAG) has invested heavily in all their airports, notably MAN and EMA, with STN to come, whilst LBA are also extending and enhancing terminal facilities as part of expansion plans which aim to increase annual passenger throughput from 4m to 7m by 2030. So why would airlines think that the situation would be any different in the future when the subsidies offered to them end? It makes no sense commercially. It's a huge risk that they simply don't need to take . Once bitten and all that.

It's also worth remembering that there are far fewer airlines operating today than there were when DSA Mk1 first opened and they are far more careful about what they do and where they operate to.

Looking at this pragmatically, and taking what Dan Fell of Doncaster Chamber has said about the Council Execs displaying entrepreneurialism in their approach to the project. One of the rumours doing the rounds is that Emirates SkyCargo want somewhere to operate into and that there’s a train of thought that DSA is the place they would want to use for pure freight purposes. In that instance an entrepreneurial approach might be to invest the gainshare money into reopening the airport, but allowing Emirates to invest in a cargo facility on the site, which if there is the demand would be plausible. An operator therefore would merely facilitate this, and perhaps the Council are confident because they have an MOU from operators such as that, that they will invest into the facilities that they want to use.

It might be unlikely from where we’re looking, but it’s not impossible and it would offer to change my opinion on it somewhat. A shared risk shared reward as CE of Donny Council put it.

For information Emirates SkyCargo only operate into one UK airport on a pure freight basis currently, and that airport is STN (where they also have a passenger route). I’m not sure of the frequencies or what facilities they use at STN. They only operate freight only routes to 8 airports in the world.

 

Looking at this pragmatically, and taking what Dan Fell of Doncaster Chamber has said about the Council Execs displaying entrepreneurialism in their approach to the project. One of the rumours doing the rounds is that Emirates SkyCargo want somewhere to operate into and that there’s a train of thought that DSA is the place they would want to use for pure freight purposes. In that instance an entrepreneurial approach might be to invest the gainshare money into reopening the airport, but allowing Emirates to invest in a cargo facility on the site, which if there is the demand would be plausible. An operator therefore would merely facilitate this, and perhaps the Council are confident because they have an MOU from operators such as that, that they will invest into the facilities that they want to use.

It might be unlikely from where we’re looking, but it’s not impossible and it would offer to change my opinion on it somewhat. A shared risk shared reward as CE of Donny Council put it.

For information Emirates SkyCargo only operate into one UK airport on a pure freight basis currently, and that airport is STN (where they also have a passenger route). I’m not sure of the frequencies or what facilities they use at STN. They only operate freight only routes to 8 airports in the world.

That's fine but an airport needs much more than that to make money and the "People" want their holiday flights. For that to happen there needs to be a major investment in the terminal and the facilities within it and to make that worthwhile there needs to be plenty of aircraft and passengers - certainly more than they had previously.

If they want to go down the freight route and forget passenger flights, great, but MAG are certain to respond to any threat to their dominance and further development of the freight business could prove to be a long hard slog.

 

That's fine but an airport needs much more than that to make money and the "People" want their holiday flights. For that to happen there needs to be a major investment in the terminal and the facilities within it and to make that worthwhile there needs to be plenty of aircraft and passengers - certainly more than they had previously.

If they want to go down the freight route and forget passenger flights, great, but MAG are certain to respond to any threat to their dominance and further development of the freight business could prove to be a long hard slog.

I agree, but actually if they have found some regular freight users that want to build their own facilities at the airport which will in turn generate more revenue than what was previously available then that is plausible. I’m not entirely sure exactly what demand there might be for a pure freight route into DSA, I can’t imagine EMA would turn them away, and looking at the routes available into STN they operate to BRU and DXB and that’s it. But it’s all academic at the moment and based on unsubstantiated rumour that’s doing ten rounds currently.

Brexit has created some increased demand for pure freight, we’ve seen that BOH based outfit expand a little. But is it enough to justify purpose built facilities that couldn’t be more efficiently and cost effectively absorbed into the EMA operation if it’s far north enough?

Emirates SkyCargo is available on all passenger flights and currently contributes to the revenues of existing passenger flights into MAN, BHX and NCL.

I’d just like to add that there is discussion elsewhere about what sort of investment could be attracted for the airport development. Venture Capital has been one mentioned as a possible way of attracting external investment. I think this is inherently flawed, Venture Capitalists are not averse to taking risks, in fact that’s part of their MO. However, what they will not do is invest in a business that has its own proposals at a low level of profit and/or is being sold to the tax payer as value for money GVA and not necessarily a profitable proposition in isolation. To put it simply there’s no real reward on the investment at this time, and it would probably take a good ten years of solid performance before such an investment could be considered.

The Councils own outline case says that the airport is expected to rely on subsidy for an as yet to be determined period. In fact whispers I’ve heard is that some of the operators they were in discussions with walked away when the Council were unable to confirm that the airport would be in profit at all. There is too much we don’t know at the moment but if the market has dictated that the airport must be profitable before they take a shared risk approach it might have whittled down the contenders somewhat and would explain why the process has been delayed. The budget on Thursday being the obvious most recent delay.

 

All the airlines that have operated at DSA in the past (other than TUi, and perhaps Wizz Hungary) found that once subsidies were withdrawn, operations at DSA were nowhere near viable, so they left.

Without disagreeing with you, it’s worth pointing out that any airport losing £10m/year is subsidising its airlines.

Wizz and TUI may not have been directly subsidised, but if they weren’t paying enough to run the facility then they were being subsidised indirectly by Peel absorbing the losses.

 

Without disagreeing with you, it’s worth pointing out that any airport losing £10m/year is subsidising its airlines.

Wizz and TUI may not have been directly subsidised, but if they weren’t paying enough to run the facility then they were being subsidised indirectly by Peel absorbing the losses.

Good point that’s been made on here before but not in as direct a way. It cost up to £20.00 for every departing passenger. That’s unsustainable.

Another point that I don’t think has been raised though is the ‘administration expenses’ as stated in the published accounts. These costs are not itemised so it’s enabled people to perpetuate the narrative that things like car parking revenue were syphoned off to another Peel entity in some clever accounting tricks to make the airport financially under perform. This I feel is rubbish, I’ve used the car parking revenue of another Peel Airport LPL, to prove that it’s rubbish.

In fact I believe admin expenses were probably largely things like paying the contracted fees for the radar operation that was remote from DSA. Also marketing and any subsidies Peel were likely paying to their airline partners for flying from DSA. These are subject to commercial sensitivity and as such will not be published in itemised form in publicly available accounts. Nor will the contracted fees that every operator paid the airport as part of commercial agreements, there are some people who I believe should know better who reference the published fees as the fees that the like of TUI or Wizzair would have been paying. That’s utter rubbish, and I’ve been afforded the ability to see how much they charged one particular airline and it was very cheap compared with everywhere else.

So to my mind from a passenger ops perspective the only way they would be able to get that sort of passenger useage back AND at least break even would be to leverage higher aviation and non aviation revenues through passing the costs back on to the airlines and the passengers.

Nothing comes for free. Perhaps they might realise that Peel were actually quite benevolent when they ran it.

 

Looking at this pragmatically, and taking what Dan Fell of Doncaster Chamber has said about the Council Execs displaying entrepreneurialism in their approach to the project. One of the rumours doing the rounds is that Emirates SkyCargo want somewhere to operate into and that there’s a train of thought that DSA is the place they would want to use for pure freight purposes. In that instance an entrepreneurial approach might be to invest the gainshare money into reopening the airport, but allowing Emirates to invest in a cargo facility on the site, which if there is the demand would be plausible. An operator therefore would merely facilitate this, and perhaps the Council are confident because they have an MOU from operators such as that, that they will invest into the facilities that they want to use.

It might be unlikely from where we’re looking, but it’s not impossible and it would offer to change my opinion on it somewhat. A shared risk shared reward as CE of Donny Council put it.

For information Emirates SkyCargo only operate into one UK airport on a pure freight basis currently, and that airport is STN (where they also have a passenger route). I’m not sure of the frequencies or what facilities they use at STN. They only operate freight only routes to 8 airports in the world.

But the 'investor' would not own the facility they build would they as CDC are just leasing the site?? Wonder if Peel still have a finger in the pie??? It would seem odd that any such company would do that when there is a ready made facility not far down the road. There would have to be a lot of freight to justify that sort of investment.
I agree that the narrative does seem to have changed to a more 'defensive' style - now talking medium to long term!

 

But the 'investor' would not own the facility they build would they as CDC are just leasing the site?? Wonder if Peel still have a finger in the pie??? It would seem odd that any such company would do that when there is a ready made facility not far down the road. There would have to be a lot of freight to justify that sort of investment.
I agree that the narrative does seem to have changed to a more 'defensive' style - now talking medium to long term!

I suppose it depends on the terms of the lease, it is over a prolonged period which might instil some confidence. I suspect Peel would be amenable to selling at least shares in the freehold in the medium term should it prove successful and therefore valued at what Peel value it at. There is also Gateway East, the success of which the CDC claim is predicated by there being an airport next door. This has no doubt had some influential effect in the negotiations. I’m not sure if Gateway East is within proximity to have some airside function?

I will maintain that Peel always wanted the airport to work and by all accounts still do. I’m in infrequent contact with someone who works for Peel L&P and they have said the consensus within is that they will happily help CDC reopen the airport and they reluctantly closed it for the reasons we’ve outlined countless times over the years. There was no ulterior motive, not ever.

 

I will maintain that Peel always wanted the airport to work and by all accounts still do. I’m in infrequent contact with someone who works for Peel L&P and they have said the consensus within is that they will happily help CDC reopen the airport and they reluctantly closed it for the reasons we’ve outlined countless times over the years. There was no ulterior motive, not ever

Yes, I think it’s easy to lose sight, that peel is an entity and not a person with an ego. Okay, I’m sure individuals at some point would like to have spoken their mind about how individuals within the council have acted and talked badly about peel, but they are professionals and would not do that. at the end of the day, peel would like to bring its project back into profit from its heavy investment, and is currently in a win-win situation. If it is a success, they make money from the lease et cetera, if it fails then they will be able to use the land for other uses. It’s just a shame that other peoples egos seem to be the driver here rather than commercial sense and risk management.

 

Yes, I think it’s easy to lose sight, that peel is an entity and not a person with an ego. Okay, I’m sure individuals at some point would like to have spoken their mind about how individuals within the council have acted and talked badly about peel, but they are professionals and would not do that. at the end of the day, peel would like to bring its project back into profit from its heavy investment, and is currently in a win-win situation. If it is a success, they make money from the lease et cetera, if it fails then they will be able to use the land for other uses. It’s just a shame that other peoples egos seem to be the driver here rather than commercial sense and risk management.

I think it’s a naivety from a council buckling under pressure from the public and faceless ‘business leaders’ that they need an airport in Doncaster to enhance the economy and meet their regeneration targets. That is then buoyed on by consultants who are tasked to inform them of either the technical aspects of reopening the airport (which won’t include any viability assessments) and a viability assessment itself completed by consultancy (using unclear growth projection models) and ratified by another consultancy based on assumed growth projections created by the former. They may have even consulted airlines who are quite quick to lend support but can be notoriously slow to deliver. Talk is cheap as they say.

So it’s a perfect storm really. SYMCA Mayor claims there ‘might have been things that Peel could have done differently/didnt try’ but they don’t cite any evidence as to where they heard that, and I can only surmise that this is from the myths doing the rounds on social media.

Remember when the Judicial Review was thrown out? It was found that Peel went above and beyond to consult all stakeholders in public, this was not a mandatory exercise but one of a sense of responsibility to do so.

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Interesting to see what comes out of the budget. The excitement about the possibility of new Freeport locations has been dashed already today.

 

with a major land deal, it could be made a a viable plan.
DMBC as it was then ,played a blinder with the amazone site, it opens up one of the biggest areas in the uk for development.

 

with a major land deal, it could be made a a viable plan.
DMBC as it was then ,played a blinder with the amazone site, it opens up one of the biggest areas in the uk for development.

You just appear to string some words together but are incapable of actually elaborate on what you’re talking about. The key discussion points have been listed by a few people above yet you choose to ignore that. Why?

 

You just appear to string some words together but are incapable of actually elaborate on what you’re talking about. The key discussion points have been listed by a few people above yet you choose to ignore that. Why?

while you have negative feeling towards south Yorkshire having an airport, people living in the area do not.
if your view was the same in the rail industry there would not be a single train running in the uk .
I disagree with you about people in Sheffield preferring to travel to Manchester airport , then Doncaster. after living in Sheffield for over 20 years and travelling to Manchester 100's of times. I dreaded travelling over Woodhead in the winter months, sometimes it was closed for weeks at a time, I have had to travel the night before and had the added cost of an hotel. if TUI return they will be more than happy , any other airline will be a bonus.
I disagree with you that the people of south Yorkshire will not want to use the gainshare to support the airport
I do not see the people protesting about the costs to keep teeside airport open, in fact I think houchen would not have got reelected without is involvement in keeping the airport running.
I disagree with you when you think the money Peel made from selling land at the airport should not have be included in the profits of the airport.
when it opens I do not think it will ever , be as big or successful as EMA or LBA.
but as CDC aim is to attract business to set up around the area, with the offer of very attractive priced land and amazing transport links. if this happens and creates 10,000 - 20,000 jobs they will have reached their goals.

 

while you have negative feeling towards south Yorkshire having an airport, people living in the area do not.
if your view was the same in the rail industry there would not be a single train running in the uk .
I disagree with you about people in Sheffield preferring to travel to Manchester airport , then Doncaster. after living in Sheffield for over 20 years and travelling to Manchester 100's of times. I dreaded travelling over Woodhead in the winter months, sometimes it was closed for weeks at a time, I have had to travel the night before and had the added cost of an hotel. if TUI return they will be more than happy , any other airline will be a bonus.
I disagree with you that the people of south Yorkshire will not want to use the gainshare to support the airport
I do not see the people protesting about the costs to keep teeside airport open, in fact I think houchen would not have got reelected without is involvement in keeping the airport running.
I disagree with you when you think the money Peel made from selling land at the airport should not have be included in the profits of the airport.
when it opens I do not think it will ever , be as big or successful as EMA or LBA.
but as CDC aim is to attract business to set up around the area, with the offer of very attractive priced land and amazing transport links. if this happens and creates 10,000 - 20,000 jobs they will have reached their goals.

However when DSA was open for near 20 years the vast majority of people from SY DID fly from other airports and mostly shunned DSA…..Airlines came and went as they couldn’t attract a market base - if travel to other airports is so difficult perhaps you can explain why these airlines tried and failed…..and before you say no it wasn’t anything to do with landing fees
As to Teeside I think you will find there are a significant and growing number of locals who are now challenging why public funds are being used to prop up a loss making venture which despite Houchens words has failed to attract a low cost operator to bad even one aircraft there.

 

while you have negative feeling towards south Yorkshire having an airport, people living in the area do not.
if your view was the same in the rail industry there would not be a single train running in the uk .
I disagree with you about people in Sheffield preferring to travel to Manchester airport , then Doncaster. after living in Sheffield for over 20 years and travelling to Manchester 100's of times. I dreaded travelling over Woodhead in the winter months, sometimes it was closed for weeks at a time, I have had to travel the night before and had the added cost of an hotel. if TUI return they will be more than happy , any other airline will be a bonus.
I disagree with you that the people of south Yorkshire will not want to use the gainshare to support the airport
I do not see the people protesting about the costs to keep teeside airport open, in fact I think houchen would not have got reelected without is involvement in keeping the airport running.
I disagree with you when you think the money Peel made from selling land at the airport should not have be included in the profits of the airport.
when it opens I do not think it will ever , be as big or successful as EMA or LBA.
but as CDC aim is to attract business to set up around the area, with the offer of very attractive priced land and amazing transport links. if this happens and creates 10,000 - 20,000 jobs they will have reached their goals.

For a start, how are you drawing parallels with my views of DSA in isolation and the rail industry? Not sure what you’re trying to get at there.

I never said people in Sheffield prefer to travel from MAN, I am saying that they continued to do so even after DSA opened and throughout its lifespan, and though the number of people is fairly large at around 1mppa, it’s not possible to determine where they are going and it’s less than 50% of the number who travel from WY to MAN. So where do you think might be the bigger market to explore?

I haven’t said the profit Peel made from selling the land shouldn’t have been included in the airports accounts. But even so, if they’ve sold off that land it wouldn’t be part of the airport or of Peel would it!? So a one off may have actually indirectly contributed to covering the overheads of the airport at some point, after all the losses had to be covered somehow didn’t they…

They could create 10-20,000 jobs without going to the expense of reopening the airport. That’s my point and one that is continually missed.

I’m not trying to put a dampener on things, I’ve nothing against South Yorkshire and if DSA could meet the ambitions people have for it then it’s in my interests for it to do so. But I’ve provided the evidence which backs up the real tangibles that we have seen happen over the last 20 years and none of it points to any underhand or ulterior motives from the owners Peel or by Vantage when they owned the site. So this is why I remain skeptical until such a time that the council appear with a credible plan and not some other pie in the sky scheme that is unlikely to ever come to fruition.