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...?

 

Just had a quick review and yes you’re right re 9:1. No mention of any private investment - suspect that answers the question about the viability of any ongoing negotiations. SAU report mentioned and legal recourse by competitors remains a risk….
As to the business case if you put that forward in the private sector based on the forecast losses against the growth targets they are working to it wouldn’t see the light of day….Given the current state of the industry and that it is highly likely in the period before this airport returns a penny we will face a recession even if this airport returns its highly questionable for how long…


One other snippet from the report - seems they are struggling with ATC staff - states they’ve had interest but will have to increases remuneration- Really well there’s a surprise!!

I don’t see the council voting against this, they’re all in too deep now and the way that moronic Mayor keeps telling everyone it’s the single biggest growth generate for Doncaster ‘and UK PLC’ means that nobody will dare vote it down. It’s terribly sad. They’ve also intimated that they’re in talks to get TUI and Wizzair back, but Wizzair are struggling now too and word on the networks is that they’re going to pull out of LGW next year.

How anyone could justify this level of spend which will, by their own admittance, only work in the most optimistic scenario, is just beyond comprehension.

No surprises about ATC. It’s a joke.

 

Cumulative projected loss of £81m!

There is a clanger in there though. Didn’t the SYMCA financial assessment find that the forecast 9:1 ROI was over exaggerated and that they found at best an ROI of between 0.9 (pessimistic) and 3 (optimistic) was forecast? Well the document attached once again states that the projected ROI is 9:1. They’re ignoring the SYMCA due diligence.

The document clearly states that if they can’t meet the aggressive growth targets the airport won’t be viable. They’ve set some strategic review points as get out to close the airport if it isn’t performing as expected…

The document states a CAPEX requirement of £126m and in addition £81m losses in first 9 years - going to be a bit of a shortfall there against available cash me thinks?!!! In typical political fashion, the document fails to provide any calculation as to what elements will contribute to the predicted £230m profit and whilst it lists elements tested by Consultants - it does not say what figures/numbers were tested and what the results were. The statement that the project is affordable if it operates at the top end of predictions is fine but I was unable to find anywhere in there where it details what the top end targets are. Quite some time ago 2m pax were predicted (was that in 10 years or by 2050?) but that was 'bumped to 2.5m probably because 2m didn't come near to adding up! Council Officers also in 'critical' positions whereas you would imagine you would need aviation experts. Don't think MAI will take kindly to being pulled up by Faye from Accounts

 

The document states a CAPEX requirement of £126m and in addition £81m losses in first 9 years - going to be a bit of a shortfall there against available cash me thinks?!!! In typical political fashion, the document fails to provide any calculation as to what elements will contribute to the predicted £230m profit and whilst it lists elements tested by Consultants - it does not say what figures/numbers were tested and what the results were. The statement that the project is affordable if it operates at the top end of predictions is fine but I was unable to find anywhere in there where it details what the top end targets are. Quite some time ago 2m pax were predicted (was that in 10 years or by 2050?) but that was 'bumped to 2.5m probably because 2m didn't come near to adding up! Council Officers also in 'critical' positions whereas you would imagine you would need aviation experts. Don't think MAI will take kindly to being pulled up by Faye from Accounts

I’m pretty sure the current lease agreement stipulates 2.5mppa by 2036, though Coppard has suggested this be revised through negotiation which is something the document mentions is ongoing ‘positively’. So clearly an agreement hasn’t been reached there.

One wonders why this UAE led consortium aren’t mentioned anywhere. It does say there is option to divest some of the risk onto the private sector but of course it doesn’t go into detail. Much like the rest it appears to be based more on wishful thinking than sound logic.

 

The document states a CAPEX requirement of £126m and in addition £81m losses in first 9 years - going to be a bit of a shortfall there against available cash me thinks?!!! In typical political fashion, the document fails to provide any calculation as to what elements will contribute to the predicted £230m profit and whilst it lists elements tested by Consultants - it does not say what figures/numbers were tested and what the results were. The statement that the project is affordable if it operates at the top end of predictions is fine but I was unable to find anywhere in there where it details what the top end targets are. Quite some time ago 2m pax were predicted (was that in 10 years or by 2050?) but that was 'bumped to 2.5m probably because 2m didn't come near to adding up! Council Officers also in 'critical' positions whereas you would imagine you would need aviation experts. Don't think MAI will take kindly to being pulled up by Faye from Accounts

This is astonishing, so basically the airport that Peel was making a loss with apparently due to being incompetent, will now be run by the council, who will run it better by making a loss for 9 years, for a cost of £81m. And that’s if all goes well!! To me this is already acceptance of distortion of the market, as tax payer is paying for losses already. Then if they need to pay airlines on top of this to operate from DSA……..

I agree with others, they will press ahead, and we will watch as they self admittedly will throw money away for at least 9 years …… but it will all be worth it for the one Holiday a year to Benidorm…..and well they will link the airport to success of the 56th vape store in Doncaster centre to open, that wouldn’t have existed without the airport bringing in international tourists & business!!

 

This is astonishing, so basically the airport that Peel was making a loss with apparently due to being incompetent, will now be run by the council, who will run it better by making a loss for 9 years, for a cost of £81m. And that’s if all goes well!! To me this is already acceptance of distortion of the market, as tax payer is paying for losses already. Then if they need to pay airlines on top of this to operate from DSA……..

I agree with others, they will press ahead, and we will watch as they self admittedly will throw money away for at least 9 years …… but it will all be worth it for the one Holiday a year to Benidorm…..and well they will link the airport to success of the 56th vape store in Doncaster centre to open, that wouldn’t have existed without the airport bringing in international tourists & business!!

It's ironic. Airlines are in such a strong position because lets face it, nobody is desperate to get into DSA, there is clearly a huge lack of interest (from airlines and private investors) so they will get as much ££ out of CDC to fly into DSA, thus adding to no doubt bigger losses then projected as they are clearly basing these figures on best case scenario

 

This is astonishing, so basically the airport that Peel was making a loss with apparently due to being incompetent, will now be run by the council, who will run it better by making a loss for 9 years, for a cost of £81m. And that’s if all goes well!! To me this is already acceptance of distortion of the market, as tax payer is paying for losses already. Then if they need to pay airlines on top of this to operate from DSA……..

I agree with others, they will press ahead, and we will watch as they self admittedly will throw money away for at least 9 years …… but it will all be worth it for the one Holiday a year to Benidorm…..and well they will link the airport to success of the 56th vape store in Doncaster centre to open, that wouldn’t have existed without the airport bringing in international tourists & business!!

These numbers for the losses will grow following the budget once wage demands etc grow and it’ll be interesting to see how public support may even swing when people are hit hard again with tax increases giving them much less in there pocket to spend on a week in Benidorm.

This will only end one way for CDC and there will be a lot of people with questions to answer in the coming years.

 

From the YEP:

Doncaster Sheffield Airport: cost of taxpayer-funded reopening increases to £193m​

And we all know how public infrastructure projects go in this country. You can probably double that again.

 

These numbers for the losses will grow following the budget once wage demands etc grow and it’ll be interesting to see how public support may even swing when people are hit hard again with tax increases giving them much less in there pocket to spend on a week in Benidorm.

This will only end one way for CDC and there will be a lot of people with questions to answer in the coming years.

Frankly, if ever there was a project that should be called in by government for a public inquiry, its this one. The risk of blowing huge sums of public money on a dead duck mk 2 airport are huge. Yet the government, in its desperation to be seen improving the economy, supports the project openly despite the numbers clearly not stacking up.

So, no public scrutiny now, no public sharing of the business case, and ultimately no chance of it ever making money. No doubt in the future, when its all fallen apart again, with huge losses, then there WILL be a public inquiry into what has been going on and with whom the responsibility lies. All a bit late then.

 

The document states a CAPEX requirement of £126m and in addition £81m losses in first 9 years - going to be a bit of a shortfall there against available cash me thinks?!!! In typical political fashion, the document fails to provide any calculation as to what elements will contribute to the predicted £230m profit and whilst it lists elements tested by Consultants - it does not say what figures/numbers were tested and what the results were. The statement that the project is affordable if it operates at the top end of predictions is fine but I was unable to find anywhere in there where it details what the top end targets are. Quite some time ago 2m pax were predicted (was that in 10 years or by 2050?) but that was 'bumped to 2.5m probably because 2m didn't come near to adding up! Council Officers also in 'critical' positions whereas you would imagine you would need aviation experts. Don't think MAI will take kindly to being pulled up by Faye from Accounts

Capital is not the same as CAPEX

 

Capital is not the same as CAPEX

As Im sure you know, CAPEX is short for Capital Expenditure, and refers to anything bought new, or procured to improve or maintain existing infrastructure or assets. So really, saying its different to Capital is splitting hairs as the amount of CAPEX refers to the amount of Capital earmarked for expenditure.

So in this case the expenditure is planned to be £126m which will cover everything from purchasing fire equipment and baggage scanners and refitting the terminal to repairing the runway, installing lights and radar. From my experience managing CAPEX budgets, whatever it says now, you can probably increase that. The longer they take, the more likely it is that costs will increase . They are going to have to get very clever tying suppliers down contractually to avoid cost increases due to inflation.

 

As Im sure you know, CAPEX is short for Capital Expenditure, and refers to anything bought new, or procured to improve or maintain existing infrastructure or assets. So really, saying its different to Capital is splitting hairs as the amount of CAPEX refers to the amount of Capital earmarked for expenditure.

So in this case the expenditure is planned to be £126m which will cover everything from purchasing fire equipment and baggage scanners and refitting the terminal to repairing the runway, installing lights and radar. From my experience managing CAPEX budgets, whatever it says now, you can probably increase that. The longer they take, the more likely it is that costs will increase . They are going to have to get very clever tying suppliers down contractually to avoid cost increases due to inflation.

Cue contractors arriving, sucking air through their teeth, and declaring "This is gonna cost you gov, I'm going to need to order parts from China..."

Given the amount of financial diligence CDC have displayed so far, potential contractors will have a field day. If you listen you can probably hear their squeals of delight!

 

From the YEP:

Doncaster Sheffield Airport: cost of taxpayer-funded reopening increases to £193m​

And we all know how public infrastructure projects go in this country. You can probably double that again.

Cue contractors arriving, sucking air through their teeth, and declaring "This is gonna cost you gov, I'm going to need to order parts from China..."

Given the amount of financial diligence CDC have displayed so far, potential contractors will have a field day. If you listen you can probably hear their squeals of delight!

The obvious political

Cue contractors arriving, sucking air through their teeth, and declaring "This is gonna cost you gov, I'm going to need to order parts from China..."

Given the amount of financial diligence CDC have displayed so far, potential contractors will have a field day. If you listen you can probably hear their squeals of delight!

Agreed - any supplier or potential airlines can see that the politicians are over a barrel on this and are in significant weak position commercially. They will be desperate to provide some positive news and as a result are hardly in a good position to negotiate, especially as DSA offers nothing new to the established competition…..

 

The obvious political

Agreed - any supplier or potential airlines can see that the politicians are over a barrel on this and are in significant weak position commercially. They will be desperate to provide some positive news and as a result are hardly in a good position to negotiate, especially as DSA offers nothing new to the established competition…..

Think immediately it’s the suppliers that might see a potential goldmine. The whole point of this meeting next week is to get sign off to push ahead but with the intention to keep costs low initially to ensure they don’t run out of money. Budget is clearly tight and they’re operating at the top end of the available funding already. I do wonder whether this UAE led consortium are aware of this and hence the tactical leak a couple of weeks ago that appears to have gone unanswered so far. Maybe a disconnect between SYMCA and CDC? Certainly the podcast that was ‘scuppered by technical issues’ last week between the mechanic and Coppard was apparently to discuss the possibility of supplementary private sector investment.

Wonder whether this private sector investor has piqued the interest of the councillors who will be tasked with voting this through. The Chair of the Councils Audit Committee has already gone on record as saying that the business plan doesn’t make sense, even on first glance.. The ‘consortium’ circling like vultures?

 

Think immediately it’s the suppliers that might see a potential goldmine. The whole point of this meeting next week is to get sign off to push ahead but with the intention to keep costs low initially to ensure they don’t run out of money. Budget is clearly tight and they’re operating at the top end of the available funding already. I do wonder whether this UAE led consortium are aware of this and hence the tactical leak a couple of weeks ago that appears to have gone unanswered so far. Maybe a disconnect between SYMCA and CDC? Certainly the podcast that was ‘scuppered by technical issues’ last week between the mechanic and Coppard was apparently to discuss the possibility of supplementary private sector investment.

Wonder whether this private sector investor has piqued the interest of the councillors who will be tasked with voting this through. The Chair of the Councils Audit Committee has already gone on record as saying that the business plan doesn’t make sense, even on first glance.. The ‘consortium’ circling like vultures?

This is of course is assuming there is a credible offer. If it was me being asked to put my political head on the block to vote this through I would certainly be asking questions about the availability of any external funding to offset the commercial and political risk……Given this consortium has supposedly been around since the closure why did the SAU report state no credible offers had been received and all private investors had walked citing “significant commercial risk”.

Just doesn’t seem to stack up…..

 

This is of course is assuming there is a credible offer. If it was me being asked to put my political head on the block to vote this through I would certainly be asking questions about the availability of any external funding to offset the commercial and political risk……Given this consortium has supposedly been around since the closure why did the SAU report state no credible offers had been received and all private investors had walked citing “significant commercial risk”.

Just doesn’t seem to stack up…..

None of it does really, and their reluctance to release the business case with redactions is troubling too.

The ACP does have some interesting snippets, including a power point presentation with the forecasts they’re working with, subject to periodic review;

https://airspacechange.caa.co.uk/documents/download/7984

They claim that the growth trajectory of pre closure will simply continue, but the counter factual hasn’t been considered, that is the growth that they claim the airport was witnessing was illusory, they lost FlyBe (end 2019) and lost the 2022 growth source (Wizzair base). It’s irritatingly simple yet the choice to ignore this is going to be fatal to the project.

Let’s not delude ourselves though, like the big pre-planned show in September, it’s already been agreed and this is just a display of procedure.

 

Lets review a few things that have happened over the last month.

At the SYMCA Board meeting held at DSA
160 million pounds of gainshare funds was approved for use to #saveDSA by the SYMCA Board.

This decision was based on 2 years work by doncaster council and its consultants, approval from the subsidies committee with some work needed to be addressed, and by consultants employed by SYMCA in 2024, after all this the full business case was submitted to SYMCA last year, the full business case was accepted by SYMCA however they felt the need for more due diligence and scrutiny carried out by consultants they employed and their advisors.

Here we are now 160 million pound of funding approved. Its an annual payment over the next circa 25 years.
Fly Doncaster are moving forward with appointing senior team members at DSA (Heads of Departments)

We have a number of things happening soon, a council cabinet meeting and a subsequent full council meeting , to agree on the next stage of funding.

160 million pounds from Symca is an annual payment over the next circa 25 years, so the council need to borrow some funds to cover the opening investment to reopen the airport with payments guaranteed by symca’s annual payments from the gainshare funds.

We also have a yorkshire post article announcing that there are investors wanting to invest in DSA.

My understanding is there are a number of possible investors wanting to get involved with our airport.
The ones who approached the yorkshire post have been involved since november 2022 Trying to buy the airport from PEEL originally,
They also entered the procurement process in 2023/4 and are still here now.
Wanting to still invest and they fully support the reopening of DSA.

Lets face the facts here.
This consortium has been here for 3 years, they want to invest in DSA, they have plans to grow and expand DSA, its all great news.
If we have investors wanting a piece of the action there must be some profit involved

Some great positives must be taken from this.

The #saveDSA Project and the #southyorksairportcity Project must be an attractive investment and therefore outsiders must see the full potential we all believe a reopened DSA has.

Who would want to invest otherwise !!

Private investors are interested in our reopened airport.

So basically we have approval of the plans to reopen our airport, we have the gainshare funds approved.
Doncaster council needs to approve the application for a loan to cover the opening costs this repayment will be guaranteed by SYMCA from the gainshare annual payments
There’s investors wanting to be involved , who have the necessary support and the funds to contribute and to #saveDSA
What an opportunity we now have !!

From a closing airport in nov 2022, various political issues
A change of government, new MPs, a change in council with new councillors and a different majority.

Mayor Ros still in full support of a reopened DSA,

Grant Aston Leader of the reform Party on record in support of a reopened airport along with his party.

With all of the above isn’t it just a waiting game now !!!

#saveDSA #saveDSAairspace.

Thought I’d post the mechanics latest troop rally in full. No link as social media.

If this consortium is credible the questions must be asked then why, if they’ve been involved for 3 years, the council chose not to select them as part of their procurement exercise, and why the council require a loan of almost £60 million on top of the Gainshare to get the airport up and running?

 

This reads, to me, that SYCA is giving the airport £160 million each year for the next 25 years. I would imagine that it is £160 million over 25 years so just over £6 million a year - not a lot to reopen the airport.
Can someone confirm which interpretation is correct please?

 

This reads, to me, that SYCA is giving the airport £160 million each year for the next 25 years. I would imagine that it is £160 million over 25 years so just over £6 million a year - not a lot to reopen the airport.
Can someone confirm which interpretation is correct please?

The second one!!

This is of course is assuming there is a credible offer. If it was me being asked to put my political head on the block to vote this through I would certainly be asking questions about the availability of any external funding to offset the commercial and political risk……Given this consortium has supposedly been around since the closure why did the SAU report state no credible offers had been received and all private investors had walked citing “significant commercial risk”.

Just doesn’t seem to stack up…..

This seems to be the same UAE lot 'in discussions' at the start but failed to provide evidence of source of funds to Peel - I recall reading there was suspicion that it was Russian money being 'laundered'. Like you I feel that this does not add up as something legitimate. I could understand if they had purchased the site at least they would own the infrastructure that they were to invest in, but as this the site is stilled owned by Peel any building extensions etc. would still accrue to Peel (?)

Thought I’d post the mechanics latest troop rally in full. No link as social media.

If this consortium is credible the questions must be asked then why, if they’ve been involved for 3 years, the council chose not to select them as part of their procurement exercise, and why the council require a loan of almost £60 million on top of the Gainshare to get the airport up and running?

I don't know if anyone else read, but the article in the YEP reporting on the Mayor's statement that CDC anticipated a loss of £80+m drew many negative comments. Clearly this required mitigation and drew a statement from the Chamber of Commerce which basically said - open at any cost - as benefits will be enjoyed by the wider community. I'll wager that the Chamber - like just about everyone else - has not had sight of the Business Plan and are stumbling through the minefield with a bucket on its head. My personal view is that any benefit will accrue to the 'narrower' community of holiday makers assuming they get some flights. It would appear that Mr Fell, Mr C., Mayor Ms Jones are piddling in the same potty and there are bound to be more of these apparently co-ordinated releases to combat any waning of interest or negativity regarding projected losses.

 

This reads, to me, that SYCA is giving the airport £160 million each year for the next 25 years. I would imagine that it is £160 million over 25 years so just over £6 million a year - not a lot to reopen the airport.
Can someone confirm which interpretation is correct please?

They’re borrowing against Gainshare (the £125m figure), some of the £35m has come from other pots, but I think there is also money that’s been released over and above the headline figure. They’re also now applying for a loan for £57m to get the airport up and running. So it’s all based on public sector borrowing. Obviously with large scale projects like this the private sector would also borrow to fund, certain Peel will have done this along with the grant they received from the EU. However in this instance if I understand correctly, the loan will be made to FlyDoncaster Ltd by CDC and any shortfall as a result would need to be guaranteed by CDC. They are claiming that business rates from Gateway East will cover the cost, but it then begs the question, somewhere raking the line someone is going to miss out. If they are investing all the money into the airport what incentives do they then have access to to attract business to Gateway East? How will it be more competitive than EMA which is a Freeport and will probably qualify for public sector grants that simply won’t be available in this instance because it’s all tied up in getting the airport open and subsidising its losses?

Just madness.

The second one!!


This seems to be the same UAE lot 'in discussions' at the start but failed to provide evidence of source of funds to Peel - I recall reading there was suspicion that it was Russian money being 'laundered'. Like you I feel that this does not add up as something legitimate. I could understand if they had purchased the site at least they would own the infrastructure that they were to invest in, but as this the site is stilled owned by Peel any building extensions etc. would still accrue to Peel (?)


I don't know if anyone else read, but the article in the YEP reporting on the Mayor's statement that CDC anticipated a loss of £80+m drew many negative comments. Clearly this required mitigation and drew a statement from the Chamber of Commerce which basically said - open at any cost - as benefits will be enjoyed by the wider community. I'll wager that the Chamber - like just about everyone else - has not had sight of the Business Plan and are stumbling through the minefield with a bucket on its head. My personal view is that any benefit will accrue to the 'narrower' community of holiday makers assuming they get some flights. It would appear that Mr Fell, Mr C., Mayor Ms Jones are piddling in the same potty and there are bound to be more of these apparently co-ordinated releases to combat any waning of interest or negativity regarding projected losses.

Yes I’ve seen one from the train enthusiast who is on the SYMCA advisory board, today comparing DSA to Hong Kong airport. This is the sort of talk animating from the echo chamber.

Let’s face it, it’s happening, Ros Jones will force it through using her executive power even if the Reform councillors reject it on 27th November.

 

I get the feeling the politicians are somewhat rattled by the perceived increasing negative rhetoric which will only get worse each time the costs increase (which they almost certainly will) or the opening of the world's next major airport is delayed again. The fact they are regularly publicly justifying the costs yet continuing to deny the public sight of the business plan says a lot.