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...?

 

Oh good God...

"Utter twaddle": Richard Tice hits out at Labour over airport claim

Reform’s deputy leader Richard Tice has insisted a purchase of Doncaster Sheffield Airport “could be done quickly” with a combination of “political will and property nous”.

www.yorkshirepost.co.uk

Tice is giving a masterclass on how to snatch defeat from the jaws of victory!

Why does a mad CPO move make a clearly nonviable airport viable? Let me help you out, Richard: it doesn't.

Strip away the lease question entirely. Imagine Tice gets his way and a Reform government acquires the freehold by CPO at whatever cost, the council's lease is extinguished, the public sector now owns DSA outright with no Peel involvement at all. The site is debt-free, the rent obligation is gone, the turnover share is gone, the volume break clauses are gone. What changes commercially? Nothing. None of the fundamental problems are caused by Peel owning the freehold; they are caused by the fact that the underlying market for a regional commercial passenger airport at this location doesn't support one. You still need carriers willing to base aircraft there. You still need passengers willing to fly from Doncaster rather than Manchester or East Midlands or Leeds Bradford. You still need a freight market that isn't completely dominated by East Midlands just down the road.

The lease has dominated the political conversation because it's the proximate problem, the document everyone can point to, the thing whose specific clauses generate quotable controversy. Farage is right: it's a disaster. But it's not actually the reason DSA can't reopen viably. It's just the reason the council's specific reopening attempt won't work. Even if the lease problem were magically solved tomorrow - by CPO, by surrender, by mutual variation, by whatever mechanism... the airport still wouldn't be commercially viable. The lease is the symptom of the underlying problem, not the cause.

I feel very sorry for Jason Charity. He's done a fantastic job of taking this mad project apart forensically and diligently. But he's being undermined by Tice and Farage who just wade in and mouth off without doing their homework.

The reality is that like most of the public, these politicians know nothing about the aviation industry and how it works. They just think there's this long runway and therefore airlines will flock to fly there, despite past evidence to the contrary. Despite the fact the industry is once again facing uncertainty and despite the fact there are three significant snd established airports within 50 miles which will always offer more.

 

Did somebody say a CPO isn’t possible ? Can someone confirm?

It’s a real mess, only people I feel sorry for is 2excel. Remained loyal to DSA but surely getting frustrated with the chaos. I wonder there plan B is

 

Did somebody say a CPO isn’t possible ?

They said it'd be very difficult, very onerous and expensive and would probably fail. I'm pointing out that it wouldn't solve the real problem even if it worked.

The real problem is that Peel were right: the airport isn't viable.

This is why the entire conversation has had a slightly hallucinatory quality. Everyone is debating questions one level removed from the real problem. Should the council borrow £57m? Should the lease be renegotiated? Should the freehold be CPO'd? Should there be private investment? Should there be early surrender? These are all reasonable enough questions, but they're all secondary to the question nobody seems to be asking: is there actually a viable commercial airport at this site, on any reasonable financial structure, at any time in the foreseeable future? And the honest answer is: no. Certainly not as a passenger hub of the scale envisaged. Possibly as a niche specialist site - cargo, special missions, engineering, maintenance or whatever - but only at a scale that doesn't justify the full reopening cost or the operational infrastructure of a commercial passenger airport. There'll always be someone who can find a use for a runway and some hangars when someone else is paying for them!

 

They said it'd be very difficult, very onerous and expensive and would probably fail. I'm pointing out that it wouldn't solve the real problem even if it worked.

The real problem is that Peel were right: the airport isn't viable.

This is why the entire conversation has had a slightly hallucinatory quality. Everyone is debating questions one level removed from the real problem. Should the council borrow £57m? Should the lease be renegotiated? Should the freehold be CPO'd? Should there be private investment? Should there be early surrender? These are all reasonable enough questions, but they're all secondary to the question nobody seems to be asking: is there actually a viable commercial airport at this site, on any reasonable financial structure, at any time in the foreseeable future? And the honest answer is: no. Certainly not as a passenger hub of the scale envisaged. Possibly as a niche specialist site - cargo, special missions, engineering, maintenance or whatever - but only at a scale that doesn't justify the full reopening cost or the operational infrastructure of a commercial passenger airport. There'll always be someone who can find a use for a runway and some hangars when someone else is paying for them!

I think Peel would have all the information available and the legal backing to see to it that a CPO would not work. They closed an unviable business that was costing them around £10million per year to keep running. That alone would be enough to challenge.

Yes it’s frustrating when trying to appeal to the ‘will of the people’ that the true lack of viability is something that apparently must not be discussed. It sends out message that the airport will be a success which is far removed from the truth. Hence the narrative is as you say one level removed from the real problem.

The truth is really that they should never have been allowed to get to this point. They’ve been secretly hiding independent viability studies, releasing snippets of information to the public that doesn’t provide a true appraisal of the risk yet they’ll happily have a small mention about how high risk it is just to tick a box. It’s been playing to a wider cognitive dissonance amongst the population of Doncaster - ‘well it’s high risk but think of all the jobs’.. You still see it in articles like this where their financial advisors have said now is not the time to seek private investors as ‘the level of risk remains too high to secure private investment on preferential terms’. The council report apparently goes on to state ‘Advisers indicated that the optimal point would be at a later stage, once key risks have been mitigated and operations have commenced.’

"Utter twaddle": Richard Tice hits out at Labour over airport claim

Reform’s deputy leader Richard Tice has insisted a purchase of Doncaster Sheffield Airport “could be done quickly” with a combination of “political will and property nous”.

www.yorkshirepost.co.uk

But what is it based on? A growth forecast modelled on what exactly? Are we to assume that just having the airport open would make it attractive to the private sector? We know certain consultants like to use the best case figures for elsewhere in the world and apply them to the U.K. Have the council based their assumptions that DSA will see levels of growth and demand witnessed in the USA for instance? I’m sure I don’t need to explain why this is problematic.

Peel have set the bar high with the turnover rent specifically to deter the council from trying to run it themselves. Yet this is exactly what they’re trying to do. So how can the terms of the lease be problematic for the private sector if the terms are more favourable towards a private sector operator owning and running the business?

Now they’re between a rock and a hard place. The question is how much more money are they prepared to risk on this? Seems it’s going to bankrupt the council one way or another.

 

Chadwick's a union militant,outted by a man called Dom https://www.facebook.com/share/r/1CrN8hdkDb/