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...?

 

Ros Jones in Yorkshire Post interview saying "We are not going to commit to agreeing to a ten year lease until we meet all the requirements."

 

Ros Jones in Yorkshire Post interview saying "We are not going to commit to agreeing to a ten year lease until we meet all the requirements."

Ominous. I thought she was all about building momentum to instil confidence? Are Peel really likely to blink first? Do they really care in the grand scheme of things? They do need CDC and SYMCA on side for their Gateway East project to bear fruit, but I think they’ll run rings around CDC and may possibly want to see expressions of interest from airlines or this elusive freight partner that prove there is some genuine interest where there wasn’t before. Successful airport = increased land value. Failed airport = poor value and lethargic growth prospects.

 

Currently with how the industry is (and a war going on) I cannot see any airlines giving a sniff of commitment and investment. Airlines need to tread carefully and not make risks that will result in a loss of investment. Setting up a new base costs millions. 2028, hopefully things will calm down, but will the industry look a lot different to what it does today? Yes. Will there be even less airlines? Yes. Will any want to reduce their presence at major UK airports to risk DSA?…. I highly doubt it and if any do, need to have a word with their commercial teams. (Of course unless CDC cover all costs which would be even more comical). Poor Doncaster, already branded a sh*t hole is only going to get worse because of this.

 

there will be no legal challenge, other airports will look at the bristol / cardiff ruling.
and it was unanimous.
it was common practice for airports to provide up-front payments to airlines.

 

there will be no legal challenge, other airports will look at the bristol / cardiff ruling.
and it was unanimous.
it was common practice for airports to provide up-front payments to airlines.

Not remotely true. True to form though, It ‘was’ common practice was it? Shame they have no money to do this then, isn’t it.

 

In Yorkshire Post

2031 break clause removed.

2036 targets:
Passengers: 1 million
Cargo: 13,000 Tonnes

2041 targets:
Passengers: 1.4 million
Cargo: 41,000 Tonnes

2056 targets:
Passengers: 2.3 million
Cargo: 41,000 Tonnes

 

In Yorkshire Post

2031 break clause removed.

2036 targets:
Passengers: 1 million
Cargo: 13,000 Tonnes

2041 targets:
Passengers: 1.4 million
Cargo: 41,000 Tonnes

2056 targets:
Passengers: 2.3 million
Cargo: 41,000 Tonnes

But in the same article Ros Jones claims those targets would be easily exceeded anyway. Meanwhile Coppard has stipulated that the airport is only viable if it achieved eves 2.3mppa by Y19.

 

Not remotely true. True to form though, It ‘was’ common practice was it? Shame they have no money to do this then, isn’t it.

wrong again pug . read the report , and cardiff legal defence was just that

the Welsh government argued that it was common practice for airports to provide up-front payments to airlines.

In its ruling, published on Tuesday, the Competition Appeal Tribunal said: "Bristol's application for a declaration, a quashing order and a recovery order is dismissed."

"This judgment is unanimous."

In welcoming the decision, a Welsh government spokesperson said: "We welcome the Competition Appeal Tribunal ruling that our investment in Cardiff Airport is lawful and can continue on its current terms.

so its not remotely true. please do not make false statements , and mislead people

 

wrong again pug . read the report , and cardiff legal defence was just that

the Welsh government argued that it was common practice for airports to provide up-front payments to airlines.

In its ruling, published on Tuesday, the Competition Appeal Tribunal said: "Bristol's application for a declaration, a quashing order and a recovery order is dismissed."

"This judgment is unanimous."

In welcoming the decision, a Welsh government spokesperson said: "We welcome the Competition Appeal Tribunal ruling that our investment in Cardiff Airport is lawful and can continue on its current terms.

so its not remotely true. please do not make false statements , and mislead people

See the problem here, rabbithoof, is that you’ve unsurprisingly read the headline but not picked up on the nuance of the BRS vs CWL case. You see the reason it was unanimously waved off is because CWL is a going concern with access to credit. That is to say it’s an active airport, has continued to be an active airport and as such the subsidy rules that apply do not in the case of DSA. Even the SAU was far more damning of the DSA submission than they were of the case if CWL, as we now know the business case has changed yet again.

DSA has no grounds to argue market failure. Subtle difference. That is not to say that a hypothetical legal challenge would succeed against DSA, but it is a completely different kettle of fish as the baseline is 0.

Like I say it’s irrelevant anyway, FlyDoncaster do not and will not have access to sufficient funding to underwrite airline losses. It failed at CWL already and it failed at DSA. Far more likely that this will result in a damning public enquiry than it will ever get to the point where a legal challenge will be raised on the subsidy issue.

 

wrong again pug . read the report , and cardiff legal defence was just that

the Welsh government argued that it was common practice for airports to provide up-front payments to airlines.

In its ruling, published on Tuesday, the Competition Appeal Tribunal said: "Bristol's application for a declaration, a quashing order and a recovery order is dismissed."

"This judgment is unanimous."

In welcoming the decision, a Welsh government spokesperson said: "We welcome the Competition Appeal Tribunal ruling that our investment in Cardiff Airport is lawful and can continue on its current terms.

so its not remotely true. please do not make false statements , and not mislead people

It sets a precedent in one area only. It’s highly likely that if it distorts competition the ruling could easily go the other way. I imagine Leeds would have learnt from the ruling to understand their possible case and not make the same mistakes Bristol did.

Also where is this cash coming from? CDC? Gainshare? That cash doesn’t even cover the reopening! Do you understand how far £100m goes when fully underwriting a route?

Cardiff will have burnt through that cash easily within 5 years and then what? Back to square one when the airlines withdraw without the cash. Just as happened with Flybe at DSA

 

Also where is this cash coming from? CDC? Gainshare? That cash doesn’t even cover the reopening!

The financing does not pencil, unless there's something wrong with my pencil or they have some other sources of funding that they are keeping secret.

I understand the plan is to increase the number of staff to 200 by the end of the year. Let's take £45,000/year as a conservative average cost per head. That's £9m a year. Base rent is £3.3m rising to £5m a year. That's £12.3m rising to £14.3m every year.

Over the ten year budget period CDC are loaning FDL £128m. It's loaded up front and then reduces, nevertheless that averages £12.8m a year. £128m sounds like a large sum of money but in fact only just about pays the wages and covers the rent. £12.8m a year is the local swimming pool not an international airport!

The underlying assumption has to be that FDL will become wildly profitable immediately when passenger flights resume in 2028 and stay wildly profitable indefinitely.

A realistic time table for the ACP etc takes you to 2030 and it is very difficult to envisage airlines operating from the site before 2031-32.

So where does the huge profit required to keep the show on the road come from? Or where is the huge shortfall going to come from?

 

Ros Jones in Yorkshire Post interview saying "We are not going to commit to agreeing to a ten year lease until we meet all the requirements."

Confusing as they are still paying the rent. The current lease is being re-negotiated but the current agreement is not suspended?

wrong again pug . read the report , and cardiff legal defence was just that

the Welsh government argued that it was common practice for airports to provide up-front payments to airlines.

In its ruling, published on Tuesday, the Competition Appeal Tribunal said: "Bristol's application for a declaration, a quashing order and a recovery order is dismissed."

"This judgment is unanimous."

In welcoming the decision, a Welsh government spokesperson said: "We welcome the Competition Appeal Tribunal ruling that our investment in Cardiff Airport is lawful and can continue on its current terms.

so its not remotely true. please do not make false statements , and mislead people

The critical issue seemed to be that Cardiff was a 'going concern'. DSA is not quite the same. Nearby airports will no doubt decide whether it is worthwhile. Maybe they will, maybe they won't - we can speculate until the cows come home but it will not affect reality.

 

Confusing as they are still paying the rent. The current lease is being re-negotiated but the current agreement is not suspended?

She doesn't know what she's saying, I think she means the 5 year passenger threshold has been moved back to 2036, so they've got 10 years to hit 1 mppa.

The article is ridiculous. Jones says the forecasts are pessimistic and easy to beat. If they are so easy to beat, why did the council just spend months desperately renegotiating the 2036 passenger target down from 2.3 million to just 1 million?

Mind you, she's only recently conceded that passenger flights won't restart in spring 2026.

She talks out of her bottom.

 

The financing does not pencil, unless there's something wrong with my pencil or they have some other sources of funding that they are keeping secret.

I understand the plan is to increase the number of staff to 200 by the end of the year. Let's take £45,000/year as a conservative average cost per head. That's £9m a year. Base rent is £3.3m rising to £5m a year. That's £12.3m rising to £14.3m every year.

Over the ten year budget period CDC are loaning FDL £128m. It's loaded up front and then reduces, nevertheless that averages £12.8m a year. £128m sounds like a large sum of money but in fact only just about pays the wages and covers the rent. £12.8m a year is the local swimming pool not an international airport!

The underlying assumption has to be that FDL will become wildly profitable immediately when passenger flights resume in 2028 and stay wildly profitable indefinitely.

A realistic time table for the ACP etc takes you to 2030 and it is very difficult to envisage airlines operating from the site before 2031-32.

So where does the huge profit required to keep the show on the road come from? Or where is the huge shortfall going to come from?

I suspect this is precisely what Grant Thornton the Council auditors have 'red flagged' for the second time with quite severe criticism of the financial governance, the very high risk (in their opinion) and scathing criticism of the lack of aviation experience on the board together with no commercial experience in rolling out such a complex project. Surprisingly, there was no mention of this in the meeting the other day so if Cllr Charity - Chair of Scrutiny or whatever he is - chooses to ignore this then he and his colleagues become equally complicit together with the current 'cabal'. Not a position you would think they would want to place themselves in!

 

She doesn't know what she's saying, I think she means the 5 year passenger threshold has been moved back to 2036, so they've got 10 years to hit 1 mppa.

The article is ridiculous. Jones says the forecasts are pessimistic and easy to beat. If they are so easy to beat, why did the council just spend months desperately renegotiating the 2036 passenger target down from 2.3 million to just 1 million?

Mind you, she's only recently conceded that passenger flights won't restart in spring 2026.

She talks out of her bottom.

The Irony in her statements that this dilly dally has knocked confidence, she can barely string a coherent sentence together. I know the people doing the hard yards (Christian Foster excepted) will be far more articulate and capable of dealing with stakeholders, but Ros Jones is the face of the project and the financing of it. Shes been allowed out to make herself look silly again.

My suspicions are, given that SYMCA are leading the discussions with Peel, they have been correctly appraised by their chosen consultants of the true risk with regards modelling forecasts.

DSA could achieve over 2mppa relatively rapidly if it attracted two or three big named carriers with sufficient volume and scalability. Conversely it could not, or it could but as in the case of the previous incarnation it could lose an airline partner and have its passenger throughput slashed by 50% over night! Same can be said for their freight ambitions.

These are the real risks, and they do need to look at historical performance which is one reason Grant Thornton have flagged it as Red.

Talking of Grant Thornton, their evidence submitted to the CAT helped Cardiff win their case against Bristol. Their evidence that FlyDoncaster is high risk can be used by LBA against them. Again not to say that it would be successful, but it shows there are fundamental differences.