Monday, September 26, 2022

News: Dead as a dodo? Owners to wind down services at region's airport


Doncaster Sheffield Airport's (DSA's) future looks to be flightless and extinct as the board of directors concludes a review of strategic options for South Yorkshire's airport.

The review follows lengthy deliberations by the Board of DSA which reluctantly concluded that aviation activity on the site may no longer be commercially viable.

A statement said that the review was complete and that "no tangible proposals have been received regarding the ownership of the airport or which address the fundamental lack of financial viability."

South Yorkshire's Mayor Oliver Coppard said that he was "devestated" and "angry" at the findings.

Peel said that the high fixed costs associated with running a safe, regulated airport, together with recent events materially reducing prospective future aviation income streams, mean that a break-even business plan cannot be identified for the foreseeable future.

As a result, DSA will begin winding down the provision of aviation services during the week commencing October 31 2022.

A statement from Peel said: "Since the July 2022 announcement of the Strategic Review, Peel has been actively engaging on a weekly basis with local and national political stakeholders, including proactively engaging with working group meetings, primarily led by officers at Doncaster Council, South Yorkshire Mayoral Combined Authority (SYMCA) and the Department for Transport (DfT). Throughout the consultation process up until today, Peel has also been in close contact with the airlines and other aviation users of the Airport. None of these discussions has delivered any tangible results that have changed the Board of DSA or Peel’s clear view that the Airport is and will remain unviable.

"Peel received a letter from the Mayor of South Yorkshire and Mayor of Doncaster on Thursday, 8 September, stating that they had completed an economic impact study of DSA which identified its economic benefit to the region but provided no solution to its lack of financial viability. Furthermore, they informed Peel that they had been approached by a group interested in purchasing or operating the airport. Peel has yet to receive a response to urgent requests for details on the consortium’s identity, nor have the terms of any proposal or evidence of the consortium’s financial standing or aviation expertise been provided.

"On Friday, 23 September, Peel received a further letter from SYMCA and Doncaster Council, which was supported by the Mayor of South Yorkshire and the Mayor of Doncaster, along with the Leaders of Barnsley and Rotherham, which included a proposal to provide public money to DSA to fund its operating losses until 31 October 2023. The grant was described as providing DSA with free cashflow to sustain losses that may occur over thirteen months while the Peel Group and South Yorkshire partners jointly explore the future potential of DSA and the GatewayEast site. In the absence of any actual proposals to address the lack of viability of DSA, even those at an early stage of development, or any identified potential acquirers or operators of DSA, Peel’s Board has concluded that it cannot responsibly accept public money for this highly uncertain process against the backdrop of an unviable, loss-making operating business."

Robert Hough, Chairman of Peel Airports Group, which includes Doncaster Sheffield Airport, said: “We recognise that this will come as a great disappointment to many. The intractable problem remains the fundamental and insufficient lack of current or prospective revenue streams, together with the airport’s high operating costs. Our employees have always been DSA’s greatest asset, and we are grateful to them all, past and present, for their dedication and diligence over the years. The immediate priority remains to continue engaging closely with them over the next few weeks.

“As such, DSA will now begin a formal process of consulting with team members. We will do everything we can to minimise the impact of these proposals and work closely with local authorities and agencies to support our employees through what we know will be an extremely difficult period. DSA has remained in contact with union representatives on site throughout and we are committed to ensuring they are updated through every step of this next phase.”

South Yorkshire's Mayor Oliver Coppard said: "I’m devastated by today’s announcement by Peel and angry about the impact it will have on our communities. Most importantly, there are hundreds of people across Doncaster and South Yorkshire who will now be frightened for their future.

"For years, we have been investing public money in and around DSA to support the airport, including providing emergency funding through the pandemic. Since the announcement by Peel that they were entering into a review of DSA, we have done everything we could to constructively and proactively find a path forward. We have identified market interest, brought potential investors to the table, and last week we offered them a deal to project the jobs and livelihoods of DSA staff, and to give Peel the time and space to negotiate with new investors.

"The fact that they chose to turn our offer down simply confirms what many of us suspected: that Peel was never serious about finding an alternative and safeguarding the future of DSA. It is still not too late for them to do the right thing; for them to reconsider their decision for the sake of those employees, businesses and communities directly impacted by this appalling decision. But ultimately if they cannot be stopped from taking this course of action then our focus will shift to supporting our communities through the next few difficult weeks and months.

"The only people who can now intervene to keep DSA operational are national Government. Liz Truss said she would protect the airport. Now is the moment to turn those words into action. We stand ready to work with the Government.

"Despite everything, I am proud of how our community has come together over the past few months in our efforts to protect the future of the airport. I remain steadfast in my commitment to an ambitious plan for Doncaster and South Yorkshire, and those impacted by Peel’s decision today will be at the forefront of my efforts."

Steven Underwood, Chief Executive, Peel Group, said: “We recognise that we are living in uncertain times, and we understand that our announcement will be difficult to hear for the Doncaster and wider South Yorkshire communities in which we have worked and invested for over two decades. However, as has been seen many times before in industries undergoing structural change, although change brings uncertainty it can also bring significant opportunity.

“As the Strategic Review concludes, we look forward to collaborating with our partners to create a vibrant, long-term vision for GatewayEast and the airport site. We will not accept any public sector grant to cover the costs of an airport that is not viable due to its lack of adequate forward revenues and high operating costs. Accepting funds from SYMCA may postpone the inevitable for another thirteen months, but it will divert funds away from services on which communities throughout South Yorkshire rely.

“Instead, we intend to continue working closely with local and national stakeholders to develop a forward-thinking strategy for the airport site, in conjunction with the £1.7 billion GatewayEast development next door, to help unlock vibrant, job-creating alternatives to ensure future growth and prosperity. We have the potential to attract cutting-edge, future-tech businesses to South Yorkshire, but only if we are able to collaborate with our local stakeholders and community in South Yorkshire.”

DSA website

Images: DSA


Anonymous,  September 26, 2022 at 5:47 PM  

Yet another nail in the coffin of the Government's spurious levelling up agenda

Anonymous,  September 27, 2022 at 10:48 AM  

Clearly Peel have earmarked this site for something else that's going to generate more income for the business.

I thought Nick Fletcher, the MP for Don Valley who has been campaigning to save it made some very interesting points on Look North last night. He said there were still a few options available: Possibilities include DMBC tabling a compulsory purchase, SYMCA purchasing the site in partnership with the Private Sector and urged Doncaster Council to refuse any change of use plans submitted from the site.

It appears from some industry sources in the aviation industry and the mayor of Doncaster that bids have been tabled to purchase the site, so it may not quite be the end of the saga just yet.

For what it's worth it will be a great loss to the region.

Anonymous,  September 27, 2022 at 9:58 PM  

Good,if it's not viable,shut it,don't throw my money at it!Far better things to spend public money on.Oh and as for redundancies,well there's literally thousands of vacancies locally!

Anonymous,  September 28, 2022 at 10:55 AM  

Maybe not within their desired skillset though! Plus, there are businesses that purposely located near to the airport for the benefits it provided. Maybe your outlook wouldn't be so negative if you were directly affected. Gutter comment!

Supported by:
More news...

  © Blogger template Newspaper III by 2008

Back to TOP