Last call for Doncaster Sheffield: the cause of the airport's closure

Airports have always faced difficulty achieving profitability, given the high operating costs of processes such as security, air traffic control, and infrastructure maintenance.

DSA isn’t the first regional airport to face such struggles and many have been bailed out using taxpayer money in the past. However, given DSA’s proximity to hubs such as Manchester Airport, the need to maintain it is called into question.

“The challenge for an airport like DSA is that it shares its catchment area with a number of airports including Manchester, Leeds Bradford, and East Midlands,” John Strickland, director of JLS Consulting, explains.

“This means that there is enormous choice for customers, making it difficult for DSA to establish a loyal customer base. This is reflected in passenger numbers which were short of what the airport may have aspired to.”

To attract passengers, airports must provide routes that are attractive to customers, but with so much competition in the area, here airlines hold all the cards.

“The need to compete on price on many routes influences revenues for airlines, meaning that they have sought to negotiate favourable commercial terms which have reduced commercial viability for the airport,” Strickland explains.

Peel Group has stated that it would continue to work closely with local authorities and agencies to minimise the impact on the 800 people that DSA directly employs. However, the resulting loss could be far greater.

In a statement published on Twitter following the announcement, Doncaster Mayor Ros Jones estimated that the decision could impact the future of 2,700 employees, residents and businesses within the local area and beyond.

In recent years, Doncaster has established itself as one of the UK’s major distribution hubs, attracting investment from companies such as Amazon, which opened its third fulfilment centre in the area in 2017.

Likewise, it was also recently awarded city status as part of Queen Elizabeth’s diamond jubilee, which local officials hoped would boost Doncaster’s profile, attracting greater business and tourism to the area.

“Aviation connectivity can provide such regions with quick, convenient, and reliable access to national and international markets and enable them to exploit the opportunities created by globalisation,” Damian Devlin of the University of West London’s Department of Airline and Airport Management says.

“It stimulates FDI [direct foreign investment] and has become a major influencer of where businesses choose to locate; particularly those businesses from modern knowledge-intensive sectors that become crucial drivers of growth in de-industrialised economies.”

“Convenient and inexpensive air transport is equally important for tourism development, as it allows domestic short-break and inbound international tourists to travel to a region conveniently and cost-effectively. However, 50% of International tourists to the UK are to London and 80% of these do not travel beyond the capital city because of connectivity challenges.”

Undoubtedly, DSA’s closure poses a threat to the city’s growth, with many local businesses already fearing the worst. Speaking to the BBC, Craig Dowie, managing director of the nearby Crown Hotel, said that the closure would be a “massive blow” to the accommodation side of the business, of which 35% of bookings accommodate aviation workers such as pilots and cabin crew.

Aerial view of Doncaster Sheffield Airport.

Many, such as GMB union senior organiser Les Dobbs, feel that Peel Group’s intention has always been to close the airport. However, it was Peel Group that invested in transforming the airport – previously a military airfield – to provide commercial services in 2005. Likewise, the group was seemingly receptive to the idea of selling DSA on prior to announcing its closure.

Airport Industry Review contacted Peel Group to learn more about its future plans for the site and how it intends to minimise the closure’s impact on local communities and businesses. However, representatives were unwilling to comment.

Peel Group has stated that it will work with local and national stakeholders to develop a “forward-thinking” strategy for the redevelopment of the DSA site. Located next to its £1.7bn GatewayEast development, it has committed to unlocking “vibrant, job-creating alternatives” that will fuel growth and prosperity in the area.

Pointing to its MediaCityUK development in Manchester, which now employs over 10,000 people, Peel Group says it can attract cutting-edge technology businesses to South Yorkshire with support from local stakeholders and the community.

These plans certainly fit with local initiatives such as Doncaster’s ‘Delivering Together’ strategy, which promises to embrace innovation to unlock new jobs in areas such as product design, artificial intelligence, automation, and the internet of things. However, with connectivity reduced, the area may now be less attractive to future investors.

“These sectors require competitive access to global markets, collaborators, resources, skills, and investors,” Devlin says.

“Those firms already located in Doncaster could indeed travel further to airports in Leeds, Humberside or Birmingham, for now. But this raises the question: why would new businesses, investors, and high-quality tourists – the drivers of future growth – look beyond cities that can offer direct access to a local airport?”

DSA isn’t alone in its struggles, with a number of the UK’s regional airports facing an uncertain future. Official passenger numbers for the likes of George Best Belfast City, Newquay, Norwich, Cardiff, Southampton, Exeter, and Humberside show that passenger numbers remain more than 50% below pre-pandemic figures.

Generating profit is difficult for smaller airports at the best of times. Now, with the cost of living soaring and businesses looking to cut back, the challenge to attract passengers and cover costs, let alone generate profit, is even greater.

“Each regional airport has its own characteristics making it difficult to draw comparison,” Strickland says.

“It is, however, fair to say that most smaller regional airports lose money, being unable to generate sufficient commercial revenues to cover high fixed costs. It becomes a question of political will to support the airport financially in view of wider economic benefits which it generates.”

Thankfully, politicians across local, regional and national government seemingly agree on the importance of regional airports to the people and areas they serve – as the recently published ‘Flightpath to the Future’ plan made clear – and have shown a willingness to use taxpayers’ funds to maintain them.

In September, the South Yorkshire Mayoral Combined Authority (SYMCA) and Doncaster Council proposed a grant to cover DSA’s operating losses until October 2023 while alternative solutions to its closure were considered.

This may offer hope of a lifeline to struggling regional airports across the UK, but little to those fighting to keep DSA open — With Peel Group having turned down the offer, which it says would “divert funds away from services on which communities throughout South Yorkshire rely”, its decision appears to be final.

Main image credit: LD Media UK / Shutterstock.com