Doncaster Sheffield Airport: Leak reveals shock taxpayer payment and passenger number clauses in lease

An anonymous source has provided this newspaper with a copy of the 125-year lease between City of Doncaster Council and DSA site owner Peel, which was signed in March 2024 following what the local authority described as “over a year of detailed and complex negotiations”.

The deal was signed at a point when it was hoped a private operator could be secured to reopen the airport. However, after attempts to find a private investor failed the council is now pursuing a plan to reopen the airport via a council-owned company called FlyDoncaster.

While £160m of funding towards the plan was provisionally approved by South Yorkshire mayor Oliver Coppard and local council leaders in September as part of the South Yorkshire Mayoral Combined Authority (SYMCA) board, the money will not be released by SYMCA until key elements of the lease are renegotiated with Peel due to concerns about the financial risks of the current arrangements.

The leaked document reveals that in addition to paying £5m a year in base rent, a figure which becomes subject to inflation calculations from 2029, turnover rent is also potentially due to be paid.

It has been set at a figure of 20 per cent of gross turnover in excess of the annual base rent.

The document sets out 12 factors which should be counted towards gross turnover, including “all grants, subsidies and fees paid to the tenant by national or local government or any public authority in consideration of, or to defray, in whole or in part, the cost of supply of goods and services at, in, from or on the premises”. Income from airport operators, landing fees and parking fees are among the other areas included.

However, the lease states that gross turnover calculations apply to sums received by the council only. It said that if the council enters into a sub-letting arrangement with a third party operator to run the airport, the gross turnover clause would not apply to “any sums or other property-related income received by any operator, subtenants, licensees, or any other occupiers, franchisees or similar of the premises”.

The lease separately states that the council “shall not have any shareholding in any operator to which a lease or operating agreement might be granted and which operates an airport on the premises”. It currently has 100 per cent ownership of FlyDoncaster, the company which will operate the airport.

Doncaster Council did not respond directly to a specific question from The Yorkshire Post as to whether the gross turnover clause applies to public grants already approved towards reopening costs, with its general statement saying “we are not going to debate the contents of a confidential lease in the public domain as these matters are commercially confidential”.

The leaked document also reveals break clauses for passenger numbers have been set above what was previously achieved by DSA under private operation and higher than even the most optimistic estimates for the reopened airport.

The lease sets out dates of break clauses in the contract which can be triggered to end the lease by either the council or Peel if targets for passenger numbers and freight traffic are not hit.

The first clause in March 2031 sets minimum figures of at one million passengers a year and 13,000 tonnes of freight. The second break point in March 2036 puts the minimum required figures at 2.3 million passengers a year and at least 25,000 tonnes of freight. The latter numbers need to be maintained to prevent break clauses being triggered in March 2039 and every five years thereafter.

A previously published official forecast has said that under ‘high case’ estimates, passenger numbers are due to hit 1.1m in 2031 – slightly above the break clause trigger –but would only reach 1.9m by 2036; 400,000 below the break clause target for that year.

It forecast passenger numbers at just under 2.1m in 2039; again below the break clause number.

In the ‘base case’ scenario, passenger numbers are forecast at one million in 2031, 1.4m in 2036 and 1.6m in 2039.

When the airport was operated under private ownership by Peel, Companies House filings show in the years prior to Covid it was regularly handling around 1.2 million passengers per year, with 1.24 million the highest number recorded in the 2017/18 financial year.

A separate public report published in advance of the £160m funding decision in September said the high case numbers were the target for the project.

The report adds that advisors have suggested the high case targets are “achievable” if the airport runs on “best practice” principles.

But it also highlighted the risk of the break point being triggered in 2036 due to targets not being hit even under the most optimistic scenario. It said: “Accordingly, a risk could crystallise in 2036, with the landowner having the option of terminating the lease unilaterally rendering the MCA’s investment abortive.”

The report said at the time that Peel has committed “in principle” to reducing the 2036 targets to “achievable levels”.

Council bosses believe lease deal can be reached

Public sector bosses have previously expressed hopes they are on course for a ‘satisfactory’ renegotiation of the lease.

Doncaster Council wants to use its share of devolution funding controlled by the office of South Yorkshire mayor Oliver Coppard for the reopening project after being unable to secure a private investor.

In September 2025, SYMCA gave the green light for the release of funding – but set a condition that the lease needed to be renegotiated. It highlighted concerns around the passenger number and freight number break points, saying it had requested the council renegotiated the lease to mitigate that risk, along with others.

The September report said: “Significant progress has been made to address the risks identified in the lease between CDC and the landowner.

"Whilst additional work is required to mitigate these concerns in full, the positive and productive nature in which the landowner has worked with the MCA and CDC suggests that these issues can be concluded in a manner that is satisfactory for all parties.”

A report in November said intended changes to the lease include site management arrangements, providing a sublease to council-owned company FlyDoncaster and those that allow CDC to provide a sublease to FDL and “clarifying points in relation to turnover rent”. It said “the content for the Heads of Terms have been drafted and provided.”