Doncaster Sheffield Airport operator revealed - but £105m reopening decision due to be delayed until summer

Doncaster Council has set up a council-owned company called Fly Doncaster and wants to lend it £105m in a bid to reopen the airport by spring next year using its share of South Yorkshire devolution funding, which is overseen by Mayor Oliver Coppard. The low rate of lending equates to an effective public grant of £89.7m.

The council confirmed on Tuesday afternoon that Munich Airport International will operate the airport with Fly Doncaster.

But the South Yorkshire Mayoral Combined Authority board has now been told independent advice is needed as the scheme carries an "inherent and significant financial risk to the public sector".

It is proposed that up to £10m in funding is provided to the council to support essential costs connected to preparations for reopening the airport while independent advice is sought. A risk report has already been prepared for the mayoral board but has not been made public.

The Yorkshire Post reported on Saturday that there are concerns more public cash beyond the initial loans will be required following DSA making losses in every financial year of its operation between 2005 and 2022 under private ownership. Around £250m was spent on assets and covering losses over the period but the site never returned a profit.

The council has already taken a 125-year lease on the airport site from landowners Peel Group.

It is planned that the reopening of the airport would act as a catalyst for wider regeneration around the site involving new homes and employment land, with forecasts that 5,000 direct jobs could be created and a potential economic benefit of £9 for every £1 spent.

A previous SYMCA board meeting in November had been told that it was intended a final report on whether to go ahead would be presented to the board in January.

But a newly-published report to a board meeting next week said efforts are now being directed towards a decision being made in summer due to the need to seek “independent advice and assurance” about the project following a series of recent developments.

It said that since November, a now-completed procurement process had been unable to return an operator which could bring private investment with it. The intended operating model will instead see the council-owned Fly Doncaster work with Munich Airport International which will help establish operations and develop the business “over a multi-year period”.

A revised full business case has been submitted to the mayoral authority and will be considered at a future meeting.

Last week, Chancellor Rachel Reeves announced the Government would support the reopening of the airport, which the report to the authority board said now also needs to be taken into account.

It said: “Whilst the projected benefits are significant, there is inherent and equally significant financial risk to the public sector.

"An internally prepared risk report has noted that conditionality within the superior-headlease between the freeholder and CDC is a limiting factor in the ability to generate the long-term stability needed to attract private investment. This issue, coupled with the inherent commercial challenges in reestablishing a complex business and recapturing market-share, has led to a 100 per cent publicly funded proposal being brought forward.

"The significant risks alongside recent Government announcements mean that there is a requirement to now seek further independent advice and assurance on the project on behalf of residents of South Yorkshire.

"The Mayoral Combined Authority will require confidence that identified risks can be appropriately managed in both the short and longer-term. The proposal from Government to work with local partners provides a further opportunity to consider how risk mitigations can be affected.

"Managing the identified risks provides the best opportunity to create the conditions for private investment and longer-term success.”

Board members have been advised to back the option of ordering an independent assessment "to enable a more informed risk-based decision” on whether to give the scheme the green light.

The report said providing the full funding at this stage would use up all available devolution funding for Doncaster to 2050 “thereby limiting the ability to fund other investment priorities in the city”. It added: “Work undertaken to-date has highlighted the significant risks in the proposal.”

It also said refusing support now would mean “it is likely that the airport infrastructure would be lost” and also impact the wider regeneration plans.

Terms of reference for the independent assessment are yet to be confirmed.

The report said making funding available to the council in the meantime “will support the work required to make a long-term investment decision by summer 2025 and maintain the critical path of preparatory work”.