"Unfair competition": Leeds Bradford Airport boss hits out at plan to give Doncaster Sheffield Airport £90m public subsidy

Doncaster Council has created a new special purpose vehicle company called FlyDoncaster to manage the latter airport and intends to provide £105m in loans. The low rate of the loans equates to an effective grant to the new company of £89.7m.

A South Yorkshire Mayoral Combined Authority board report in November about the airport noted the public money to support the costs of reinstating and operating the airport could come from Gainshare funding – a £900m settlement from Government given to South Yorkshire mayor Oliver Coppard as part of devolution arrangements.

The council will then work alongside an unnamed private operator to run the site, with an intention of flights restarting in spring 2026.

But Vincent Hodder, chief executive of LBA, said: “Whilst we wholeheartedly support the sustainable growth of aviation in Yorkshire, we are concerned about the introduction of distortive public subsidies creating unfair competition.”

LBA’s concerns were highlighted this week in a report by the Government’s Subsidy Advice Unit on the council’s plans.

It noted that both LBA and the Regional & City Airport groups, which runs sites in locations including Norwich and Exeter, had questioned the “proportionality” of the subsidy.

The report said: “Leeds Bradford Airport submitted a report which said that achieving passenger volumes at or above previous levels seen by the airport would be difficult, and that the level of the proposed subsidy was unlikely to lead to a viable airport over the longer term.”

The report noted that LBA could potentially lose as much as 20.5 per cent of its air passenger traffic to a reopened DSA.

Mr Hodder said: “We submitted a comprehensive report to the CMA’s Subsidy Advice Unit. The report considers the distortive effects on competition such a use of public funds could have as well the viability and costs of reopening DSA considering its commercial failure in November 2022.

“We’re pleased that the CMA’s Subsidy Advice Unit has reflected our comments and concerns in its report. There are potentially less market-distorting investments to be made that could deliver the same or greater levels of benefits for the region.

“In order to facilitate future regional growth in industry and avoid anti-competitive and detrimental effects, it’s vital that the City of Doncaster Council takes action on the areas highlighted for improvement and engage with others to ensure sufficient safeguards are in place as to how public funds are used.”

While the council currently owns 100 per cent of FlyDoncaster, the SAU report notes that the idea of the authority running the airport itself has previously been ruled out due to a lack of “appropriate expertise and experience”.

It said the subsidy is required “to enable a sufficiently attractive internal rate of return to be achieved to a private investor”.

A further update about the project is expected to be given at a full council meeting in Doncaster today, with several councillors submitting questions about the airport issue and funding arrangements.

A City of Doncaster Council spokesperson said: "The submission of the proposed subsidy to the Government’s Subsidy Advice Unit to support the reopening of the former Doncaster Sheffield Airport is another key milestone reached. The overall tone of the report is a positive one and acknowledges that the council has considered options for reopening the airport in Spring 2026 and why public funding is an appropriate mechanism to consider.

“We recognise that there are some points raised in the SAU report for further consideration which will be responded to as part of our ongoing planning. This will be subject to further reports by the council in due course.

"We have established a limited company, FlyDoncaster which is wholly owned by the council, to manage the airport which will partner with an airport operator after we finalise the required contractual and legal matters. We will announce further details of this arrangement in the near future.”