Sheffield City Airport opened in 1997 following development by the Sheffield Development Corporation. With the winding up of the Development Corporation in 1997, the freehold to the airport land was transferred to the City Council, which entered into a lease with the developer on the same terms as the original Development Agreement. The lease required the developers to use reasonable endeavours to operate the airport as set out in the planning approval. If, at the end of a 10 year ‘reverter period’ it could be demonstrated that the operation of the airport was not financially viable, the freehold of the site could be transferred from the Council to the developer for the sum of £1. The development of the airport by the private sector could only be financed if this reversion clause was in place. Without the ability to use the land as security, the development of the airport would not have been fundable because of the high risks involved. This process was overseen and expressly approved at the time by the District Valuer and Department for the Environment.
Sheffield City Council has managed subsequent processes within the inherited context outlined in this paper – namely a contracted operator, insufficient runway length and limited period of protection. A Joint Liaison Committee, made up of representatives from the Council, the airport operator and Chamber of Commerce nominees, received audited accounts and heard proposals to develop the airport operation. This committee was originally set up by the Development Corporation in an advisory capacity and continued to operate in this role once the freehold had transferred to the Council. Operational and regulatory decisions have been conducted directly between the Council and operator.
By February 1998 Sheffield City Airport had attracted its first scheduled service, a KLM link to Amsterdam. The airport went on to attract services to 6 destinations in total, operated over time by 6 different airlines. The services experienced mixed success, with the Amsterdam route carrying the most traffic. In the light of a restructuring of the KLM UK operations the route no longer fitted within the airline’s strategic development plan and ceased in 1999. Brymon and British Regional Airlines were merged into British Airways CitiExpress. British Airways found that the limited runway length meant that not all aircraft were able to operate at full payload. On routes to Belfast and Dublin, this became a major issue because of the volumes of baggage being carried. British Airways route to London City struggled to attract north-bound traffic and was not viable.
Of the other airlines involved, Sabena is no longer operational and Aer Arann indicated that yields on the Dublin service were not strong. The service to London City Airport, which continued with a local operator after British Airways pulled out, proved unsustainable due to competition from GNER East Coast and Midland Mainline as local business travellers did not continue to support the service once quality rail services were reinstated. By the time the current operators acquired a share in Sheffield City Airport, only the British Airways Belfast and Aer Arann Dublin services remained.
It is against this backdrop that a Memorandum of Understanding was signed between Sheffield City Council and the airport operators in 2001 supporting the creation of a partnership between Tinsley Park Ltd and Peel Holdings to take forward the development of the airport. The agreement records that, although reasonable effort should continue to be made to attract new scheduled airlines to Sheffield City Airport, “the long term future for aviation services in South Yorkshire will be underpinned by the development of Finningley as a commercial airport.”
Whether or not millions have been offered to Peel (I would like to know the exact amount) it is their choice whether to accept the offer or not. Whether they do or don't should not, and will not, be the subject of any kind of enquiry. It is a commercial decision.
The two paragraphs in bold (from the "biased" independant report of 2005) show clearly why Peel ended up owning the site for £1. The £1 clause was in the development agreement from the outset, long before Peel's involvement. When Peel did get involved, they made it clear that their focus would be on DSA.
I suppose you could try and argue in court that Peel did not make reasonable efforts and so they breached their side of the MoU. Unless there was a line of airline CEOs prepared to come forward to say they would have operated from Sheffield between 2001 and 2007, this would be very easy for Peel to win the argument. The dismal record when it was open and the paucity of business services from HUY & DSA would only strengthen the Peel case.
So, where do you then with this enquiry? Beat up on a long defunct development agency for putting the £1 reverion clause in back in 1995. What will that achieve? Beat up on the council for selling to Peel ? Maybe. It would make the Peel / DSA haters feel better for a day or two, but it won't take the site out of Peel's ownership. Too late.