Disastrous airport site receives even more taxpayers' money

July 09, 2013 4:24 PM

The failed Sheffield City Airport is to be redeveloped with a £1.8 million taxpayer-funded loan. This comes despite current owners having being allowed to purchase the £18 million site for £1. The airport was opened in 1997 but did not attract anywhere near the expected passenger numbers – just 13,000 customers in 2002, the year in which scheduled flights ceased.

Executives branded the project as the 'London City Airport of South Yorkshire', with short haul customers who were said to be desperate for an airport serving Sheffield’s business sector. This convinced the Government to spend £18 million of taxpayers' money on the project. However in the post 9/11 aviation market, the airport was bypassed by the new low cost carriers due to a short runway. BA’s smaller craft, for which Sheffield's runway had been designed, were slowly being cut back to make savings in a troubled market.

Passenger numbers dwindled and revenues plummeted. The operating company, Peel Holdings, lost £1 million in 2001 alone. This lack of financial viability led to, as agreed in the operating contract, Peel being allowed to purchase the land for £1 in 2002.

Since April 2008, when its Civil Aviation Authority license was withdrawn and it was officially closed, there have been attempts to salvage parts of the mess by office conversions. However, as neither central government and Sheffield City Council no longer own the land, none of these new developments will reimburse taxpayers for the £18 million loss. Furthermore, proposals to tear up the runway and build a business park are due to receive a further £1.8 million out of taxpayers’ pockets.

Local opposition to the moves, as well as an anonymous bid to reopen the airport, have complicated the situation. But one thing is for certain: taxpayers have got a raw deal.

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