MANAGEMENT REPORT 2010

BRUSSELS SOUTH CHARLEROI AIRPORT S.A. ORDINARY GENERAL MEETING, 17/06/2011

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1/ The Board of Directors

BSCA’s Board of Directors is made up as follows:

Laurent LEVEQUE* Chairman

Valérie LEBURTON Vice Chairman

Jean-Jacques CLOQUET Managing Director

Leonardo BELLODI Director

Alain BELOT* Director

Carlos BOURGEOIS Director

Anne Sophie CHARLE* Director

Christophe CLERSY Director

Marc DENEVE* Director

Antonio DI SANTO* Director

*At its meeting of 18/06/10, the General Meeting ended the terms of the following Directors: Alain Belot,

Marc Denève, Antonio Di Santo, Jean-Pol Fontaine, Dominique Hausman, Jean-Marie Hoslet,

Christophe Jonlet, Laurent Lévêque, Pierre Rombaux, Philippe Suinen, Luc Vuylsteke. At its meeting of 18/06/10, the General Meeting appointed the following as category A Directors, for a

term that will end on 10/12/2014, with the exception of Pierre Rombaux, whose term will expire on

30/09/10: Laurent Lévêque, Valérie Leburton, Anne-Sophie Charle, Marc Denève, Antonio Di Santo,

Georges Dutry, Jean-Marie Hoslet, Anne Prignon, Pierre Rombaux, Philippe Suinen, Luc Vuylsteke. At its meeting of 24/06/10, the General Meeting appointed the following Directors as Independent

Directors: Dominique Hausman, Louis Marie Piron, Leonardo Bellodi.

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Georges DUTRY Director

Jean-Pol FONTAINE* Director

Dominique HAUSMAN* Director

Jean-Marie HOSLET* Director

Christophe JONLET* Director

Enrico MARCHI Director

Louis Marie PIRON Director

Anne PRIGNON Director

Pierre ROMBAUX* Director

Paolo SIMIONI Director

Philippe SUINEN* Director

Luc VUYLSTEKE* Director

At its meeting of 18/06/10, the General Meeting appointed Christophe Jonlet as a category C

Director, for a term that will end on 10/12/2014. At its meeting of 27/01/11 the General Meeting appointed Christophe Clersy and Jean-Jacques

Cloquet as directors until 10th December 2014, the second of whom has been given the task of the

day-to-day management of the company, as well as the role of company representative by the

Board of Directors after making its decision on 22nd December 2010.

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2/ Shareholders

Since the Extraordinary General Meeting of 10th December 2009

SHAREHOLDERS NUMBER OF SHARES OWNED

Category A

REGION WALLONNE

loco SOGEPA

3,450

SOWAER 2,815

SAMBRINVEST S.A. 2,390

IGRETEC S.C. 289

Category B

SABCA S.A. 83

Category C

BELGIAN AIRPORT s.a 3450

Number of registered shares 12,477

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3/ Observations on events in 2010

3.1 Major events in 2010

3.1.1 Launch of the North Taxiway on 8th July 2010

The North Taxiway was launched on 8th July 2010. This major

infrastructure is a vital improvement in terms of traffic control, as

it means that planes no longer have to cross the main runway.

3.1.2 Long-term car park

Completion and opening of a new car park with 1,500 spaces in

May 2010.

3.1.3 Jean-Jacques Cloquet appointed as Managing Director

On 10th December 2010, the Board of Directors elected Mr Jean-

Jacques Cloquet as Managing Director, giving him the task of

managing the company on a day-to-day basis.

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3.2 Aviation activities

Sales income from airlines (refuelling, excess baggage, ticket sales etc.)

is €4,965, equivalent to €1.90/departing passenger.

Despite a large number of cancellations and diversions this year

following the volcanic eruption, strikes in France, Belgium and Spain,

and terrible weather conditions in December, 2010 saw a 32% increase

in passenger numbers compared to 2009 and the launch of 23 new

connections. Ryanair, Jetairfly and Wizzair continued to grow by

intensifying their presence at Brussels South Charleroi Airport.

In terms of airline companies, we have seen a general rise in the

number of passengers compared to 2009: +32% for Ryanair, +7% for

Wizz Air, +71% for Jetairfly and + 61% for Jet4you.

A total of 182 ad hoc flights were recorded in 2010, broken down as

follows:

- 162 positioning flights,

- 1 extra departure following a technical problem after takeoff (bird

strike),

- 19 ad hoc flights operated by Nouvelair Tunisie, Danube Wings, Adria

Airways, Jetairfly for TV Limburg, TNT & Strategic Airlines.

In 2010, Ryanair introduced 14 new destinations and also changed

flight frequencies, mainly by increasing them. The new destinations

were: Barcelona BCN, Bari, Fuerteventura, Gothenburg, Ibiza, Kaunas,

Krakow, Lappeenranta, Larnaca, Nador, Oujda, Seville, Verona and

Zadar.

Flyonair restarted flights to Pescara and Sicily during the summer of

2010.

Jetairfly launched 9 new destinations, namely Al Hoceima, Algiers,

Antalya, Fez, Heraklion, Istanbul, Rhodes, Tangiers and Toulon. Flights to

Antalya were operated by Freebird Airlines on behalf of Jetair.

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Air Arabia decided to transfer its flights to BRU from November 2010

because of competition for Moroccan destinations with Ryanair,

Jetairfly and Jet4you, the fact that cargo operations are not possible at

our airport, the absence of a VIP lounge and the constantly falling

prices at BRU.

In terms of passenger load factors for airline companies, the following

changes were observed:

Passenger load factor Jan. - Dec.

2009

Jan. - Dec. 2010 Change Y-1

All airlines 79.98% 77.73% -3%

Ryanair 80.50% 77.08% -4%

Wizzair 78.40% 79.07% 1%

Jetairfly 84.12% 86.83% 3%

Jet4you 77.65% 77.76% 0%

Air Arabia 55.39% 69.59% 26%

FlyOnair 60.72% 59.80% -2%

Freebird Airlines - 86.04% -

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In terms of airline companies’ market share, the following changes

were observed:

2005

2006

2007

2008

2009

2010

Number of

passengers

1,873,651

2,166,915

2,458,980

2,957,026

3,937,187

5,195,372

Total number

of movements

61,212

66,480

70,725

79,487

81,726

80,009

Market share Jan. - Dec. 2009 Jan. - Dec. 2010

Ryanair 82.54% 82.73%

Wizzair 9.66% 7.86%

Jetairfly 4.59% 5.96%

Jet4you 1.67% 2.04%

Air Arabia 0.89% 0.60%

Freebird Airlines 0.00% 0.37%

FlyOnair 0.20% 0.09%

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3.3 Marketing and Communication activities

Marketing and communication activities targeted 3 different sectors:

tourism, aviation (airline companies) and the general public. In most

cases, the activities organised make use of marketing and

communication.

3.3.1 Marketing & Communication

As far as the aviation sector is concerned, collaboration with

airline companies present on the airport site has been very

proactive. Every 6 months, a marketing plan and a

communication plan are presented to them and approved.

For the general public, the purpose of the 15 campaigns

collaborated on by both the marketing and communication

departments was to improve the airport’s reputation and

promote the lines that need support. Examples of activities

include: a flash mob on Valentine’s Day, the ad hoc flight

organised for TV Limburg, and a number of radio partnerships.

3.3.2. Marketing

In 2010, promotion of the airport and its services within the

tourism industry (travel agencies, tour operators, tourist

information offices) was intensified and customised, with, among

other things, the introduction of a monthly newsletter,

involvement in B2C events and the organisation of a fam trip.

3.3.3. Communication

In terms of internal communication, the department is

responsible for producing the internal magazine (“Entre Nous”),

which comes out once every 3 months. Every day, they look at

the media coverage of BSCA, its partners and issues connected

to the airport, with a view to carrying out a press review.

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When it comes to external communication, there are two main

target audiences (apart from airline companies): the press and

the general public (travellers or potential travellers).

In 2010, the airport organised 6 press conferences to present the

development of its airline companies, the new services available

at the airport, as well as events put on within the terminal. 33

press releases were sent out. Several press trips were organised in

collaboration with tourist offices and airline companies to

promote new destinations or those needing support.

Communication targeting the general public uses a number of

different channels. First of all there is “Gate” magazine, which

the airport gives out to passengers in the terminal free of charge.

Its purpose is to promote routes in need of help, and to

encourage passengers to want to go there. Another goal is to

promote the services available at the airport and become a

money maker.

In order to promote the lines that need support, a promotional

campaign was created and rolled out through the terminal. 29

signs were put up in the airside zone, in baggage reclaim and

near the ticket offices. To launch the summer season, Vivacité

and Radio Contact broadcast their morning shows from the

airport’s airside zone. This helped us promote BSCA, its services

and its destinations (interviews with different departments on the

airport site), as well as the Charleroi region in general, Wallonia

and Belgium.

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3.4 Commercial concessions

Our non-aviation commercial income rose by 42% compared to 2009.

This figure is double the amount seen in 2008.

We have a range of car parks that are easy to use and accessible, with

carefully fixed prices; a car park with 1,470 spaces was built to offer

different options for all budgets.

On a number of occasions, during very busy periods, the Economy car

park, which is a bit further away, was used and will soon be redesigned

to cater for long-term customers.

This year, the shuttle bus to Brussels was renamed, the “Brussels City

Shuttle”, and increased its frequency (to once every thirty minutes) to

the main Brussels-Midi station. To avoid passengers having to queue, a

booking service has been launched via the website, and ticket

machines are located outside the terminal.

A shuttle service between Brussels South Charleroi Airport and the

Luxembourg region has been introduced. It has been such a success

that the frequency has been increased to 15 shuttle buses a day, so 30

return trips every day, between Charleroi airport and Arlon,

Luxembourg centre (3 stops), Thionville and Metz.

In the public part of the terminal and in the boarding area, the

restaurant and bars offer a broad range of dishes and sandwiches to

eat before flights.

A petrol station, carwash, 5 car hire companies, a travel agency, a

bookshop, a sweetshop, a duty free shop, a florist and a toyshop

complete our range of concessions.

As part of the services we offer our passengers, we have increased the

Internet points (terminals and areas), and we have launched services

such as the fast lane and the corporate card.

The airport has grown and developed its welcome desk. This service is

available for passengers as an information and reception point and to

market our products in the BSCA colours.

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During April 2010, BSCA carried out a survey among its passengers with

a view to assessing how satisfied they are with the quality of services

available. The infrastructure, the airport staff and security checks are

the main areas with which passengers her happy. Areas where the

most passengers are unhappy are the commercial outlets and the

accessibility of the airport.

There were a number of “mystery shoppers” who visited the HoReCa

outlets: what was offered to customers, the quantity and quality of the

dishes available and the visibility of menus and prices were given high

scores, as did the staff.

BSCA plans to repeat these kinds of surveys in the future in order to

continue to improve the service that we offer our passengers.

Revenue from the different concessions represent a total income of

€21,608,095 for the airport, equivalent to €8.30 per departing passenger.

The largest profits are generated by the car parks, the shuttle service to

Brussels, HoReCa and the Duty Free shop.

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3.5 Human resources

In 2010, the number of employees at BSCA rose by 30 people between

1st January 2010 and 31st December 2010.

This represents a total of 414.40 full-time equivalents as of 31st

December 2010.

Staff

number

Staff

number

Staff

number

Staff

number

Staff

number

Staff

number

Staff

number

Staff

number

Staff

number

Staff

number

Staff

number

Staff

number

FTE FTE FTE FTE FTE FTE FTE FTE FTE FTE FTE FTE

Jan Feb Mar Apr. May Jun Jul Aug Sep Oct Nov Dec

TOTAL 372.85 362.99 365.20 389.11 386.99 386.31 392.25 412.53 403.68 399.17 392.38 414.40

FTE Clerical 202.65 197.54 198.75 206.06 206.65 208.76 210.7 230.96 222.61 221.42 213.1 229.60

FTE Manual 170.20 165.45 166.45 183.05 180.34 177.55 181.55 181.57 181.07 177.75 179.28 184.80

TOTAL 372.85 362.99 365.20 389.11 386.99 386.31 392.25 412.53 403.68 399.17 392.38 414.40

The majority of these jobs are based on permanent contracts.

0

50

100

150

200

250

300

350

400

450

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

372,85 362,99 365,20 389,11 386,99 386,31 392,25 412,53 403,68 399,17 392,38 397,64

Staff numbers 2010

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BSCA currently has more clerical staff than manual labourers (55%

clerical compared to 45% manual).

The male/female division is as follows: 28% women compared to 72%

men.

BSCA has a youthful population; our average age is 33.

We have introduced a new procedure for workplace accidents, which

is proving useful.

3.5.1. Training

BSCA attaches particular importance to training. This involves

operational training on the one hand and training focusing more

on behaviour on the other.

In 2010, 1,079 days of training were provided.

3.6 Management of environment measures by the

SOWAER

Spurred on by the Walloon Government’s determination as well as by

the legal stability acquired in 2005, the Société Wallonne des Aéroports

(Walloon Airport Authority, SOWAER) has continued and improved its

handling of communication from local residents within the context of

managing environmental measures in the areas around Wallonia’s two

airports.

Lastly, the ongoing monitoring of sound levels, compliance with noise

reduction procedures and information for local residents remain the

main ongoing actions of the Sowaer.

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Management of environmental measures

3.6.1 Acquisition of buildings in zones A’ and B’ of the P.E.B. (Plan

d’exposition au bruit, noise exposure plan) and soundproofing in

zones A’ to D’

Within the context of an agreement with the Walloon Region,

buildings and land in zones A’ and B’ of the Charleroi airport

P.E.B. were purchased by IGRETEC on the SOWAER’s behalf.

On 31/12/2010, 158 buildings had been bought, and 2,050

buildings had been soundproofed.

The following statistics have been provided by the SOWAER:

PEB zones A’ B’ C’ D’ Total

Charleroi – completed

- soundproofing

- purchases

4

74

101

84

510

0

1,435

0

2,050

158

Charleroi – underway

- soundproofing

- purchases

10

38

38

63

200

0

805

0

1,053

101

3.6.2 Relocation allowances for tenants of buildings in zones A’ and B’

of Charleroi.

On 31st December 2010, 25 relocation allowances had been

paid to tenants who had moved from zones A’ and B’.

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3.6.3 Compensation for commercial difficulties in zones A’ and B’ of

the P.E.B.

On 31st December 2010, 6 payments had been paid to people

who had been working in zone A’ or B’ and who had moved or

stopped this work.

3.7 Board of Directors, Management Committee,

Nomination and remuneration Committee and

Strategic Committee

At its meeting of 24/06/10, the Board of Directors unanimously decided

to appoint Laurent Lévêque as a member and Chairman of the

statutory boards and committees. It also appointed Valérie Leburton as

a member and Vice Chairman of the statutory boards and

committees.

Management Committee

The Board of Directors unanimously decided to appoint the following

members:

Laurent Lévêque, Chairman

Valérie Leburton, Vice Chairman

Paolo Simioni, Director

Nomination and Remuneration Committee

The Board of Directors unanimously decided to appoint the following

members:

Laurent Lévêque, Chairman

Valérie Leburton, Vice Chairman

Monsieur Carlos Bourgeois, Director

Enrico Marchi, Director

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On 25/11/2010, Enrico Marchi resigned from the Nomination and

remuneration Committee and was replaced by Paolo Simioni, Director

Strategic Committee

The Board of Directors unanimously decided to appoint the following

members:

Laurent Lévêque, Chairman

Paolo Simioni, Director

Christophe Jonlet, Director

Jean-Jacques Cloquet, Managing Director

Jean-Jacques Cloquet became a member of the Strategic Committee

when he was elected by the Board of Directors on 10/12/2010.

The Board of Directors unanimously decided that Pierre Rombaux

would be invited to join the Board of Directors because of his role as

representative of BSCA Security to BSCA.

The General Meeting appointed the following as Independent

Directors:

Dominique Hausman

Louis Marie Piron

Léonardo Bellodi

At its meeting of 27/01/11, the General Meeting unanimously

appointed Christophe Clersy and Jean-Jacques Cloquet as Directors

until 10th December 2014, the second of whom has been given the task

of the day-to-day management of the company.

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4/ Observations on the annual accounts

All the amounts mentioned in this paragraph are in THOUSANDS OF EUROS,

unless indicated otherwise.

4.1 Profit and loss

4.1.1. Sales and Services

Sales in 2010 were clearly directly affected by the rise in the

number of passengers recorded during the year (+37% rise in

turnover for +32% in terms of passengers).

The main sources of this rise are the profits from handling

activities (+30%), income from commercial concessions (+42%)

and the income we receive from airline companies, mainly for

ticketing, refuelling and excess baggage (+45.7%).

The total for sales and services was EUR 81,387 for 2010

compared to EUR 67,533 in 2009, so an increase of 20.5%.

4.1.2. Cost of sales and services

The entry for “Miscellaneous goods and services” rose to EUR

39.349 compared to EUR 37,444 in 2009. This is the result of the rise

in costs directly linked to the number of passengers, as well as

the running costs for BSCA Security, which represent EUR 13,745

compared to EUR 13,523 for 2009.

In order to deal with the increase in passenger numbers,

additional staff were taken on. This led to an increase in staff

costs of 14.4%, rising to EUR 21,459 compared to EUR 18,754 in

2009.

Capital allowance was EUR 2,149 for 2010 compared to EUR

1,780 in 2009. This increase can essentially be explained by the

capital allowance for the low-cost car park, which was the first

major investment by BSCA from its Equity.

The total for the “Cost of sales and services” was EUR 66,162

compared to EUR 60,474 in 2009.

4.1.3. Financial income

Financial income fell (- 27.2%), which was mainly a result of the

significant reduction interest rates in 2010.

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4.1.4. Pre-tax profit

The pre-tax profit was EUR 14,952 compared to a profit of EUR

6,860 in 2009. Taxes on profit were EUR 4,958.

4.1.5. Profit to be allocated

The profit from this period to be allocated was EUR 9,994

compared to a profit of EUR 4,445 in 2009. The Board of Directors

recommends that the General Meeting distribute a dividend of

EUR 2.079. This is made up of a preferred dividend for Belgian

Airport of EUR 1,799 and an ordinary dividend for the other

shareholders of EUR 280. The profit to be carried forward was EUR

20,109.

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4.2 Balance sheets

4.2.1. Assets

Fixed assets increased, rising from EUR 19,064 in 2009 to EUR

22,324 in 2010. This increase can be explained by the acquisition

of new handling equipment and by accounting for the new low-

cost car park.

Accounts receivables rose from EUR 8,044 to EUR 11,576,

following the increase in our sales and services.

Short-term investments and cash assets also rose, increasing from

EUR 18,499 in 2009 to EUR 23,143 in 2010.

4.2.2. Liabilities

Equity rose to EUR 28,618 instead of EUR 20,703 in 2009.

Debts more than one year old mainly represent the long-term

share in the funding for the oil tank infrastructure.

Trade debts fell from EUR 14,813 to EUR 13,744.

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5/ IMPORTANT EVENTS AFTER THE END OF THE YEAR, AND

CIRCUMSTANCES THAT MIGHT HAVE A SIGNIFICANT INFLUENCE ON

THE COMPANY’S DEVELOPMENT

5.1. Development of aviation activities

After a relative drop in activities traditionally seen over the winter, BSCA

is preparing for a summer that should once again break all records, with

the presence of 19 planes based at the airport (16 Ryanair and 3

Jetairfly) from01/04/2011.

5.2. Addition of 4 additional departure gates

To deal with this, work began on the construction of four additional

departure lounges in January 2011, decided on in 2010. The lounges

should be ready for use in July-August 2011.

5.3. Master Plan

To support development, BSCA released an invitation to tender with a

view to preparing a Master Plan. The purpose of this is to plan out the

site’s growth over the next 20 years, starting in 2011.

5.4. 20th birthday

During 2011, BSCA will celebrate its 20th birthday. A number of events

have been planned throughout the year. The keywords for the

celebrations will be “Inclusivity and Solidarity”.

5.5. Implementation of the Strategic Committee

On 24/03/2011 the strategic committee was held for the first time to

give its opinions in order to provide the Board of Directors with more

information to help it make its decisions.

5.6. Resignation of a director

In a letter dated 10/05/2011, Mr Marchi resigned from his role as a

Director of BSCA.

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5.7. Brainwin dispute

On 18/04/2011, Brainwin started proceedings against BSCA as part of

the dispute between them (see pt. 9.5).

6/ Research and development

N/A.

7/ Indications relating to the existence of a subsidiary

N/A.

8/ Financial instruments

BSCA does not use financial instruments.

9/

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9/ Description of the main risks and uncertainties

9.1. Risks connected to the appeal against permits

On 1st February 2005, the City of Charleroi granted the SOWAER an

environmental permit.

On 14th February 2005, the planning officer and technical officer

granted the single permit for the first investment phase for Charleroi

airport.

Having exhausted all internal appeal processes, the residents’

association filed appeals to suspend and annul these with the Council

of State. The appeals to suspend the permits were rejected by the

Council of State on 17th January 2006. The appeals to cancel them

were still underway on 31st December 20112010.

9.2. Risks connected to residents’ civil appeals

A number of residents brought proceedings against BSCA and the

Walloon Region in November 2003, to demand compensation for

damages for faults allegedly committed by BSCA and the Walloon

Region, who they claim, in substance, authorised flights producing

sound levels over and above the authorised limits, as well as flights that

breached the provisions of the decree of 23rd June 1994 relating to

airport opening times.

In the ruling of the Charleroi Tribunal de Première Instance on 30th

March 2004, movements contrary to article 1b of the decree of 23rd

June 1994 were prohibited, with penalties, and a legal assessment was

ordered to determine any excess noise for the residents concerned.

On 1st February 2005, the Mons Court of Appeal amended the ruling,

confirming the legal assessment, and asked the Court of Arbitration for

preliminary rulings for the moment when, after 1st April 2004, the decree

had been modified to relax a number of disproportionate restrictions

related to running the airport.

The Court of Arbitration ruled that the decree of 1st April 2004 did not

breach the constitution.

After the end of the current year (the expert has submitted his draft

report to the parties), the case will be heard again and examined on its

merits to assess the damages that the residents claim they have

suffered.

The expert’s report, whose conclusions supported BSCA and the

Walloon Region, was submitted to the Charleroi Tribunal de Première

Instance de Charleroi on 23rd January 2008.

The case has not seen any developments during 2010.

24

9.3. Decontamination for the South fuel station.

In accordance with a Walloon decree, the ground must be cleaned up

as soon as activities cease at the South station. A fund of €95,000 has

been entered in the accounts for 31/12/2010.

Studies are due to start during the 2nd quarter, and the work itself is

planned to be carried out during the 4th quarter.

9.4. Dependency on one main client

RYANAIR is currently BSCA’s main client and generates over 82% of its

passengers. This presence could discourage other companies from

developing their business in Charleroi.

However, it is worth highlighting the growing success of WIZZ Air, Jet 4

YOU and Jet Air Fly (3 planes based at Charleroi), which has helped to

reduce the proportion of RYANAIR passengers.

9.5. Risk connected to the existence of a consultancy

contract

A consultancy contract currently poses a problem, as the legislation

governing public contracts has not been respected, which means that

this contract is not applicable in terms of its financial implications.

Invoices raised by this consultant have been sent to BSCA. These were

included in the accounts but disputed immediately by BSCA, through a

credit note to be received, on the basis of this same issue.