MANAGEMENT REPORT 2010
BRUSSELS SOUTH CHARLEROI AIRPORT S.A. ORDINARY GENERAL MEETING, 17/06/2011
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 2
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.
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 3
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.
2/ Shareholders
Since the Extraordinary General Meeting of 10th December 2009 SHAREHOLDERS
NUMBER OF SHARES OWNED
Category A REGION WALLONNE
3,450
loco SOGEPA SOWAER
2,815
SAMBRINVEST S.A.
2,390 4
IGRETEC S.C.
289
Category B SABCA S.A.
83
Category C BELGIAN AIRPORT s.a
Number of registered shares
3450
12,477
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 JeanJacques 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 â‚Ź4,965, equivalent to â‚Ź1.90/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: 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%
2010 2005
2006
2007
2008
2009
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
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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. 12
The largest profits are generated by the car parks, the shuttle service to Brussels, HoReCa and the Duty Free shop.
3.5
Human resources In 2010, the number of employees at BSCA rose by 30 people between 1st January 2010 and 31st December 2010.
Staff numbers 2010 450 400 350 300 250 200
412,53 403,68 399,17 392,38 397,64 372,85 362,99 365,20 389,11 386,99 386,31 392,25
150 100 50 0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
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This represents a total of 414.40 full-time equivalents as of 31st December 2010. Staff number
Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff number number number number number number number number number number 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.
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 15
Charleroi – completed -
soundproofing
4
101
510
1,435
2,050
-
purchases
74
84
0
0
158
Charleroi – underway
3.6.2
-
soundproofing
10
38
200
805
1,053
-
purchases
38
63
0
0
101
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’.
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. 17
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.
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 18
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.
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 lowcost 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.
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Trade debts fell from EUR 14,813 to EUR 13,744.
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 22
N/A.
8/ Financial instruments
BSCA does not use financial instruments.
9/
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 30 th March 2004, movements contrary to article 1b of the decree of 23 rd 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.
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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 â‚Ź95,000 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.
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