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Managing Director's Message

While the financial year certainly presented its challenges, 2010 ended with a strong sense of optimism and promise.

Brisbane Airport's stakeholders in South East Queensland experienced, literally overnight, the benefits that BAC's investments are delivering to the region. Our $220 million privately funded Moreton Drive was met with widespread community acceptance, not the least because of its seamless integration with the road networks being developed by our partners in Brisbane City Council and the Queensland Government.

The year also saw the first major steps in the challenging Domestic Terminal development program, potentially our most momentous project to date, and one which is attracting an unprecedented level of community interest.

BAC's focus on sustainability, energy efficiency and caring for our airport environment continued to be a priority, and is delivering tangible benefits across all aspects of our airport operations, our commercial activities and our corporate reputation.

In order to deliver these benefits BAC has reviewed and updated its enterprise risk management framework to identify any potential constraints and areas of opportunity that will ensure BAC increase the effective use of our human and capital resources thus ensuring on time project delivery.

On the aviation front, 2010 saw Brisbane Airport expand its network and seat capacity, including new services from V Australia, China Southern, Tiger Airways and Qantas. We continue to work closely with our airline partners and the city and State authorities to promote Brisbane as a destination and to grow Queensland's share of the tourism and aviation market.

Following the Federal Government's 2009 Aviation White Paper, BAC has led the way in rolling out a comprehensive Community Engagement Program, including Australia's first fully integrated planning forums that bring together the Brisbane City Council, the Queensland Government and the Federal Government.

Under our commitment to engagement, BAC now runs a series of Brisbane Airport Community Forums across Brisbane and we continue to invest significantly in the artistic, cultural, environmental and community life of Greater Brisbane.

At the community level, we saw the opening of Australia's first Airport Experience Centre, a world-class facility enabling residents, investors, developers and planners to gain a clearer understanding of Brisbane Airport, its future development, and how this will impact on the lives of the community. The centre is proving popular and is seen as a benchmark in community engagement.

In the critical area of airport planning, the approval of the 2009 Master Plan elevated our engagement with the Federal Government to a new level, helping to ensure the highest levels of consultation on the objectives, outcomes and regulatory implications of the White Paper process to ensure the long-term safeguarding of Brisbane Airport as a critical piece of national infrastructure.

Despite weaker than expected passenger growth, BAC's performance for the financial year ended June 2010 was nevertheless resilient. Strong revenue growth of 11 percent was achieved due to the solid performance of our car parking and property businesses, combined with aeronautical price increases agreed with airlines. Operating costs grew by four percent resulting in EBITDA growth of 14 percent.

Through strong management and a focus on value, operating expenditure came in well below expectations. Capital and investment expenditure was also tightly controlled, with a number of projects prudently deferred in line with slower than expected growth in passenger demand. As a result, debt drawdown and interest expenses were managed well below forecast levels.

On a personal note, I have been fortunate to have so many supportive partners in business, government and community, who quickly made me feel welcome back to my hometown of Brisbane, which is truly the place to be in this exciting era.

BAC underwent its first major corporate restructure, which is never an easy process. However, I was very pleased at the level of engagement, enthusiasm and passion of staff and stakeholders that continue to be a hallmark of this dynamic company.

On behalf of the senior management team, I am proud of BAC's achievement in 2010, delivering on our budget, and working with our Board to create an exciting new vision for Australia's most dynamic airport precinct.