INCENTIVE POLICY FOR THE NETWORK DEVELOPMENT OF CAGLIARI AIRPORT

Incentive program for the development of Cagliari A irport’s network through the start-up of new routes and the development of existing air services .

AIM OF THE INCENTIVE POLICY

Cagliari Airport’s main objective is to stimulate the devel opment of its air traffic by encouragingairlines to operate new routes as well as to increase capacit y on existing services, in order togenerate a continuous development of its network.

Sogaer’s network development strategy, hereinafter refer red to as “Incentive Policy” aims toconsolidate and grow air services to and from Cagliari, to co ntribute to the business of routedevelopment by offering carriers a risk-sharing policy, to meet the needs of its catchment areain terms of air connectivity and tourism development and to f acilitate new businessopportunities that can contribute to the economic growth of the Sardinian Region.

In order to reach the objectives described above, Sogaer aim s to implement a policy based onincentives directly related and proportional to the invest ment that airlines will be willing tomake, in terms of traffic growth, at Cagliari Airport, from 2 015.

OBJECTIVES AND BENEFITS OF THE INCENTIVE POLICY

In compliance with the Guidelines published by the Italian M inistry of Transport andInfrastructure on 2 nd October 2014, Sogaer has decided to introduce the herein Inc entive Policyto inform all airlines, in a transparent and non discriminat ory manner, in order to assure equalopportunities to all interested airlines with regards to th e commercial strategy that Soger hasplanned to implement during the two-year period 2015/16. On the base of the herein Policy,incentive contracts shall be concluded with airlines that w ill contribute to the development ofCagliari Airport’s network.

With the implementation of the Incentive Policy, Sogaer aim s to achieve the following benefits:

• Increase its point to point connections, therefore the numb er and frequency of its domesticand international routes;

• grow the airport’s passenger traffic;

• Improve Cagliari Airport’s intercontinental connectivit y by connecting it to major Europeanhubs;

• Traffic deseasonalization.

The network development strategy aimed at increasing the ai rport’s connectivity throughconsolidation and growth of existing connections, with the objective to develop traffic alsoduring low peak seasons, is based on the following 3 categori es:

1.) Launch of a new scheduled route: development of point to p oint services to specificdestinations, both domestic and international, that can gu arantee the airport and consequentlythe catchment area a better accessibility and with volumes t hat can sustain the route’sprofitability. A new route is intended as one that has not bee n operated as a scheduled routeto/from Cagliari Airport during the last 2 IATA seasons and t hat is included in the list ofqualifying routes of Appendix A and B. Charter flights shall not be taken into consideration.

2.) Development of an existing scheduled route able to gener ate incremental traffic. Suchdevelopment shall consist in at least an additional weekly f requency compared to the previousyear, for not less than 16 consecutive weeks of operation. Th e route’s additional services shallbe operated with aircraft of the same seats capacity or highe r compared to the previous year,that is in order to bring an effective increase of seats on sal e as well as of weekly frequencies.

3.) Launch of seasonal charter flights able to generate addi tional inbound traffic.

INCENTIVE POLICY

The incentive will be given to airlines in proportion to:

� The effective number of transported passengers;� Type of destination, differentiating between domestic and international;� Type of destination, differentiating between “Strategic” a nd “of interest”;� Period of activity of the route, differentiating between IA TA summer and IATA winter;

INCENTIVE POLICY

INCENTIVES FOR NEW SCHEDULED ROUTES

The incentives illustrated in the below table shall be grant ed to airlines on a per departingpassenger basis:

NEW SCHEDULED INTERNATIONAL ROUTES

NEW INTERNATIONAL STRATEGIC ROUTES

Incentive per departing passenger during IATA Summer € 5,00

Incentive per departing passenger during IATA Winter € 7,00

NEW INTERNATIONAL ROUTES OF INTEREST

Incentive per departing passenger during IATA Summer € 4,00

Incentive per departing passenger during IATA Winter € 6,00

NEW SCHEDULED DOMESTIC ROUTES

Incentive per departing passenger during IATA Summer € 3,00

Incentive per departing passenger during IATA Winter € 4,00

INCENTIVES FOR CAPACITY INCREASE ON EXISTING SCHEDU LED ROUTES

CAPACITY INCREASE ON INTERNATIONAL SCHEDULED ROUTES

CAPACITY INCREASE ON INTERNATIONAL STRATEGIC ROUTES

Incentive per departing passenger during IATA Summer € 3,50

Incentive per departing passenger during IATA Winter € 5,00

CAPACITY INCREASE ON INTERNATIONAL ROUTES OF INTEREST

Incentive per departing passenger during IATA Summer € 3,00

Incentive per departing passenger during IATA Winter € 4,00

CAPACITY INCREASE ON DOMESTIC SCHEDULED ROUTES

Incentive per departing passenger during IATA Summer € 2,00

Incentive per departing passenger during IATA Winter € 3,00

The incentives illustrated in the below table shall be grant ed to airlines on a per departingpassenger basis:

INCENTIVES FOR NEW CHARTER FLIGHTS

INCENTIVES FOR NEW CHARTER FLIGHTS

NEW INTERNATIONAL STRATEGIC ROUTES

Incentive per departing passenger during IATA Summer € 2,50

Incentive per departing passenger during IATA Winter € 3,50

NEW INTERNATIONAL ROUTES OF INTEREST

Incentive per departing passenger during IATA Summer € 2,00

Incentive per departing passenger during IATA Winter € 3,00

The incentives illustrated in the below table shall be grant ed to airlines on a per departingpassenger basis:

NETWORK DEVELOPMENT POLICY – GENERAL TERMS AND CONDI TIONS

This document sets the terms and conditions that are require d to receive the incentivesprovided by the herein Policy.

Sogaer and the airline shall sign an agreement which shall de fine the obligations of the carrierin terms of traffic development. The airline shall abide by i ts obligations in terms of routes andtraffic flows in order to obtain the set incentives.

The airline shall commit to operate the route/s for at least 1 6 consecutive weeks during a singleIATA season, with at least one weekly frequency.

Destinations and frequencies shall be agreed with the airpo rt managing company. The incentivecontract will have a maximum duration of 3 years from the star t-up date of the route.

The herein policy shall be valid until Sogaer’s budget for th is activity is exhausted.

The signing of agreements with carriers that are to benefit f rom the incentives shall depend onconfirmation that they meet the requirements of the anti-ma fia legislation, and that they haveproperly fulfilled their tax and social security obligatio ns as required by law.

The incentives of the herein policy must under no circumstan ces imply discounts on theamounts invoices by Sogaer in relation to airport charges. A irlines which shall qualify for theherein Policy shall pay all airport charges and taxes. Offse t operations between incentives andairport taxes & charges are not allowed.

The airline shall not apply the commercial practice known as "one carry-on bag“, regardinggoods purchased at the airport.

90% of the frequencies of the agreed schedule shall be operat ed. Routes under Public ServiceObligations are excluded from the herein Policy. The routes must always be operated with directflights.

In order to qualify to incentives related to scheduled route s, the carrier shall request slots with Jcode. For scheduled flights, at least 50% of the seats offere d on the aircraft shall be sold onlineor through GDS.

At the signing of the incentive contract, Sogaer reserves th e right to invest in a marketingcampaign in the destination city of the route (i.e.: adverti sing campaign, press conference,promotional event, etc.) where the route development plan i s of particular interest andcommercial benefit for Cagliari Airport.

NETWORK DEVELOPMENT POLICY – GENERAL TERMS AND CONDI TIONS

PROCEDURE TO ACCESS THE INCENTIVE POLICY

In order to qualify for the Incentive Policy, airlines shall send their offer by 30 th April 2015 to thee-mail address info@sogaer.it or via fax: +39 070 241013. The offer shall indicate the route s thatthe airline intend to operate by 2015/16, specifying the fol lowing details for each route:� Start-up date;� Duration of operation of the route;� Weekly frequencies;� Type of aircraft to be used.

Within 30 days following the above deadline, Sogaer, in exer cising its discretionary power tomake business decisions on the granting of incentives and th e selection of the respectivebeneficiaries:

� Shall examine airlines’ offers received within the deadlin e 30th April 2015;� Shall select the carriers that will have presented the netwo rk development proposals which

comply to the terms and conditions of the herein Incentive Po licy.

PROCEDURE TO ACCESS THE INCENTIVE POLICY

The Carrier whose offer will be accepted and deemed to be in co nformance with the hereinPolicy will receive from Sogaer a letter of approval.

No carrier shall assume to be qualified to receive the incent ives of the herein policy beforehaving received a formal written confirmation from the airp ort managing company.

Should an airline receive an approval letter on the incentiv e policy and should not operate theroute(s) within the set date, such approval will no longer be valid and will automaticallyterminate, unless Sogaer communicates its approval by writ ing.

PROCEDURE TO ACCESS THE INCENTIVE POLICY

Should two or more airlines submit offers for the developmen t of the same route, the selectionof the airline that will have access to the incentives for the route will be made according to thefollowing assessments:

� the overall number of routes proposed by the airline;� the overall number of seats offered on the route(s);� The level of market penetration, meaning the number of route s served from the new airport(s)

to be connected with Cagliari Airport, demonstrating the bu siness potential of the airline inthat particular market;� the type of aircraft that the airline intends to operate.

Sogaer reserves the right to evaluate route development pro posals that arrive after the deadline30th April 2015, should such proposals regard routes among the de stinations listed in AppendixA & B, for which no route development plans held to be valid wer e received within the deadline30th April 2015.

Any modifications to the present Incentive Policy shall be p ublished by Sogaer, in accordancewith the provisions of the Guidelines approved by the Minist ry of Transport and Infrastructureon the 2 nd October 2014.

APPENDIX A – LIST OF STRATEGIC ROUTES

AUSTRIA: Innsbruck - Salzburg.BELGIUM: BrusselsDENMARK: CopenhagenESTONIA: TallinnFINLAND: HelsinkiFRANCE: Nice – Lyon – Toulouse – Bordeaux – Nantes – Lille - Str asbourgGERMANY: Hamburg - HannoverIRELAND: DublinISRAELE: Tel AvivLATVIA: RigaLITHUANIA: Vilnius – KaunasNORWAY: OsloNETHERLANDS: Amsterdam – Rotterdam - EindhovenUNITED KINGDOM: Manchester – Liverpool – Leeds – Birmingham - BristolRUSSIA: Moscow – St Petersburg – Novosibirsk - EkaterinburgSPAIN: Malaga – Palma de Mallorca – Valencia – SevilleSWEDEN: Stockholm - GothenburgTURKEY: Istanbul – Ankara - IzmirUKRAINE: Kiev

APPENDIX B – LIST OF ROUTES OF INTEREST

BULGARIA: SofiaCROATIA: ZagrebGREECE: Athens - RhodesITALY: Catania, Florence, PalermoMOROCCO: Casablanca – Rabat - MarrakechMOLDAVIA: ChisinauPOLAND: WarsawPORTUGAL: Lisbon - PortoCZECH REPUBLIC: PragueROMANIA: BucharestSERBIA: BelgradeSLOVAKIA: BratislavaSLOVENIA: LjubljanaTUNISIA: TunisHUNGARY: Budapest

The list of destinations covered by the incentives shall be u pdated, increased or reduced,following any interruptions of routes previously served or following the start-up of new routes.For further information, please contact the Network Develo pment Department at the followingcontact details: Tel: +39 070 211 211 – Fax: +39 070 241 013 – e- mail: info@sogaer.it

Cagliari Airport applies to all airlines the airport charge s and taxes regulated by ENAC.The above airport charges cannot be negotiated.

AIRPORT CHARGES