分析師 覆蓋

附件 - 金融衍生工具

公司的活動面臨不同的財務風險，來自於無法控制的外在變數，但其影響可能會有潛在的負面作用。公司的全球風險管理計劃專注於金融市場中現有的不確定性，目的在於減少對淨收益和工作資本需求的可能負面影響。墨西哥國際航空運營商使用衍生金融工具來減輕部分風險，並不為投機或交易目的而取得金融衍生工具。

公司設有風險管理團隊，負責識別和評估不同金融風險的風險暴露，同時負責設計緩解這些風險的策略。因此，公司擁有避險政策和相關程序，這些策略是基於該政策制定的。所有方針、程序和策略均經不同行政實體批准，這些實體基於公司治理立場進行審批。

避險政策及其流程根據公司治理得到不同行政機構的批准。避險政策確立了衍生金融工具交易將由特定委員會批准並實施/監控。遵守避險政策及其程序需接受內部及外部審計，同時也需遵循公司治理。

避險政策對衍生金融工具持保守立場，因為它僅允許公司進入與待對沖的主要立場相關的立場（符合國際財務報告準則），“IFRS”根據公司編製財務信息的《國際財務報告準則》，公司的目標是對所有衍生金融工具應用避險會計處理。

墨西哥國內最大的廉價航空公司Volaris旨在通過衍生金融工具將市場風險的一部分轉移給其金融交易對手，該工具描述如下：

1.      燃料價格波動風險：Volaris與其燃料供應商的合同協議與基礎資產的市場價格指數挂鉤，因此，面臨其價格上升。Volaris進入衍生金融工具來對抗燃料價格出現顯著增加的風險。這些金融工具在場外交易（“OTC”）市場上進行交易，與經批准的對手方交易，並在對沖政策中指定的限制內進行交易。截至本報告日期，Volaris持有亞洲看漲期權的噴射燃料。

衍生性金融工具可能需要提供一定數量的擔保金用於彌補到期前未結算的損失部分。抵押品的數量交付作為「擔保存款」的一部分，根據衍生性金融工具項目的公平價值，每日進行評估、審查和調整。

交易市場和合格的對手方

該公司僅在場外交易（OTC）市場營運。為了最小化對手方風險，該公司與具有公認金融實力的對手方簽訂ISDA協議；因此，並不預見任何對其其中之一的重大違約風險。 截至2024年9月30日^日，2024年，該公司已與不同的金融機構和t-Locks簽訂了8份ISDA協議，並在2024年第三季度註冊了亞洲看漲期權。

該公司僅與具有ISDA合同的金融交易對手合作， Asset Backed Trust Notes CAPs除外。這些協議具有信用支持附件（"CSA"）部分，其中包括在其中規定的信用條件和保證金調用的準則，包括最低金額和四捨五入。衍生金融工具的合約分佈在不同的交易對手之間，目的是避免他們的風險集中在單一交易對手身上，並且更有效地利用不同CSA的金融條件，從而最小化潛在的保證金調用。

計算代理的指派在奧威航空運營的ISDA文件中有記載。公司使用每個衍生金融工具的金融機構提供的估值。該公平價值將與內部開發的估值技術進行比較，該技術使用有效且被承認的方法論，通過該方法論估計衍生金融工具的公平價值，該方法以市場上資產的價格和變數來估計參考資產的市場價值，而以彭博為主要信息來源。

根據國際財務報告準則（"IFRS"），公司詳細說明其基本報表；Volaris執行前瞻效能測試，以及避險記錄中導衍金融工具的類別根據基礎資產的類別分類（持續監控並不斷更新）。截至本報告提供日期，公司所有的導衍金融工具均被視為有效，因此被歸類為根據避險會計原則記錄。

公司將衍生金融工具的交易分配給已簽署授信協議的各方，以提高財務條件使用效率；藉此，可以避免風險集中在單一交易對手身上。同時，採用不同的工具和到期日來減少潛在的追加保證金需求。若上述措施仍不足以應對，公司內部擁有資源以滿足衍生金融工具相關需求。

公司的活動 面臨不同的財務風險，其中燃料價格波動風險、匯率波動風險和市場利率波動風險尤爲突出。在2024年第三季度，未發現能夠顯著改變上述風險暴露的證據，這種情況在未來可能會發生變化。

As of the date of this report, all the derivative financial instruments held by the Company qualified as hedge accounting; for this reason, the changes in their fair value will only be the result of changes in the price levels of the underlying asset, and it will not modify the objective of the hedge for which it was initially entered for.

List of accounting policies

Basis of preparation

Statement of compliance

The unaudited condensed consolidated interim financial statements, which include the condensed consolidated statements of financial position as of September 30, 2024 (unaudited) and December 31, 2023 (audited) and the condensed consolidated statements of operations, comprehensive income, for the three and nine months period ended September 30, 2024 and 2023 (unaudited), changes in equity and cash flows for the nine months period ended September 30, 2024 and 2023 (unaudited), have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting and using the same accounting policies as in preparing the annual financial statements, with the exceptions explained below.

The unaudited condensed consolidated interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company’s annual consolidated financial statements as of December 31, 2023, and 2022 (audited).

Items included in the unaudited condensed consolidated interim financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which each entity operates (“functional currency”). The functional currency of Company and its subsidiary Concesionaria is the US dollar. The presentation currency of the Company’s unaudited condensed consolidated interim financial statements is the US dollar. All values in the unaudited condensed consolidated interim financial statements are rounded to the nearest thousand (US$000), except when otherwise indicated.

公司始終按照其會計政策適用於所呈現的所有期間，併爲上一期提供了比較信息。

計量和呈報基礎

附表中未經審計的簡明綜合中期財務報表是根據歷史成本約定編制的，除了按公允價值計量的衍生金融工具。

根據IFRS，未經審計的簡明綜合中期財務報表的編制要求管理層進行影響隨附的未經審計的簡明綜合中期財務報表和附註中報告金額的估計和假設。實際結果可能與這些估計有所不同。

附註的未經審計的簡明綜合中期財務報表包括公司及其子公司的財務報表。截至2024年9月30日（未經審計）和2023年12月31日（已審計），根據會計要求，未經審計的簡明綜合中期財務報表中包括的公司如下：

子公司的基本報表是按照與母公司相同的報告期準備的，採用一致的會計政策。

當公司暴露於投資者的變量收益，並且能夠通過對投資者的控制權影響這些收益時，便實現了控制。具體而言，公司僅在具備以下條件時才控制投資者：

當公司持有少數投票權或類似權益時，公司在評估其是否對被投資方擁有控制權時考慮所有相關事實和情況，包括：

公司重新評估是否控制被投資實體，如果事實和情況表明控制的三個要素中有一個或多個發生了變化。子公司的合併是在公司獲得對子公司的控制權時開始，並在公司失去對子公司的控制權時結束。子公司在年度內取得或處置的資產、負債、收入和費用將從公司獲得控制的日期起至公司失去對子公司控制權的日期，被納入合併基本報表。

所有板塊的公司間餘額、交易以及公司間交易帶來的未實現收益和損失，在合併基本報表中完全予以抵消。

在合併時，外國經營資產和負債以報告日匯率折算爲美元，其損益表以當時平均匯率折算。合併折算產生的匯兌差額記錄在其他綜合收益("OCI")中。在處置外國經營時，與該特定外國經營有關的OCI部分確認在利潤或虧損中。

乘客收入

客運空運收入在提供服務或者不可退票機票在計劃旅行日期到期時，以較早者爲準。

未來航班的機票銷售一開始被確認爲合同責任，在「未賺取的運輸營業收入」欄下，一旦公司提供運輸服務或者不可退款的機票在計劃旅行日期到期時，已賺取的收入被確認爲乘客機票收入，未賺取的運輸營業收入相應減少。所有公司的機票均爲不可退款，並且在支付費用後可以更改。此外，公司不提供常旅客計劃。

最重要的客運營收包括從以下方面產生的收入：（i）車費收入和（ii）其他客運收入。其他客運服務包括但不限於超重行李費、通過呼叫中心或第三方機構預訂的費用、高級座位選擇、行程更改和包機。當公司提供乘客運輸服務的義務或不可退還的機票在計劃旅行日期到期時，這些收入被確認爲營業收入。

公司還將「V俱樂部」等其他乘客收入分類，並在提供服務的過程中逐步確認爲營業收入。

公司銷售帶有聯程航班的特定機票，其中一個或多個航段由其其他航空公司合作伙伴運營。對於由其其他航空公司合作伙伴運營的航段，公司已確定自己是代表其他航空公司行事，並對其合同的部分（即乘客的運輸）負責。作爲代理商，公司在旅行時間將營業收入確認爲其他營業收入，用於公司保留的其他航空公司飛行的部分的淨金額。

非乘客收入

最顯著的非旅客收入包括：（i）以下非旅客服務產生的收入和（ii）貨運服務。

來自其他非乘客服務的營業收入主要包括但不限於向第三方收取的旅行保險、租車和廣告空間的佣金。這些以及貨運服務在提供服務時被確認爲營業收入。

公司還要在每筆新交易（如適用）中評估與第三方供應商有關的某些非航空旅遊服務安排的主要與代理考慮。當公司確定基礎服務是通過第三方提供的，這些第三方主要負責提供服務時，這些特定的非航空旅遊服務的營業收入以淨額（代理）呈現。

代碼共享協議

2018年1月16日，公司和Frontier航空公司（以下簡稱Frontier）簽署了一項代碼共享經營協議，該協議於2018年9月開始運營。

通過這一聯盟，公司的客戶可以訪問美國境內除當前可用目的地外的其他城市，因爲公司的客戶可以在經營航班的任何Frontier目的地購買機票；而Frontier的客戶可以首次通過Volaris在墨西哥機場的存在獲得進入新目的地的機會。

代碼共享機票可以直接從Volaris的網站購買。提供運輸的航空公司在向客戶提供服務時才確認營業收入。

作爲與客戶簽訂合同的營業收入的一部分分析的其他考慮因素

公司提供的所有服務，包括銷售未來航班的機票、其他乘客相關服務和非乘客服務，必須通過全額現金結算支付。 交易價格的支付等於客戶在銷售時的現金結算（使用不同的支付選項，比如信用卡、借記卡、第三方支付或直接在櫃台現金支付）。幾乎沒有或根本沒有判斷來確定營業收入確認的時間點及其金額。即使主要所有服務銷售最初都被確認爲合同負債，在這些交易中也沒有融資成分。

獲取合同的成本由支付給旅行社的佣金和金融機構爲處理電子交易收取的銀行佣金代表。 公司不會因符合資本化要求的合同的獲取和履行而產生額外成本。

交易應收款項主要由金融機構持有，因使用信用卡和借記卡進行交易，因此不產生利息，並且主要在24至48小時的條款下。公司在合同開始時有收款權，並且在購買後沒有折扣、付款激勵、獎金或其他變量考慮因素可以修改交易價格。

公司的機票不可退款。然而，如果公司取消航班是由於航空公司可歸因的原因，包括COVID-19大流行，乘客們有權無需額外費用調整他們的航班、獲得退款或獲得代金券。直到代金券被兌現，關聯的航班發生，或代金券到期之前，沒有營業收入被確認。當發出的代金券超過乘客支付的原始金額時，超額部分被記錄爲營業收入的減少。所有公司與未來服務相關的營業收入在大約12個月的期間內實現。

Contract with FEMSA

Under the "Spin Premia" agreement customers participating in this program are entitled to accumulate or redeem points when they purchase goods or use services with any of the companies that are part of the coalition.

The points accumulated for services provided by the Company are recorded as a reduction in revenues. The points redeemed for the Company's services are recorded as deferred revenue until the time when the service is provided, or the points expire. The value of points is determined according to contractual conditions between the Company and FEMSA.

Cash and cash equivalents are represented by bank deposits and highly liquid investments with maturities of 90 days or less at the original purchase date. For the purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash and short-term investments as defined above.

The Company has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. These credit card processing agreements do not have significant cash reserve requirements.

Restricted cash are used to constitute the debt service reserves and cannot be used for purposes other than those established.

Short-term investments consist of fixed-term bank deposits with a maturity of more than three but less than twelve months.

A financial instrument is any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity.

i) Financial assets

Initial recognition

Classification of financial assets and initial recognition

The Company determines the classification and measurement of financial assets, in accordance with the categories in IFRS 9, which are based on both: the characteristics of the contractual cash flows of these assets and the business model objective for holding them.

Financial assets include those carried at fair value through profit and losses (“FVTPL”), whose objective to hold them is for trading purposes (short-term investments), or at amortized cost, for accounts receivables held to collect the contractual cash flows, which are characterized by solely payments of principal and interest (“SPPI”). Derivative financial instruments are also considered financial assets when these represent contractual rights to receive cash or another financial asset. All the Company’s financial assets are initially recognized at fair value, including derivative financial instruments.

Subsequent measurement

The subsequent measurement of financial assets depends on their initial classification, as is described below:

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when:

在這種情況下，公司還確認了相關的負債。轉移的資產和相關的負債是根據反映公司所保留的權利和義務的基礎進行衡量。

ii)金融資產減值

公司在每個報告日評估是否存在客觀證據表明某個金融資產或一組金融資產發生信用受損。金融資產在自資產初始確認後發生一個或多個事件（發生的『損失事件』）會對金融資產或一組金融資產的估計繼續現金流量產生影響，並且這種影響能夠可靠估計。

財務資產出現信用受損的證據 可能包括債務人或一組債務人遇到重大財務困難，違約 或應收賬款拖欠，他們將破產或其他財務重組的可能性，以及表明 估計現金流減少的可觀數據，比如拖欠金額的變化或與 違約相關的經濟狀況的變化。

對於應收賬款，公司採用簡化方法計算預期信用損失（ECLs）。因此，公司不追蹤信用風險變化，而是根據每個報告日期的終身ECLs確認損失準備。

根據這項評估，已考慮進帳戶中這些應收賬款的預期損失。

iii) 金融負債

初始確認和計量

財務負債在初始確認時被分類爲按公允價值計量且其變動計入當期損益的金融負債，包括貸款和借款、應付供應商賬款、未實現的運輸收入、其他應付款和金融工具。

所有板塊的財務負債最初確認時 以公允價值計量，在貸款及借款和應付款項的情況下，扣除直接相關的交易成本。

後續計量

財務負債的計量取決於如下描述的分類：

按攤餘成本計量的財務負債

應付賬款按攤銷成本計量，由於其短期性質，不計利息也不會產生收益和損失。

貸款和借款是最相關的類別，對公司最爲重要。在以公允價值（收到的對價）初始確認後，利息人形機器人-軸承的貸款和借款按照有效利率法以攤銷成本計量。債務註銷時，利潤或損失通過有效利率攤銷過程確認。

攤銷成本是通過考慮發行時的任何折扣或溢價以及作爲有效利率的一部分的費用或成本來計算的。 有效利率攤銷包括在綜合損益表的財務成本中。 這一攤銷成本類別通常適用於利息收入貸款和借款。

公允價值計量下的金融負債

按照公允價值計量且其變動計入當期損益的金融負債包括公允價值選擇權下的金融負債，如果其是爲了在不久的將來出售而獲取的，則按照持有供交易分類。該類別包括不是根據IFRS 9定義的對沖關係中指定爲避險工具的衍生金融工具。

註銷

財務負債在負債項下的義務履行、取消或到期時被取消認列。

當現有的金融負債被另一家同一貸款人以實質上不同的條件替代，或者現有的負債條件發生實質性修改時，這種交換或修改被視爲原負債的攤銷和新負債的確認。

各自的賬面價值差額將在合併利潤表中得到確認。

金融工具的抵消

金融資產和金融負債互相抵消， 如果存在，則在合併財務狀況表中報告淨額：

其他應收賬款主要來自與門票銷售相關的主要信用卡處理商，按成本計量並扣除信用損失準備，其短期性質使其接近公允價值。

存貨主要包括飛行設備、易耗品、材料和用品，最初按取得成本記錄。存貨按成本下限或淨實現價值兩者中較低的一個進行覈算。成本根據具體識別方法確定，用於運營時立即費用化。公司對存貨價值由於減值、過時、滯銷和表明庫存中飛機備件和飛行設備配件的使用或實現將低於記錄價值的原因進行必要的估計。存貨的成本根據具體識別方法確定，並在用於經營時記入費用。

Cost related to the purchase or development of computer software that is separable from an item of related hardware is capitalized separately measured at cost and amortized over the period in which it will generate benefits on a straight-line basis. The Company annually reviews the estimated useful lives and salvage values of intangible assets and any changes are accounted for prospectively.

The Company records impairment charges on intangible assets used in operations when events and circumstances indicate that the assets or related cash generating unit may be impaired and the carrying amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of (i) its fair value less cost to sell, and (ii) its value in use.

使用價值計算基於折現現金流模型，使用我們對未來幾年經營結果的預測，通常不超過五年。長期資產的可收回金額對於制定預測和計算中使用的折現率中固有的不確定性非常敏感。

軟件

已獲得的計算機軟件許可將根據獲得、實施和啓用軟件所發生的成本計入資本化。與維護計算機軟件程序相關的成本將隨着發生而支出。如果存在將產生潛在未來經濟利益的系統開發或改進，公司將資本化軟件開發成本，包括直接可歸因於材料、勞動和其他直接成本的支出。

公司已獲得的軟件成本按直線法分期攤銷。公司獲得的許可證和軟件權利具有有限的使用壽命，並根據合同期限按直線法分期攤銷。攤銷費用在綜合損益表中得到確認。

待售資產，以前爲非流動資產或準備在接下來的十二個月內出售的資產組，按照再分類時的賬面價值和市價減賣出成本中的較低者計量。市價減賣出成本是根據最近的市場交易反推算得出，如果有的話。

按金主要包括支付給承租人的飛機維護 存款、飛行設備租金存款和其他按金。飛機和發動機存款由 承租人持有，以美元計價，並根據建立的每筆存款的回收日期 在相關協議中作爲流動資產和非流動資產。

已支付飛行器維護保障的按金給出租方

大多數公司的租賃合同規定支付飛機租賃方維修按金的義務，以保證進行重大維修工作。

這些租賃協議規定，維護存款在主要維護事件結束時可退還給公司，退款金額等於：(i)與特定維護事件相關的出租方持有的維護存款，或(ii)與特定維護事件相關的符合資格的成本。

一般而言， 絕大部分重要維護存款通常是根據租賃飛機和發動機的使用情況（飛行小時或飛行循環）計算的。 這些存款的唯一目的是確保租賃方能夠對飛機和發動機進行維護工作。

公司預計從租賃方追回的維護存款，將在合併資產負債表中作爲安防-半導體存款呈現。

根據租賃條款，在每份合同中 都會評估是否有必要對出租飛機和發動機進行重大維護。如果不預計 自行進行重大維護，則在綜合收入控件中將存入資金作爲變量租金支付記錄，因爲其代表了對已租賃貨物的使用的一部分，並基於時間或飛行循環確定。

當修改租賃協議導致租賃期限延長時，之前記錄爲變量租金的維護按金可以轉換爲可收回按金，並在修改日期顯示爲可收回資產。

某些其他飛機租賃協議不要求提前支付維護存款給出租方以保證重要的維護活動；因此，公司不會就這些飛機支付擔保金。然而，其中一些租賃協議包括在租賃期結束時向出租方進行維護調整支付的義務。這些維護調整支付用於覆蓋在租賃終止前不期望執行的維護事件；對於這樣的協議，公司積累了與最終將發生的費用相關的責任，因爲尚未支付維護存款。

The Company is required to conduct various levels of aircraft maintenance. Maintenance requirements depend on the type of aircraft, age and the route network over which it operates (utilization).

Fleet maintenance requirements may include preventive maintenance tasks based on manufacturers recommendations, for example, component checks, airframe and systems checks, periodic major maintenance and engine checks.

Aircraft maintenance and repair consists of routine and non-routine tasks, divided mainly into three general categories: (i) routine line maintenance, (ii) major maintenance and (iii) component checks.

(i) Routine line maintenance requirements consist of scheduled maintenance checks on the Company’s aircraft, including pre-flight, daily, weekly and overnight checks, any diagnostics and routine repairs and any unscheduled maintenance is performed as required. These type of maintenance events are normally performed by in-house mechanics and are primarily completed at the main airports that the Company currently serves, supported by sub-contracted companies.

Other maintenance activities are sub-contracted to certified maintenance business partners, repair and overhaul organizations. Routine maintenance also includes scheduled tasks that can typically take from 6 to 12 days to accomplish and are required between every 24 or 36 months, such as 24-month checks and C checks. All routine maintenance costs are expensed as incurred.

(ii) Major maintenance for the aircraft consists of a series of more complex tasks, including structural checks for the airframe, that can take up to six weeks to accomplish and typically are required every six years.

Major maintenance is accounted for under the deferral method, whereby the cost of major maintenance, major overhaul and repair is capitalized (leasehold improvements to flight equipment) and amortized over the shorter of the period to the next major maintenance event or the remaining contractual lease term. The next major maintenance event is estimated based on assumptions including estimated time of usage. The United States Federal Aviation Administration (“FAA”) and the Mexican Federal Civil Aviation Agency (Agencia Federal de Aviación Civil- AFAC) authorize maintenance intervals and average removal times as recommended by the manufacturer.

These assumptions may change based on changes in the utilization of aircraft, changes in government regulations and recommended manufacturer maintenance intervals. In addition, these assumptions can be affected by unplanned incidents that could damage an airframe, engine, or major component to a level that would require a heavy maintenance event prior to a scheduled maintenance event. To the extent the planned usage increases, the estimated life would decrease before the next maintenance event, resulting in additional expense over a shorter period.

The amortization of deferred maintenance costs is recorded as part of depreciation and amortization in the consolidated statements of operations.

(iii) The Company has a power-by-the hour agreement for component services, which guarantees the availability of aircraft components for the Company’s fleet when they are required. It also provides aircraft components that are included in the redelivery conditions of the contract (hard time) with a fixed priced at the time of redelivery. The monthly maintenance cost associated with this agreement is recognized as incurred in the consolidated statements of operations.

The Company has an engine flight hour agreement (component repair agreement), that guarantees a cost for the engines shop visits, provides miscellaneous engines coverage, supports the cost of foreign objects damage events, ensures there is protection from annual escalations, and grants credit for certain scrapped components. The cost associated with the miscellaneous engines’ coverage is recorded monthly as incurred in the consolidated statements of operations.

Rotable spare parts, furniture, and equipment, are recorded at cost and are depreciated over their estimated useful lives using the straight-line method. Depreciation is calculated based on the cost less the estimated residual value of the assets.

Aircraft spare engines have significant components with different useful lives; therefore, they are accounted for as separate items of spare engine parts (major components).

Pre-delivery payments refer to prepayments made to aircraft and engine manufacturers during the manufacturing stage of the aircraft. The borrowing costs related to the acquisition or construction of a qualifying asset are capitalized as part of the cost of that asset.

Depreciation rates are as follows:

公司每年審查這些資產的預期使用壽命，任何變化都將進行前瞻性會計處理。

公司確定了一個現金收益單位（CGU），其中包括長期資產和整個機組，包括租賃權資產和飛機設備。公司在每個報告日評估，是否存在客觀證據表明CGU中的長期資產和整個機組，包括租賃權資產和飛機設備存在減值。公司在操作中記錄減值費用，當事件和情況表明資產可能存在減值，或者長期資產或相關現金收益單位的賬面價值超過其可收回金額時，其可收回金額爲（i）其公允價值減少賣出成本和（ii）其使用價值。

使用計算中的價值是基於折現現金流模型，使用對未來經營結果的預測，通常不超過五年。長期資產的可收回金額對於預測準備中的不確定性和計算中使用的折現率敏感。

公司的合併基本報表以美元列示，這是母公司及其主要子公司的貨幣。對於每個子公司，公司確定基本貨幣，並且每個實體的財務報表中的項目均使用實體運營的主要經濟環境的貨幣進行衡量（「基本貨幣」）。

根據基本報表和用各自本地貨幣表示的外國業務的財務報表需按以下方式重新計量爲其功能貨幣：

任何因重新計量而導致的差異將在合併利潤表中予以確認。

外國子公司的資產和負債 被轉換爲報告日的展示貨幣匯率；收入和支出 在每個月底按照當年每月平均匯率進行換算。

將外幣差異轉換成報告貨幣後，應在OCI中予以確認。

公司確認準備金的時機是在公司對過去事件形成的現有義務（法定或約定）方面，如果可能需要支付裝載經濟利益的資源以解決義務，並且可以對義務數量做出可靠估計。如果貨幣時間價值的影響是重大的，則使用反映適當風險的當前稅前利率折現準備金，對於特定負債使用時。使用貼現時，由於時間流逝而導致準備金增加的部分被視爲財務費用。

i) Personnel vacations

The Company and its subsidiaries in Mexico and Central America recognize a reserve for the costs of paid absences, such as vacation time, based on the accrual method.

ii) Termination benefits

The Company recognizes a liability and expense for termination benefits at the earlier of the following dates:

a) When it can no longer withdraw the offer of those benefits; and

b) When it recognizes costs for a restructuring that is within the scope of IAS 37, Provisions, Contingent Liabilities and Contingent Assets, and involves the payment of termination benefits.

The Company is demonstrably committed to a termination when, and only when, it has a detailed formal plan for the termination and is without realistic possibility of withdrawal.

iii) Seniority premiums

In accordance with Mexican Labor Law, the Company provides seniority premium benefits to the employees which rendered services to its Mexican subsidiaries under certain circumstances. These benefits consist of a one-time payment equivalent to 12 days’ wages for each year of service (at the employee’s most recent salary, but not to exceed twice the legal minimum wage), payable to all employees with 15 or more years of service, as well as to certain employees terminated involuntarily prior to the vesting of their seniority premium benefit.

Obligations relating to seniority premiums other than those arising from restructurings, are recognized based upon actuarial calculations and are determined using the projected unit credit method.

The latest actuarial computation was prepared as of December 31, 2023. Remeasurement of the net defined benefit liability arising from actuarial gains and losses are recognized in full in the period in which they occur in OCI. Such remeasurement gains and losses are not reclassified to profit or loss in subsequent periods.

定義的福利資產或負債包括根據政府債券爲基準的貼現率使用定義的福利責任的現值，減去計劃資產的公允價值， 其中義務將被償還。

對於哥斯達黎加、危地馬拉和薩爾瓦多的法人實體，不需要支付高級工齡津貼，這些國家有員工福利。

iv)激勵措施

公司爲特定人員設有季度激勵計劃，根據達成特定績效目標發放現金獎金。這些激勵在每個季度結束後不久支付，並根據IAS 19的規定作爲短期收益計入。 員工福利根據預計激勵支付金額確認一項準備金。

公司爲部分關鍵人員制定了短期福利計劃，當達到特定公司績效目標時，將授予現金獎金。這些激勵措施在每年結束後不久支付，並根據IAS 19列爲短期福利。根據估計的激勵支付金額確認計提。

v) 開多期激勵計劃（「LTIP」） 和長期留任計劃（LTRP）

公司已採用了長期激勵計劃 （"LTIP"）。該計劃包括股票購買計劃（以股份結算）和股票增值權「SARs」 計劃（以現金結算），因此根據IFRS 2「股份支付」進行會計處理。

公司按照公允價值測定其股本結算的成本，日期爲股本利益有條件授予員工的日期。股本結算交易的成本在業績表中得到確認，與庫存股相應增加，直至履行績效和/或服務條件的期間結束。

2023年，公司批准了一項新的長期留任計劃（「LTRP」），其中包括購買計劃（以股票結算）。該計劃不包括通過公司股票的增值權獲得的現金補償。在以前期間授予的留任計劃將繼續生效直至各自的到期日，並從中獲取的現金補償將根據每個計劃中確定的條件結算。

vi) 基於股份的支付

a) LTIP

- 分享購買計劃（股份結算）

公司的某些關鍵員工通過以限制性股票單位（"RSUs"）指定的股票購買計劃獲得額外的福利，該股票購買計劃被分類爲以股票結算的股權支付。股權結算股票購買計劃的成本在授予日衡量，考慮到授予期權的條款和條件。股權結算的補償成本在合併利潤表中按照工資和福利的名稱，在規定的服務期內確認。

- SARs計劃（現金結算）

公司向關鍵員工授予了股票期權， 在服務期滿後給予他們現金支付。

現金支付金額是根據公司股價在授予日和行使日之間的增長而確定的。 SAR的責任在每個報告期的開始和結束直到結清時，根據SAR的公允價值計量，考慮授予SAR的條款和條件。 補償成本在要求的服務期間，在工資和福利項目下的綜合利潤表中承認。

SAR計劃的成本最初在授予日期以公允價值來衡量。此公允價值在直至實現日期的期間開支，並對應債務的確認。 類似於上述權益結算獎勵，貨幣結算獎勵的估值也需要使用相似的輸入，視情況而定。

b) 管理激勵計劃（「MIP」）

- MIP II

2016年2月19日，公司董事會授權對某些關鍵員工的MIP進行延期，此計劃被命名爲MIP II。根據該計劃，公司向關鍵員工授予SARs，這使他們有權在服務期後獲得現金支付。現金支付金額根據公司股價在授予日和行使時之間的增長確定。對於SARs的責任在初始時和每個報告期末進行測量，直到根據授予SARs的條款和條件解決爲止。補償成本在合併損益表中的薪酬和福利分類下，在規定的服務期內確認。

c) Board of Directors Incentive Plan (BoDIP)

Certain members of the Board of Directors of the Company receive additional benefits through a share-based plan, which has been classified as an equity-settled share-based payment and therefore accounted under IFRS 2 “Share based payment”.

In April 2018, the Board of Directors of the Company authorized a Board of Directors Incentive Plan “BoDIP”, for the benefit of certain board members. The BoDIP grants options to acquire shares of the Company or CPOs during a five-year period, which was determined on the grant date. Under this plan, no service or performance conditions are required to the board members for exercise the option to acquire shares, and therefore, they have the right to request the delivery of those shares at the time they pay for them.

In April 2023, the Company's Annual General Shareholders' Meeting modified the terms of the BoDIP so that starting in 2023 certain members of the Board of Directors receive additional benefits through a stock-based plan.

vii) Employee profit sharing

The Mexican Income Tax Law (“MITL”), establishes that the base for computing current year employee profit sharing shall be the taxpayer’s taxable income of the year for income tax purposes, including certain adjustments established in the Income Tax Law, at the rate of 10%. The Mexican Federal Labor Law (“MFLL”) establishes a limit for employee profit sharing payment, up to three months of the employee´s current salary or the average employee profit sharing received by the employee in the previous three years.

Subsidiaries in Central America do not have such profit-sharing benefit, as it is not required by local regulations.

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration.

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognizes lease liabilities for payments to be made under the lease term and right-of-use assets representing the right to use the underlying assets.

The Company recognizes right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, an estimate of costs to be incurred by the Company in dismantling and removing the underlying asset to the condition required by the terms and conditions of the lease, and lease payments made at or before the commencement date less any lease incentives received.

Components of the right-of-use assets are depreciated on a straight-line basis over the shorter of the remining lease term and the estimated useful lives of the assets, as follows:

At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.

短期租賃和低價值資產的租賃 按租賃期內的直線基礎上確認爲費用。

截至2024年9月30日和2023年12月31日，與使用權資產相關的減值損失未記錄。

公司與飛機或引擎出租商簽訂協議，根據交付，出租商同意將此類飛機或引擎租回給公司。

公司按照賣方承租人保留的使用權所佔前一計量基礎的比例計量租回資產的使用權資產。 因此，公司在合併利潤表中只確認與轉讓給買方出租人的權利相關的任何收益或損失金額。如果資產的出售對價的公允價值與資產的公允價值不等，或者租金支付率不是市場價格，則公司會調整這種差異，以公允值計量出售所得，並將任何低於市價條款視爲預付租金支付，並將任何高於市價條款視爲買方出租人向賣方承租人提供的額外融資。

首先，需要在《國際財務報告準則第15號 - 與客戶訂立的合同收入》範圍內對買賣回租交易進行分析，以驗證是否已履行績效義務，從而確認對資產出售的會計處理。如果不符合該要求，則該交易構成未成功的售後買賣回租，並應作爲金融交易進行會計處理。如果符合《國際財務報告準則第15號》中建立的績效義務要求，則公司應按照相關權利由銷售後與後續租賃交易產生的使用權資產的賬面價值與公司保留的對使用權資產的相關資產的比例進行衡量資產。因此，只會確認轉讓給承租人買方的權利相關的收益或損失。

公司的飛機和發動機租賃協議 需要特定的歸還條件，具體如下：

a) 拆除和移除基礎資產，以符合租賃協議中規定的條件，通常與飛機標準化和塗裝相關，可以在租賃開始時合理估計。這些成本最初被確認爲現值的一部分，作爲使用權資產的成本。

b) 在特定維護條件下，飛機元件（機身、APU和起落架）和發動機（大修和有限壽命部件）必須按時間返回給租賃方。 返回費用由估計確定，並自可能發生並可以可靠估計的時間開始等額確認爲負債準備。 這些返回成本將作爲可變租賃費用的組成部分以直線方式確認，而準備金將在其他負債中列入，直至剩餘租賃期結束。 公司估計與飛機元件和發動機相關的準備金，使用包括飛機預期使用和維護任務預計成本在內的某些假設。 此準備金是根據預期的滿足返回條件的未來成本的現值而制定的。

公司需要代表政府機構和機場從客戶那裏收取一定的稅費，並定期將這些稅費匯入相應的政府實體或機場。這些稅款和費用包括聯邦運輸稅、聯邦安防-半導體費、機場乘客設施費以及外國抵達和離境費。這些費用是在客戶購買機票時收取的，但不包括在乘客營業收入中。公司在收取客戶款項時記錄一項負債，並在將款項匯入相關政府實體或機場時清償該負債。

當前所得稅

當前所得稅資產和負債的金額將按預計從稅務機關收回或支付的金額進行計量。計算該金額使用的稅率和稅法是報告日期已頒佈或實質頒佈的稅率和稅法。

與直接確認的項目相關的當前所得稅將被確認在權益中。管理定期評估在涉及適用稅法可解釋情況的稅務申報表中所採用的立場，並在適當情況下建立準備。

遞延所得稅

遞延所得稅是指在資產和負債的稅基和其資產負債表日的賬面金額之間的暫時差異方面進行確認，以供財務報告目的計入。

爲所有應納稅暫時性差異確認遞延所得稅負債，但對於與子公司投資相關的應納稅暫時性差異，當能夠控制暫時性差異逆轉的時間，並且暫時性差異在可預見的未來內不會逆轉時，則可以不確認遞延所得稅負債。

遞延所得稅資產是指對所有可減少的暫時性差異、未使用的稅收抵免和所有可利用的稅務損失予以確認。遞延所得稅資產的確認幅度應不超過可能產生應稅利潤來抵銷可減少的暫時性差異、未使用的稅收抵免和可利用的稅務損失的概率，但是，關於與子公司投資相關的可減少的暫時性差異，只有在可預見的未來這些暫時性差異會扭轉並且可以利用來抵消這些差異的可預期稅利潤存在的情況下，才確認遞延稅資產。

公司考慮以下標準評估可利用未使用稅損或未使用稅收抵免的概率：(a)實體是否具有與同一稅收機構和同一應稅實體相關的足夠應稅暫時性差異，將導致可以在其到期之前利用未使用稅損或未使用稅收抵免的應稅金額；(b)公司在未使用稅損或未使用稅收抵免到期之前是否可能獲得應稅利潤；(c)未使用稅損是否來自不太可能再次發生的可識別原因；以及(d)公司是否有稅收規劃機會可以在未使用稅損或未使用稅收抵免可以利用的期間創造應稅利潤。

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred income tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred income tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction in OCI.

Deferred income tax assets and deferred income tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Income taxes are computed based on tax laws approved in Mexico, Costa Rica, Guatemala and El Salvador at the date of the consolidated statement of financial position.

The IFRIC Interpretation 23 Uncertainty over Income Tax Treatment addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 Income Taxes. It does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:

The Company determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty.

The Company applies significant judgement in identifying uncertainties over income tax treatments. Since the Company operates in a complex multinational environment, it continually assess whether the interpretation has an impact on its consolidated financial statements.

Upon adoption of the Interpretation, the Company has considered whether it has any uncertain tax positions, particularly those relating to transfer pricing. The Company’s and the subsidiaries’ tax filings in different jurisdictions include deductions related to transfer pricing and the taxation authorities may challenge those tax treatments. The Company determined, based on its tax compliance and transfer pricing studies, that it is probable that its tax treatments (including those for the subsidiaries) will be accepted by the taxation authorities.

As of September 30, 2024, and December 31, 2023, the IFRIC Interpretation 23 did not have an impact on the consolidated financial statements of the Company.

The Company mitigates certain financial risks, such as volatility in the price of jet fuel, adverse changes in interest rates and exchange rate fluctuations, through a risk management program that includes the use of derivative financial instruments and non-derivative financial instrument.

In accordance with IFRS 9, derivative financial instruments and non-derivative financial instruments are recognized in the consolidated statement of financial position at fair value. At inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which it wishes to apply hedge accounting, as well as the risk management objective and strategy for undertaking the hedge. The documentation includes the hedging strategy and objective, identification of the hedging instrument, the hedged item or transaction, the nature of the risks being hedged and how the entity will assess the effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk(s).

Only if such hedges are expected to be effective in achieving offsetting changes in fair value or cash flows of the hedge item(s) and are assessed on an ongoing basis to determine that they have been effective throughout the financial reporting periods for which they were designated, hedge accounting treatment can be used.

Under the cash flow hedge (CFH) accounting model, the effective portion of the hedging instrument’s changes in fair value is recognized in OCI, while the ineffective portion is recognized in current year earnings in the statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. The amounts recognized in OCI are transferred to earnings in the period in which the hedged transaction affects earnings. As of September 30, 2024, and December 31, 2023, the Company did not recognize an ineffective portion with respect to derivative financial instruments.

The realized gain or loss of derivative financial instruments and non-derivative financial instruments that qualify as CFH are recorded in the same caption of the hedged item in the consolidated statement of operations.

Accounting for the time value of options

The Company accounts for the time value of options in accordance with IFRS 9, which requires all derivative financial instruments to be initially recognized at fair value. Subsequent measurement for options purchased and designated as CFH requires that the option’s changes in fair value be segregated into its intrinsic value (which will be considered the hedging instrument’s effective portion in OCI) and its correspondent changes in extrinsic value (time value and volatility). The extrinsic value changes will be considered as a cost of hedging (recognized in OCI in a separate component of equity) and accounted for in income when the hedged items also are recognized in income.

IFRS 7 requires a three-level hierarchy for fair value measurement disclosures and requires entities to provide additional disclosures about the relative reliability of fair value measurements.

The Company’s equity instruments that are reacquired (treasury shares), are recognized at cost and deducted from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of treasury shares. Any difference between the carrying amount and the consideration received, if reissued, is recognized in additional paid in capital. Share-based payment options exercised during the reporting period were settled with treasury shares.

Management of Controladora monitors the Company as a single business unit that provides air transportation and related services, accordingly it has only one operating segment.

The Company has two geographic areas identified as domestic (Mexico) and international (United States of America, Central America and South America).

The Company presents assets and liabilities in the consolidated statement of financial position based on current/non-current classification. An asset is current when it is: (i) expected to be realized or intended to be sold or consumed in normal operating cycle, (ii) expected to be realized within twelve months after the reporting period, or, (iii) cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.

A liability is current when: (i) it is expected to be settled in normal operating cycle, (ii) it is due to be settled within twelve months after the reporting period, or, (iii) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

CONTROLADORA VUELA COMPAÑÍA DE AVIACIÓN,

S.A.B. DE C.V. AND SUBSIDIARIES

(d.b.a. VOLARIS)

Notes to Condensed Consolidated Financial Statements

As of September 30, 2024, and 2023

(In thousands of U.S. dollars, except when indicated otherwise)

Description of the business and summary of material accounting policy information

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (“Controladora” or the “Company”) was incorporated in Mexico in accordance with the laws of Mexico on October 27, 2005.

Controladora is domiciled in Mexico City at Av. Antonio Dovali Jaime No. 70, 13th Floor, Tower B, Colonia Zedec Santa Fe, Mexico City, Mexico, 01210.

The Company, through its subsidiary Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (“Concesionaria”), has a concession to provide air transportation services for passengers, cargo and mail throughout Mexico and abroad.

Concesionaria’s concession was granted by the Mexican federal government through the Mexican Infrastructure, Communications and Transportation Ministry (Secretaría de Infraestructura, Comunicaciones y Transportes) on May 9, 2005 initially for a period of five years and was extended on February 17, 2010 for an additional period of ten years. On February 24, 2020, Concesionaria’s concession was extended for a 20-year term starting on May 9, 2020.

Concesionaria made its first commercial flight as a low-cost airline on March 13, 2006. Concesionaria operates under the trade name of “Volaris”. On June 11, 2013, Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. changed its corporate name to Controladora Vuela Compañía de Aviación, S.A.B. de C.V.

On September 23, 2013, the Company completed its dual listing Initial Public Offering on the New York Stock Exchange (“NYSE”) and on the Mexican Stock Exchange (Bolsa Mexicana de Valores, or “BMV”), and on September 18, 2013, its shares started trading under the ticker symbol “VLRS” and “VOLAR”, respectively.

On November 16, 2015, certain shareholders of the Company completed a secondary follow-on equity offering on the NYSE.

On December 11, 2020, the Company announced the closing of an upsized primary follow-on equity offering in which the Company offered 134,000,000 of its Ordinary Participation Certificates (Certificados de Participación Ordinarios), or CPOs, in the form of American Depositary Shares, or ADSs, at a price to the public of US$11.25 per ADS in the United States and other countries outside of Mexico, pursuant to the Company’s shelf registration statement filed with the Securities and Exchange Commission (the “SEC”). In connection with the offering, the underwriters exercised their option to purchase up to 20,100,000 additional CPOs in the form of ADSs. Each ADS represents 10 CPOs and each CPO represents a financial interest in one Series A share of common stock of the Company.

On November 10, 2016, the Company, through its subsidiary Vuela Aviación, S.A. (“Volaris Costa Rica”), obtained from the Costa Rica Civil Aviation Authority an Air Operator Certificate to provide air transportation services for passengers, cargo and mail, in scheduled and non-scheduled flights for an initial period of five years. On December 20, 2021, Volaris Costa Rica´s Air Operator Certificate was renewed, modified and extended for an additional 15- years term. Volaris Costa Rica started operations on December 1, 2016.

On August 25, 2021, the Company through its subsidiary Vuela El Salvador, S.A. de C.V. (“Volaris El Salvador”) obtained from the El Salvadorian Civil Aviation Authority an Operation Permit, for scheduled and non-scheduled international public air transportation services for passengers, cargo and mail valid until May 30, 2024. On May 28, 2024 Volaris El Salvador’s Operation Permit was renewed, modified and extended for an additional 5-years term. Volaris El Salvador started operations on September 15, 2021.

On October 13, 2021, Concesionaria, completed the issuance of fifteen million (15,000,000) of asset backed trust notes (certificados bursátiles fiduciarios) (the “Trust Notes”) issued under the ticker VOLARCB 21L for an amount of Ps.1.5 billion Mexican pesos (US$72.1 million, based on an exchange rate of Ps.20.80 to US$1 on October 13, 2021), issued by CIBanco, S.A., Institución de Banca Múltiple, acting as Trustee of the Irrevocable Trust number CIB/3249 created by Concesionaria, in the second offering under the program authorized by the Mexican National Banking and Securities Commission for an amount of up to Ps.3.0 billion (three billion pesos 00/100 national currency) (US$144.2 million, based on an exchange rate of Ps.20.80 to US$1 on October 13, 2021). The Trust Notes are aligned with the Sustainability-Linked Bond Principles 2020, administered by the International Capital Market Association (ICMA) and has Sustainability Objectives (SPT) for the Key Performance Indicator (KPI), to reduce carbon dioxide emissions from Volaris´ operations, measured as grams of CO2 emissions per revenue passenger/kilometer (gCO2 / RPK) by 21.54%, 24.08% and 25.53% by 2022, 2023 and 2024, respectively, compared to 2015. This offering incentives the Company to accomplish its long-term sustainable goals, among which are to reduce CO2 emissions by 35.42% gCO2 / RPK by 2030 vs 2015. The Trust Notes have a maturity of five years and will pay an interest rate of TIIE 28 plus 200 basis points.

On September 28, 2023 “Concesionaria” completed the offering of 15,000,000 (fifteen million) asset backed trust notes (certificados bursátiles fiduciarios) (the “Trust Notes “) in Mexico under the ticker VOLARCB 23 for an amount of Ps.1.5 billion Mexican pesos (US$85.8 million, based on an exchange rate of Ps.17.47 to US$1 on September 28, 2023) by CIBanco, S.A., Institución de Banca Múltiple, acting as Trustee of the Irrevocable Trust number CIB/3249 created by Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., in the third offering under the program authorized and enlarged by the Mexican National Banking and Securities Commission for an amount of up to Ps.5.0 billion Mexican pesos (US$286.2 million, based on an exchange rate of Ps.17.47 to US$1 on September 28, 2023). The Trust Notes will be backed by future collection rights under agreements entered into with credit card processors regarding flows derived from the sale of airline tickets and other related services through VISA and Mastercard credit cards, through their internet portal, travel agencies, call centers and sales offices. The Trust Notes have a maturity term of five years and will pay an interest rate of Tasa de Interes Interbancaria de Equilibrio (“TIIE”) 28 plus 215 basis points spread. The underwriters were Casa de Bolsa BBVA México, S.A. de C.V., Grupo Financiero BBVA México and Actinver Casa de Bolsa, S.A. de C.V., Grupo Financiero Actinver.

On November 22, 2023, all holders of the 57,513,873 outstanding Series B shares of the Company concluded the conversion of all Series B Shares into 57,513,873 Series A Shares represented by Ordinary Participation Certificates (Certificados de Participación Ordinarios) in the form of the corresponding American Depositary Shares.

The accompanying unaudited condensed consolidated interim financial statements and notes were approved for issuance by the Company’s Chief Executive Officer, Enrique J. Beltranena Mejicano, and the Chief Financial Officer, Jaime E. Pous Fernández, on October 16, 2024 and subsequent events were considered through that date.

Basis of preparation

Statement of compliance

The unaudited condensed consolidated interim financial statements, which include the condensed consolidated statements of financial position as of September 30, 2024 (unaudited) and December 31, 2023 (audited) and the condensed consolidated statements of operations, comprehensive income, for the three and nine months period ended September 30, 2024 and 2023 (unaudited), changes in equity and cash flows for the nine months period ended September 30, 2024 and 2023 (unaudited), have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting and using the same accounting policies as in preparing the annual financial statements, with the exceptions explained below.

The unaudited condensed consolidated interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company’s annual consolidated financial statements as of December 31, 2023, and 2022 (audited).

Items included in the unaudited condensed consolidated interim financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which each entity operates (“functional currency”). The functional currency of Company and its subsidiary Concesionaria is the US dollar. The presentation currency of the Company’s unaudited condensed consolidated interim financial statements is the US dollar. All values in the unaudited condensed consolidated interim financial statements are rounded to the nearest thousand (US$000), except when otherwise indicated.

The Company has consistently applied its accounting policies to all periods presented in these financial statements and has provided comparative information for the previous period.

Basis of measurement and presentation

The accompanying unaudited condensed consolidated interim financial statements have been prepared under the historical-cost convention, except for derivative financial instruments that are measured at fair value.

The preparation of the unaudited condensed consolidated interim financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the amounts reported in the accompanying unaudited condensed consolidated interim financial statements and notes. Actual results could differ from those estimates.

The accompanying unaudited condensed consolidated interim financial statements comprise the financial statements of the Company and its subsidiaries. On September 30, 2024 (unaudited) and December 31, 2023 (audited), for accounting purposes the companies included in the unaudited condensed consolidated interim financial statements are as follows:

The financial statements of the subsidiaries are prepared for the same reporting period as the parent Company, using consistent accounting policies.

Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, the Company has:

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

The Company re-assesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Company gains control until the date the Company ceases to control the subsidiary.

All intercompany balances, transactions, unrealized gains and losses resulting from intercompany transactions are eliminated in full on consolidation in the consolidated financial statements.

On consolidation, the assets and liabilities of foreign operations are translated into U.S. dollar at the exchange rates prevailing at the reporting date and their statements of profit or loss are translated at the average exchange rates prevailing at the time. The exchange differences arising on translation for consolidation are recognized in other comprehensive income (“OCI”). On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognized in profit or loss.

Impact of new International Financial Reporting Standards

New and amended standards and interpretations already effective

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company´s annual consolidated financial statements for the year ended 31 December 2023, except for the adoption of new standards effective as of 1 January 2024.

The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Several amendments apply for the first time in 2024, but do not have an impact on the interim condensed consolidated financial statements of the Company.

The nature and the effect of these changes are disclosed below:

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

• What is meant by a right to defer settlement.
• That a right to defer must exist at the end of the reporting period.
• That classification is unaffected by the likelihood that an entity will exercise its deferral right.
• That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

In addition, a requirement has been introduced to require disclosure when a liability arising from a loan agreement is classified as noncurrent and the entity’s right to defer settlement is contingent on compliance with future covenants within twelve months.

The amendments are effective for annual reporting periods beginning on or after January 1st, 2024, and must be applied retrospectively.

As of September 30, 2024, these amendments did not have an impact on the unaudited interim condensed consolidated financial statements of the Company.

Amendments to IFRS 16: Lease Liability in a Sale and Leaseback

In September 2022, the IASB issued amendments to IFRS 16 to specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains.

The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and must applied retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16. Earlier application is permitted, and that fact must be disclosed.

As of September 30, 2024, these amendments did not have an impact on the unaudited interim condensed consolidated financial statements of the Company.

Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7

In May 2023, the IASB issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk.

The amendments will be effective for annual reporting periods beginning on or after 1 January 2024. Early adoption is permitted but will need to be disclosed.

As of September 30, 2024, these amendments did not have an impact on the unaudited interim condensed consolidated financial statements of the Company.

Use of judgments, estimates and assumptions

The preparation of these unaudited interim condensed consolidated financial statements in accordance with IAS 34 requires management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities at the date of the Company’s unaudited interim condensed consolidated financial statements.

Seasonality of operations

The results of operations for any interim period are not necessarily indicative of those for the entire year because the business is subject to seasonal fluctuations. The Company expect demand to be greater during the summer in the northern hemisphere, in December and around Easter, which can fall either in the first or second quarter, compared to the rest of the year. The Company and subsidiaries generally experience their lowest levels of passenger traffic in February, September, and October, given their proportion of fixed costs, seasonality can affect their profitability from quarter to quarter. This information is provided to allow for a better understanding of the results; however, management has concluded that this does not constitute “highly seasonal” as considered by IAS 34.

Financial instruments and risk management

Financial risk management

The Company’s activities are exposed to different financial risks stemming from exogenous variables which are not under their control but whose effects might be potentially adverse such as: (i) market risk, (ii) credit risk, and (iii) liquidity risk.

The Company’s global risk management program is focused on uncertainty in the financial markets and tries to minimize the potential adverse effects on net earnings and working capital requirements. The Company uses derivative financial instruments to hedge part of such risks. The Company does not enter derivatives for trading or speculative purposes. The sources of these financial risk exposures are included in both “on balance sheet” exposures, such as recognized financial assets and liabilities, as well as in “off-balance sheet” contractual agreements and on highly expected forecasted transactions.

These on and off-balance sheet exposures, depending on their profiles, do represent potential cash flow variability exposure, in terms of receiving less inflows or facing the need to meet outflows which are higher than expected, therefore increase the working capital requirements.

Since adverse movements erode the value of recognized financial assets and liabilities, as well some other off-balance sheet financial exposures, there is a need for value preservation, by transforming the profiles of these fair value exposures. The Company has a Finance and Risk Management department, which identifies and measures financial risk exposures, to design strategies to mitigate or transform the profile of certain risk exposures, which are taken up to the corporate governance level for approval.

Market risk 

Since the contractual agreements with jet fuel suppliers include reference to jet fuel index, the Company is exposed to fuel price risk which might have an impact on the forecasted consumption volumes. The Company’s jet fuel risk management policy aims to provide the Company with protection against increases in jet fuel prices. In an effort to achieve the aforesaid, the risk management policy allows the use of derivative financial instruments available on over the counter (“OTC”) markets with approved counterparties and within approved limits. Aircraft jet fuel consumed in the three months period ended September 30, 2024, and 2023 represented 32% and 39% of the Company’s operating expenses, respectively. Additionally, aircraft jet fuel consumed in the nine months ended September 30, 2024, and 2023 represented 34% and 39% of the Company’s operating expenses, respectively.

In September 2024, the Company contracted Asian Call Options on US Gulf Coast Jet Fuel 54 designated to hedge 25,832 thousand gallons. These hedges represented a portion of the projected consumption for the 4Q 2024 and 1Q 2025.

For the three and nine months period ended September 30, 2023, the Company did not enter into derivative financial instruments to hedge jet fuel.

In accordance with IFRS 9 the Company separates the intrinsic value from the extrinsic value of an option contract; as such, the change in the intrinsic value can be designated as hedge accounting. Because extrinsic value (time and volatility values) of the option is related to a “transaction related hedged item”, it is required to be segregated and accounted for as a cost of hedging in OCI and accrued as a separate component of stockholders’ equity until the related hedged item matures and therefore impacts profit and loss.

The underlying asset (US Gulf Coast Jet Fuel 54) is a consumption asset (energy commodity), which is not in the Company’s inventory. Instead, it is directly consumed by the Company’s fleet at different airport terminals. Therefore, although a non-financial asset is involved, its initial recognition does not generate a book adjustment in the Company’s inventories.

Rather, it is initially accounted for in the Company’s OCI and a reclassification adjustment is made from OCI to profit and loss and recognized in the same period or periods in which the hedged item is expected to be allocated to profit and loss. Furthermore, when performing hedges, the Company hedges its forecasted jet fuel consumption month after month, which is consistent with the maturity date of the monthly serial Asian call options.

As of September 30, 2024, the fair value of the outstanding US Gulf Coast Jet Fuel Asian call options was US$956. The cost of hedging derived from the extrinsic value changes of the jet fuel hedged position given the out-of the-money position as of September 30, 2024 recognized in other comprehensive income totals US$418.

The cost of hedging will be recycled to the fuel cost during 4Q 2024 and 1Q 2025, as these options expire on a monthly basis and the jet fuel is consumed.

^* US Gulf Coast Jet Fuel 54 as underlying asset

^** Weighted Average

The Company is exposed to transactional foreign currency risk due to potential mismatches between the currencies in which sales, expenses, receivables, and borrowings are denominated, and the respective functional currencies of the Company and its subsidiaries. The U.S. dollar is the functional currency for Controladora and its main subsidiaries. Transactions are primarily denominated in U.S. dollars and Mexican pesos, with minor transactions denominated in other currencies such as Quetzales, Colombian pesos, and Colones.

Foreign currency risk arises from possible unfavorable movements in the exchange rate which could have a negative impact in the Company’s cash flows. To mitigate this risk, the Company may use foreign exchange derivative financial instruments and non-derivative financial instruments.

The summary of quantitative data about the Company’s exposure to currency risk As of September 30, 2024, is as set forth below:

⁽¹⁾ The foreign exchange exposure includes: Colones, Quetzales and Colombian pesos.

At October 22, 2024, date of issuance of these unaudited condensed consolidated financial statements, the exchange rate was Ps. 19.8325 per U.S. dollar.

The summary of quantitative data about the Company’s exposure to currency risk As of December 31, 2023, is as set forth below:

⁽¹⁾ The foreign exchange exposure includes: Colones, Quetzales and Colombian pesos.

In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company initially recognizes the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Company determines the transaction date for each payment or receipt of advance consideration.

As of September 30, 2024 and December 31, 2023, the Company did not enter into foreign exchange rate derivatives financial instruments. 

Interest rate risk is the risk that the fair value of future cash flows will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations and flight equipment lease agreements with floating interest rates.

The Company’s results are affected by fluctuations in certain benchmark market interest rates due to the impact that such changes may have on interest bearing contractual agreements indexed to the Secured Overnight Financing Rate (“SOFR”).

In November 2020 the ICE Benchmark Administration (“IBA”), the FCA-regulated and authorized administrator of LIBOR, announced that starting 2022, LIBOR would no longer be used to issue new loans and the last rates were published on 30 September 2023. As of September 30, 2024, and December 31, 2023, all our US dollar financing facilities at floating rate are referenced to SOFR.

The Company uses derivative financial instruments to reduce its exposure to fluctuations in market interest rates and accounts for these instruments as an accounting hedge.

In most cases, when a derivative can be tailored within the terms and it perfectly matches cash flows of a leasing agreement, it may be designated as a CFH and the effective portion of fair value variations are recorded in equity until the date the cash flow of the hedged lease payment is recognized in the consolidated statements of operations.

In July 2019 the Irrevocable Trust number CIB/3249, whose trustor is the Company, entered a cap to mitigate the risk due to interest rate increases on the CEBUR (VOLARCB19) coupon payments. The floating rate coupons reference to TIIE 28 were limited under the “cap” to 10% on the reference rate for the life of the CEBUR (VOLARCB19) and had the same amortization schedule.

The cap started on July 19, 2019, and the maturity date was June 20, 2024, consisting of 59 “caplets” with the same specifications as the CEBUR (VOLARCB19) coupons for reference rate determination, coupon term, and fair value.

In addition, during November 2021 the Trust entered a cap to mitigate the risk due to interest rate increases on the CEBUR (VOLARCB21L) coupon payments. The floating rate coupons reference to TIIE 28 limited under the cap to 10% on the reference rate for the life of the CEBUR (VOLARCB21L) and have the same amortization schedule.

The cap started on November 3, 2021, and the maturity date is October 20, 2026, consisting of 59 “caplets” with the same specifications as the CEBUR (VOLARCB21L) coupons for reference rate determination, coupon term, and fair value.

In October 2023 the Trust entered a cap to mitigate the risk due to interest rate increases on the CEBUR (VOLARCB23) coupon payments. The floating rate coupons reference to TIIE 28 are limited under the cap to 13% on the reference rate for the life of the CEBUR (VOLARCB23) and have the same amortization schedule.

The cap started on October 20, 2023, and the maturity date is September 20, 2028, consisting of 59 “caplets” with the same specifications as the CEBUR (VOLARCB23) coupons for reference rate determination, coupon term, and fair value.

As of September 30, 2024 and December 31, 2023, the Company’s outstanding hedging contracts in the form of interest rate caps with notional of US$129.5 million and US$187.4 million, respectively, had fair values of US$308 and US$1,683, respectively, and are presented as part of the financial assets in the condensed consolidated statement of financial position.

During the three months period ended September 30, 2024, and 2023, the amortization of the intrinsic value of the cap was US$211 and US$154, respectively, recycled to the statement of operations as part of the finance cost.

During the nine months period ended September 30, 2024, and 2023, the amortization of the intrinsic value of the cap was US$706 and US$352, respectively, recycled to the statement of operations as part of the finance cost.

In August 2024 the Company entered into T-Locks agreements (Treasury Rate Locks) to mitigate the risk associated with floating rates indexed to lease agreements. The floating rate referenced to US5Y (United States 5Y Treasury Note) was locked for a notional of US$24,900 maturing in August 2024. As of September 30, 2024 the Company recognized a total of US$124 in other comprehensive income.

As of September 30, 2024, the Company does not have any outstanding hedging contracts balances in the form of T-Locks.

Liquidity risk represents the risk that the Company has insufficient funds to meet its obligations. Because of the cyclical nature of the business, the operations, and its investment and financing needs related to the acquisition of new aircraft and renewal of its fleet, the Company requires liquid funds to meet its obligations.

The Company manages its cash, cash equivalents and its financial assets, relating the terms of investments with those of its obligations. Its policy is that the average term of its investments may not exceed the average term of its obligations. This cash and cash equivalents position is invested in highly liquid short-term instruments through financial entities.

The Company has future obligations related to maturities of bank borrowings, lease liabilities and derivative contracts. The Company’s exposure outside consolidated statements of financial position represents the future obligations related to aircraft purchase contracts. The Company concluded that it has a low concentration of risk since it has access to alternate sources of funding.

The Company has debts related to the Aircraft pre-delivery payments, which are settled with the reimbursement of the Aircraft pre-delivery payments when the sale and leaseback transaction is carried out.

The table below presents the Company’s contractual principal payments required on its financial liabilities and the derivative financial instruments fair value:

Credit risk is the risk that any counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments including derivatives.

Financial instruments that expose the Company to credit risk involve mainly cash equivalents and accounts receivable. Credit risk on cash equivalents relates to amounts invested with major financial institutions.

Credit risk on accounts receivable relates primarily to amounts receivable from the international credit card companies. The Company has a high receivable turnover; hence management believes credit risk is minimal due to the nature of its businesses, which have a large portion of their sales settled in credit cards.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties have a high credit rating assigned by international credit-rating agencies.

Outstanding derivative financial instruments could expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. However, the Company does not expect any of its counterparties to fail to meet their obligations. The amount of such credit exposure is generally the unrealized gain, if any, in such contracts.

To manage credit risk, the Company selects counterparties based on credit assessments, limits overall exposure to any single counterparty and monitors the market position with each counterparty. The Company does not purchase or hold derivative financial instruments for trading purposes.

As of September 30, 2024, the Company determined that its credit risk associated with outstanding derivative financial instruments is low, as it exclusively engages in such instruments with counterparties that have high credit ratings assigned by international credit-rating agencies.

Management believes that the resources available to the Company are enough for its present requirements and will be sufficient to meet its anticipated requirements for capital expenditures and other cash requirements for the next fiscal year. The primary objective of the Company’s capital management is to ensure that it maintains healthy capital ratios to support its business and maximize the shareholder’s value. No changes were made in the objectives, policies, or processes for managing capital during the nine months period ended September 30, 2024 and the year ended December 31, 2023. The Company is not subject to any externally imposed capital requirement, other than the legal reserve.

As part of the management strategies related to acquisition of its aircraft (pre-delivery payments), the Company pays the associated short-term obligations by entering into sale-leaseback agreements, whereby an aircraft is sold to a lessor upon delivery.

Fair value measurements

The only financial assets and liabilities measured at fair value after initial recognition are the derivative financial instruments. Fair value is the price that would be received from sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

The principal or the most advantageous market must be accessible to the Company.

The fair value of an asset or a liability is assessed using the course of thought which market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

The assessment of a non-financial asset’s fair value considers the market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the unaudited condensed consolidated interim financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

For assets and liabilities that are recognized in the unaudited condensed consolidated financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

Set out below, is a comparison by class of the carrying amounts and fair values of the Company’s financial instruments, other than those for which carrying amounts are reasonable approximations of fair values:

The following table summarizes the fair value measurements by hierarchy as of September 30, 2024:

⁽¹⁾ SOFR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt.

There were no transfers between level 1 and level 2 during the period.

⁽²⁾ Jet fuel forward levels.

The following table summarizes the fair value measurements by hierarchy as of December 31, 2023:

⁽¹⁾ SOFR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt.

There were no transfers between level 1 and level 2 during the period.

The following table summarizes the gain from derivatives financial instruments recognized in the unaudited condensed consolidated statements of operations for the three months period ended September 30, 2024, and 2023:

Unaudited condensed consolidated statements of operations

The following table summarizes the gain from derivatives financial instruments recognized in the unaudited condensed consolidated statements of operations for the nine months period ended September 30, 2024, and 2023:

Unaudited condensed consolidated statements of operations

The following table summarizes the net loss on CFH before taxes recognized in the unaudited condensed consolidated statements of other comprehensive income for the three months period ended September 30, 2024, and 2023:

Unaudited condensed consolidated statements of other comprehensive income

The following table summarizes the net loss on CFH before taxes recognized in the unaudited condensed consolidated statements of other comprehensive income for the nine months period ended September 30, 2024, and 2023:

Unaudited condensed consolidated statements of other comprehensive income

Financial assets and liabilities

As of September 30, 2024 and December 31, 2023, the Company’s financial assets measured at amortized cost are represented by cash, cash equivalents and restricted cash, short-term investments, trade and other accounts receivable, for which their carrying amount is a reasonable approximation of fair value.

TIIE: Mexican interbank rate

SOFR: Secured Overnight Financing Rate

⁽¹⁾ Sustainability adjustment

(ii) The following table provides a summary of the Company’s scheduled remaining principal payments of financial debt and accrued interest on September 30, 2024:

On June 8, 2022, the Company entered pre-delivery payments financing with Santander/Bancomext at an annual interest rate of SOFR plus 298 basis points, for the acquisition of its aircraft through a revolving facility. For purposes of financing these pre-delivery payments, a Mexican trust was created whereby, the Company assigned its rights and obligations under the Airbus Purchase Agreement with Airbus S.A.S. (“Airbus”), including its obligation to make pre-delivery payments to the Mexican trust. The Company guaranteed the obligations of the Mexican trusts under the financing agreement (CIBanco, S.A. Institución de Banca Múltiple) Trust 3853. A feature of this financing is that it will incur an additional five (5) basis points if the sustainability goals are not met. On August 31, 2023, the interest rate increased by five (5) basis points, with the possibility of mitigating the additional rate if the objectives are met in the upcoming years.

In August 2024, the Company signed an amendment to increase the facility amount and include the predelivery payments for additional aircraft, with a new maturity date on December 31, 2028.

The “Santander/Bancomext 2022” loan agreement provides for certain covenants, including limits to the ability to, among others:

As of September 30, 2024 and December 31, 2023, the Company complied with the covenants under the mentioned loan agreement.

The Company signed in April 2022 three pre-delivery payments financing with lessors for the acquisition of aircraft. For this purpose, a Mexican trust was created for each contract (CIBanco, S.A. Institución de Banca Múltiple), for JSA International U.S. Holdings, LLC Trust 3866, for GY Aviation Lease 1714 Co. Limited Trust 3855, and Incline II B Shannon 18 Limited Trust 3867. These facilities do not include financial covenants or restrictions.

The company signed in July 2022 a pre-delivery payment financing with lessors for the acquisition of aircraft with Oriental Leasing 6 Company Limited. For this purpose, a Mexican trust was created with CIBanco, S.A. Institución de Banca Múltiple, Trust 3921. This facility does not include financial covenants or restrictions.

On June 20, 2019, the Company, through its subsidiary Concesionaria issued 15,000,000 asset-backed trust notes (“CEBUR”) under the ticket VOLARCB 19 for Ps.1.5 billion Mexican pesos (US$76.4 million, based on an exchange rate of Ps.19.63 to US$1 on September 30, 2024), through the Fideicomiso Irrevocable de Administración número CIB/3249 created by Concesionaria. The issuance amount is part of a program approved by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) for an amount of up to Ps.3.0 billion Mexican pesos (US$152.8 million, based on an exchange rate of Ps.19.63 to US$1 on September 30, 2024).

The notes had a five-year maturity annual reduction of Ps.250,000, Ps.500,000, Ps.500,000 and Ps.250,000 (US$12.7 million, US$25.4 million, US$25.4 million y US$12.7 million, based on an exchange rate of Ps.19.63 to US$1 on September 30, 2024) in 2021, 2022, 2023 and 2024, respectively, with a floating one-month coupon rate referenced to TIIE 28 plus 175 basis points spread. The notes started amortizing at the end of the second year.

The asset-backed trust notes under the ticker VOLARCB19 were fully amortized on June 20, 2024.

On October 13, 2021, the Company, through its subsidiary Concesionaria issued in the Mexico market a second issuance of 15,000,000 asset-backed trust notes (“CEBUR”) under the ticket VOLARCB21L for Ps.1.5 billion Mexican pesos (US$76.4 million, based on an exchange rate of Ps.19.63 to US$1 on September 30, 2024), through the Fideicomiso Irrevocable de Administración número CIB/3249 created by Concesionaria. The issuance amount is part of a program approved by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) for an amount of up to Ps.3.0 billion Mexican pesos (US$152.8 million, based on an exchange rate of Ps.19.63 to US$1 on September 30, 2024). With this second issuance, the total amount approved for the program had been reached.

The Trust Notes comply with the Sustainability-Linked Bond Principles 2020, administered by the International Capital Market Association (ICMA). The Sustainability Objectives (SPT) for the KPI, are to reduce carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer (gCO2 / RPK) by 21.54%, 24.08% and 25.53% by 2022, 2023, and 2024, respectively, compared to 2015. This offering will help the Company to accomplish its long-term sustainable goals, among which is to reduce CO2 emissions by 35.42% in 2030.

A feature of the asset-backed trust notes is that they will pay an additional twenty-five (25) basis points to the interest rate if the sustainability goals are not met. On September 20, 2023, the interest rate increased by twenty-five (25) basis points, with the possibility of mitigating the additional rate if the 2023 or 2024 targets are met.

The notes have a five-year maturity annual reduction of Ps.83,333, Ps.500,000, Ps.500,000 and Ps.416,667 (US$4.2 million, US$25.4 million, US$25.4 million y US$21.2 million, based on an exchange rate of Ps.19.63 to US$1 on September 30, 2024) in 2023, 2024, 2025 and 2026, respectively, with a floating one-month coupon rate referenced to TIIE 28 plus 200 basis points, and adjustment of twenty-five (25) basis points starting on September 20th, 2023. The notes started amortizing at the end of the second year.

On September 28, 2023, the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) approved an increasing amount of the actual program of up to Ps.5.0 billion Mexican pesos (US$254.7 million, based on an exchange rate of Ps.19.63 to US$1 on September 30, 2024). With this authorization, the Company, through its subsidiary Concesionaria issued in the Mexico market a third issuance of 15,000,000 asset-backed trust notes (“CEBUR”) under the ticket VOLARCB23 for Ps.1.5 billion (US$76.4 million, based on an exchange rate of Ps.19.63 to US$1 on September 30, 2024) through the Fideicomiso Irrevocable de Administración número CIB/3249 created by Concesionaria.

The notes have a five-year maturity annual reduction of Ps.187,500, Ps.750,000 and Ps.562,500 (US$9.5 million, US$38.2 million and US$28.6 million, based on an exchange rate of Ps.19.63 to US$1 on September 30, 2024) in 2026, 2027 and 2028, respectively, with a floating one-month coupon rate referenced to TIIE 28 plus 215 basis points spread. The notes will start amortizing at the end of the third year.

The asset-backed trust note’s structure operates on specific rules and provides a DSCR “Debt Service Coverage Ratio” which is computed by comparing the Mexican Peso collections over the previous six months to the next six months of debt service. In general, retention of funds does not exist if the ratio exceeds 2.5 times. Amortization on the asset-backed trust notes began in July of 2021 for the first issuance, the second issuance began in November of 2023 and the third issuance will begin in October 2026. In addition, early amortization applies if:

In the event of default, the Trustee will refrain from delivering any amount that it would otherwise require to deliver to Concesionaria and will dedicate the use of such cash flow to amortize the principal of the trust notes (“CEBUR”).

As of September 30, 2024, the Company was in compliance with the conditions of the asset-backed trusted notes.

In December 2021, the Company renewed its working capital facility with Banco Sabadell S.A., Institución de Banca Multiple (“Sabadell”) in Mexican pesos. The facility matured in December 2023.

The “Sabadell” working capital facility had the following covenant:

i) Joint obligor (Concesionaria) must represent 85% of EBITDA of the holding.

The Company settled this short-term loan on January 5, 2023, as such any potential effects of the non-compliance were solved with the payment. The non-compliance did not trigger any cross-default provisions in other debt instruments or any lease agreement of the Company. The facility expired in December 2023.

In December 2022, the Company signed a working capital facility with Banco Actinver S.A., Institución de Banca Múltiple (“Actinver”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus 250 basis points margins. As of September 30, 2024, the facility is not disbursed.

The “Actinver” working capital facility does not include certain obligations.

Other financial agreements

During 2023, the Company entered into several agreements that qualified as failed sale and leaseback transactions. Consequently, these agreements were accounted for as financing transactions. The details of these agreements are presented as follows:

1) In September 2023, the Company entered into financing agreements with Tarquin Limited for the acquisition of engines The agreements bear an annual interest rate of 6.20% and mature in 2028.

2) In September 2023, the Company also entered into additional financing agreements with NBB-V11218 Lease Partnership and with NBB-V11951 Lease Partnership, for the acquisition of engines. These agreements bear an annual interest of 6.20% and mature in 2028.

3) In September and October 2023, the Company entered into financing agreements with Wilmington Trust SP Services (Dublin) Limited (not in its individual capacity but solely as Owner Trustee) for the acquisition of engines. These agreements bear an annual interest rate of 7.16% and mature in 2028.

4) In November 2023, the Company entered into financing agreements with NBB Pintail Co Ltd for the acquisition of engines. These agreements bear an annual interest rate of 6.99% and mature in 2028.

5) In August and September 2024, the Company entered into financing agreements with Bank of Utah Corporate Trust, for the acquisition of engines. These agreements bear an annual interest rate of 6.10% and mature in 2029.

Cash, cash equivalents and restricted cash

As of September 30, 2024, and December 31, 2023, this caption is comprised as follows:

(1) As of September 30, 2024, and December 31, 2023, the Company recorded a portion of advance ticket sales by an amount of US$9,146 and US$12,936, respectively as a restricted fund. The restricted funds held in Trust are used to constitute the debt service reserves and cannot be used for purposes other than those established in the contract of the Trust.

Related parties

All companies are considered affiliates, since the Company’s primary shareholders or directors are also direct or indirect shareholders of the related parties:

^{(1) This amount includes expenses related to major maintenance.}

^{(1) This amount includes expenses related to major maintenance.}

Frontier is considered a related party because Brian H. Franke and Andrew Broderick serve as members of both, the Company´s board of directors and Frontier´s board of directors. They are also managing directors of Indigo Partners, which has investments in both Companies.

As of September 30, 2024 the account receivable was US$3,973. As of December 31, 2023, the Company did not have outstanding balance due to Frontier.

As of September 30, 2024, and December 31, 2023, the account payable was US$1,996 and US$1,918, respectively.

During the three months and nine months period ended September 30, 2024, the Company recognized revenues of US$3,208. During the three months and nine months period ended September 30, 2023, the Company did not recognize revenues.

Servprot was a related party until June 13, 2023, because Enrique Beltranena Mejicano, the Company’s Chief Executive Officer and director was shareholder of such Company. Servprot provides security services for Mr. Beltranena and his family.

During the nine months period ended September 30, 2023, the Company expensed USD$115 for this concept.

Aeroman is a related party, because Marco Baldocchi a member of the board of the Company’s board of directors is an alternate director of Aeroman. On January 1^st, 2017, the Company entered into an aircraft maintenance and repair services agreement with Aeromantenimiento, S.A., which was extended and amended to be entered into with MRO Commercial, S.A. ("MRO”), an affiliate of Aeroman on January 1^st, 2022. This agreement provides for the exclusive use of Aeroman's services for the repair and maintenance of aircraft, subject to availability. Under this agreement, Aeroman provides inspection, maintenance, repair and overhaul services for aircraft. The Company makes payments under this agreement depending on the services performed. This agreement is for a five-year term, extended for an additional 5-year period as of January 1st, 2022.

As of September 30, 2024, and December 31, 2023, the Company did not have outstanding balance due to Aeroman.

As of September 30, 2024, and December 31, 2023, the balances due under the agreement with MRO were US$1,569 and US$8, respectively.

During the three months period ended September 30, 2024, and 2023, the Company incurred expenses in aircraft maintenance and technical support with MRO amounted to US$4,941 and US$4,403, respectively. During the nine months period ended September 30, 2024, and 2023, the Company incurred expenses in aircraft maintenance and technical support with MRO amounted to US$15,961 and US$13,036, respectively.

MACF is a related party because Ricardo Maldonado Yañez and Eugenio Macouzet de León, member and alternate member, respectively, of the board of the Company since April 2018, are partners of MACF provides legal services to us. As of September 30, 2024, and December 31, 2023 the balances due under the agreement with MACF was US$100 and US$105, respectively.

During the three months period ended September 30, 2024, and 2023, the Company recognized expenses in legal services under this agreement amounted to US$52 and US$32, respectively. During the nine months period ended September 30, 2024, and 2023, the Company recognized expenses in legal services under this agreement amounted to US$139 and US$234, respectively.

OMA was considered a related party, because Mr. Ricardo Maldonado Yañez, was an independent member of OMA´s board of directors, is an independent member of our board of directors and the chairman of our Corporate Practices Committee. Additionally, Mrs. Guadalupe Phillips Margain, one of our independent member, was a member of OMA´s board of directors until November 2022.

As of the issuance date of this report, OMA is no longer a related party.

During the three months period ended September 30, 2023, the Company recognized expenses with OMA of US$3,454. During the nine months period ended September 30, 2023, the Company recognized expenses with OMA of US$9,127.

Chevez is a related party because Mr. José Luis Fernández Fernández is an independent member of the board of directors, as well as the chairman of the Audit Committee of the Company and non-managing limited partner of Chevez. Chevez provides tax advisory services to us. As of September 30, 2024, and December 31, 2023, the account payable with Chevez was US$264 and US$620, respectively.

During the three months period and ended September 30, 2024, and 2023 the Company recognized expenses with Chevez of US$36 and US$223, respectively. During the nine months period and ended September 30, 2024, and 2023 the Company recognized expenses with Chevez of US$178 and US$732, respectively.

From July 4, AISG has been considered a related party due to Harry F. Krensky, a member of our Board of Directors, is the Chairman of the Board of Directors of AISG. Additionally, Harry F. Krensky is managing partner of Discovery Americas, a private equity firm that indirectly holds/manages an investment position in AISG. As of September 30, 2024, and December 31, 2023, the account payable with AISG was US$301 and US$313, respectively.

During the three months period ended September 30, 2024, and 2023, the Company recognized expenses in aircraft and engine maintenance amounted to US$792 and US$932, respectively. During the nine months period ended September 30, 2024, and 2023, the Company recognized expenses in aircraft and engine maintenance amounted to US$2,245 and US$2,086, respectively.

Jetsmart is a related party because Brian H. Franke and Andrew Broderick serve as members of the Board of Directors of both, the Company and Jetsmart. On March 15, 2024, the Company entered into an agreement to provide pilot professional technical cooperation services with Jetsmart Airlines SpA.

As of September 30, 2024, the Company´s account receivable with Jetsmart was US$120. As of December 31, 2023, the Company did not have outstanding balance due to Jetsmart.

During the three months and nine months period ended September 30, 2024, the Company recorded revenues of US$120 and US$240, respectively.

CleanJoule is considered related party because Mr. Brian H. Franke, the chairman of our board of directors, is an officer of Franke Family Joule, LLC. Since May 23, 2023, he has been a shareholder of CleanJoule and has the right to appoint a member of its board of directors. Additionally, on May 23, 2023, Mr. Andrew Broderick, a member of our board of directors, was appointed by Franke Family Joule, LLC, as a member of the board of directors of CleanJoule. CleanJoule is a Company that produces high-performance and cost-effective Sustainable Aviation Fuel from agricultural waste and organic residues. The Company directly purchased common stock of CleanJoule, recognizing 249,124 common stock shares amounting to US$3,114.

m)    Volantio, Inc. (“Volantio”)

Volantio is considered a related party because Mr. William Dean Donovan, an independent member of our Board of Directors, also serves in Volantio´s Board of Directors as of August 13, 2024. Volantio provides customer support services.

As of September 30, 2024, the Company´s account payable with Volantio was US$82. As of December 31, 2023, the Company did not have outstanding balance due to Volantio.

During the three months and nine months period ended September 30, 2024, Volantio recognized expenses of US$154.

During the three months period ended September 30, 2024 and 2023, the chairman and the independent members of the Company’s board of directors received a net compensation of US$111 and US$338 respectively, and the rest of the directors received a net compensation of US$29 and US$96, respectively. During the nine months period ended September 30, 2024 and 2023, the chairman and the independent members of the Company’s board of directors received a net compensation of US$243 and US$578 respectively, and the rest of the directors received a net compensation of US$61 and US$173, respectively.

During the nine months ended September 30, 2024 the amount paid to the chairman and independent members in-kind through the Company´s shares totaling US$788.

During the three months period ended September 30, 2024 and 2023, all the Company’s senior managers received an aggregate compensation of short and long-term benefits of US$2,936 and US$2,739, respectively, these amounts were recognized in salaries and benefits in the condensed consolidated statement of operations. During the nine months period ended September 30, 2024 and 2023, all the Company’s senior managers received an aggregate compensation of short and long-term benefits of US$12,113 and US$10,301, respectively, these amounts were recognized in salaries and benefits in the condensed consolidated statement of operations.

Inventories

An analysis of inventories As of September 30, 2024, and December 31, 2023, is as follows:

The inventory items are consumed during or used mainly in delivery of in-flight services and for maintenance services by the Company and are valued at the lower of cost or replacement value. The Company recognizes the necessary estimates for decreases in the value of its inventories due to impairment, obsolescence, slow movement and causes that indicate that the use or realization of the aircraft spare parts and flight equipment accessories that are part of the inventory will be less than recorded value. As of September 30, 2024, and December 31, 2023, the Company did not record any impairment loss in the value of its inventories.

During the three months period ended September 30, 2024, and 2023, the amount of consumption of inventories, recorded as an operating expense as part of maintenance expense was US$6,097 and US$5,206, respectively.

During the nine months period ended September 30, 2024, and 2023, the amount of consumption of inventories, recorded as an operating expense as part of maintenance expense was US$17,516 and US$15,609, respectively.

Rotable spare parts, furniture and equipment, net

a) Acquisitions and disposals

For the nine months period ended September 30, 2024, and 2023, the Company acquired rotable spare parts, furniture, and equipment paid by an amount of US$442,038 and US$340,287, respectively.

Rotable spare parts, furniture and equipment by US$98,263 and US$13,647, were disposed for the nine months period ended September 30, 2024, and 2023, respectively. As September 30, 2024, these amounts included reimbursements of pre-delivery payments for aircraft acquisition of US$98,263 and US$12,624, respectively.

b) Depreciation expense

Depreciation expense for the three months period ended September 30, 2024, and 2023 was US$43,632 and US$32,795, respectively. Depreciation expense for the nine months period ended September 30, 2024, and 2023 was US$124,912 and US$91,881, respectively. Depreciation charges for the period are recognized as a component of operating expenses in the condensed consolidated statements of operations.

As of September 30, 2024 and December 31, 2023, the Company did not record any impairment loss.

Intangible assets, net

a) Acquisitions

For the nine months period ended September 30, 2024, and 2023, the Company acquired intangible assets by an amount of US$11,655 and US$6,416, respectively.

b) Amortization expense

Software amortization expense for the three months period ended September 30, 2024, and 2023 was US$1,969 and US$1,734, respectively. Software amortization expense for the nine months period ended September 30, 2024, and 2023 was US$5,907 and US$5,213, respectively. These amounts were recorded as part of the depreciation and amortization in the condensed consolidated statements of operations. 

Leases

As of September 30, 2024, the most significant leases are as follows:

Aircraft and engines represent the Company´s most significant lease agreements. On September 30, 2024, the Company leases 135 aircraft (129 as of December 31, 2023) and 21 spare engines (20 as of December 31, 2023) that have maximum terms through 2036. The leases are generally guaranteed by either deposit in cash or letters of credit.

Composition of the fleet and spare engines leases*:

*Certain of the Company’s aircraft and engine lease agreements include an option to extend the lease term period. Management evaluates extensions based on the market conditions at the time of renewal.

In the third quarter of 2023, Pratt and Whitney announced preventive accelerated inspections for the GTF engines. Consequently, since 2023, the Company's GTF engines are being reviewed to ensure compliance with these requirements.

As a result of these preventive accelerated inspections and in accordance with the business strategy, the Company has extended certain aircraft and engines lease agreements and has added new aircraft and engines to its fleet. All accounting effects of these aircraft and engines lease extensions and new incorporations have been assessed and presented into the Company's Financial Statements. Additionally, the compensation received from the manufacturer has been included in the Company's Consolidated Statement of Operations as of September 30, 2024.

During the three months period ended September 30, 2024, the Company added one new leased aircraft to its fleet (one A320NEO was acquired through sale and leaseback transactions under the Company’s existing Airbus purchase agreement. Additionally, the Company extended the lease term of one A319CEO for an additional period of 1.5 years.

During the nine months period ended September 30, 2024, the Company added eight new leased aircraft to its fleet (five A321NEO and one A320NEO were acquired through sale and leaseback transactions under the Company’s existing Airbus purchase agreement and two used A320CEO). All the used aircraft were not subject

to sale and leaseback transactions. Additionally, the Company extended the lease term of nine A320CEO for an additional period of up to six years, extended the lease term of one A319CEO for an additional period of 1.5 years, and extended the lease term of a spare engine for an additional period of three years.

During the year ended December 31, 2023, the Company added 13 new leased aircraft to its fleet. This includes one A320NEO and two A321NEO acquired through a sale and leaseback transaction under the existing Airbus purchase agreement, as well as two A320NEO and eight A321NEO directly incorporated from the lessor's aircraft order book.

During 2023, the Company extended the lease term of eight A320CEO and one A321CEO aircraft for an additional period of up to four years.

Additionally, during the year ended December 31, 2023, the Company extended the lease term of six spare engines for an additional period of up to 3.5 years.

Set out below are the carrying amounts of right-of-use assets recognized and the movements during the period:

Set out below are the carrying amounts of lease liabilities and the movements during the period:

The following are the amounts recognized in profit or loss for the three months period ended September 30, 2024, and 2023:

The Company had total cash outflows for leases during the three months period ended September 30, 2024, of US$147,716 (US$132,353 during the three months period ended September 30, 2023).

The following are the amounts recognized in profit or loss for the nine months period ended September 30, 2024, and 2023:

The Company had total cash outflows for leases during the nine months period ended September 30, 2024, of US$431,656 (US$390,385 during the nine months period ended September 30, 2023).

The aircraft lease agreements of the Company also require that the aircraft and engines be returned to lessors under specific conditions of maintenance. The costs of return, which in no case are related to scheduled major maintenance, are estimated and recognized ratably as a provision from the time it becomes likely such costs will be incurred and can be estimated reliably. These return costs are recognized on a straight-line basis as a component of variable lease expenses and the provision is included as part of other liabilities, through the remaining lease term.

The Company estimates the provision related to airframe, engine overhaul and limited life parts using certain assumptions including the projected usage of the aircraft and the expected costs of maintenance tasks to be performed.

For the three months period ended September 30, 2024, and 2023, the Company recorded redelivery expenses by an amount of US$40,967 and US$42,433, respectively. For the nine months period ended September 30, 2024, and 2023, the Company recorded redelivery expenses by an amount of US$83,218 and US$118,049, respectively.

Certain lease agreements contain extension options, which the Company evaluates exercising once the lease period comes to its end, based on the market conditions at such moment. The lease liabilities corresponding to leases on which it was decided to extend are remeasured for the period negotiated between the Company and the lessor.

For the three months ended September 30, 2024, and 2023 due to the aircraft, engines and building leases extension agreements, the Company reassessed the right of use assets and lease liabilities, resulting in net increases of US$5,332 and US$47,592, respectively. For the nine months ended September 30, 2024, and 2023 due to the aircraft, engines and building leases extension agreements, the Company reassessed the right of use assets and lease liabilities, resulting in net increases of US$86,678 and US$79,934, respectively.

Equity

As of September 30, 2024, the total number of the Company’s authorized shares was 1,165,976,677; represented by common registered shares, issued and with no par value, fully subscribed and paid, comprised as follows:

⁽¹⁾ During the year ended September 30, 2024, there were no forfeited shares have been included as part of treasury shares.

As of December 31, 2023, the total number of the Company’s authorized shares was 1,165,976,677; represented by common registered shares, issued and with no par value, fully subscribed and paid, comprised as follows:

⁽¹⁾ During the year ended December 31, 2023, a total of 330,453 forfeited shares have been included as part of treasury shares.

On December 20, 2021, one of the Company´s shareholders concluded the conversion of 30,538,000 Series B Shares for the equivalent number of Series A Shares. This conversion has no impact either on the total number of outstanding shares nor on the earnings-per-share calculation.

On November 22, 2023, the holders of all of the 57,513,873 outstanding Series B shares of the Company concluded the conversion of all Series B Shares into 57,513,873 Series A Shares represented by Ordinary Participation Certificates in the form of the corresponding American Depositary Shares.

All shares representing the Company’s capital stock, either Series A shares or Series B shares, grant the holders the same economic rights and there are no preferences and/or restrictions attaching to any class of shares on the distribution of dividends and the repayment of capital. Holders of the Company’s Series A common stock and Series B common stock are entitled to dividends when, and if, declared by a shareholders’ resolution. The Company’s revolving line of credit with Santander and Bancomext limits the Company’s ability to declare and pay dividends if the Company fails to comply with the payment terms thereunder. Only Series A shares from the Company are listed.

As of September 30, 2024, and December 31, 2023, the Company did not declare any dividends.