Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 10

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 10
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 the Organization of the
Petroleum Exporting Countries (“ OPEC”), decide not to, or are unable to, increase their supply production.

Moreover, the escalation of conflict in the Middle East,
triggered by attacks between Israel and Iran in April 2024, heightened geopolitical tensions in the region. This direct confrontation
between Iran and Israel marks a significant escalation in their long-standing political and religious tensions. The uncertainty surrounding
the conflict and the potential responses of each country has reverberated throughout the financial markets. Notably, the price of Brent
crude oil surged to over U. S. $90 per barrel, reaching its highest level since the Gaza Strip conflict in October 2023. This uptick in
oil prices poses a significant risk to the aviation industry.

The Iran-Israel conflict has broader implications beyond
the immediate region, and the tensions between these two nations have the potential to impact other countries in the Middle East and beyond,
with the possibility of the conflict further exacerbating geopolitical instability and economic uncertainty globally.

Due to the large proportion of fuel costs in our total operating
cost base, even a relatively small increase in the price of fuel can have a significant negative impact on our operating costs and on
our business, results of operations and financial condition. For more information on our cost of fuel, see Item 4: “ Information
on the Company - Business Overview - Fuel.” In some instances, these costs or volatility may be higher due to factors associated
with other initiatives, including, for example, the availability and price of “sustainable aviation fuel” (SAF) to help reduce
our GHG emissions.

Our inability to renew our concession or the revocation by the
Mexican government of our concession would materially adversely affect us.

We hold a concession from the Mexican federal government that
authorizes us to provide domestic air transportation services of passengers, cargo and mail within Mexico (the “ Concession”).
Our Concession was granted by the Mexican government through the SICT on May 9, 2005 for an initial term of five years and was extended
by the SICT on February 17, 2010 for an additional term of ten years. On February 21, 2020, our Concession was extended for an additional
20-year term starting on May 9, 2020.

Mexican law provides that concessions may be renewed several
times. However, each renewal may not exceed 30 years, and the law requires the concessionaire to:

  have complied with the