Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 118

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 4A
Chunk 118
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 denominated in a foreign
currency other than our functional currency the lease liability will be remeasured at each reporting date, using the foreign exchange
of the period.

Salaries and Benefits. Salaries and benefits
expenses includes the salaries, hourly wages, employee health insurance coverage and variable compensation that are provided to employees
for their services, as well as the related expenses associated with employee benefit plans and employer payroll taxes.

Maintenance Expenses. Maintenance expenses
include all parts, materials, repairs and fees for repairs performed by third party suppliers directly required to maintain our fleet.
It excludes the direct labor cost of our own mechanics, which is included under salaries and benefits and only includes routine and ordinary
maintenance expenses. Major maintenance expenses are capitalized and subsequently amortized as described in “ Depreciation and Amortization.”

Sales, Marketing and Distribution Expenses. Sales,
marketing and distribution expenses consist of advertising and promotional expenses directly related to our services, including the cost
of web support, call center services, travel agent commissions, and credit card discount fees that are associated with the sale of tickets
and other products and services.

Aircraft and Engine Variable Lease Expenses.
Aircraft and engine variable expenses primarily include the estimated return costs of our fleet, which are determined in accordance with
IAS 37, which in no case are related to scheduled major maintenance. Additionally, aircraft and engine variable lease expenses include
the maintenance deposit we pay to the lessor as maintenance reserves, when we determine that we will not recover such deposits in whole
or in part. In these cases, we record these amounts as supplemental rents in the statements of operations from the time the determination
is made through the remaining lease term.

Other Operating Expenses. Other operating expenses
include: (i) administrative and operational support expenses, (ii) technology and communications and (iii) insurance expenses.

Depreciation and Amortization. Depreciation and
amortization expense includes the depreciation of all owned flight equipment, furniture, and other equipment, as well as leasehold improvements
related to flight equipment. It also includes the amortization of major maintenance events that are accounted for under the deferral accounting
method. These deferred costs, related to the aging of our fleet, are amortized over the shorter of the period until the next scheduled
major maintenance event or the remaining term of the lease.

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  Table of Contents  

A common measure of per unit costs in the airline industry
is cost per available seat mile (CASM). The following table shows the breakdown