Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 14

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 14
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, state and local, regulations and ordinances relating to the protection of the environment,
including those relating to emissions to the air, levels of noise, discharges to surface and subsurface waters, safe drinking water,
and the management of hazardous substances and waste materials. Compliance with all environmental laws and regulations can require significant
expenditures and any future regulatory developments in Mexico, the United States and other countries in which we operate could adversely
affect operations and increase operating costs in the airline industry. Concerns about climate change and greenhouse gases may result
in additional regulation or taxation of emissions. For example, on January 28, 2025, the CNBV published in the Official Gazette of the
Federation, regulations requiring mandatory disclosures of ESG matters. These regulations are mandatory for all publicly listed companies
on the Mexican Stock Exchange. These companies are required to disclose 2025 sustainability information in a separate report during 2026
and may include an assurance from an external auditor. However, the disclosure of information of year 2026 must be assured at least in
a limited manner and disclosure of information of year 2027 must have reasonable assurance of an external auditor. Future operations
and financial results may vary as a result of the aforementioned regulation in Mexico, and/or the possible adoption of equivalent ESG
regulations in the United States, Central and South America or other countries. Compliance with these regulations and new or existing
regulations that may be applicable to us in the future could increase our cost base and could have a material adverse effect on our business,
results of operations and financial condition.

Furthermore, in 2016, the ICAO, adopted a resolution creating
the Carbon Offsetting and Reduction Scheme for International Aviation (“ CORSIA”), providing a framework for a global market-based
measure to stabilize CO2emissions in international civil aviation ( i. e., civil aviation flights that depart in one
country and arrive in a different country). Mexico was a voluntary early adopter of CORSIA. Annual international emissions reporting is
required via CORSIA as of the 2019 reporting year, and offsetting compliance relative to a predetermined baseline is scheduled to be implemented
through three phases that began in 2021. Even though Mexico was a voluntary early adopter of CORSIA, at this time, the costs of complying
with our future obligations under CORSIA are uncertain, primarily due to factors such as volatility in the demand for international air
travel, regulatory uncertainty, the availability, supply and prices of CORSIA eligible