Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 320

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 320
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idiaries in Central America do not have such employee profit-sharing obligations, as it is not required by local regulations.

p) Leases

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 the right-of-use assets representing the right to use the underlying assets.

  Right-of-use 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 remaining lease term and the estimated useful lives of the assets, as follows:

  Summary of estimated useful lives of the assets                         
  Aircraft                                             up to 18 years     
  Spare engines                                        up to 18 years     
  Buildings leases                                     up to 10 years     
  Maintenance components                               up to eight years  

  ii.      Lease Liabilities  

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