Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 313

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 313
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 the utilization
of aircraft, changes in government regulations and recommended manufacturer maintenance intervals. In addition, these assumptions can
be affected by unplanned events 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.

During the years ended December
31, 2024, 2023 and 2022, the Company capitalized major maintenance events as part of leasehold improvements to flight equipment for an
amount of US$ 129,354 139,830 138,811 150,625 114,924 83,071, respectively.
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 (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.

l) Rotable spare parts, furniture and equipment, net

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) (Note 12).

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:

  Schedule of depreciation rates                                                                                                                     
                                                  Annual depreciation rate                                                                           
  Flight equipment