Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 304

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 304
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 until the date the Company ceases to control the subsidiary.

All intercompany balances, transactions, unrealized gains
and losses resulting from intercompany transactions are eliminated completely on consolidation in the consolidated financial statements.

On consolidation, the assets and liabilities of foreign operations
are translated into U. S. dollar at the exchange rates prevailing at the reporting date and their statements of profit or loss are translated
at the average exchange rates prevailing at the time. The exchange differences arising on translation for consolidation are recognized
in other comprehensive income (“ OCI”). On disposal of a foreign operation, the component of OCI relating to that particular
foreign operation is recognized in profit or loss.

c) Revenue recognition

Passenger revenues

Revenues from the air transportation of passengers are recognized
at the earlier of when the service is provided or when the non-refundable ticket expires on the date of the scheduled travel.

Ticket sales for future flights are initially recognized as
contract liabilities under the caption “unearned transportation revenue” and once the transportation service is provided by
the Company or when the non-refundable ticket expires at the date of the scheduled travel, the earned revenue is recognized as passenger
ticket revenue and the unearned transportation revenue is reduced by the same amount. All the Company’s tickets are non-refundable;
however, certain tickets may be changed upon a payment of a fee. Additionally, the Company does not operate its own frequent flier program.

The most significant passenger revenue includes revenues
generated from: (i) fare revenue and (ii) other passenger revenues. Other passenger services include but are not limited to fees charged
for excess baggage, bookings through the call center or third-party agencies, advanced seat selection, itinerary changes and charters.
They are recognized as revenue when the obligation of passenger transportation service is provided by the Company or when the non-refundable
ticket expires at the date of the scheduled travel.

The Company also classifies as other passenger revenue “ V
Club” and other similar services, which are recognized as revenue over time when the service is provided.

The Company sells certain connecting flight tickets
with one or more segments operated by other airline partners. For segments operated by other airline partners, the Company has determined
that it is acting as an agent on behalf of the other airline as it is responsible for its portion of the contract (i. e., transportation
of the passenger). When the Company acts as the agent, the Company recognizes revenue within other passenger revenues at time of travel,
for the net amount retained by the Company for