Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 107

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 4
Chunk 107
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 and is our largest operating expense. Fuel accounted for 46%, 38%, and33%
of our total operating expenses in 2022, 2023, and 2024, respectively. We purchase fuel in Mexico from ASA, who is also in charge of supplying
it directly to our aircraft in Mexico. As established in our agreement with ASA, the fuel price is determined weekly by ASA based on international
prices published by S& P Platt’s, the price of the services is determined by the Ministry of Finance and Public Credit, and the
storage costs are determined by the Energy Regulatory Commission. Our agreement with ASA may be terminated without penalty by either party
with a 30-days prior notice. We purchase our fuel outside of Mexico under fuel supply service contracts with World Fuel Services, AvFuel,
Shell, BP Products North America, Chevron, Associated Energy Group, Puma Energy Group, Total Energies, Titan, Vitol and Terpel fuel service
contracts. Historically, fuel costs have experienced substantial variances, which cannot be predicted with any degree of certainty since
they are subject to many global and geopolitical factors. Fuel prices are dependent on crude oil prices, which are quoted in U. S. dollars.
If the value of the U. S. dollar rises against the peso, our fuel costs, expressed in pesos, may increase even absent any increase in the
U. S. dollar price of crude oil. Our fuel hedging policy allows us to enter into fuel derivative contracts to hedge against changes in
fuel prices up to 18 months forward subject to certain financing controls. See Item 3: “ Key Information - Risk Factors - Our
fuel hedging strategy may not reduce our fuel costs.”

Insurance

We maintain insurance policies we believe are customary in the
airline industry and as required by the Mexican and U. S. aviation authorities. We maintain all insurance policies required by the aviation
authorities in the markets we operate in, as well as our leasing and financing agreements. We believe that this insurance coverage is
consistent with airline industry standards and appropriate to protect us from material loss in light of the activities we conduct. No
assurances can be given, however, that the amount of insurance we carry will be sufficient to protect us from material losses.

In connection with our operations, we carry insurance coverage
against loss and damages, including those caused by war and terrorist risks or to our passengers or third-party property, for our entire
fleet of aircraft, spares and equipment. We also hold non