Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 78

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 4
Chunk 78
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, such as baggage fees, advanced
seat selection, extra legroom, ticket change fees, and/or itinerary attachments such as hotels, airport transportation, and rental cars.
ULCCs focus on VFR and leisure customers as opposed to business travelers. The ULCC product appeals to the cost-conscious customer because
they are offered a low base-fare and are able to choose to pay for only the additional products and services they want to receive.

Economic and Demographic Trends

We believe the Mexican airline industry has strong potential
for growth, given the country’s young demographics, the long-term trend for improving macroeconomic base and growing middle class,
which will likely facilitate organic expansion of the airline sector. In addition, the national airline industry is relatively underpenetrated
when compared to other countries of similar economic size and demographic characteristics, in terms of trips per capita. These elements
combine at a time when the industry has been under considerable attrition due in part from some of the operators ceasing operations.

In terms of the macroeconomic environment, GDP growth in Mexico
is expected to be 0.6% in 2025 and 1.8% in 2026 according to the Mexican Central Bank’s mid-point projections. Mexico’s GDP
grew at a CAGR of 2.1% from 2014 to 2024, according to INEGI. U. S. GDP is expected to grow by 1.7% for 2025 and by 1.8% for 2026, according
to the U. S. Federal Reserve.

As of 2020, according to theCenso de Población
y Vivienda 2020of INEGI intercensal survey, approximately 70% of the Mexican population was over 18 years of age, which we believe
benefits us by providing a strong base of young, potential passengers in the future. These contrasts favorably with more mature aviation
markets like the United States, where, as of July 2024, approximately 78% of the population was over 18 years of age according to the
U. S. Census Bureau.

However, despite these favorable demographic indicators, the
Mexican domestic aviation market remains underpenetrated. According to data from the local Civil Aviation Authorities in Mexico, such
as the AFAC, as of 2023 the domestic flights per capita in Mexico was 0.5 per capita, indicating a lower level of domestic air travel
pen