Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 291

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 291
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 the consolidated financial statements, taken as a whole, and we are not, by communicating the
critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the aircraft components and engines lease return obligations

As described in Notes 1q), 2i), 14i) and 16 to the consolidated financial
statements, as of December 31, 2024, the Company has a provision for its aircraft components and engines lease return obligations in the
amount of $ 377,377 thousand. Aircraft lease agreements require the Company to return aircraft components (airframe, APU and landing gears)
and engines (overhaul and limited life parts) to the lessor under specific conditions of use.

A provision for the aircraft components and engines lease return obligation
is recognized from the time it becomes more likely than not that such costs will be incurred, and these can be estimated reliably. The
provision is included as part of other liabilities and the costs are recognized as a component of variable lease expenses on a straight-line
basis through the remaining lease term. The Company estimates the provision for its aircraft components and engines lease return obligation
using certain assumptions including the projected usage of the aircraft and the expected costs of the maintenance tasks to be performed
at the return date as well as discount rates to determine the present value of the obligations at the reporting date.

We have identified the evaluation of the estimate of the aircraft components
and engines lease return obligation as a critical audit matter. The assessment of the provision required significant judgment given the
complexity involved in determining the key assumptions, which included the projected usage of the aircraft, the estimated maintenance
cost at the end of the lease contract, and the discount rates. In addition, specialized skills and knowledge were required to assess the
discount rates.

The following are the primary procedures we performed to address this critical
audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the aircraft components
and engines lease return obligation process, including controls related to the key assumptions used in the estimate of the provision.
We compared the cost of historical aircraft returns to the amounts accrued by the Company in previous years to assess the Company’s
ability to estimate the provision. For all redeliveries performed during the year, we compare the total cost of redeliveries to the accrued
provision for this specific events of return. To evaluate the key assumption used by the Company to estimate its future aircraft components