Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 343

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 343
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Note 16)                                  803                              286,405                   287,208  
  Total                                                       US$                    587,371      US$                   3,240,432      US$        3,827,803  

e) Credit risk

Credit risk is the risk that any counterparty will not meet
its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk
from its operating activities (primarily from trade receivables) and from its financing activities, including deposits with banks and
financial institutions, foreign exchange transactions and other financial instruments including financial instruments derivatives.

Financial instruments that expose the Company to credit risk
involve mainly cash equivalents and accounts receivable. Credit risk on cash equivalents relates to amounts invested with financial institutions.

Credit risk on accounts receivable relates primarily to amounts
receivable from the international credit card companies. The Company has a high receivable turnover, hence management believes credit
risk is minimal due to the nature of its businesses, which have a large portion of their sales settled in credit cards.

The credit risk on liquid funds and derivative financial instruments
is limited because the counterparties have a high credit rating assigned by international credit-rating agencies.

Outstanding derivative financial instruments expose the Company
to credit loss in the event of nonperformance by the counterparties to the agreements. However, the Company does not expect any of its
counterparties to fail to meet their obligations. The amount of such credit exposure is generally the unrealized gain, if any, in such
contracts.

To manage credit risk, the Company selects counterparties
based on credit assessments, limits overall exposure to any single counterparty and monitors the market position with each counterparty.
The Company does not purchase or hold derivative financial instruments for trading purposes.

As of December 31, 2024, the Company determined that its credit
risk associated with outstanding derivative financial instruments is low, as it exclusively engages in such instruments with counterparties
that have high credit ratings assigned by international credit-rating agencies.

f) Capital management

Management believes that the resources available to the Company
are enough for its present requirements and will be sufficient to meet its anticipated requirements for capital expenditures and other
cash requirements for the next fiscal year. The primary objective of the Company’s capital management is to ensure that it maintains
healthy capital ratios to support its business and maximize the shareholder’s value. No changes were made in the objectives, policies
or processes for managing capital during the years ended December