Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 121

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 4A
Chunk 121
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on our business, results of operations and financial condition.

Along with the cost pressure due to the higher fuel price,
this major disruption in the global economy has also raised concerns regarding inflationary pressures and the global economic growth rate.
Such disruption in inflation indexes could affect our cost in the near future, as several contracts are subject to annual adjustments
based on historical inflation ratios. A reduction in the economy’s growth pace could also adversely impact demand for air transport
services, potentially affecting our financial performance.

Economic
Conditions in Mexico. Mexico’s GDP is expected to grow by 2.0% per year for the next ten years according to the Mexican
Central Bank, compared to a 1.8% annual growth rate for the United States during the same period as reported by the U. S. Federal
Reserve. See “ Key Information - Risk Factors - Risks Related to the Airline Industry - Public health threats, such as
the H1N1 flu virus, the bird flu, Severe Acute Respiratory Syndrome (SARS), the Zika virus, COVID-19 and other highly communicable diseases,
could affect suspension of domestic and international flights, travel behavior and could have a material adverse effect on the Mexican
economy, airline industry reputation, the price of our shares, our business, results of operations and financial condition”.

In terms of population dynamics as of 2020, the INEGI intercensal
survey revealed that approximately 34% of the Mexican population was under 20 years of age. This presents a favorable outlook as it provides
a solid foundation for potential passenger growth. Furthermore, the inflation rate in Mexico in 2024 was 4.21%, based on data from the
INEGI. Despite this inflation rate, as of December 31, 2024, Mexico’s international reserves were U. S. $228.8 billion.

Competition.
The airline industry is highly competitive. The principal competitive factors in the airline industry are fare pricing, total price, flight
schedules, aircraft type, passenger amenities and related services, number of routes served from a city, customer service, safety record
and reputation, code-sharing relationships and frequent flier programs and redemption opportunities. Our current and potential competitors
include traditional legacy airlines, low-cost carriers, regional airlines and new entrant airlines, such as New Mexicana de Aviación.
We typically compete in markets served by legacy carriers and other low-cost carriers, and, to a lesser extent, regional airlines. Some