Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 34

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 34
---
cross default clauses, as a result of which defaults under one agreement may be treated as defaults under other lease agreements. As such,
a failure to comply with the covenants in our aircraft and engine lease agreements, or the occurrence of an event of default thereunder,
could have a negative impact on us and, as a result, on our financial condition and results of operations.

  28  

  Table of Contents  

We rely on maintaining a high daily aircraft utilization rate to implement
our ultra-low-cost structure, which makes us especially vulnerable to flight delays or cancellations or aircraft unavailability.

One of the key elements of our business strategy is to maintain
a high daily aircraft utilization rate. Our average daily aircraft utilization was 13.28 block hours in 2022, 13.37 block hours in 2023,
and 13.03 block hours in 2024. Aircraft utilization is the average amount of time per day that our aircraft spend carrying passengers.
Our revenue per aircraft can be increased by high daily aircraft utilization, which is achieved in part by reducing turnaround times at
airports, so we can fly more hours on average in a day. Aircraft utilization is reduced by delays and cancellations arising from various
factors, many of which are beyond our control, including air traffic congestion at airports or other air traffic control problems, adverse
weather conditions, increased security measures or breaches in security, international or domestic conflicts, terrorist activity, health
outbreaks, changes to supply chain and demand conditions, quality issues related to our limited suppliers or other changes in business
conditions. In addition, pulling aircraft out of service for unscheduled and scheduled maintenance, which will increase as our fleet ages,
may materially reduce our average fleet utilization. High aircraft utilization increases the risk that if an aircraft falls behind schedule
during the day, it could remain behind schedule during the remainder of that day and potentially into the next day, which can result in
disruption in operating performance, leading to passenger dissatisfaction related to delayed or cancelled flights and missed connections.
Due to the relatively small size of our fleet and high daily aircraft utilization rate, the unavailability of one or more aircraft and
resulting reduced capacity or our failure to operate within time schedules, could have a material adverse effect on our business, results
of operations and financial condition.

The growth of our operations to the United States is dependent on continued
favorable safety assessment in Mexico and the Central and South American countries in which we operate.

The FAA regularly conducts audits of foreign aviation