Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 318

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 318
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2, the Company approved and renewed
the long-term retention plan (“ LTRP”), which consisted of a purchase plan (equity-settled). This plan does not include cash
compensations granted through appreciation rights on the Company’s shares. The retention plans granted in previous periods will
continue in full force and effect until their respective due dates and the cash compensation derived from them will be settled according
to the conditions established in each plan.

a) Share-based payments

LTIP

- Share purchase plan (equity-settled)

Certain key executives of the Company receive additional benefits
through a share purchase plan denominated in Restricted Stock Units (“ RSUs”), which has been classified as an equity-settled
share-based payment. The cost of the equity-settled share purchase plan is measured at grant date, taking into account the terms and conditions
on which the share options were granted. The equity-settled compensation cost is recognized in the consolidated statements of operations
under the caption of salaries and benefits, over the required service period (Note 18).

b) SARs plan (share appreciation rights - cash-settled)

The Company granted SARs to key executives, which entitled
them to a cash payment after a service period.

The amount of the cash payment is determined based on the
increase in the share price of the Company between the grant date and the time of exercise. The liability for the SARs is measured, initially
and at the end of each reporting period until settled, at the fair value of the SARs, taking into account the terms and conditions on
which the SARs were granted. The compensation cost is recognized in the consolidated statements of operations under the caption of salaries
and benefits, over the required service period (Note 18).

The cost of the SARs plan is measured initially at fair value
at the grant date, further details of which are given in Note 18. This fair value is expensed over the period until the vesting date with
recognition of a corresponding liability. Similar to the equity-settled awards described above, the valuation of cash-settled award also
requires using similar inputs, as appropriate.

Management incentive plan (“ MIP”)

- MIP II

On February 19, 2016, the Board of Directors of the Company
authorized an extension to the MIP for certain key executives; this plan was named MIP II. In accordance with this plan, the Company granted
SARs to key executives, which