Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 131

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 4A
Chunk 131
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2, we entered into a total support agreement
with LHT, as amended in December 2016, that expires December 2031, which includes a total component support agreement (power-by-hour)
and ensures the availability of aircraft components for our fleet when they are required. The cost of the total component support agreement
is applied monthly to our results of operations. As part of this total support agreement, we received credit notes of U. S. $5.0 million
in 2022 and of U. S. $1.5 million in 2017, which were deferred on our consolidated statements of financial position and are being amortized
on a straight-line basis, prospectively during the term of the agreement.

During 2022, 2023, and 2024, we amortized a corresponding
benefit from these credit notes of, U. S. $0.7 million, U. S. $0.5 million, and U. S. $0.5 million, respectively, which is recognized in
the consolidated statements of operations as a reduction of maintenance expenses.

Fair
Value. The fair value of our financial assets and financial liabilities recorded in the consolidated statements of financial
position cannot be derived from active markets. They are determined using valuation techniques such as the discounted cash flow model.
The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required
in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and expected volatility.
Changes in assumptions regarding these factors could affect the reported fair value of financial instruments.

Gains
and Losses on Sale and Leaseback. We enter into sale and leaseback agreements whereby an aircraft or engine is sold to a lessor
upon delivery and the lessor agrees to lease such aircraft or engine back to us.

During the years ended December 31, 2022, 2023, and 2024,
we sold and transferred aircraft and engines to third parties, giving rise to a gain of U. S. $21.2 million, U. S. $8.3 million, and U. S.
$32.2 million, respectively, that was recorded as other operating income in the consolidated statements of operations.

Share-based
payments

Long Term Incentive Plan (LTIP)

- Share purchase plan (equity-settled)

Certain key executives receive additional benefits through
a share purchase plan denominated in Restricted Stock