Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 257

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 11
Chunk 257
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including our assessment of market conditions for fuel, our access to the capital necessary to support margin requirements under derivative
agreements and the pricing of hedges and other derivative products in the market.

During the years ended December 31, 2022, and 2023, we
did not enter into new hedging positions for Jet Fuel.

In September
2024, the Company contracted Asian Call Options on US Gulf Coast Jet Fuel 54 designated to hedge 25,832 thousand gallons. These hedges
represented a portion of the projected consumption for the fourth quarter 2024 and first quarter 2025.

In October
2024, the Company contracted Asian Call Options on US Gulf Coast Jet Fuel 54 designated to hedge 14,457 thousand gallons. These hedges
represented a portion of the projected consumption for the fourth quarter 2024 and first quarter 2025.

Currency
fluctuations. The value of the U. S dollar has been subject to fluctuations with respect to the peso in the past and may be
subject to fluctuations in the future. If the peso declines in value against the U. S. dollar our demand would be adversely affected. See
Item 3: “ Key Information - Risk Factors - Currency fluctuations or the devaluation and depreciation of the U. S. dollar could adversely
affect our business, results of operations, financial condition and prospects.”

In 2022 and 2023, as a consequence of either the appreciation
or depreciation of the U. S. dollar against the peso, and our net monetary liability position in Mexican peso and other currencies, we
recorded foreign exchange gains (losses) of U. S. $3.6 million and U. S. $(34.1) million, respectively. In 2024, we recorded gains of U. S.
$13.7 million.

Interest
Rates. We use derivative financial instruments to reduce our exposure to fluctuations in market interest rates. As of December
31, 2022, we had an outstanding hedging contract in the form of an interest rate cap with a notional amount of Ps.2.25 billion (U. S. $116.2
million based on an exchange rate of Ps.19.36 to U. S. $1 on December 31, 2022) and a fair value of U. S. $1.6 million. As of December 31,
2023, we had an outstanding hedging contract in the form of an interest