Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 80

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 4
Chunk 80
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 will result in significant
growth potential for the Mexican airline market. In January 2019, the Mexican federal government introduced plans to invest in
the expansion of the existing airport and build a new airport in the Mexico City metropolitan area. In March 2022, the first phase of
Felipe Angeles International Airport was completed, and it began operations. This new airport is managed and operated by the Mexican federal
government. In January 2025, the Mexican federal government announced the remodeling of the Mexico City International Airport, starting
in the first semester of 2025, with the goal of concluding in 2026.

According
to the Airbus Global Market Forecast 2024 (GMF24), Airbus forecasts a CAGR of 3.5% for domestic air traffic within the Latin America
and Caribbean region, from 2019 to 2043. Specifically, the Mexican domestic market is forecasted to exhibit a CAGR of 5.0%, from 2019
to 2027, with a corresponding CAGR of 4.7% for routes between Mexico and the United States during the same period. Similarly, traffic
originating from Central America to the United States is expected to achieve a CAGR of 4.5%. The projected growth is primarily driven
by intra-regional flows, supported by the continued growth of low-cost carrier networks. The continued growth of the middle class as well
as rising income levels is expected to continue to drive long-term economic expansion in Latin America. Traffic between Central America
and the Caribbean and North America is expected to remain strong, as North and Latin American LCCs continue to grow their service in this
flow.

The Mexican aviation industry has transformed significantly
since the emergence of ultra-low-cost carriers and the exit of more than nine carriers since 2007, according to the SICT. Furthermore,
the pandemic led to an unprecedented market consolidation. As of December 31, 2024, the top three carriers in Mexico collectively held
approximately 99% of the domestic market, with 71% of this share attributed to ultra-low-cost carriers, Volaris and Viva. Changes in the
Mexican airline competitive environment have resulted in an increase in the domestic market load factor for the remaining carriers.

Market Environment

The airline industry is highly competitive. The principal
competitive factors in the airline industry include fare pricing, total ticket price, flight schedules, aircraft type, passenger amenities,
number of routes/destinations, customer service, safety record and reputation