Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 344

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 19
Chunk 344
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31, 2024 and 2023. The Company is not subject to any externally imposed
capital requirement, other than the legal reserve (Note 19).

As part of the management strategies related to acquisition
of its aircraft (pre-delivery payments), the Company pays the associated short-term obligations by entering into sale-leaseback agreements,
whereby an aircraft is sold to a lessor upon delivery (Note 5b).

4. Fair value measurements

The only financial assets and liabilities measured at fair
value after initial recognition are the derivative financial instruments. Fair value is the price that would be received from sale of
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

  (i)      In the principal market for the asset or liability; or  

  (ii)      In the absence of a principal market, in the most advantageous market for the asset or liability.  

The principal or the most advantageous market must be accessible
to the Company.

The fair value of an asset or a liability is assessed using
the course of thought that market participants would use when pricing the asset or liability, assuming that market participants act in
their economic best interest.

The assessment of a non-financial asset’s fair value
considers the market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling
it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate
in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level
input that is significant to the fair value measurement as a whole:

  Level 1 – Quoted (unadjusted) prices in active markets for identical  

  Level 2 – Valuation techniques for which the lowest level input that                

  Level 3 – Valuation techniques for which the lowest level input that is significant to the fair  

For assets and liabilities that are recognized in the consolidated
financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorization (based on the lowest level