Company: CTTRF
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001292814-25-001765
Chunk: 135

Company: Controladora Vuela Compania de Aviacion, S.A.B. de C.V.
Filing Date: 2025-04-30
Form: 20-F
Item: Item 4A
Chunk 135
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, its initial recognition does not generate a book adjustment in our inventories. Rather, it
is initially accounted for in our OCI and a reclassification adjustment is made from OCI toward the profit and loss and recognized in
the same period or periods during which the hedged item is expected to be allocated to profit and loss (in accordance with IFRS 9.6.5.15,
B6.5.29 (a), B6.5.34 (a) and B6.5.39). As of January 2015, we began to reclassify these amounts (previously recognized as a component
of equity) to our consolidated statement of operations in the same period in which our expected jet fuel volume consumed affects our jet
fuel purchase line item therein.

As of December 31, 2024, the fair value of the outstanding US Gulf Coast Jet
Fuel Asian call options was US$431 thousand. The cost of hedging derived from the extrinsic value changes of the jet fuel hedged position
given the out-of-the-money position as of December 31, 2024, recognized in other comprehensive loss was US$307 thousand.

The cost of hedging will be recycled to the fuel cost during fourth quarter
2024 and first quarter 2025, as these options expire on a monthly basis and the jet fuel is consumed. Contracted options for the fourth
quarter 2024 expired and the only outstanding are the ones for the first quarter 2025.

  (ii)      Foreign Currency Risk. Foreign currency risk is the risk that the fair value of future cash flows will fluctuate because of                     
            changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange rates relates primarily to our operating activities  
            (when revenue or expense is denominated in a different currency than dollars). Exchange exposure relates to amounts payable arising from        
            pesos-denominated and pesos-linked expenses and payments. To mitigate this risk, we may use foreign exchange derivative financial instruments   
            and non-derivative financial instruments.                                                                                                       
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During the years ended December 31, 2022, 2023, and 2024, the Company did
not enter into foreign currency derivative contracts.

As of December 31, 2022, 2023, and 2024, our foreign exchange exposure also
was a net liability position of U. S