20-F 1 vlrs-20211231x20f.htm FORM 20-F
0.02600.0260000.030.030.01750.01750.02000.0200MIAXP15Y0.0025P1DP2DP7DP42DP5YP5YP1YP10YP8Y1.231.931.231.931.00001.00001.00001.0000000.01750.0025P5Y0.0200000.02400.0300P5Y113760050000.00500.00500.00500.0050P3YP5YP10YControladora Vuela Compania de Aviacion, S.A.B. de C.V.0001520504false--12-312021FYfalse0001520504ifrs-full:ComputerSoftwareMemberifrs-full:TopOfRangeMember2021-01-012021-12-310001520504ifrs-full:ComputerSoftwareMemberifrs-full:BottomOfRangeMember2021-01-012021-12-310001520504vlrs:JetFuelZeroCostCollarsAndOptionContractMember2020-01-012020-12-310001520504vlrs:LaterThanFourYearsMember2021-12-310001520504vlrs:FuelExpenseMember2021-01-012021-12-310001520504vlrs:FuelExpenseMember2020-01-012020-12-310001520504vlrs:SecondTrancheAssetBackedTrustNotesMember2021-01-012021-12-310001520504vlrs:AssetBackedTrustNotesMember2021-01-012021-12-310001520504vlrs:AssetBackedTrustNotesMember2020-01-012020-12-310001520504vlrs:LufthansaTechnikAgDecember2016AgreementMember2017-12-012017-12-310001520504country:MX2021-01-012021-12-310001520504country:CR2021-01-012021-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2014-11-112014-11-110001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2014-11-012014-11-300001520504vlrs:SeriesAndBSharesMembervlrs:ManagementIncentivePlan1Member2012-12-210001520504vlrs:ServprotS.a.DeC.v.Member2021-01-012021-12-310001520504vlrs:ServprotS.a.DeC.v.Member2020-01-012020-12-310001520504vlrs:ServprotS.a.DeC.v.Member2019-01-012019-12-310001520504ifrs-full:ForeignCountriesMemberifrs-full:GoodsOrServicesTransferredOverTimeMember2020-01-012020-12-310001520504ifrs-full:CountryOfDomicileMemberifrs-full:GoodsOrServicesTransferredOverTimeMember2020-01-012020-12-310001520504vlrs:MijaresAngoitiaCortsYFuentesS.c.Member2021-01-012021-12-310001520504vlrs:MijaresAngoitiaCortsYFuentesS.c.Member2020-01-012020-12-310001520504vlrs:MijaresAngoitiaCortsYFuentesS.c.Member2019-01-012019-12-310001520504vlrs:DerivativesAllInMembervlrs:NotLaterThanSixMonthsMember2021-12-310001520504vlrs:DerivativesAllInMemberifrs-full:NotLaterThanOneYearMember2021-12-310001520504ifrs-full:CommodityPriceRiskMember2021-01-012021-12-310001520504ifrs-full:CommodityPriceRiskMember2019-01-012019-12-310001520504vlrs:SustainabilityLinkedBondPrinciples2020Membervlrs:Year2030Member2021-01-012021-12-310001520504vlrs:SustainabilityLinkedBondPrinciples2020Membervlrs:Year2024Member2021-01-012021-12-310001520504vlrs:SustainabilityLinkedBondPrinciples2020Membervlrs:Year2023Member2021-01-012021-12-310001520504vlrs:SustainabilityLinkedBondPrinciples2020Membervlrs:Year2022Member2021-01-012021-12-310001520504vlrs:EquilibriumInterbankInterestRateMember2021-01-012021-12-310001520504vlrs:EquilibriumInterbankInterestRateMember2020-01-012020-12-310001520504vlrs:GuaranteeDepositMember2021-01-012021-12-3100015205042020-05-122020-05-120001520504vlrs:V2500ModelV2527mA5Member2021-12-310001520504vlrs:V2500ModelV2527eA5Member2021-12-310001520504vlrs:V2500ModelV2527A5Member2021-12-310001520504vlrs:V2500ModelV2524A5Member2021-12-310001520504vlrs:Pw1100ModelPw1133gJmEngineMember2021-12-310001520504vlrs:Pw1100ModelPw1127gJmEngineMember2021-12-310001520504vlrs:V2500ModelV2527mA5Member2020-12-310001520504vlrs:V2500ModelV2527eA5Member2020-12-310001520504vlrs:V2500ModelV2527A5Member2020-12-310001520504vlrs:V2500ModelV2524A5Member2020-12-310001520504vlrs:Pw1100ModelPw1133gJmEngineMember2020-12-310001520504vlrs:Pw1100ModelPw1127gJmEngineMember2020-12-310001520504vlrs:SeriesCommonStockMember2020-12-112020-12-110001520504vlrs:PrimaryFollowOnEquityOfferingMember2020-12-112020-12-110001520504vlrs:A320NeoModelMember2020-05-122020-05-120001520504vlrs:A320NeoModelMember2013-08-162013-08-160001520504vlrs:A320CeoModelMember2013-08-162013-08-160001520504vlrs:CeburVolarcb21lMember2021-11-032021-11-0300015205042020-10-012020-10-3100015205042020-07-012020-07-3100015205042018-11-012018-11-300001520504vlrs:PrattAndWhitneyPurchaseAgreementFmpMember2021-01-012021-12-310001520504vlrs:A320NeoModelMembervlrs:OperatingLeasesEstablishedFromAirbusPurchaseAgreementsMember2021-11-012021-11-300001520504vlrs:A321NeoModelMember2021-01-012021-12-310001520504vlrs:A320neoIntoA321neoMember2021-01-012021-12-310001520504vlrs:A320ModelMember2021-01-012021-12-310001520504vlrs:A321NeoModelMember2020-05-122020-05-120001520504vlrs:OperatingLeasesEstablishedFromAirbusPurchaseAgreementsMember2020-01-012020-12-310001520504vlrs:A320neoIntoA321neoMember2018-11-012018-11-300001520504vlrs:A320NeoModelMembervlrs:OperatingLeasesEstablishedFromAirbusPurchaseAgreementsMember2017-12-282017-12-280001520504vlrs:A321NeoModelMember2017-12-012017-12-310001520504vlrs:A320NeoModelMember2017-12-012017-12-310001520504vlrs:A320ModelMember2017-12-012017-12-310001520504vlrs:A320NeoModelMember2011-01-012011-12-310001520504vlrs:A320ModelMember2011-01-012011-12-310001520504vlrs:A320CeoModelMember2011-01-012011-12-310001520504vlrs:A321neoModel271nMember2021-12-310001520504vlrs:A321Model231Member2021-12-310001520504vlrs:A320neoModel271nMember2021-12-310001520504vlrs:A320Model233Member2021-12-310001520504vlrs:A320Model232Member2021-12-310001520504vlrs:A319Model133Member2021-12-310001520504vlrs:A319Model132Member2021-12-310001520504vlrs:A321neoModel271nMember2020-12-310001520504vlrs:A321Model231Member2020-12-310001520504vlrs:A320neoModel271nMember2020-12-310001520504vlrs:A320Model233Member2020-12-310001520504vlrs:A320Model232Member2020-12-310001520504vlrs:A319Model133Member2020-12-310001520504vlrs:A319Model132Member2020-12-310001520504vlrs:SaleAndLeasebackTransactionMember2021-02-012021-02-280001520504vlrs:A319CeoModelMembervlrs:OperatingLeasesEstablishedFromAirbusPurchaseAgreementsMember2021-01-012021-12-3100015205042021-10-012021-10-3100015205042021-04-012021-04-300001520504vlrs:A321NeoModelMember2015-11-012015-11-300001520504vlrs:A320NeoModelMember2015-11-012015-11-3000015205042015-11-012015-11-300001520504vlrs:A320CeoModelMembervlrs:OperatingLeasesEstablishedFromAirbusPurchaseAgreementsMember2021-01-012021-12-310001520504vlrs:OperatingLeasesEstablishedFromAirbusPurchaseAgreementsMember2021-01-012021-12-310001520504vlrs:ManagementIncentivePlan1Member2012-12-272012-12-2700015205042020-02-242020-02-240001520504vlrs:VolarisCostaRicaMember2016-11-102016-11-100001520504vlrs:ConcesionariaMember2010-02-172010-02-170001520504vlrs:ConcesionariaMember2005-05-092005-05-090001520504ifrs-full:OptionContractMemberifrs-full:CommodityPriceRiskMembervlrs:FinanceCostMember2021-01-012021-12-310001520504vlrs:FuelExpenseMember2021-01-012021-12-310001520504vlrs:FinanceCostMember2021-01-012021-12-310001520504ifrs-full:CommodityPriceRiskMembervlrs:FuelExpenseMember2020-01-012020-12-310001520504ifrs-full:CommodityPriceRiskMembervlrs:FinanceCostMember2020-01-012020-12-310001520504ifrs-full:CommodityPriceRiskMember2020-01-012020-12-310001520504ifrs-full:OptionContractMemberifrs-full:CommodityPriceRiskMember2019-01-012019-12-310001520504vlrs:FuelExpenseMember2019-01-012019-12-310001520504vlrs:FuelExpenseMember2018-01-012018-12-310001520504vlrs:CeburVolarcb19Memberifrs-full:AtFairValueMembercurrency:MXN2021-12-310001520504vlrs:CeburVolarcb21lMember2021-12-310001520504vlrs:CeburVolarcb19Memberifrs-full:AtFairValueMembercurrency:MXN2020-12-310001520504vlrs:CeburVolarcb21lMember2021-01-012021-12-310001520504vlrs:CeburVolarcb19Member2021-01-012021-12-310001520504vlrs:CeburVolarcb19Member2020-01-012020-12-310001520504vlrs:AllowanceForObsolescenceMember2021-01-012021-12-310001520504vlrs:EmployeeProfitSharingMember2021-01-012021-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMember2021-01-012021-12-310001520504vlrs:GuaranteeDepositMember2020-01-012020-12-310001520504vlrs:EmployeeProfitSharingMember2020-01-012020-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMember2020-01-012020-12-3100015205042018-01-012018-12-310001520504vlrs:AmericanDepositarySharesMembervlrs:IfrsOverAllotmentOptionMember2020-12-112020-12-110001520504vlrs:BoardOfDirectorsIncentivePlanMember2018-04-012018-04-300001520504vlrs:SeriesBCommonStockMember2021-12-202021-12-200001520504vlrs:SeriesBCommonStockMember2020-01-012020-12-310001520504vlrs:TaxYear2017Expiration2027Member2021-12-310001520504vlrs:ConcesionariaMember2021-12-310001520504ifrs-full:Level2OfFairValueHierarchyMember2021-12-310001520504vlrs:MijaresAngoitiaCortsYFuentesMember2021-01-012021-12-310001520504vlrs:OneLinkS.a.DeC.v.Member2020-01-012020-12-310001520504vlrs:MijaresAngoitiaCortsYFuentesMember2020-01-012020-12-310001520504vlrs:OneLinkS.a.DeC.v.Member2019-01-012019-12-310001520504vlrs:MijaresAngoitiaCortsYFuentesMember2019-01-012019-12-310001520504vlrs:ChevezRuizZamarripaYCa.S.cMember2021-01-012021-12-310001520504vlrs:ChevezRuizZamarripaYCa.S.cMember2020-01-012020-12-310001520504vlrs:ManagementIncentivePlan1Member2021-12-310001520504vlrs:BancoSabadellS.a.InstitucinDeBancaMultipleSabadellMember2021-12-310001520504vlrs:BancoNacionalDeComercioExteriorS.n.c.BancomextMember2021-12-310001520504vlrs:BancoSabadellS.a.InstitucinDeBancaMultipleSabadellMember2020-12-310001520504vlrs:BancoNacionalDeComercioExteriorS.n.c.BancomextMember2020-12-310001520504ifrs-full:BottomOfRangeMembervlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2021-01-012021-12-310001520504vlrs:LufthansaTechnikAgDecember2016AgreementMember2017-01-012017-12-3100015205042017-01-012017-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMember2021-12-310001520504vlrs:AircraftEnginesLandAndBuildingsLeasesMemberifrs-full:NotLaterThanOneYearMember2021-12-310001520504vlrs:AircraftEnginesLandAndBuildingsLeasesMemberifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMember2021-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMemberifrs-full:NotLaterThanOneYearMember2021-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMemberifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMember2021-12-310001520504vlrs:AircraftEnginesLandAndBuildingsLeasesMember2021-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMember2021-12-310001520504ifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMember2021-12-310001520504vlrs:ShorttermWorkingCapitalFacilitiesMemberifrs-full:NotLaterThanOneYearMember2020-12-310001520504vlrs:RevolvingLineOfCreditMemberifrs-full:NotLaterThanOneYearMember2020-12-310001520504vlrs:RevolvingLineOfCreditMemberifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMember2020-12-310001520504vlrs:JetFuelZeroCostCollarsAndOptionContractMemberifrs-full:NotLaterThanOneYearMember2020-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:NotLaterThanOneYearMember2020-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMember2020-12-310001520504vlrs:AircraftEnginesLandAndBuildingsLeasesMemberifrs-full:NotLaterThanOneYearMember2020-12-310001520504vlrs:AircraftEnginesLandAndBuildingsLeasesMemberifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMember2020-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMemberifrs-full:NotLaterThanOneYearMember2020-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMemberifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMember2020-12-310001520504vlrs:ShorttermWorkingCapitalFacilitiesMember2020-12-310001520504vlrs:AssetBackedTrustNotesMember2020-12-310001520504vlrs:AircraftEnginesLandAndBuildingsLeasesMember2020-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMember2020-12-310001520504ifrs-full:NotLaterThanOneYearMember2020-12-310001520504ifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMember2020-12-310001520504vlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2021-01-012021-12-310001520504vlrs:AssetBackedTrustNotesMember2021-10-132021-10-130001520504vlrs:AssetBackedTrustNotesMembervlrs:PercentageOf200BasisPointMember2021-01-012021-12-310001520504vlrs:AssetBackedTrustNotesMember2019-06-202019-06-200001520504vlrs:ManagementIncentivePlan2Member2020-01-012020-12-310001520504vlrs:StockAppreciationRightsCashSettledMember2021-01-012021-12-310001520504vlrs:StockAppreciationRightsCashSettledMember2019-01-012019-12-310001520504ifrs-full:LeaseholdImprovementsMember2019-01-012019-12-310001520504vlrs:LufthansaTechnikAgDecember2016AgreementMember2021-12-310001520504vlrs:LufthansaTechnikAgDecember2016AgreementMember2020-12-310001520504vlrs:LufthansaTechnikAgDecember2016AgreementMember2019-12-310001520504vlrs:GrupoAeroportuarioDelCentroNorteMember2021-01-012021-12-310001520504vlrs:GrupoAeroportuarioDelCentroNorteMember2020-01-012020-12-310001520504vlrs:AeromantenimientoS.a.Member2020-01-012020-12-310001520504vlrs:AeromantenimientoS.a.Member2019-01-012019-12-310001520504vlrs:AeromantenimientoS.a.Member2021-01-012021-12-310001520504vlrs:LaterThanSixYearsAndNotLaterThanSevenYearsMember2021-12-310001520504vlrs:LaterThanSevenYearsAndNotLaterThanEightYearsMember2021-12-310001520504vlrs:LaterThanFiveYearsAndNotLaterThanSixYearsMember2021-12-310001520504vlrs:LaterThanEightAndNotLaterThanNineYearsMember2021-12-310001520504ifrs-full:LaterThanFourYearsAndNotLaterThanFiveYearsMember2021-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2021-11-012021-11-300001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2020-11-012020-11-300001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2019-11-012019-11-300001520504vlrs:GeneralZoneMember2021-12-310001520504vlrs:BorderZoneMember2021-12-310001520504vlrs:AmericanDepositarySharesMember2020-12-112020-12-110001520504vlrs:ManagementIncentivePlan1Member2012-12-240001520504vlrs:StockAppreciationRightsCashSettledMember2014-11-060001520504vlrs:BoardOfDirectorsIncentivePlanMember2021-01-012021-12-310001520504vlrs:BoardOfDirectorsIncentivePlanMember2020-01-012020-12-310001520504vlrs:BoardOfDirectorsIncentivePlanMember2019-01-012019-12-310001520504vlrs:MaintenanceComponentMemberifrs-full:TopOfRangeMember2021-01-012021-12-310001520504ifrs-full:BuildingsMemberifrs-full:TopOfRangeMember2021-01-012021-12-310001520504ifrs-full:BuildingsMemberifrs-full:BottomOfRangeMember2021-01-012021-12-310001520504vlrs:SpareEnginesMember2021-01-012021-12-310001520504ifrs-full:VehiclesMember2021-01-012021-12-310001520504vlrs:VuelaSaMember2021-12-310001520504vlrs:ViajesVuelaS.a.DeC.v.Member2021-12-310001520504vlrs:TaxYear2021Expiration2031Member2021-12-310001520504vlrs:TaxYear2021Expiration2024Member2021-12-310001520504vlrs:TaxYear2020Expiration2030Member2021-12-310001520504vlrs:TaxYear2020Expiration2023Member2021-12-310001520504vlrs:TaxYear2019Expiration2029Member2021-12-310001520504vlrs:TaxYear2019Expiration2022Member2021-12-310001520504vlrs:TaxYear2018Expiration2021Member2021-12-310001520504vlrs:ComercializadoraMember2021-12-310001520504vlrs:ServprotS.a.DeC.v.Member2021-12-310001520504vlrs:AeromantenimientoS.a.Member2021-12-310001520504vlrs:MijaresAngoitiaCortsYFuentesS.c.Member2020-12-310001520504vlrs:MijaresAngoitiaCortsYFuentesMember2020-12-310001520504vlrs:AeromantenimientoS.a.Member2020-12-310001520504vlrs:AircraftSpareEnginesMember2021-12-310001520504ifrs-full:LandAndBuildingsMember2021-12-310001520504ifrs-full:AircraftMember2021-12-310001520504vlrs:AircraftSpareEnginesMember2020-12-310001520504ifrs-full:LandAndBuildingsMember2020-12-310001520504ifrs-full:AircraftMember2020-12-310001520504vlrs:AircraftSpareEnginesMember2019-12-310001520504ifrs-full:LandAndBuildingsMember2019-12-310001520504ifrs-full:AircraftMember2019-12-310001520504vlrs:UnitedStatesAndCentralAmericaMember2021-01-012021-12-310001520504ifrs-full:CountryOfDomicileMember2021-01-012021-12-310001520504country:US2021-01-012021-12-310001520504vlrs:UnitedStatesAndCentralAmericaMember2020-01-012020-12-310001520504ifrs-full:CountryOfDomicileMember2020-01-012020-12-310001520504vlrs:UnitedStatesAndCentralAmericaMember2019-01-012019-12-310001520504ifrs-full:CountryOfDomicileMember2019-01-012019-12-310001520504vlrs:FrontierAirlinesInc.Member2021-01-012021-12-310001520504vlrs:FrontierAirlinesInc.Member2020-01-012020-12-310001520504vlrs:FrontierAirlinesInc.Member2019-01-012019-12-310001520504ifrs-full:ForeignCountriesMemberifrs-full:GoodsOrServicesTransferredOverTimeMember2021-01-012021-12-310001520504ifrs-full:CountryOfDomicileMemberifrs-full:GoodsOrServicesTransferredOverTimeMember2021-01-012021-12-310001520504ifrs-full:ForeignCountriesMemberifrs-full:GoodsOrServicesTransferredOverTimeMember2019-01-012019-12-310001520504ifrs-full:CountryOfDomicileMemberifrs-full:GoodsOrServicesTransferredOverTimeMember2019-01-012019-12-310001520504ifrs-full:ForeignCountriesMemberifrs-full:GoodsOrServicesTransferredAtPointInTimeMember2021-01-012021-12-310001520504ifrs-full:CountryOfDomicileMemberifrs-full:GoodsOrServicesTransferredAtPointInTimeMember2021-01-012021-12-310001520504ifrs-full:ForeignCountriesMemberifrs-full:GoodsOrServicesTransferredAtPointInTimeMember2020-01-012020-12-310001520504ifrs-full:CountryOfDomicileMemberifrs-full:GoodsOrServicesTransferredAtPointInTimeMember2020-01-012020-12-310001520504vlrs:GoodsOrServicesTransferredTotalRevenuesTimeMember2020-01-012020-12-310001520504ifrs-full:ForeignCountriesMemberifrs-full:GoodsOrServicesTransferredAtPointInTimeMember2019-01-012019-12-310001520504ifrs-full:CountryOfDomicileMemberifrs-full:GoodsOrServicesTransferredAtPointInTimeMember2019-01-012019-12-310001520504ifrs-full:OptionContractMember2021-12-310001520504vlrs:AircraftSpareEnginesMembervlrs:PrattAndWhitneyPurchaseAgreementFmpMember2021-01-012021-12-310001520504vlrs:VuelaSaMember2021-01-012021-12-310001520504vlrs:VuelaElSalvadorS.a.DeC.v.Member2021-01-012021-12-310001520504vlrs:VolarisCostaRicaMember2021-01-012021-12-310001520504vlrs:ViajesVuelaS.a.DeC.v.Member2021-01-012021-12-310001520504vlrs:ServiciosEarhartSaMember2021-01-012021-12-310001520504vlrs:ServiciosCorporativosVolarisSaDeCvMember2021-01-012021-12-310001520504vlrs:GuatemalaDispatchServiceS.aMember2021-01-012021-12-310001520504vlrs:FideicomisoIrrevocableDeAdministracionNumeroF745291Member2021-01-012021-12-310001520504vlrs:FideicomisoIrrevocableDeAdministracionNumeroF307750Member2021-01-012021-12-310001520504vlrs:FideicomisoIrrevocableDeAdministracionNumeroCib3249Member2021-01-012021-12-310001520504vlrs:FideicomisoDeAdministracionNumeroCib3081Member2021-01-012021-12-310001520504vlrs:ConcesionariaMember2021-01-012021-12-310001520504vlrs:ComercializadoraVFrecuentaS.a.DeC.v.Member2021-01-012021-12-310001520504vlrs:ComercializadoraMember2021-01-012021-12-310001520504vlrs:CibancoS.a.InstitucionDeBancaMultipleFidecomiso1711Member2021-01-012021-12-310001520504vlrs:CibancoS.a.InstitucionDeBancaMultipleFidecomiso1710Member2021-01-012021-12-310001520504vlrs:VuelaSaMember2020-01-012020-12-310001520504vlrs:VuelaElSalvadorS.a.DeC.v.Member2020-01-012020-12-310001520504vlrs:VolarisCostaRicaMember2020-01-012020-12-310001520504vlrs:ViajesVuelaS.a.DeC.v.Member2020-01-012020-12-310001520504vlrs:ServiciosEarhartSaMember2020-01-012020-12-310001520504vlrs:ServiciosCorporativosVolarisSaDeCvMember2020-01-012020-12-310001520504vlrs:ServiciosAdministrativosVolarisSaDeCvMember2020-01-012020-12-310001520504vlrs:FideicomisoIrrevocableDeAdministracionNumeroF745291Member2020-01-012020-12-310001520504vlrs:FideicomisoIrrevocableDeAdministracionNumeroF307750Member2020-01-012020-12-310001520504vlrs:FideicomisoIrrevocableDeAdministracionNumeroCib3249Member2020-01-012020-12-310001520504vlrs:FideicomisoDeAdministracionNumeroCib3081Member2020-01-012020-12-310001520504vlrs:ConcesionariaMember2020-01-012020-12-310001520504vlrs:ComercializadoraVFrecuentaS.a.DeC.v.Member2020-01-012020-12-310001520504vlrs:ComercializadoraMember2020-01-012020-12-310001520504vlrs:CibancoS.a.InstitucionDeBancaMultipleFidecomiso1711Member2020-01-012020-12-310001520504vlrs:CibancoS.a.InstitucionDeBancaMultipleFidecomiso1710Member2020-01-012020-12-310001520504vlrs:A319ModelMemberifrs-full:PropertyPlantAndEquipmentSubjectToOperatingLeasesMember2019-09-050001520504ifrs-full:GrossCarryingAmountMembervlrs:WorkshopToolsMember2021-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:ServiceCartsOnBoardMember2021-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:PreDeliveryPaymentsMember2021-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:MotorizedTransportEquipmentPlatformMember2021-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:ConstructionsAndImprovementsMember2021-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:PowerGeneratingAssetsMember2021-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:OfficeEquipmentMember2021-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:MachineryMember2021-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:LeaseholdImprovementsMember2021-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:ConstructionInProgressMember2021-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:ComputerEquipmentMember2021-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:CommunicationAndNetworkEquipmentMember2021-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:AircraftMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMembervlrs:WorkshopToolsMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMembervlrs:ServiceCartsOnBoardMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMembervlrs:MotorizedTransportEquipmentPlatformMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMembervlrs:ConstructionsAndImprovementsMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:PowerGeneratingAssetsMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:OfficeEquipmentMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:MachineryMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:LeaseholdImprovementsMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:ComputerEquipmentMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:CommunicationAndNetworkEquipmentMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:AircraftMember2021-12-310001520504vlrs:WorkshopToolsMember2021-12-310001520504vlrs:ServiceCartsOnBoardMember2021-12-310001520504vlrs:PreDeliveryPaymentsMember2021-12-310001520504vlrs:MotorizedTransportEquipmentPlatformMember2021-12-310001520504vlrs:ConstructionsAndImprovementsMember2021-12-310001520504vlrs:AircraftSpareEnginesMember2021-12-310001520504ifrs-full:PowerGeneratingAssetsMember2021-12-310001520504ifrs-full:OfficeEquipmentMember2021-12-310001520504ifrs-full:MachineryMember2021-12-310001520504ifrs-full:LeaseholdImprovementsMember2021-12-310001520504ifrs-full:GrossCarryingAmountMember2021-12-310001520504ifrs-full:ConstructionInProgressMember2021-12-310001520504ifrs-full:ComputerEquipmentMember2021-12-310001520504ifrs-full:CommunicationAndNetworkEquipmentMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMember2021-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:WorkshopToolsMember2020-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:ServiceCartsOnBoardMember2020-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:PreDeliveryPaymentsMember2020-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:MotorizedTransportEquipmentPlatformMember2020-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:ConstructionsAndImprovementsMember2020-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:AllowanceForObsolescencePropertyPlantAndEquipmentMember2020-12-310001520504ifrs-full:GrossCarryingAmountMembervlrs:AllowanceForObsolescenceMember2020-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:PowerGeneratingAssetsMember2020-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:OfficeEquipmentMember2020-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:MachineryMember2020-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:LeaseholdImprovementsMember2020-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:ConstructionInProgressMember2020-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:ComputerEquipmentMember2020-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:CommunicationAndNetworkEquipmentMember2020-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:AircraftMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMembervlrs:WorkshopToolsMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMembervlrs:ServiceCartsOnBoardMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMembervlrs:MotorizedTransportEquipmentPlatformMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMembervlrs:ConstructionsAndImprovementsMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:PowerGeneratingAssetsMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:OfficeEquipmentMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:MachineryMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:LeaseholdImprovementsMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:ComputerEquipmentMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:CommunicationAndNetworkEquipmentMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:AircraftMember2020-12-310001520504vlrs:WorkshopToolsMember2020-12-310001520504vlrs:ServiceCartsOnBoardMember2020-12-310001520504vlrs:PreDeliveryPaymentsMember2020-12-310001520504vlrs:MotorizedTransportEquipmentPlatformMember2020-12-310001520504vlrs:ConstructionsAndImprovementsMember2020-12-310001520504vlrs:AllowanceForObsolescencePropertyPlantAndEquipmentMember2020-12-310001520504vlrs:AllowanceForObsolescenceMember2020-12-310001520504vlrs:AircraftSpareEnginesMember2020-12-310001520504ifrs-full:PowerGeneratingAssetsMember2020-12-310001520504ifrs-full:OfficeEquipmentMember2020-12-310001520504ifrs-full:MachineryMember2020-12-310001520504ifrs-full:LeaseholdImprovementsMember2020-12-310001520504ifrs-full:GrossCarryingAmountMember2020-12-310001520504ifrs-full:ConstructionInProgressMember2020-12-310001520504ifrs-full:ComputerEquipmentMember2020-12-310001520504ifrs-full:CommunicationAndNetworkEquipmentMember2020-12-310001520504ifrs-full:AircraftMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMember2020-12-310001520504vlrs:WorkshopToolsMember2019-12-310001520504vlrs:ServiceCartsOnBoardMember2019-12-310001520504vlrs:PreDeliveryPaymentsMember2019-12-310001520504vlrs:MotorizedTransportEquipmentPlatformMember2019-12-310001520504vlrs:ConstructionsAndImprovementsMember2019-12-310001520504vlrs:AllowanceForObsolescenceMember2019-12-310001520504ifrs-full:PowerGeneratingAssetsMember2019-12-310001520504ifrs-full:OfficeEquipmentMember2019-12-310001520504ifrs-full:MachineryMember2019-12-310001520504ifrs-full:LeaseholdImprovementsMember2019-12-310001520504ifrs-full:ConstructionInProgressMember2019-12-310001520504ifrs-full:ComputerEquipmentMember2019-12-310001520504ifrs-full:CommunicationAndNetworkEquipmentMember2019-12-310001520504ifrs-full:AircraftMember2019-12-310001520504country:CRifrs-full:UnusedTaxLossesMember2021-01-012021-12-310001520504country:SV2021-01-012021-12-310001520504country:CRifrs-full:UnusedTaxLossesMember2020-01-012020-12-310001520504country:SV2020-01-012020-12-310001520504country:GT2020-01-012020-12-310001520504country:GTifrs-full:UnusedTaxLossesMember2019-01-012019-12-310001520504country:CRifrs-full:UnusedTaxLossesMember2019-01-012019-12-310001520504vlrs:SeriesCommonStockMembervlrs:ManagementIncentivePlan1Member2019-01-012019-12-310001520504ifrs-full:AtFairValueMemberifrs-full:CurrencyRiskMembercurrency:USD2021-12-310001520504ifrs-full:AtFairValueMemberifrs-full:CurrencyRiskMembercurrency:MXN2021-12-310001520504ifrs-full:AtFairValueMemberifrs-full:CurrencyRiskMembercurrency:USD2020-12-310001520504ifrs-full:LaterThanTwoMonthsAndNotLaterThanThreeMonthsMember2021-12-310001520504ifrs-full:LaterThanThreeMonthsMember2021-12-310001520504ifrs-full:LaterThanOneMonthAndNotLaterThanTwoMonthsMember2021-12-310001520504ifrs-full:CurrentMember2021-12-310001520504ifrs-full:LaterThanTwoMonthsAndNotLaterThanThreeMonthsMember2020-12-310001520504ifrs-full:LaterThanThreeMonthsMember2020-12-310001520504ifrs-full:LaterThanOneMonthAndNotLaterThanTwoMonthsMember2020-12-310001520504ifrs-full:CurrentMember2020-12-310001520504vlrs:EmployeeProfitSharingMember2021-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMember2021-12-310001520504vlrs:GuaranteeDepositMember2020-12-310001520504vlrs:EmployeeProfitSharingMember2020-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMember2020-12-310001520504vlrs:EmployeeProfitSharingMember2019-12-310001520504vlrs:AircraftAndEngineLeaseReturnObligationMember2019-12-310001520504vlrs:JetFuelZeroCostCollarsMemberifrs-full:AtFairValueMember2021-01-012021-12-310001520504vlrs:IfrsInterestRateCapMemberifrs-full:AtFairValueMember2021-01-012021-12-310001520504ifrs-full:OptionContractMemberifrs-full:AtFairValueMember2021-01-012021-12-310001520504ifrs-full:DerivativesMemberifrs-full:AtFairValueMember2021-01-012021-12-310001520504vlrs:DerivativeAndNonDerivativeFinancialInstrumentsMember2021-01-012021-12-310001520504ifrs-full:AtFairValueMember2021-01-012021-12-310001520504vlrs:JetFuelZeroCostCollarsMemberifrs-full:AtFairValueMember2020-01-012020-12-310001520504vlrs:IfrsInterestRateCapMemberifrs-full:AtFairValueMember2020-01-012020-12-310001520504ifrs-full:OptionContractMemberifrs-full:AtFairValueMember2020-01-012020-12-310001520504ifrs-full:DerivativesMemberifrs-full:AtFairValueMember2020-01-012020-12-310001520504vlrs:DerivativeAndNonDerivativeFinancialInstrumentsMember2020-01-012020-12-310001520504ifrs-full:AtFairValueMember2020-01-012020-12-310001520504vlrs:JetFuelZeroCostCollarsMemberifrs-full:AtFairValueMember2019-01-012019-12-310001520504vlrs:IfrsInterestRateCapMemberifrs-full:AtFairValueMember2019-01-012019-12-310001520504ifrs-full:OptionContractMemberifrs-full:AtFairValueMember2019-01-012019-12-310001520504ifrs-full:ForwardContractMemberifrs-full:AtFairValueMember2019-01-012019-12-310001520504ifrs-full:DerivativesMemberifrs-full:AtFairValueMember2019-01-012019-12-310001520504vlrs:DerivativeAndNonDerivativeFinancialInstrumentsMember2019-01-012019-12-310001520504ifrs-full:AtFairValueMember2019-01-012019-12-310001520504ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2021-01-012021-12-310001520504ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2020-01-012020-12-310001520504vlrs:SeriesCommonStockMembervlrs:VariableClassIiMember2021-12-310001520504vlrs:SeriesCommonStockMembervlrs:FixedClassIMember2021-12-310001520504vlrs:SeriesBCommonStockMembervlrs:VariableClassIiMember2021-12-310001520504vlrs:SeriesBCommonStockMembervlrs:FixedClassIMember2021-12-310001520504vlrs:VariableClassIiMember2021-12-310001520504vlrs:SeriesCommonStockMember2021-12-310001520504vlrs:SeriesBCommonStockMember2021-12-310001520504vlrs:FixedClassIMember2021-12-310001520504vlrs:SeriesCommonStockMembervlrs:VariableClassIiMember2020-12-310001520504vlrs:SeriesCommonStockMembervlrs:FixedClassIMember2020-12-310001520504vlrs:SeriesBCommonStockMembervlrs:VariableClassIiMember2020-12-310001520504vlrs:SeriesBCommonStockMembervlrs:FixedClassIMember2020-12-310001520504vlrs:VariableClassIiMember2020-12-310001520504vlrs:SeriesCommonStockMember2020-12-310001520504vlrs:SeriesBCommonStockMember2020-12-310001520504vlrs:FixedClassIMember2020-12-310001520504vlrs:SeriesCommonStockMembervlrs:ManagementIncentivePlan1Member2021-01-012021-12-310001520504vlrs:ManagementIncentivePlan1Member2021-01-012021-12-310001520504vlrs:SeriesCommonStockMembervlrs:ManagementIncentivePlan1Member2020-01-012020-12-310001520504vlrs:ManagementIncentivePlan2Member2019-01-012019-12-310001520504vlrs:BoardOfDirectorsIncentivePlanMember2021-12-310001520504vlrs:BoardOfDirectorsIncentivePlanMember2020-12-310001520504vlrs:ManagementIncentivePlan1Member2020-12-310001520504vlrs:ManagementIncentivePlan1Member2019-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMembervlrs:IfrsShareBasedCompensationAwardTrancheTwoMember2021-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMembervlrs:IfrsShareBasedCompensationAwardTrancheThreeMember2021-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMembervlrs:IfrsShareBasedCompensationAwardTrancheOneMember2021-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2021-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2020-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2019-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2018-12-310001520504vlrs:StockAppreciationRightsCashSettledMember2014-11-062014-11-060001520504vlrs:JetFuelZeroCostCollarsAndOptionContractMembervlrs:NotLaterThanSixMonthsMember2021-12-310001520504vlrs:JetFuelZeroCostCollarsAndOptionContractMemberifrs-full:NotLaterThanOneYearMember2021-12-310001520504vlrs:ManagementIncentivePlan2Member2021-12-310001520504vlrs:ManagementIncentivePlan2Member2020-12-310001520504vlrs:StockAppreciationRightsCashSettledMember2019-12-310001520504ifrs-full:KeyManagementPersonnelOfEntityOrParentMember2021-01-012021-12-310001520504ifrs-full:KeyManagementPersonnelOfEntityOrParentMember2020-01-012020-12-310001520504ifrs-full:KeyManagementPersonnelOfEntityOrParentMember2019-01-012019-12-3100015205042020-12-112020-12-110001520504ifrs-full:IssuedCapitalMember2020-01-012020-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:ComputerSoftwareMember2021-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:ComputerSoftwareMember2021-12-310001520504ifrs-full:ComputerSoftwareMember2021-12-310001520504ifrs-full:CapitalisedDevelopmentExpenditureMember2021-12-310001520504ifrs-full:GrossCarryingAmountMemberifrs-full:ComputerSoftwareMember2020-12-310001520504ifrs-full:AccumulatedDepreciationAndAmortisationMemberifrs-full:ComputerSoftwareMember2020-12-310001520504ifrs-full:ComputerSoftwareMember2020-12-310001520504ifrs-full:ComputerSoftwareMember2019-12-310001520504ifrs-full:AdditionalPaidinCapitalMember2021-01-012021-12-310001520504ifrs-full:TreasurySharesMember2020-01-012020-12-310001520504ifrs-full:AdditionalPaidinCapitalMember2020-01-012020-12-310001520504ifrs-full:AdditionalPaidinCapitalMember2019-01-012019-12-310001520504ifrs-full:TreasurySharesMember2021-01-012021-12-310001520504ifrs-full:TreasurySharesMember2019-01-012019-12-310001520504ifrs-full:AtFairValueMemberifrs-full:CurrencyRiskMembercurrency:USD2021-01-012021-12-310001520504ifrs-full:AtFairValueMemberifrs-full:CurrencyRiskMembercurrency:MXN2021-01-012021-12-310001520504ifrs-full:AtFairValueMemberifrs-full:CurrencyRiskMembercurrency:USD2020-01-012020-12-310001520504ifrs-full:ActuarialAssumptionOfExpectedRatesOfSalaryIncreasesMember2021-12-310001520504ifrs-full:ActuarialAssumptionOfDiscountRatesMember2021-12-310001520504ifrs-full:ReserveOfRemeasurementsOfDefinedBenefitPlansMember2021-01-012021-12-310001520504ifrs-full:ReserveOfCashFlowHedgesMember2021-01-012021-12-310001520504ifrs-full:ReserveOfRemeasurementsOfDefinedBenefitPlansMember2020-01-012020-12-310001520504ifrs-full:ReserveOfCashFlowHedgesMember2020-01-012020-12-310001520504vlrs:IfrsInterestRateCapMembervlrs:FinanceCostMember2021-01-012021-12-310001520504ifrs-full:OptionContractMembervlrs:FuelExpenseMember2021-01-012021-12-310001520504vlrs:JetFuelZeroCostCollarsMembervlrs:FuelExpenseMember2020-01-012020-12-310001520504vlrs:JetFuelZeroCostCollarsMembervlrs:FinanceCostMember2020-01-012020-12-310001520504vlrs:IfrsInterestRateCapMembervlrs:FinanceCostMember2020-01-012020-12-310001520504ifrs-full:OptionContractMembervlrs:FuelExpenseMember2020-01-012020-12-310001520504ifrs-full:OptionContractMembervlrs:FinanceCostMember2020-01-012020-12-310001520504vlrs:JetFuelZeroCostCollarsMembervlrs:FuelExpenseMember2019-01-012019-12-310001520504vlrs:IfrsInterestRateCapMembervlrs:FinanceCostMember2019-01-012019-12-310001520504ifrs-full:OptionContractMembervlrs:FuelExpenseMember2019-01-012019-12-310001520504ifrs-full:ForwardContractMembervlrs:AircraftAndEngineRentExpensesMember2019-01-012019-12-310001520504vlrs:NonDerivativeFinancialInstrumentsMember2021-01-012021-12-310001520504vlrs:JetFuelZeroCostCollarsMember2021-01-012021-12-310001520504vlrs:IfrsInterestRateCapMember2021-01-012021-12-310001520504ifrs-full:OptionContractMember2021-01-012021-12-310001520504vlrs:NonDerivativeFinancialInstrumentsMember2020-01-012020-12-310001520504vlrs:JetFuelZeroCostCollarsMember2020-01-012020-12-310001520504vlrs:IfrsInterestRateCapMember2020-01-012020-12-310001520504ifrs-full:OptionContractMember2020-01-012020-12-310001520504vlrs:NonDerivativeFinancialInstrumentsMember2019-01-012019-12-310001520504vlrs:JetFuelZeroCostCollarsMember2019-01-012019-12-310001520504vlrs:IfrsInterestRateCapMember2019-01-012019-12-310001520504ifrs-full:OptionContractMember2019-01-012019-12-310001520504ifrs-full:ForwardContractMember2019-01-012019-12-310001520504vlrs:InterestBearingLoansAndBorrowingsMemberifrs-full:Level2OfFairValueHierarchyMember2021-12-310001520504vlrs:InterestBearingLoansAndBorrowingsMember2021-12-310001520504vlrs:InterestBearingLoansAndBorrowingsMemberifrs-full:Level2OfFairValueHierarchyMember2020-12-310001520504vlrs:InterestBearingLoansAndBorrowingsMember2020-12-310001520504ifrs-full:Level2OfFairValueHierarchyMember2020-12-310001520504vlrs:FinancialDebtMember2021-12-310001520504vlrs:FinancialDebtMember2020-12-310001520504ifrs-full:DerivativesMember2020-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanTwoYearsAndNotLaterThanThreeYearsMembervlrs:PercentageOf200BasisPointMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanTwoYearsAndNotLaterThanThreeYearsMembervlrs:PercentageOf175BasisPointMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanThreeYearsAndNotLaterThanFourYearsMembervlrs:PercentageOf200BasisPointMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanThreeYearsAndNotLaterThanFourYearsMembervlrs:PercentageOf175BasisPointMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanOneYearAndNotLaterThanTwoYearsMembervlrs:PercentageOf200BasisPointMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanOneYearAndNotLaterThanTwoYearsMembervlrs:PercentageOf175BasisPointMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanFourYearsAndNotLaterThanFiveYearsMembervlrs:PercentageOf200BasisPointMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanFourYearsAndNotLaterThanFiveYearsMembervlrs:PercentageOf175BasisPointMember2021-12-310001520504vlrs:RevolvingLineOfCreditMemberifrs-full:NotLaterThanOneYearMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:NotLaterThanOneYearMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanTwoYearsAndNotLaterThanThreeYearsMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanThreeYearsAndNotLaterThanFourYearsMember2021-12-310001520504vlrs:AssetBackedTrustNotesMemberifrs-full:LaterThanOneYearAndNotLaterThanTwoYearsMember2021-12-310001520504vlrs:AssetBackedTrustNotesMember2021-12-310001520504ifrs-full:NotLaterThanOneYearMember2021-12-310001520504ifrs-full:LaterThanTwoYearsAndNotLaterThanThreeYearsMember2021-12-310001520504ifrs-full:LaterThanThreeYearsAndNotLaterThanFourYearsMember2021-12-310001520504ifrs-full:LaterThanOneYearAndNotLaterThanTwoYearsMember2021-12-310001520504ifrs-full:AircraftMember2021-12-3100015205042021-03-310001520504vlrs:IfrsInterestRateCapMemberifrs-full:Level2OfFairValueHierarchyMember2021-12-310001520504vlrs:IfrsInterestRateCapMemberifrs-full:Level2OfFairValueHierarchyMember2020-12-310001520504ifrs-full:OptionContractMemberifrs-full:Level2OfFairValueHierarchyMember2020-12-310001520504vlrs:IfrsInterestRateCapMember2020-12-310001520504ifrs-full:OptionContractMember2020-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2021-01-012021-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2020-01-012020-12-310001520504vlrs:LongTermIncentivePlanSharePurchasePlanMember2019-01-012019-12-310001520504vlrs:StockAppreciationRightsCashSettledMember2020-01-012020-12-310001520504vlrs:SeriesAndBSharesMembervlrs:ManagementIncentivePlan1Member2012-12-212012-12-210001520504vlrs:IfrsOtherComprehensiveIncomeMember2021-12-310001520504vlrs:ContributionForFutureCapitalIncreasesMember2021-12-310001520504ifrs-full:TreasurySharesMember2021-12-310001520504ifrs-full:StatutoryReserveMember2021-12-310001520504ifrs-full:RetainedEarningsMember2021-12-310001520504ifrs-full:IssuedCapitalMember2021-12-310001520504ifrs-full:AdditionalPaidinCapitalMember2021-12-310001520504vlrs:IfrsOtherComprehensiveIncomeMember2020-12-310001520504vlrs:ContributionForFutureCapitalIncreasesMember2020-12-310001520504ifrs-full:TreasurySharesMember2020-12-310001520504ifrs-full:StatutoryReserveMember2020-12-310001520504ifrs-full:RetainedEarningsMember2020-12-310001520504ifrs-full:IssuedCapitalMember2020-12-310001520504ifrs-full:AdditionalPaidinCapitalMember2020-12-310001520504vlrs:IfrsOtherComprehensiveIncomeMember2019-12-310001520504vlrs:ContributionForFutureCapitalIncreasesMember2019-12-310001520504ifrs-full:TreasurySharesMember2019-12-310001520504ifrs-full:StatutoryReserveMember2019-12-310001520504ifrs-full:RetainedEarningsMember2019-12-310001520504ifrs-full:IssuedCapitalMember2019-12-310001520504ifrs-full:AdditionalPaidinCapitalMember2019-12-310001520504vlrs:IfrsOtherComprehensiveIncomeMember2018-12-310001520504vlrs:ContributionForFutureCapitalIncreasesMember2018-12-310001520504ifrs-full:TreasurySharesMember2018-12-310001520504ifrs-full:StatutoryReserveMember2018-12-310001520504ifrs-full:RetainedEarningsMember2018-12-310001520504ifrs-full:IssuedCapitalMember2018-12-310001520504ifrs-full:AdditionalPaidinCapitalMember2018-12-310001520504vlrs:SeniorManagerMember2021-01-012021-12-310001520504vlrs:RestOfDirectorsMember2021-01-012021-12-310001520504vlrs:QuarterlyIncentiveBonusesMember2021-01-012021-12-310001520504vlrs:ManagementIncentivePlan2Member2021-01-012021-12-310001520504vlrs:IFRSRestrictedStockUnitsMember2021-01-012021-12-310001520504vlrs:EmployeeProfitSharingMember2021-01-012021-12-310001520504vlrs:ChairmanAndIndependentMembersMember2021-01-012021-12-310001520504vlrs:SeniorManagerMember2020-01-012020-12-310001520504vlrs:RestOfDirectorsMember2020-01-012020-12-310001520504vlrs:QuarterlyIncentiveBonusesMember2020-01-012020-12-310001520504vlrs:IFRSRestrictedStockUnitsMember2020-01-012020-12-310001520504vlrs:EmployeeProfitSharingMember2020-01-012020-12-310001520504vlrs:ChairmanAndIndependentMembersMember2020-01-012020-12-310001520504vlrs:SeniorManagerMember2019-01-012019-12-310001520504vlrs:RestOfDirectorsMember2019-01-012019-12-310001520504vlrs:QuarterlyIncentiveBonusesMember2019-01-012019-12-310001520504vlrs:IFRSRestrictedStockUnitsMember2019-01-012019-12-310001520504vlrs:EmployeeProfitSharingMember2019-01-012019-12-310001520504vlrs:ChairmanAndIndependentMembersMember2019-01-012019-12-310001520504vlrs:ManagementIncentivePlan1Member2012-12-242012-12-240001520504vlrs:CeburVolarcb21lMembervlrs:IfrsInterestRateCapMember2021-12-310001520504vlrs:CeburVolarcb21lMembervlrs:IfrsInterestRateCapMember2020-12-310001520504vlrs:ZeroCostCollarOptionsMember2020-12-310001520504vlrs:JetFuelZeroCostCollarsAndOptionContractMember2020-12-310001520504ifrs-full:OptionContractMember2020-12-310001520504ifrs-full:AircraftMemberifrs-full:TopOfRangeMember2021-01-012021-12-310001520504ifrs-full:AircraftMemberifrs-full:BottomOfRangeMember2021-01-012021-12-310001520504ifrs-full:MotorVehiclesMember2021-01-012021-12-310001520504vlrs:ServiceCartsOnBoardMember2021-01-012021-12-310001520504vlrs:ConstructionsAndImprovementsMember2021-01-012021-12-310001520504vlrs:AircraftSpareEnginesMember2021-01-012021-12-310001520504ifrs-full:CommunicationAndNetworkEquipmentMember2021-01-012021-12-310001520504vlrs:MotorizedTransportEquipmentPlatformMember2020-01-012020-12-310001520504vlrs:AircraftSpareEnginesMember2020-01-012020-12-310001520504ifrs-full:PowerGeneratingAssetsMember2020-01-012020-12-310001520504ifrs-full:MachineryMember2020-01-012020-12-310001520504ifrs-full:CommunicationAndNetworkEquipmentMember2020-01-012020-12-310001520504vlrs:AircraftSpareEnginesMember2019-01-012019-12-310001520504vlrs:RotableSparePartsFurnitureAndEquipmentNetMember2021-12-310001520504vlrs:ProvisionsMember2021-12-310001520504vlrs:PrepaidExpensesAndOtherAssetsMember2021-12-310001520504vlrs:OtherPrepaymentMember2021-12-310001520504vlrs:IfrsInventoriesMember2021-12-310001520504vlrs:DeductibleSupplementalRentMember2021-12-310001520504ifrs-full:RightofuseAssetsMember2021-12-310001520504vlrs:RotableSparePartsFurnitureAndEquipmentNetMember2020-12-310001520504vlrs:ProvisionsMember2020-12-310001520504vlrs:PrepaidExpensesAndOtherAssetsMember2020-12-310001520504vlrs:OtherPrepaymentMember2020-12-310001520504vlrs:IfrsInventoriesMember2020-12-310001520504vlrs:DeductibleSupplementalRentMember2020-12-310001520504ifrs-full:RightofuseAssetsMember2020-12-310001520504vlrs:UnearnedTransportationRevenueMember2021-01-012021-12-310001520504vlrs:RotableSparePartsFurnitureAndEquipmentNetMember2021-01-012021-12-310001520504vlrs:ProvisionsMember2021-01-012021-12-310001520504vlrs:PrepaidExpensesAndOtherAssetsMember2021-01-012021-12-310001520504vlrs:OtherPrepaymentMember2021-01-012021-12-310001520504vlrs:NonDerivativeFinancialInstrumentsMember2021-01-012021-12-310001520504vlrs:IntangibleTaxAssetsMember2021-01-012021-12-310001520504vlrs:IfrsInventoriesMember2021-01-012021-12-310001520504vlrs:ExtensionLeaseAgreementMember2021-01-012021-12-310001520504vlrs:EmployeeProfitSharingMember2021-01-012021-12-310001520504vlrs:EmployeeBenefitsMember2021-01-012021-12-310001520504vlrs:DeferredTaxLiabilitiesMember2021-01-012021-12-310001520504vlrs:DeferredTaxAssetsMember2021-01-012021-12-310001520504vlrs:DeductibleSupplementalRentMember2021-01-012021-12-310001520504ifrs-full:UnusedTaxLossesMember2021-01-012021-12-310001520504ifrs-full:RightofuseAssetsMember2021-01-012021-12-310001520504ifrs-full:LeaseLiabilitiesMember2021-01-012021-12-310001520504ifrs-full:AllowanceForCreditLossesMember2021-01-012021-12-310001520504vlrs:UnearnedTransportationRevenueMember2020-01-012020-12-310001520504vlrs:RotableSparePartsFurnitureAndEquipmentNetMember2020-01-012020-12-310001520504vlrs:ProvisionsMember2020-01-012020-12-310001520504vlrs:PrepaidExpensesAndOtherAssetsMember2020-01-012020-12-310001520504vlrs:OtherPrepaymentMember2020-01-012020-12-310001520504vlrs:NonDerivativeFinancialInstrumentsMember2020-01-012020-12-310001520504vlrs:IntangibleTaxAssetsMember2020-01-012020-12-310001520504vlrs:IfrsInventoriesMember2020-01-012020-12-310001520504vlrs:FinancialInstrumentsDeferredTaxAssetsMember2020-01-012020-12-310001520504vlrs:ExtensionLeaseAgreementMember2020-01-012020-12-310001520504vlrs:EmployeeProfitSharingMember2020-01-012020-12-310001520504vlrs:EmployeeBenefitsMember2020-01-012020-12-310001520504vlrs:DeferredTaxLiabilitiesMember2020-01-012020-12-310001520504vlrs:DeferredTaxAssetsMember2020-01-012020-12-310001520504vlrs:DeductibleSupplementalRentMember2020-01-012020-12-310001520504ifrs-full:UnusedTaxLossesMember2020-01-012020-12-310001520504ifrs-full:RightofuseAssetsMember2020-01-012020-12-310001520504ifrs-full:LeaseLiabilitiesMember2020-01-012020-12-310001520504ifrs-full:AllowanceForCreditLossesMember2020-01-012020-12-310001520504vlrs:UnearnedTransportationRevenueMember2021-12-310001520504vlrs:IntangibleTaxAssetsMember2021-12-310001520504vlrs:FinancialInstrumentsDeferredTaxAssetsMember2021-12-310001520504vlrs:ExtensionLeaseAgreementMember2021-12-310001520504vlrs:EmployeeProfitSharingMember2021-12-310001520504vlrs:EmployeeBenefitsMember2021-12-310001520504ifrs-full:UnusedTaxLossesMember2021-12-310001520504ifrs-full:LeaseLiabilitiesMember2021-12-310001520504ifrs-full:AllowanceForCreditLossesMember2021-12-310001520504country:CR2021-12-310001520504vlrs:UnearnedTransportationRevenueMember2020-12-310001520504vlrs:NonDerivativeFinancialInstrumentsMember2020-12-310001520504vlrs:IntangibleTaxAssetsMember2020-12-310001520504vlrs:FinancialInstrumentsDeferredTaxAssetsMember2020-12-310001520504vlrs:ExtensionLeaseAgreementMember2020-12-310001520504vlrs:EmployeeProfitSharingMember2020-12-310001520504vlrs:EmployeeBenefitsMember2020-12-310001520504ifrs-full:UnusedTaxLossesMember2020-12-310001520504ifrs-full:LeaseLiabilitiesMember2020-12-310001520504ifrs-full:AllowanceForCreditLossesMember2020-12-310001520504country:CR2020-12-310001520504ifrs-full:UnusedTaxLossesMember2019-12-310001520504country:CR2019-12-310001520504ifrs-full:KeyManagementPersonnelOfEntityOrParentMember2021-12-310001520504ifrs-full:KeyManagementPersonnelOfEntityOrParentMember2019-12-310001520504vlrs:IfrsOtherComprehensiveIncomeMember2021-01-012021-12-310001520504ifrs-full:RetainedEarningsMember2021-01-012021-12-310001520504vlrs:IfrsOtherComprehensiveIncomeMember2020-01-012020-12-310001520504ifrs-full:RetainedEarningsMember2020-01-012020-12-310001520504vlrs:IfrsOtherComprehensiveIncomeMember2019-01-012019-12-310001520504ifrs-full:RetainedEarningsMember2019-01-012019-12-3100015205042022-04-2600015205042018-12-310001520504vlrs:SecondTrancheAssetBackedTrustNotesMembervlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2021-01-012021-12-310001520504vlrs:AssetBackedTrustNotesMembervlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2021-01-012021-12-310001520504vlrs:ShortTermWorkingCapitalFacilityWithBancoSabadellS.a.Member2021-01-012021-12-310001520504vlrs:RevolvingLineOfCreditMember2021-01-012021-12-310001520504ifrs-full:TopOfRangeMember2021-01-012021-12-310001520504ifrs-full:BottomOfRangeMember2021-01-012021-12-310001520504vlrs:SecondTrancheAssetBackedTrustNotesMembervlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2020-01-012020-12-310001520504vlrs:AssetBackedTrustNotesMembervlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2020-01-012020-12-310001520504vlrs:ShortTermWorkingCapitalFacilityWithBancoSabadellS.a.Member2020-01-012020-12-310001520504vlrs:RevolvingLineOfCreditMember2020-01-012020-12-310001520504vlrs:SecondTrancheAssetBackedTrustNotesMembervlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2021-12-310001520504vlrs:AssetBackedTrustNotesMembervlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2021-12-310001520504vlrs:AssetBackedTrustNotesMembervlrs:PercentageOf200BasisPointMember2021-12-310001520504vlrs:AssetBackedTrustNotesMembervlrs:PercentageOf175BasisPointMember2021-12-310001520504ifrs-full:TopOfRangeMembervlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2021-12-310001520504vlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2021-12-310001520504vlrs:ShortTermWorkingCapitalFacilityWithBancoSabadellS.a.Member2021-12-310001520504vlrs:RevolvingLineOfCreditMember2021-12-310001520504vlrs:IfrsInterestRateCapMember2021-12-310001520504vlrs:SecondTrancheAssetBackedTrustNotesMembervlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2020-12-310001520504vlrs:AssetBackedTrustNotesMembervlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2020-12-310001520504vlrs:ShortTermWorkingCapitalFacilityWithBancoSabadellS.a.Member2020-12-310001520504vlrs:RevolvingLineOfCreditMember2020-12-310001520504vlrs:TwentyEightDayEquilibriumInterbankInterestRateMember2019-12-310001520504vlrs:AssetBackedTrustNotesMembervlrs:EquilibriumInterbankInterestRateMember2019-06-200001520504vlrs:AssetBackedTrustNotesMember2021-10-130001520504vlrs:AssetBackedTrustNotesMember2019-06-200001520504vlrs:JetFuelZeroCostCollarsAndOptionContractMembervlrs:NotLaterThanSixMonthsMemberifrs-full:TopOfRangeMemberifrs-full:CommodityPriceRiskMember2021-12-310001520504vlrs:JetFuelZeroCostCollarsAndOptionContractMembervlrs:NotLaterThanSixMonthsMemberifrs-full:BottomOfRangeMemberifrs-full:CommodityPriceRiskMember2021-12-310001520504vlrs:JetFuelZeroCostCollarsAndOptionContractMemberifrs-full:NotLaterThanOneYearMemberifrs-full:TopOfRangeMemberifrs-full:CommodityPriceRiskMember2021-12-310001520504vlrs:JetFuelZeroCostCollarsAndOptionContractMemberifrs-full:NotLaterThanOneYearMemberifrs-full:BottomOfRangeMemberifrs-full:CommodityPriceRiskMember2021-12-310001520504ifrs-full:OptionContractMembervlrs:NotLaterThanSixMonthsMember2021-12-310001520504ifrs-full:OptionContractMemberifrs-full:NotLaterThanOneYearMember2021-12-310001520504ifrs-full:ForwardContractMembervlrs:OthersCurrenciesMember2021-12-310001520504ifrs-full:ForwardContractMembercurrency:USD2021-12-310001520504ifrs-full:ForwardContractMembercurrency:MXN2021-12-310001520504ifrs-full:ForwardContractMember2021-12-310001520504ifrs-full:CurrencyRiskMember2020-12-310001520504ifrs-full:UnusedTaxLossesMembervlrs:VuelaSaMember2021-01-012021-12-310001520504country:GT2021-01-012021-12-310001520504country:CR2020-01-012020-12-310001520504country:SV2019-01-012019-12-310001520504vlrs:FrontierAirlinesInc.Member2021-12-310001520504vlrs:FrontierAirlinesInc.Member2020-12-310001520504vlrs:GrupoAeroportuarioDelCentroNorteMember2021-12-310001520504vlrs:ChevezRuizZamarripaYCa.S.cMember2021-12-310001520504vlrs:GrupoAeroportuarioDelCentroNorteMember2020-12-310001520504vlrs:ChevezRuizZamarripaYCa.S.cMember2020-12-310001520504ifrs-full:ComputerSoftwareMember2019-01-012019-12-310001520504vlrs:AircraftSpareEnginesMember2021-01-012021-12-310001520504ifrs-full:LandAndBuildingsMember2021-01-012021-12-310001520504ifrs-full:AircraftMember2021-01-012021-12-310001520504vlrs:AircraftSpareEnginesMember2020-01-012020-12-310001520504ifrs-full:LandAndBuildingsMember2020-01-012020-12-310001520504ifrs-full:AircraftMember2020-01-012020-12-310001520504vlrs:WorkshopToolsMember2021-01-012021-12-310001520504vlrs:PreDeliveryPaymentsMember2021-01-012021-12-310001520504vlrs:MotorizedTransportEquipmentPlatformMember2021-01-012021-12-310001520504ifrs-full:PowerGeneratingAssetsMember2021-01-012021-12-310001520504ifrs-full:OfficeEquipmentMember2021-01-012021-12-310001520504ifrs-full:MachineryMember2021-01-012021-12-310001520504ifrs-full:LeaseholdImprovementsMember2021-01-012021-12-310001520504ifrs-full:ConstructionInProgressMember2021-01-012021-12-310001520504ifrs-full:ComputerEquipmentMember2021-01-012021-12-310001520504ifrs-full:AircraftMember2021-01-012021-12-310001520504vlrs:WorkshopToolsMember2020-01-012020-12-310001520504vlrs:ServiceCartsOnBoardMember2020-01-012020-12-310001520504vlrs:PreDeliveryPaymentsMember2020-01-012020-12-310001520504vlrs:ConstructionsAndImprovementsMember2020-01-012020-12-310001520504ifrs-full:OfficeEquipmentMember2020-01-012020-12-310001520504ifrs-full:LeaseholdImprovementsMember2020-01-012020-12-310001520504ifrs-full:ConstructionInProgressMember2020-01-012020-12-310001520504ifrs-full:ComputerEquipmentMember2020-01-012020-12-310001520504ifrs-full:AircraftMember2020-01-012020-12-310001520504ifrs-full:ComputerSoftwareMember2021-01-012021-12-310001520504ifrs-full:ComputerSoftwareMember2020-01-012020-12-3100015205042019-01-012019-12-310001520504ifrs-full:ReserveOfRemeasurementsOfDefinedBenefitPlansMember2021-12-310001520504ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2021-12-310001520504ifrs-full:ReserveOfCashFlowHedgesMember2021-12-310001520504ifrs-full:ReserveOfRemeasurementsOfDefinedBenefitPlansMember2020-12-310001520504ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2020-12-310001520504ifrs-full:ReserveOfCashFlowHedgesMember2020-12-310001520504ifrs-full:ReserveOfRemeasurementsOfDefinedBenefitPlansMember2019-12-310001520504ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2019-12-310001520504ifrs-full:ReserveOfCashFlowHedgesMember2019-12-3100015205042019-12-3100015205042021-12-3100015205042020-12-310001520504vlrs:SeriesCommonStockMember2021-01-012021-12-310001520504vlrs:OrdinaryParticipationCertificatesMember2021-01-012021-12-310001520504vlrs:AmericanDepositarySharesMember2021-01-012021-12-310001520504vlrs:SeriesCommonStockMember2021-12-310001520504vlrs:OrdinaryParticipationCertificatesMember2021-12-310001520504dei:BusinessContactMember2021-01-012021-12-3100015205042020-01-012020-12-3100015205042021-01-012021-12-31iso4217:MXNiso4217:USDvlrs:Yutr:galvlrs:EquityInstrumentsvlrs:aircraftvlrs:segmentvlrs:enginevlrs:agreementvlrs:itemxbrli:sharesiso4217:MXNiso4217:USDxbrli:pureiso4217:CRCiso4217:USDiso4217:GTQiso4217:USDiso4217:USDutr:galiso4217:MXNxbrli:sharesiso4217:USDxbrli:shares

Table of Contents

As filed with the Securities and Exchange Commission on April 26, 2022

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

       REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

       SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from                   to            

Commission file number 001-36059

Controladora Vuela Compañía de Aviación, S.A.B. de C.V.

(Exact name of Registrant as specified in its charter)

Volaris Aviation Holding Company

(Translation of Registrant’s name into English)

United Mexican States

(Jurisdiction of incorporation or organization)

Av. Antonio Dovalí Jaime No. 70, 13 Floor, Tower B

Colonia Zedec Santa Fe

United Mexican States, Mexico City, 01210

(Address of principal executive offices)

Renato Duarte Salomone (ir@volaris.com)
Av. Antonio Dovalí Jaime No. 70, 13 Floor, Tower B, Colonia Zedec Santa Fe United Mexican States, Mexico City, 01210

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

American Depositary Shares (ADSs)

VLRS

New York Stock Exchange

Ordinary Participation Certificates (Certificados de
Participación Ordinarios or CPOs)

VLRS

New York Stock Exchange

Series A shares of common stock, no par value

VOLARA

Mexican Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Ordinary Participation Certificates (Certificados de Participación Ordinarios):

964,200,367

Series A shares of common stock, no par value per share:

1,108,462,804

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

  Yes      No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

  Yes      No

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

  Yes      No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

  Yes      No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  

Accelerated filer  

Non-accelerated filer  

Emerging growth company  

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.   ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  

International Financial Reporting Standards as issued
by the International Accounting Standards Board 

Other  

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

  Item 17      Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

   Yes     No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

   Yes     No

TABLE OF CONTENTS

Page

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

1

INTRODUCTION AND USE OF CERTAIN TERMS

3

SUMMARY OF RISK FACTORS

4

GLOSSARY OF AIRLINES AND AIRLINE TERMS

6

PRESENTATION OF FINANCIAL INFORMATION AND OTHER INFORMATION

9

PART I.

10

ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

10

ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE

10

ITEM 3 KEY INFORMATION

10

ITEM 4 INFORMATION ON THE COMPANY

41

ITEM 4A UNRESOLVED STAFF COMMENTS

68

ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS

68

ITEM 6 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

98

ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

108

ITEM 8 FINANCIAL INFORMATION

111

ITEM 9 THE OFFER AND LISTING

112

ITEM 10 ADDITIONAL INFORMATION

120

ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

137

ITEM 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

140

PART II.

146

ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

146

ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

146

ITEM 15 CONTROLS AND PROCEDURES

146

ITEM 16 [Reserved]

147

ITEM 16A Audit Committee Financial Expert

147

ITEM 16B Code of Ethics

147

ITEM 16C Principal Accountant Fees and Services

148

ITEM 16D Exemptions from the Listing Standards for Audit Committees

148

ITEM 16E Purchases of Equity Securities by the Issuer and Affiliated Purchasers

148

ITEM 16F Change in Registrant’s Certifying Accountant

148

ITEM 16G Corporate Governance

148

ITEM 16H MINE SAFETY DISCLOSURE

152

PART III.

152

ITEM 17 FINANCIAL STATEMENTS

152

ITEM 18 FINANCIAL STATEMENTS

153

ITEM 19 EXHIBITS

153

EXHIBIT INDEX

154

i

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

This annual report on Form 20-F or our “annual report,” contains various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company’s expectations, beliefs or projections concerning future events and financial trends affecting the financial condition of our business. When used in this annual report, the words “expects,” “intends,” “estimates,” “predicts,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “potential,” “outlook,” “may,” “continue,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe the Company’s objectives, plans or goals, or actions the Company may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company’s intentions and expectations regarding the delivery schedule of aircraft on order, announced new service routes and customer savings programs. Forward-looking statements should not be read as a guarantee or assurance of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations, including the competitive environment in the airline industry; the Company’s ability to keep costs low; changes in fuel costs; the impact of worldwide economic conditions on customer travel behavior; the Company’s ability to generate non-passenger revenues; and government regulation. Additional information concerning these, and other factors is contained in the Company’s Securities and Exchange Commission filings. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date of this annual report. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Important factors that could cause such differences include, but are not limited to:

the competitive environment in our industry;
ability to keep costs low;
changes in our fuel cost, the effectiveness of our fuel cost hedges and our ability to hedge fuel costs;
the impact of worldwide economic conditions, including the impact of the economic recession on customer travel behavior;
actual or threatened terrorist attacks, global instability, geopolitical risks and potential U.S. military actions or activities;
ability to generate non-passenger revenues;
external conditions, including air traffic congestion, weather conditions and outbreak of disease and pandemics;
ability to maintain slots in the airports that we operate and service provided by airport operators;
ability to operate through new airports that match our operative criteria;
air travel substitutes;
labor disputes, employee strikes and other labor-related disruptions, including in connection with our negotiations with our union;
ability to attract and retain qualified personnel;
loss of key personnel;

1

aircraft-related fixed obligations;
dependence on cash balances and operating cash flows;
our aircraft utilization rate;
maintenance costs;
our reliance on automated systems and the risks associated with changes made to those systems;
use of personal data;
lack of marketing alliances;
government regulation, changes in law and interpretation and supervision of compliance with applicable law;
maintaining and renewing our permits and concessions;
our ability to execute our growth strategy;
operational disruptions;
our indebtedness;
currency fluctuations or the devaluation and depreciation of the peso;
our liquidity;
our reliance on third-party vendors and partners;
our reliance on a single fuel provider in Mexico;
an aircraft accident or incident;
our aircraft and engine suppliers;
changes in the Mexican and VFR (passengers who are visiting friends and relatives) markets;
insurance costs;
environmental regulations;
cyber-attacks;
our ability to respond to global health crises, such as the ongoing COVID-19 pandemic; and
other risk factors included under “Risk Factors” in this annual report.

In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this annual report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date of this annual report. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

2

INTRODUCTION AND USE OF CERTAIN TERMS

In this annual report, we use the term “Volaris” to refer to Controladora Vuela Compañía de Aviación, S.A.B. de C.V., “Volaris Opco” to refer to Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., “Comercializadora” to refer to Comercializadora Volaris, S.A. de C.V., “Servicios Corporativos” to refer to Servicios Corporativos Volaris, S.A. de C.V., “Servicios Administrativos” to refer to Servicios Administrativos Volaris, S.A. de C.V., “Servicios Earhart” to refer to Servicios Earhart, S.A., “Vuela” to refer to Vuela, S.A. and “Vuela Aviación” to refer to Vuela Aviación, S.A., “Viajes Vuela” to refer to Viajes Vuela, S.A. de C.V., “Comercializadora Frecuenta” to refer to Comercializadora V. Frecuenta, S.A. de C.V., “Vuela El Salvador” to refer to Vuela El Salvador, S.A. de C.V., and “GDS” to refer to Guatemala Dispatch Service, S.A.Volaris Opco, Comercializadora, Servicios Corporativos, Servicios Administrativos, Vuela, Vuela Aviación, Viajes Vuela, Comercializadora Frecuenta and Vuela El Salvador are wholly-owned subsidiaries of Volaris. The terms “we,” “our” and “us” in this annual report refer to Volaris, together with its subsidiaries, and to properties and assets that they own or operate, unless otherwise specified. References to “Series A shares” refer to Series A shares of Volaris.

3

SUMMARY OF RISK FACTORS

An investment in our securities and ADSs is subject to a number of risks, including risks related to Mexico, risks related to the airline industry, risks related to our business, and risks related to our securities and the ADSs. The following list summarizes some, but not all, of these risks. Please read the information in the section entitled “Risk Factors” for a more thorough description of these and other risks.

Risks related to Mexico

Political events and changes in Mexican government policy: The Mexican government has exercised, and continues to exercise, significant influence over the Mexican economy. In particular, Mexican federal governmental actions and policies concerning air transportation and similar services could have a significant impact on us.
Adverse economic conditions in Mexico: Decreases in the growth rate of the Mexican economy, or periods of negative growth, or increases in inflation may result in lower demand for our flights, lower fares or a shift to ground transportation options, such as long-distance buses.
Developments in other countries: Developments in other countries, including the immigration and trade policies imposed by former U.S. President Donald Trump, adversely impacted our financial condition and results of operations. While it is expected that the current administration will reverse these policies, other developments, particularly related to international COVID-19 response measures, may result in lower demand for our flights.
Currency fluctuations: The value of the peso has been subject to significant fluctuations with respect to the U.S. dollar in the past and may be subject to significant fluctuations in the future. If the peso declines in value against the U.S. dollar our demand would be adversely affected. Please see Item 3: -“ Currency fluctuations or the devaluation and depreciation of the peso could adversely affect our business, results of operations, financial condition, and prospects”.
Downgrade of IASA rating: The FAA periodically audits the aviation regulatory authorities of other countries and gives an International Aviation Safety Assessment, or IASA, rating to each country. In May 2021, Mexico´s IASA rating was downgraded from Category 1 to Category 2. The AFAC is currently working to address the FAA findings. Consequently, we are unable to add new aircraft, services, or routes to the United States.

Risks related to the airline industry

Competition: We operate in an extremely competitive industry and face significant competition with respect to routes, fares, services and slots in airports. In addition to other airlines, we compete with bus services on many of our routes. Decisions by our competitors that increase overall industry capacity, or capacity dedicated to a particular region, market or route, could have a material adverse impact on our business.
Economic Conditions: The airline industry is particularly sensitive to changes in economic conditions. Unfavorable economic conditions, such as the recent economic contraction triggered by the COVID-19 pandemic, could affect our ability to raise prices to counteract increased fuel, labor or other costs, which could result in a material adverse effect on our business, results of operations and financial condition.
Regulations: The airline industry is heavily regulated, and our financial condition and results of operations could be materially adversely affected if we fail to maintain the required U.S., Mexican, Central American and South American governmental concessions or authorizations necessary for our operations.
Fixed Costs: The airline industry is characterized by low gross profit margins, high fixed costs and revenues that generally exhibit substantially greater elasticity than costs. As a result, airlines, including us, cannot quickly reduce their costs to respond to shortfalls in expected revenue and a shortfall from expected revenue levels could have a material adverse effect on our results of operations and financial condition.

4

Fuel Costs: The airline industry is heavily impacted by the price and availability of fuel. Fuel is our largest cost and continued volatility in fuel costs or significant disruptions in the supply of fuel could have a material adverse effect on our business, results of operations and financial condition. The global fuel markets have reacted negatively to the recent conflict between Russia and Ukraine with fuel prices surging to their highest level since 2008 amid supply concerns. Our ability to pass on any significant increases in fuel costs through fare increases is also limited by our ultra-low-cost business model.
COVID-19: Public health threats, including COVID-19 and other highly communicable diseases, have and could in the future result in suspension of domestic and international flights, changes to travel behavior and a material adverse effect on the Mexican economy and the other countries in which we operate, airline industry reputation, the price of our shares, our business, results of operations and financial condition. Additional government responses to the ongoing COVID-19 pandemic and its present and future variants remain unknown and depend on future developments, including the scope and duration of the pandemic, the effectiveness and acceptance of the COVID-19 vaccines, which are highly fluid, uncertain and cannot be predicted.

Risks related to our business

Ultra-Low-Cost Structure: Our ultra-low-cost structure is one of our primary competitive advantages and many factors could affect our ability to control our costs, some of which are not under our control. We rely on maintaining a high daily aircraft utilization rate to implement our ultra-low-cost structure, which makes us especially vulnerable to flight delays or cancellations or aircraft unavailability. We also depend on our non-passenger revenue to remain profitable, and we may not be able to maintain or increase our non-passenger revenue base. If our cost structure increases and we are no longer able to maintain a cost advantage over our competitors, it could have a material adverse effect on our business, results of operations, financial condition, and prospects.
Maintenance Costs: While we currently have a young fleet, with an average age of 5.4 years as of December 31, 2021, our relatively new aircraft require less maintenance now than they will in the future and our maintenance costs will increase as our fleet ages. Any significant increase in maintenance and repair expenses would have a material adverse effect on our margins and our business, results of operations and financial condition.
Dependence on Certain Airports: Our business is heavily dependent on our routes to and from the Mexico City, Tijuana, Guadalajara and Cancun airports, which make up a large portion of the balance of our routes. The Mexico City International Airport has been declared saturated and we cannot guarantee that in the future we may obtain additional slots in Mexico City. Any significant increase in competition, redundancy in demand for air transportation or disruption in service or the fuel supply at these airports, could have a material adverse impact on our business, results of operations and financial condition.
Limited suppliers: We rely on a limited number of suppliers for fuel, aircraft and engines.

Risks related to our securities and the ADSs

CPO Trust: Non-Mexican investors may not hold our Series A shares directly and must have them held in a CPO trust, which releases CPOs underlying Series A shares, at all times. If the current trust is terminated, a new trust similar to the CPO trust may not be created.
Voting Rights: Holders of the ADSs and CPOs are not entitled to vote the underlying Series A shares. As a result, holders of the ADSs and CPOs do not have any influence over the decisions made relating to our company’s business or operations, nor are they protected from the results of any such corporate action taken by our holders of Series A shares and Series B shares.

5

GLOSSARY OF AIRLINES AND AIRLINE TERMS

Set forth below is a glossary of industry terms used in this annual report:

“Aeroméxico”

means Aerovías de México, S.A. de C.V.

"AFAC"

means the Mexican Federal Civil Aviation Agency (Agencia Federal de Aviación Civil).

“AirAsia”

means AirAsia Berhad.

“Airbus”

means Airbus S.A.S.

“Alaska Air”

means Alaska Air Group, Inc.

“Allegiant”

means Allegiant Travel Company.

“Aeroméxico Connect”

means Aerolitoral, S.A. de C.V.

“American”

means American Airlines Group.

“Available seat miles” or “ASMs”

means the number of seats available for passengers multiplied by the number of miles the seats are flown.

“Average daily aircraft utilization”

means flight hours or block hours, as applicable, divided by number of days in the period divided by average aircraft in the period.

“Average economic fuel cost per gallon”

means total fuel expense net of hedging effect, divided by the total number of fuel gallons consumed.

“Average passenger revenue per booked passenger”

means total passenger revenue divided by booked passengers.

“Average stage length”

means the average number of miles flown per passenger flight segment.

“Avianca”

means Avianca Holdings S.A.

“Azul”

means Azul Linhas Aéreas Brasileiras S.A.

“Block hours”

means the number of hours during which the aircraft is in revenue service, measured from the time it leaves the gate until the time it arrives to the gate at destination.

“Booked passengers”

means the total number of passengers booked on all flight segments.

“CASM” or “unit costs”

means total operating expenses, net divided by ASMs.

“CASM ex fuel”

means total operating expenses, net excluding fuel expense divided by ASMs.

“CBP”

means U.S. Customs and Border Protection.

“CEO”

means current engine option.

“Copa”

means Copa Holding S.A.

“Delta”

means Delta Air Lines, Inc.

6

“DHS”

means the U.S. Department of Homeland Security.

“DOT”

means the U.S. Department of Transportation.

“EPA”

means the U.S. Environmental Protection Agency.

“FAA”

means the U.S. Federal Aviation Administration.

“FCC” m

eans the U.S. Federal Communications Commission.

“Flight hours”

means the number of hours during which the aircraft is in revenue service, measured from the time it takes off until the time it lands at the destination.

“Frontier”

means Frontier Airlines, Inc.

“Gol”

means Gol Linhas Aéreas Inteligentes, S.A.

“Grupo Aeroméxico”

means Grupo Aeroméxico, S.A.B. de C.V., which includes Aeroméxico and Aeroméxico Connect.

“Grupo Mexicana”

means Grupo Mexicana de Aviación, S.A. de C.V., which is the holding company for three airlines, Compañía Mexicana de Aviación, Mexicana Click and Mexicana Link.

“Grupo TACA”

means Taca International Airlines, S.A.

“IATA”

means the International Air Transport Association.

“INEGI”

means the Mexican Institute of Statistics and Geography (Instituto Nacional de Estadística y Geografía),

“Interjet”

means ABC Aerolíneas, S.A. de C.V.

“JetSMART”

means JetSMART Airlines SpA.

“LATAM”

means LATAM Airlines Group S.A.

“Latin America”

means, collectively, Mexico, the Caribbean, Central America and South America.

“Latin American publicly traded airline carriers”

means, collectively, Grupo Aeroméxico, Avianca, Azul, Copa, Gol and LATAM.

“Legacy carrier”

means an airline that typically offers scheduled flights to major domestic and international routes (directly or through membership in an alliance) and serves numerous smaller cities, operates mainly through a “hub-and-spoke” network route system and has higher cost structures than low-cost carriers due to higher labor costs, flight crew and aircraft scheduling inefficiencies, concentration of operations in higher cost airports and multiple classes of services.

“Load factor”

means RPMs divided by ASMs and expressed as a percentage.

“Low-cost carrier”

means an airline that typically flies direct, point-to-point flights, often serves major markets through secondary, lower cost airports in the same regions as major population centers, provides a single class of service, thereby increasing the number of seats on each flight and avoiding the significant and incremental cost of offering premium-class services, and tends to operate fleets with only one or two aircraft families, in order to maximize the utilization of flight crews across the fleet, improve

7

aircraft scheduling efficiency and flexibility and minimize inventory and aircraft maintenance costs.

“NEO”

means new engine option.

“On-time”

means flights arriving within 15 minutes of the scheduled arrival time.

“Other Latin American publicly traded airlines”

means, collectively, Avianca, Azul, Copa, Gol, Grupo Aeroméxico and LATAM.

“Passenger flight segments”

means the total number of passengers flown on all flight segments.

“RASM”

means passenger revenue divided by ASMs.

“Revenue passenger per miles” or “RPMs”

means the number of seats sold to passengers divided by the number of miles the seats are flown.

“Ryanair”

means Ryanair Holdings plc.

“SCT”

means the Mexican Infrastructure, Communications and Transportation Ministry (Secretaría de Infraestructura, Comunicaciones y Transportes).

“Southwest Airlines”

means Southwest Airlines Co.

“Spirit”

means Spirit Airlines, Inc.

“Tiger”

means Tiger Airways Holdings Limited.

“Total operating revenue per ASM” or “TRASM”

means total revenue divided by ASMs.

“TSA”

means the U.S. Transportation Security Administration.

“ULCC”

means an airline that belongs to a subset of low-cost carriers, which distinguishes itself by using a business model with an intense focus on low-cost, efficient asset utilization, unbundled revenue sources aside from the base fares with multiple products and services offered for additional fees. In the United States, Frontier, and Spirit Airlines, Inc. define themselves as ULCCs and Volaris and VivaAerobus follow the ULCC model in Mexico.

“United”

means United Continental Holdings, Inc.

“U.S.-based publicly traded target market competitors”

means Alaska Air, Allegiant, American, Delta, Frontier, Spirit, JetBlue, Southwest and United.

“VFR”

means passengers who are visiting friends and relatives.

“VivaAerobus”

means Aeroenlaces Nacionales, S.A. de C.V.

“Wizz”

means Wizz Air Holdings Plc.

8

PRESENTATION OF FINANCIAL INFORMATION AND OTHER INFORMATION

This annual report includes our audited consolidated financial statements at December 31, 2020 and 2021, and for each of the three years in the period ended December 31, 2021, which have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB.

Unless otherwise specified, all references to “U.S. dollars,” “dollars,” “U.S. $” or “$” are to United States dollars, the legal currency of the United States, and references to “pesos” or “Ps.” are to Mexican Pesos, the legal currency of Mexico. Except as otherwise indicated, peso amounts have been converted to U.S. dollars at the exchange rate of Ps.20.5835 per U.S. $1.00, as reported by the Mexican Central Bank (Banco de México) as the rate for the payment of obligations denominated in foreign currency payable in Mexico (tipo de cambio para solventar obligaciones denominadas en moneda extranjera, pagaderas en México) in effect on December 31, 2021.

Such conversions are for the convenience of the reader and should not be construed as representations that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated, or at all. Amounts presented in this annual report may not add up due to rounding.

Industry and Market Data

We obtained the industry and market data used in this annual report from research, surveys or studies conducted by third parties on our behalf, information contained in third-party publications, such as the INEGI, reports from the AFAC, reports from the Mexican Central Bank and other publicly available sources. Third-party publications generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. Although we believe that this data and information is reliable, we have not independently verified it. Additionally, certain market share data is based on published information available for the Mexican states. There is no comparable data available relating to the particular cities we serve. In presenting market share estimates for these cities, we have estimated the size of the market on the basis of the published information for the state in which the particular city is located. We believe this method is reasonable, but the results have not been verified by any independent source.

9

PART I.

ITEM  1    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable.

ITEM  2    OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

ITEM  3    KEY INFORMATION

A.Selected Consolidated Financial Data

SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OPERATING DATA

The following tables summarize selected financial and operating data for our business for the periods presented. You should read this selected consolidated financial data in conjunction with Item 5: “Operating and Financial Review and Prospects” and our audited consolidated financial statements, including the related notes thereto, all included elsewhere in this annual report. We prepare our consolidated financial statements in accordance with IFRS.

We derived the selected consolidated statements of operations data for the years ended December 31, 2019, 2020 and 2021 and the selected consolidated statements of financial position data as of December 31, 2020 and 2021 from our audited financial statements included in this annual report. The selected consolidated statements of operations data for the years ended December 31, 2017, 2018 and 2019 and the selected consolidated statements of financial position data as of December 31, 2017, 2018 and 2019 were

10

derived from the audited financial statements for those periods. See Item 18: “Financial Statements.” Our historical results are not necessarily indicative of the results to be expected in the future.

11

For the Years ended December 31, 

    

2017

    

2018

    

2019

    

2020

    

2021

    

2021

Adjusted(1)

Adjusted(1)

(in thousands

of U.S.

(in thousands of pesos, except share and per share data and operating data)

dollars)(2)

CONSOLIDATED STATEMENTS OF OPERATIONS DATA

    

    

    

    

    

    

Operating revenues:

Passenger revenues:

 

 

 

 

 

 

Fare revenues

17,791,317

 

18,487,858

 

23,129,991

 

12,873,174

 

25,703,144

 

1,248,726

Other passenger revenues

6,098,504

7,892,497

10,569,208

8,613,398

17,594,223

854,773

Non-passenger revenues:

Other non-passenger revenues

727,392

697,357

897,586

882,360

1,558,092

75,696

Cargo

170,973

227,438

228,836

201,881

241,202

11,718

Non-derivative financial instruments

(72,949)

(411,222)

(434,522)

(21,110)

 

24,788,186

 

27,305,150

34,752,672

 

22,159,591

 

44,662,139

 

2,169,803

Other operating income

 

(96,765)

 

(621,973)

 

(327,208)

 

(730,333)

 

(217,838)

 

(10,583)

Fuel expense, net

7,255,636

 

10,134,982

 

11,626,069

 

6,640,820

 

12,376,263

 

601,271

Landing, take-off and navigation expenses

4,002,744

 

4,573,319

 

5,108,489

 

4,090,864

 

6,020,681

 

292,500

Depreciation of right of use assets

3,437,903

 

4,043,691

 

4,702,971

 

5,048,976

 

5,462,625

 

265,389

Salaries and benefits

2,823,647

 

3,125,393

 

3,600,762

 

3,453,382

 

4,857,083

 

235,970

Sales, marketing and distribution expenses

1,691,524

 

1,501,203

 

1,447,637

 

1,840,819

 

1,961,936

 

95,316

Maintenance expenses(3)

1,418,253

 

1,497,989

 

1,488,431

 

1,167,720

 

1,952,202

 

94,843

Aircraft and engine variable lease expenses

1,429,595

 

956,010

 

961,657

 

1,845,254

 

1,686,875

 

81,953

Other operating expenses

1,034,258

 

1,059,098

 

1,112,927

 

1,157,240

 

1,336,792

 

64,944

Depreciation and amortization(4)

548,687

 

500,641

 

675,514

 

898,445

 

1,159,224

 

56,318

23,545,482

26,770,353

30,397,249

25,413,187

36,595,843

1,777,921

Operating income (loss)

1,242,704

 

534,797

 

4,355,423

 

(3,253,596)

 

8,066,296

 

391,882

Finance income

105,795

 

152,603

 

207,799

 

101,511

 

71,578

 

3,477

Finance cost

(1,515,281)

 

(1,876,312)

 

(2,269,829)

 

(3,018,484)

 

(2,831,989)

 

(137,585)

Foreign exchange gain (loss), net

683,039

 

(103,790)

 

1,440,501

 

470,594

 

(2,591,406)

 

(125,897)

Income (loss) before income tax

516,257

 

(1,292,702)

 

3,733,894

 

(5,699,975)

 

2,714,479

 

131,877

Income tax (expense) benefit

(237,586)

 

349,820

 

(1,094,831)

 

1,406,184

 

(593,928)

 

(28,855)

Net income (loss)

278,671

 

(942,882)

 

2,639,063

 

(4,293,791)

 

2,120,551

103,022

Weighted average shares outstanding Basic and diluted

1,011,876,677

1,011,876,677

1,011,876,677

1,021,560,557

1,165,976,677

1,165,976,677

12

Earnings (loss) per share Basic and diluted(5)

0.28

 

(0.93)

 

2.61

 

(4.20)

 

1.82

 

0.09

Earnings (loss) per ADS Basic and diluted(6)

2.75

 

(9.32)

 

26.08

 

(42.03)

 

18.19

 

0.88

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION DATA (as of December 31,)

Cash, cash equivalents and restricted cash

6,950,879

5,862,942

7,979,972

10,103,385

15,254,876

741,122

Accounts receivable, net

1,449,292

 

1,466,690

 

2,320,334

 

2,027,379

 

2,183,562

 

106,083

Guarantee deposits-current portion

1,352,893

790,635

600,327

1,141,956

1,625,886

78,990

Total current assets(11)

11,046,071

 

8,922,769

 

12,117,239

 

14,402,310

 

20,150,807

 

978,980

Total assets

49,952,973

56,724,683

63,295,127

68,189,113

82,016,361

3,984,568

Total current liabilities

13,555,372

 

14,083,029

 

17,324,216

 

20,965,950

 

25,760,976

 

1,251,534

Total non-current liabilities

32,572,248

39,936,501

40,441,228

44,426,978

49,809,947

2,419,897

Total liabilities

46,127,620

 

54,019,530

 

57,765,444

 

65,392,928

 

75,570,923

 

3,671,431

Capital stock

2,973,559

2,973,559

2,973,559

3,426,406

3,426,406

166,464

Total equity

3,825,353

 

2,705,153

 

5,529,683

 

2,796,185

 

6,445,438

 

313,137

CASH FLOW DATA

 

 

 

 

 

Net cash flows provided by operating activities

6,018,767

6,276,707

9,509,643

4,359,445

15,868,532

770,939

Net cash flow used in investing activities

(2,260,440)

 

(1,389,395)

 

(1,879,341)

 

(67,757)

 

(2,730,786)

 

(132,669)

Net cash flow used in financing activities

(3,634,598)

 

(5,946,059)

 

(5,238,840)

 

(3,040,840)

 

(8,828,377)

 

(428,906)

FINANCIAL DATA

 

 

 

 

 

Operating income (loss)

1,242,704

 

534,797

 

4,355,423

 

(3,253,596)

 

8,066,296

 

391,882

Depreciation of right of use assets

3,437,903

 

4,043,691

 

4,702,971

 

5,048,976

 

5,462,625

 

265,389

Depreciation and amortization

548,687

 

500,641

 

675,514

 

898,445

 

1,159,224

 

56,318

Aircraft and engine variable lease expenses

1,429,595

 

956,010

 

961,657

 

1,845,254

 

1,686,875

 

81,953

OPERATING DATA(9) (10)

Aircraft at end of period

71

77

 

82

 

86

 

101

 

Average daily aircraft utilization (block hours)

12.57

13.21

12.94

11.30

12.53

Average daily aircraft utilization (flight hours)

10.02

10.56

 

10.90

 

9.73

 

10.77

 

Average pesos/U.S. dollar exchange rate

18.93

19.24

 

19.26

 

21.50

 

20.28

 

End of period pesos/U.S. dollar exchange rate

19.74

19.68

 

18.85

 

19.95

 

20.58

 

Airports served at end of period

69

69

65

68

69

13

Departures(7)

108,060

117,920

 

138,084

 

97,819

 

153,913

 

Passenger flight segments (thousands)(7)

15,670

17,478

 

20,917

 

13,153

 

22,560

 

Booked passengers (thousands)(7)

16,427

18,396

 

21,975

 

14,712

 

24,405

 

Revenue passenger miles (RPMs) (thousands)(7)

15,917,246

17,748,408

21,032,364

14,596,745

23,802,381

Available seat miles (ASMs) (thousands)(7)

18,860,950

21,009,545

 

24,498,893

 

18,274,946

 

28,096,701

 

Load factor(8)

84

%  

85

%  

86

%  

80

%  

85

%  

Average fare revenue per booked passenger(8)

1,086

 

1,006

 

1,054

 

875

 

1,054

 

51

Average other passenger revenue per booked passenger(7)(9)

371

 

429

 

481

 

585

 

721

 

35

Total ancillary revenue per booked passenger(7)(9)

426

 

479

 

532

 

659

 

795

 

39

Total operating revenue per ASM (TRASM) (cents)(7)(9)

131.4

 

130.0

 

142.2

 

123.5

 

160.5

 

7.8

Passenger revenue per ASM (RASM) (cents)(7)(9)

94.3

 

88.0

 

94.4

 

70.4

 

91.5

 

4.4

Operating expenses per ASM (CASM) (cents)(7)(9)

124.8

 

127.4

 

124.3

 

141.3

 

130.9

 

6.4

CASM ex fuel (cents)(7)(9)

86.4

 

79.2

 

76.6

 

102.7

 

86.2

 

4.2

Fuel gallons consumed (thousands)

210,536

 

227,436

 

251,802

 

176,645

 

273,515

 

Average economic fuel cost per gallon(9)

34.5

 

44.6

 

46.4

 

39.9

 

45.9

 

2.2

Average of employees per aircraft at end of period

67

 

60

 

60

 

54

 

63

 

(1)As of January 1, 2019, we adopted IFRS 16 using the full retrospective method of adoption in order to provide comparative results in all periods presented, recognizing the effect in retained earnings as of January 1, 2017. Our financial results as of and for the years ended December 31, 2017 and 2018 were presented in our annual report for the year ended December 31, 2018 filed with the SEC on April 26, 2019 and were adjusted in our Audited Consolidated Financial Statements presented in the annual report to consider this application of IFRS 16.
(2)Peso amounts were converted to U.S. dollars solely for the convenience of the reader at the rate of Ps.20.5835 per U.S. $1.00 as the rate for the payment of obligations denominated in foreign currency payable in Mexico in effect on December 31, 2021. Such conversions should not be construed as a representation that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated, or at all.
(3)Includes routine and ordinary maintenance expenses only. See Item 5: “Operating and Financial Review and Prospects—Operating Results.”
(4)Includes, among other things, major maintenance expenses, which are capitalized and subsequently amortized. See Item 5: “Operating and Financial Review and Prospects—Operating Results.”
(5)Basic and diluted earnings per share amounts are calculated by dividing the income for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares and unvested shares awarded under the management incentive and long-term incentive plans outstanding during the year, this is because the shares are entitled to a dividend if and when it is declared by the Company.

14

(6)The basis used for the computation of the information is to multiply the earnings per basic and diluted share obtained pursuant to footnote (5) above by ten, which is the number of CPOs represented by each ADS. Each CPO, in turn, represents a financial interest in one Series A share of common stock of Volaris.
(7)Includes scheduled and charter.
(8)Includes scheduled.
(9)Excludes non-derivative financial instruments.
(10)See “Glossary of Airlines and Airline Terms” elsewhere in this annual report for definitions of terms used in this table.
(11)See detail of other current assets in Item 17: “Financial Statements”.

a.Key Performance Indicators

The following measures are often provided, and utilized by the Company’s management, analysts, and investors to enhance comparability of year-over-year results, as well as to compare results to other airlines: Revenue passenger miles, or RPMs; Average passenger revenue per booked passenger; Average non-passenger revenue per booked passenger, Total operating revenue per ASM, or TRASM; Passenger Revenue per ASMS, or RASM; Operating expenses per ASM, or CASM; CASM ex fuel, and average economic fuel cost per gallon. Average passenger revenue per booked passenger represents the total passenger revenue divided by booked passengers. The CASM ex fuel represents total operating expenses, net excluding fuel expense divided by ASMs. Average economic fuel cost per gallon represents total fuel expense net of hedging effect, divided by the total number of fuel gallons consumed. We believe this operating data is useful in reporting the operating performance of our business, however, these measures may differ from similarly titled measures reported by other companies and should not be considered in isolation or as a substitute for measures of performance in accordance with IFRS.

B.Capitalization and Indebtedness

Not Applicable.

C.

Reasons for the Offer and Use of Proceeds

Not Applicable.

D.Risk Factors

You should carefully consider all of the information set forth in this annual report and the risks described below before making an investment decision. Our business, results of operations and financial condition could be materially and adversely affected by any of these risks. The trading price of the ADSs could decline due to any of these risks or other factors, and you may lose all or part of your investment.

The risks described below are those that we currently believe may adversely affect us or the ADSs. In general, investing in the securities of issuers in emerging market countries, such as Mexico, involves risks that are different from the risks associated with investing in the securities of U.S. companies and companies located in other countries with developed capital markets. Any of these risks could materially and adversely affect our business and results of operations.

To the extent that information relates to, or is obtained from sources related to, the Mexican government or Mexican macroeconomic data, the following information has been extracted from official publications of the Mexican government and has not been independently verified by us.

15

Risks related to Mexico

Political and social events in Mexico as well as changes in Mexican federal governmental policies may have an adverse effect on our business, results of operations, financial condition and prospects.

Our business, results of operations and financial condition are affected by economic, political or social developments in Mexico, including, among others, any political or social instability in Mexico, changes in the rate of economic growth or contraction, changes in the exchange rate between the peso and the U.S. dollar, an increase in inflation or interest rates, changes in Mexican taxation and any amendments to existing Mexican laws, federal governmental policies and regulations.

Adverse social or political developments in or affecting Mexico could negatively affect us and Mexican financial markets generally, thereby affecting our ability to obtain financing. Presidential and federal congressional elections in Mexico were held on July 1, 2018. Mr. Andrés Manuel López Obrador, a member of the National Regeneration Movement (Movimiento Regeneración Nacional), was elected President of Mexico and took office on December 1, 2018. The President’s party and its allies currently hold the majority of the Chamber of Deputies and the Senate. We cannot provide any assurance that the current political situation or any future developments in Mexico will not have a material adverse effect on our business, results of operations, financial condition, or prospects.

In addition, the Mexican government has exercised, and continues to exercise, significant influence over the Mexican economy. In particular, Mexican federal governmental actions and policies concerning air transportation and similar services could have a significant impact on us. We cannot assure you that changes in Mexican federal governmental and air transportation policies, such as opening Mexican domestic segments to airlines from other countries, will not adversely affect our business, results of operations, financial condition and prospects or the price of the ADSs.

Adverse economic conditions in Mexico may adversely affect our business, results of operations and financial condition.

Most of our operations are conducted in Mexico and our business is affected by the performance of the Mexican economy. In 2019, 2020 and 2021 the Mexican economy decreased 0.2%, contracted 8.4% and grew 5.1%, respectively, in terms of gross domestic product or GDP, according to the INEGI. Moreover, in the past, Mexico has experienced prolonged periods of economic crises, caused by internal and external factors, over which we have no control. Those periods have been characterized by exchange rate instability, high inflation, high domestic interest rates, economic contraction, a reduction of international capital flows, a reduction of liquidity in the banking sector and high unemployment rates. Decreases in the growth rate of the Mexican economy, or periods of negative growth, or increases in inflation may result in lower demand for our flights, lower fares or a shift to ground transportation options, such as long-distance buses.

We cannot assure you that economic conditions in Mexico will not worsen, or that those conditions will not have an adverse effect on our business, results of operations and financial condition.

If inflation rates in Mexico increase, demand for our services may decrease and our costs may increase.

Mexico has historically experienced levels of inflation that are higher than the annual inflation rates of its main trading partners. The annual rate of inflation, as measured by changes in the Mexican national consumer price index, calculated and published by the Mexican Central Bank and INEGI was 2.83% for 2019, 3.15% for 2020 and 7.36% for 2021. High inflation rates could adversely affect our business and results of operations by reducing consumer purchasing power, thereby adversely affecting consumer demand for our services, increasing our costs beyond levels that we could pass on to our customers and by decreasing the benefit to us of revenues earned to the extent that inflation exceeds growth in our pricing levels.

Currency fluctuations or the devaluation and depreciation of the peso could adversely affect our business, results of operations, financial condition, and prospects.

Foreign currency exchange gains or losses included in our total financing cost resulted primarily from the impact of changes in the U.S. dollar-peso exchange rate on our U.S. dollar-denominated monetary liabilities (such as U.S. dollar-denominated debt, U.S. dollar-denominated aircraft lease payments and accounts payable arising from imports of spare parts and equipment) and assets (such as U.S. dollar-denominated cash, cash equivalents, accounts receivable, security deposits and aircraft maintenance deposits). During

16

2021, our U.S. dollar-denominated monetary liabilities exceeded our U.S. dollar-denominated assets. As a result, the devaluation and appreciation of the peso resulted in exchange losses and gains, respectively.

The value of the peso has been subject to significant fluctuations with respect to the U.S. dollar in the past and may be subject to significant fluctuations in the future. In 2008, as a consequence of the global economic and financial crisis, the peso depreciated 26.7% against the U.S. dollar in nominal terms. In 2009, 2010 and 2012, the peso appreciated 5.5%, 5.2% and 6.9%, respectively, against the U.S. dollar in nominal terms. However, in 2011 and 2013, the peso depreciated 12.9% and 0.5%, respectively, against the U.S. dollar in nominal terms. This trend in fluctuations has continued as the peso appreciated 4.5%, 0.3% and 4.3% against the U.S. dollar in nominal terms in 2017, 2018 and 2019, respectively.

As of December 31, 2020 and 2021, the peso depreciated 5.8% and 3.2%, respectively, against the U.S. dollar in nominal terms since December 31, 2020.

During the second half of 2021 management identified indicators of changes in the primary economic environment in which its main subsidiary Volaris Opco operates, as follows: (i) increase in the international market transactions during 2021, (ii) change in the determination of rates (iii) most representative costs are determined and denominated in U.S. dollars. As a result, we evaluated the functional currency of its main subsidiary in accordance with the regulatory provisions contained in IAS-21 “Effects of Variations in Foreign Currency Exchange Rates”, concluding that the functional currency has changed from the Mexican peso to the U.S. dollar as of December 31, 2021.

In addition, considering the dependency of our operations related to our subsidiary Volaris Opco, management has evaluated and concluded that its functional currency has also changed from the Mexican peso to U.S. dollar as of December 31, 2021. The change in functional currency is prospectively applied from the date of the change.

Devaluation or depreciation of the peso against the U.S. dollar may adversely affect the U.S. dollar value of an investment in the ADSs, as well as the U.S. dollar value of any dividend or other distributions that we may make.

Fluctuations in the exchange rate between the peso and the U.S. dollar, particularly depreciations in the value of the peso, may adversely affect the U.S. dollar equivalent of the peso price of the Series A shares on the Mexican Stock Exchange. Such peso depreciations will likely affect the market price of the ADSs. Exchange rate fluctuations would also affect the U.S. dollar equivalent value of any dividends and other distributions we may elect to make in the future and may affect the timely payment of any peso cash dividends and other distributions to holders of CPOs that we may elect to pay in the future in respect of the Series A shares.

Developments in other countries could adversely affect the Mexican economy, the market value of our securities, our financial condition and results of operations.

The market value of securities of Mexican companies is affected by economic and market conditions in developed and other emerging market countries. Although economic conditions in those countries may differ significantly from economic conditions in Mexico, investors’ reactions to developments in any of these other countries, may have an adverse effect on the market value of securities of Mexican issuers. In recent years, for example, prices of both Mexican debt and equity securities have sometimes suffered substantial drops as a result of developments in other countries. In 2008-2009, credit issues in the United States related principally to the sale of sub-prime mortgages resulted in significant fluctuations in securities traded in global financial markets, including Mexico.

In addition, the direct correlation between economic conditions in Mexico and the United States has strengthened in recent years because of the North American Free Trade Agreement, or NAFTA, and increased economic activity between the two countries (including increased remittances of U.S. dollars from Mexican workers in the United States to their families in Mexico). On November 30, 2018, Mexico, the United States and Canada signed the USMCA (United States-Mexico-Canada Agreement), which entered into force on July 1, 2020, as a replacement for NAFTA. During his presidency, President Trump implemented immigration policies that have adversely affected United States—Mexico travel behavior, especially in the VFR and leisure markets. President Trump’s immigration policies had a negative impact on our results of operations. In addition, as a result of the COVID-19 pandemic, on April 22, 2020, President Trump signed a Presidential Proclamation entitled: “Suspending Entry of Immigrants Who Present Risk to the U.S. Labor Market During the Economic Recovery Following the COVID-19 Outbreak.” On January 20, 2021, Joseph Biden became the President of the United States. While President Biden reversed many of President Trump’s immigration policies, we can offer no assurance of the extent to which his administration will continue do so. In addition, even if President Biden continues to

17

reverse President Trump’s immigration policies, subsequent presidential administrations could reimpose them, which could have a material adverse effect on our operations and revenues and affect the market price of our securities, including the ADSs.

Mexican antitrust provisions may affect the fares we are permitted to charge to customers.

The Mexican Aviation Law (Ley de Aviación Civil) provides that in the event that the SCT considers that there is no effective competition among permit and concession holders (required to operate airlines in Mexico), the SCT may request the opinion of the Mexican Antitrust Commission (Comisión Federal de Competencia Económica) and then issue regulations governing the fares that may be charged for air transportation services by airlines operating in Mexico. Such regulations will be maintained only during the existence of the conditions that resulted in their establishment. The imposition of fare regulations by the SCT could materially affect our business, results of operations and financial condition.

Violent crime in Mexico has adversely impacted, and may continue to adversely impact, the Mexican economy and may have a negative effect on our business, results of operations or financial condition.

Mexico has experienced high levels of violent crime over the past few years relating to illegal drug trafficking, particularly in Mexico’s northern states near the U.S. border. This violence has had an adverse impact on the economic activity in Mexico. In addition, violent crime may further affect travel within Mexico and between Mexico and other countries, including the United States, affect the airports or cities in which we operate, including airports or cities in the north of Mexico in which we have significant operations, and increase our insurance and security costs. We cannot assure you that the levels of violent crime in Mexico or their expansion to a larger portion of Mexico, over which we have no control, will not increase or decrease and will have no further adverse effects on the country’s economy and on our business, results of operations or financial condition.

Risks related to the airline industry

We operate in an extremely competitive industry.

We face significant competition with respect to routes, fares, services and slots in airports. Within the airline industry, we compete with legacy carriers, regional airlines and low-cost airlines on many of our routes. The intensity of the competition we face varies from route to route and depends on a number of factors, including the strength of competing airlines. Our competitors may have better brand recognition and greater financial and other resources than we do. In the event our competitors reduce their fares to levels which we are unable to match while sustaining profitable operations or are more successful in the operation of certain routes (as a result of service or otherwise), we may be required to reduce or withdraw services on the relevant routes, which may cause us to incur losses or may impact our growth, financial condition or results of operations. See Item 4: “Information on the Company—Business Overview—Competition.”

The airline industry is particularly susceptible to price discounting, because once a flight is scheduled, airlines incur only nominal additional costs to provide service to passengers occupying otherwise unsold seats. Increased fare or other price competition could adversely affect our results of operations and financial condition. Moreover, other airlines have begun to unbundle services by charging separate fees for services such as baggage transported, food and beverages consumed onboard and advance seat selection. This unbundling and potential reduction of costs could enable competitor airlines to reduce fares on routes that we serve, which may result in an improvement in their ability to attract customers and may affect our results of operations and financial condition.

In addition, airlines increase or decrease capacity in markets based on perceived profitability. Decisions by our competitors that increase overall industry capacity, or capacity dedicated to a particular region, market or route, could have a material adverse impact on our business. Our growth and the success of our ULCC business model could stimulate competition in our markets through our competitors’ development of their own ULCC strategies or new market entrants. Any such competitor may have greater financial resources and access to cheaper sources of capital than we do, which could enable them to operate their business with a lower cost structure than we can. If these competitors adopt and successfully execute a ULCC business model, we could be materially adversely affected, including our business, results of operations and financial condition.

Furthermore, we also face competition from air travel substitutes. On our domestic routes, we face competition from other transportation alternatives, such as bus or automobile. In addition, technology advancements may limit the desire for air travel. For example, video teleconferencing and other methods of electronic communication may reduce the need for in-person communication and add a new dimension of competition to the industry as travelers seek lower cost substitutes for air travel. If we are unable to adjust

18

rapidly in the event the basis of competition in our markets changes, it could have a material adverse effect on our business, results of operations and financial condition.

The airline industry is heavily impacted by the price and availability of fuel. Continued volatility in fuel costs or significant disruptions in the supply of fuel could have a material adverse effect on our business, results of operations and financial condition.

Fuel is a major cost component for airlines and is our largest operating expense. The cost of fuel accounted for 38%, 26% and 34% (including derivative and non-derivative financial instruments) of our total operating costs in 2019, 2020 and 2021, respectively. As such, our operating results are significantly affected by changes in the cost and availability of fuel. Both the cost and the availability of fuel are subject to economic, social and political factors and other events occurring throughout the world, which we can neither control nor accurately predict. Fuel prices have been subject to high volatility, fluctuating substantially over the past several years. Because Russia is one of the world’s largest oil exporters, we expect recent global developments relating to Russia’s invasion of Ukraine, and resulting export restrictions, will likely lead to decreased global supply and increased fuel prices, which effects could be more acute if the participants of the Organization of the Petroleum Exporting Countries, or OPEC, decide not to, or are unable to, increase their supply production. Due to the large proportion of fuel costs in our total operating cost base, even a relatively small increase in the price of fuel can have a significant negative impact on our operating costs and on our business, results of operations and financial condition See Item 4: “Information on the Company—Business Overview—Fuel.”

Our inability to renew our concession or the revocation by the Mexican government of our concession would materially adversely affect us.

We hold a government concession authorizing us to provide domestic air transportation services of passengers, cargo and mail within Mexico, or our Concession. Our Concession was granted by the Mexican federal government through the SCT on May 9, 2005 initially for a period of five years and was extended by the SCT on February 17, 2010 for an additional period of ten years. On February 21, 2020, our Concession was extended for a 20-year term starting on May 9, 2020. Mexican law provides that concessions may be renewed several times. However, each renewal may not exceed 30 years and requires that the concessionaire (i) has complied with the obligations set forth in the concession title to be renewed, (ii) requests the renewal one year before the expiration of the applicable concession terms, (iii) has made an improvement in the quality of the services during the term of the concession, and (iv) accepts the new conditions established by the SCT according to the Mexican Aviation Law (Ley de Aviación Civil). Failure to renew our Concession would have a material adverse effect on our business, results of operations, financial condition and prospects and would prevent us from continuing to conduct our business.

We are required under the terms of our Concession to comply with certain ongoing obligations. Failure to comply with these obligations could result in penalties against us. In addition, the Mexican government has the right to revoke our Concession and the permits we currently hold for various reasons including: service interruptions; our failure to comply with the terms of our Concession; if we assign or transfer rights under our Concession or permits; if we fail to maintain insurance required under applicable law; if we charge fares different from fares registered with the SCT; if we violate statutory safety conditions; and if we fail to pay statutory indemnification or if we fail to pay to the Mexican government the required compensation. For more information on the potential causes for revocation of our Concession and permits, see Item 4: “Information of the Company—Regulation.” If our Concession or permits are revoked, we will be unable to operate our business as it is currently operated and be precluded from obtaining a new concession or permit for five years from the date of revocation.

Under Mexican law, our assets could be taken or seized by the Mexican government under certain circumstances.

Pursuant to Mexican law and our Concession, the Mexican federal government may take or seize our assets, temporarily or permanently, including the aircraft, in the event of natural disasters, war, serious changes to public order or in the event of imminent danger to the national security, internal peace or the national economy. The Mexican federal government, in all cases, except in the event of international war, must indemnify us by paying the respective losses and damages at market value. In these circumstances, we would not be able to continue with our normal operations. Applicable law is unclear as to how indemnification is determined and the timing of payment thereof. A temporary seizure of our assets is likely to have a material adverse effect on our business, results of operations and financial condition.

19

The airline industry is particularly sensitive to changes in economic conditions. The recent global economic contraction or a reoccurrence of similar conditions could negatively impact our business, results of operations and financial condition.

Our business and the airline industry in general are affected by changing economic conditions beyond our control, including, among others:

changes and volatility in general economic conditions, including the severity and duration of any downturn in Mexico, the United States or global economy and financial markets;
changes in consumer preferences, perceptions, spending patterns or demographic trends, including any increased preference for higher-fare carriers offering higher amenity levels, and reduced preferences for low-fare carriers offering more basic transportation, during better economic times or for other reasons;
higher levels of unemployment and varying levels of disposable or discretionary income;
health outbreaks, pandemics and concerns with safety;
depressed housing and stock market prices;
lower levels of actual or perceived consumer confidence;
high inflation rates; and
exchange rate volatility and increased fuel prices, especially in the context of the conflict between Russia and Ukraine.

These factors can adversely affect our results of operations and financial condition, our ability to obtain financing on acceptable terms and our liquidity generally. Current unfavorable general economic conditions, such as higher unemployment rates, a constrained credit market, housing-related pressures and increased focus on reducing business operating costs can reduce spending for leisure, VFR and business travel. For many travelers, in particular the leisure and VFR travelers we serve, air transportation is a discretionary purchase that they can eliminate from their spending in difficult economic times. Unfavorable economic conditions could affect our ability to raise prices to counteract increased fuel, labor or other costs, which could result in a material adverse effect on our business, results of operations and financial condition. In addition, we are currently striving to increase demand for our flights among the portion of the population in Mexico that has traditionally used ground transportation for travel due to price constraints, by offering lower fares that compete with bus fares on similar routes. Unfavorable economic conditions could affect our ability to offer these lower fares and could affect this population segment’s discretionary spending in a more adverse manner than other travelers.

Further, in an inflationary environment, such as the current U.S. and Mexico economic environment, depending on airline industry and other economic conditions, we may be unable to manage through the resulting increases in our operating costs. We cannot predict how long the current inflationary period will last or the extent to which high inflation may occur in the economy in the future. As such, we cannot guarantee we will be able to maintain our costs. If our costs increase and we are no longer able to maintain a competitive cost structure, it could have a material adverse effect on our business, results of operations and financial condition.

The airline industry is heavily regulated and our financial condition and results of operations could be materially adversely affected if we fail to maintain the required U.S., Mexican, Central American and South American governmental concessions or authorizations necessary for our operations.

The airline industry is heavily regulated and we are subject to regulation in Mexico and in the United States for the routes we serve between Mexico and the United States. In order to maintain the necessary concessions or authorizations issued by the SCT, acting through the AFAC, the FAA and some of the aviation authorities in the Latin American countries in which we operate, including authorizations to operate our routes, we must continue to comply with applicable statutes, rules and regulations pertaining to the airline industry, including any rules and regulations that may be adopted in the future. We cannot predict which criteria the SCT will apply for awarding rights to landing slots, bi-lateral agreements, and international routes, which may prevent us from obtaining routes that may become available. In addition, international routes are limited by bi-lateral agreements and not obtaining them will limit our expansion plans in the international market. Furthermore, we cannot predict or control any actions that the AFAC, FAA or the aviation authorities in the Latin American countries in which we operate may take in the future, which could include restricting our operations or imposing new and costly regulations. Also, our fares are subject to review by the AFAC, the FAA and some of the

20

aviation authorities in the Latin American countries in which we operate, either of which may in the future impose restrictions on our fares. Our business, results of operations and financial condition could be materially adversely affected if we fail to maintain the required U.S., Mexican, Central American and South American governmental concessions or authorizations or slots necessary for our operations.

The airline industry is subject to increasingly stringent environmental regulations and non-compliance therewith may adversely affect our financial condition and results of operations.

The airline industry is subject to increasingly stringent federal, state, local and foreign laws, regulations and ordinances relating to the protection of the environment, including those relating to emissions to the air, levels of noise, discharges to surface and subsurface waters, safe drinking water, and the management of hazardous substances, oils and waste materials. Compliance with all environmental laws and regulations can require significant expenditures and any future regulatory developments in Mexico, the United States and other countries could adversely affect operations and increase operating costs in the airline industry. For example, some form of federal regulation may be forthcoming in the United States with respect to greenhouse gas emissions (including carbon dioxide, or CO2, and/or ‘cap and trade’ legislation), compliance with which could result in the creation of substantial additional costs to us. The U.S. Congress is considering climate change legislation and the EPA issued a rule that regulates larger emitters of greenhouse gases. Concerns about climate change and greenhouse gases may result in additional regulation or taxation of emissions, including aircraft emissions, in the United States and Mexico. Future operations and financial results may vary as a result of such regulations in the United States and equivalent regulations adopted by other countries, including Mexico. Compliance with these regulations and new or existing regulations that may be applicable to us in the future could increase our cost base and could have a material adverse effect on our business, results of operations and financial condition.

Furthermore, in 2016 the International Civil Aviation Organization, or ICAO, adopted a resolution creating the Carbon Offsetting and Reduction Scheme for International Aviation, or CORSIA, providing a framework for a global market-based measure to stabilize CO2 emissions in international civil aviation (i.e., civil aviation flights that depart in one country and arrive in a different country). CORSIA will be implemented in phases, starting with the participation of ICAO members on a voluntary basis during a pilot phase (from 2021 through 2023), followed by a first phase (from 2024 through 2026) and a second phase (from 2027). Currently, CORSIA focuses on defining standards for monitoring, reporting and verification of emissions from air operators, as well as on defining steps to offset CO2 emissions. To the extent most of the countries in which we operate continue to be ICAO member states, in the future we may be affected by regulations adopted pursuant to the CORSIA framework. In addition, in January 2021, the EPA finalized greenhouse gas emission standards for new aircraft engines designed to implement the ICAO standards on the same timeframe contemplated by the ICAO. Like the ICAO standards, the final EPA standards would not apply to engines on in-service aircraft. The final standards have been challenged by several states and environmental groups, and the Biden administration has announced plans to review these final standards along with others issued by the prior administration. The outcome of the legal challenge and administrative review cannot be predicted at this time. Certain CORSIA details remain to be developed and could potentially be affected by political developments in participating countries or the results of the pilot phase of the program, and thus the impact of CORSIA cannot be predicted at this time. However, CORSIA is expected to increase operating costs for airlines that operate internationally.

Growing recognition among stakeholders of the dangers of climate change and related risks may translate, among others, into financial and reputational risks. Additionally, customers may choose to fly less frequently or fly on an airline they perceive as operating in a manner that is more sustainable to the climate. Customers may choose to use alternatives to travel, such as virtual meetings and workspaces. In addition, the potential acute and chronic physical effects of climate change, such as increased frequency and severity of storms, floods, fires, sea-level rise, excessive heat, longer-term changes in weather patterns and other climate-related events, could affect our operations, infrastructure and financial results. Operational impacts, such as the canceling of flights, could result in loss of revenue. We could also incur significant costs to improve the climate resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate such physical effects of climate change. As of the date of this annual report, we are not able to predict accurately the materiality of any potential losses or costs associated with the physical effects of climate change.

Compliance with airline industry regulations involves significant costs and regulations enacted in Mexico, the United States, Central America and South America may increase our costs significantly in the future.

Airlines are subject to extensive regulatory and legal compliance requirements, both domestically and internationally, that involve significant costs. In the last several years, the U.S. Congress has passed laws, and the DOT, FAA and TSA have issued regulations, relating to the operation of airlines that have required significant expenditures. FAA requirements cover, among other

21

things, collision avoidance systems, airborne wind shear avoidance systems, noise abatement and other environmental issues, and increased inspections and maintenance procedures to be conducted on older aircraft. We expect to continue to incur expenses in connection with complying with government regulations. Additional laws, regulations, taxes and airport rates and charges have been proposed from time to time that could significantly increase the cost of airline operations or reduce the demand for air travel. If adopted, these measures could have the effect of raising ticket prices, reducing revenue and increasing costs. For example, the DOT finalized rules, taking effect on April 29, 2010, requiring new procedures for customer handling during long onboard tarmac delays, as well as additional reporting requirements for airlines that could increase the cost of airline operations or reduce revenues.

The DOT released additional rules, most of which became effective beginning in August 2011, that address, among other things, concerns about how airlines handle interactions with passengers through advertising, the reservations process, at the airport and on board the aircraft, including requirements for disclosure of base fares plus a set of regulatory mandated options and limits on cancellations and change fees. Failure to remain in full compliance with these rules, or new rules as enacted from time to time, may subject us to fines or other enforcement action, which could have a material effect on our business, results of operations and financial condition.

In addition, the TSA mandates the federalization of certain airport security procedures in the United States and imposes additional security requirements on airports and airlines, most of which are funded by a per ticket tax on passengers and a tax on airlines. The U.S. federal government has on several occasions proposed a significant increase in the per ticket tax. The proposed ticket tax increase, if implemented, could negatively impact our business, results of operations and financial condition.

Our ability to operate as an airline in the United States is dependent on maintaining our certifications issued to us by the DOT and the FAA. The FAA has the authority to issue mandatory orders relating to, among other things, the grounding of aircraft, inspection of aircraft, installation of new safety-related items and removal and replacement of aircraft parts that have failed or may fail in the future. A decision by the FAA to ground, or require time consuming inspections of or maintenance on, our aircraft, for any reason, could negatively affect our business, results of operations and financial condition. U.S. federal law requires that air carriers operating large aircraft be continuously ‘fit, willing and able’ to provide the services for which they are licensed. Our “fitness” is monitored by the DOT, which considers factors such as unfair or deceptive competition, advertising, baggage liability and disabled passenger transportation. While the DOT has seldom revoked a carrier’s certification for lack of fitness, such an occurrence would render it impossible for us to continue operating as an airline in the United States. The DOT may also institute investigations or administrative proceedings against airlines for violations of regulations.

On July 26, 2017 amendments to the Mexican Aviation Law (Ley de Aviación Civil) and the Mexican Consumer Protection Law were enacted to provide for additional passenger rights, and this legislation has increased our costs and has reduced our ability to charge for certain ancillary services.

Furthermore, we cannot assure you that airline industry regulations enacted in the future in Mexico, Central America, South America and the United States will not increase our costs significantly.

Airlines are often affected by factors beyond their control, including air traffic congestion at airports, weather conditions, health outbreaks or concerns, pandemics, or increased security measures, any of which could harm our business, results of operations and financial condition.

Like other airlines, we are subject to delays caused by factors beyond our control, including air traffic congestion at airports, air traffic control inefficiencies, adverse weather conditions, health outbreaks or concerns, increased security measures and new travel related taxes. Delays frustrate passengers, reduce aircraft utilization and increase costs, all of which in turn could adversely affect profitability. The federal governments of Mexico, the United States and the countries in Central and South America in which we operate control their respective airspace and airlines are completely dependent on the AFAC, the FAA and the aviation authorities in Central and South America to operate these airspaces in a safe, efficient and affordable manner. The air traffic control system, which is operated by Services to the Navigation in the Mexican Air Space (Servicios a la Navegación en el Espacio Aéreo Mexicano) in Mexico, the FAA in the United States and the Central American Corporation of Aerial Navigation Services (Corporación Centroamericana de Servicios de Navegación Aérea) in Central America, the Air Navigation Services Directorate (Dirección de Servicios a la Navegación Aérea) in Colombia, and the Peruvian Corporation of Airports and Commercial Aviation (Corporación Peruana de Aeropuertos y Aviación Comercial) in Peru faces challenges in managing the growing demand for air travel. U.S. and Mexican air-traffic controllers often rely on outdated technologies that routinely overwhelm the system and compel airlines to fly inefficient, indirect routes resulting in delays. Adverse weather conditions and natural disasters can cause flight cancellations or

22

significant delays. Cancellations or delays due to weather conditions or natural disasters, air traffic control problems, health outbreaks or concerns, pandemics, breaches in security or other factors and any resulting reduction in airline passenger traffic could have a material adverse effect on our business, results of operations and financial condition.

Airline consolidations and reorganizations could adversely affect the industry.

The airline industry has undergone substantial consolidation throughout the years and recently, and it may undergo additional consolidation in the future. Any consolidation or significant alliance activity within the airline industry could increase the size and resources of our competitors. In particular, the airline industry in Mexico has seen a sharp contraction, with the exit of eight Mexican airlines since 2007, the most recent one being Interjet, our third largest competitor by market share in 2020, which has been unable to resume flights since suspending their operations in December 2020. Interjet’s fleet decreased by 100% in 2021, from three aircraft as of December 31, 2020 to zero as of December 31, 2021, according to information published by the AFAC. According to media reports, on April 26, 2021, Interjet announced that its shareholders had approved the filing of a reorganization process (concurso mercantil) in Mexico. We cannot predict the outcome of Interjet’s future financial condition or whether we will be awarded any of its slots in the Mexico City International Airport, some of which we currently operate.

Because the airline industry is characterized by high fixed costs and relatively elastic revenues, airlines cannot quickly reduce their costs to respond to shortfalls in expected revenue.

The airline industry is characterized by low gross profit margins, high fixed costs and revenues that generally exhibit substantially greater elasticity than costs. The operating costs of each flight do not vary significantly with the number of passengers flown and, therefore, a relatively small change in the number of passengers, fare pricing or traffic mix could have a significant effect on operating and financial results. These fixed costs cannot be adjusted quickly to respond to changes in revenues and a shortfall from expected revenue levels could have a material adverse effect on our results of operations and financial condition.

Increases in insurance costs and/or significant reductions in coverage would harm our business, results of operations and financial condition.

Following the September 11, 2001 terrorist attacks, premiums for insurance against aircraft damage and liability to third parties increased substantially, and insurers could reduce their coverage or increase their premiums even further in the event of additional terrorist attacks, hijackings, wars, seizures/confiscations, airline crashes or other events adversely affecting the airline industry. In the future, certain aviation insurance could become unaffordable, unavailable or available only for reduced amounts of coverage that are insufficient to comply with the levels of insurance coverage required by aircraft lenders and lessors or applicable government regulations.

Governments in other countries have agreed to indemnify airlines for liabilities that they might incur from terrorist attacks or provide low-cost insurance for terrorism risks. In that respect, the Mexican government provided certain loans to help airlines face increases in aircraft insurance right after the 2001 terrorist attacks. However, the Mexican government has not indicated an intention to provide similar benefits to us now or at any time in the future.

A general increase in the cost of insurance coverage, including as a consequence of the COVID-19 pandemic, may result in both higher fares and a decreased demand for air travel generally, which could materially and negatively affect our business, results of operations and financial condition.

Downturns in the airline industry caused by terrorist attacks or war, which may alter travel behavior or increase costs, may adversely affect our business, results of operations and financial condition.

Demand for air transportation may be adversely affected by terrorist attacks, war or political and social instability, natural disasters and other events. Furthermore, these types of situations could have a prolonged effect on air transportation demand and on certain cost items.

The terrorist attacks in the United States on September 11, 2001, for example, have had a severe and lasting adverse impact on the airline industry. Airline traffic in the United States fell dramatically after the attacks and decreased severely throughout Latin America. The repercussions of September 11, including increases in security, insurance and fear of similar attacks, continue to affect us and the airline industry. Since September 11, 2001, the DHS and the TSA in the United States have implemented numerous security

23

measures that restrict airline operations and increase costs and are likely to implement additional measures in the future. For example, following the widely publicized attempt of an alleged terrorist to detonate plastic explosives hidden underneath his clothes on a Northwest Airlines flight on Christmas Day in 2009, international passengers became subject to enhanced random screening, which may include pat-downs, explosive detection testing or body scans. Enhanced passenger screening, increased regulation governing carry-on baggage and other similar restrictions on passenger travel may further increase passenger inconvenience and reduce the demand for air travel. In addition, increased or enhanced security measures have tended to result in higher governmental fees imposed on airlines, resulting in higher operating costs for airlines. Therefore, any future terrorist attacks or threat of attacks, whether or not involving commercial aircraft, any increase in hostilities relating to reprisals against terrorist organizations, including an escalation of military involvement in the Middle East, or otherwise and any related economic impact, could result in decreased passenger traffic and materially and adversely affect our business, results of operations and financial condition.

Public health threats, such as the H1N1 flu virus, the bird flu, Severe Acute Respiratory Syndrome, or SARS, the Zika virus, COVID-19 and other highly communicable diseases, could affect suspension of domestic and international flights, travel behavior and could have a material adverse effect on the Mexican economy, airline industry reputation, the price of our shares, our business, results of operations and financial condition.

During the second quarter of 2009, passenger traffic was negatively affected as a result of the H1N1 flu crisis, which resulted in lower overall demand for intra-Latin America travel, especially to and from Mexico. In the past, Latin American travel has been negatively affected as a result of the Zika virus. Most recently, the outbreak of COVID-19 that has grown into a global pandemic was first reported on December 31, 2019 in Wuhan, Hubei Province, China. From Wuhan, the disease spread rapidly to other parts of China as well as other countries, including Mexico and the United States. Since the pandemic began, countries around the world have responded by taking various containment measures, including imposing quarantines and medical screenings, restricting domestic and international travel, closing borders, restricting or prohibiting public gatherings and widely suspending previously scheduled activities and events. In addition, concerns related to COVID-19 have drastically reduced demand for air travel and caused major disruptions and volatility in global financial markets, resulting in the fall of stock prices (including the price of our stock), both trends which may continue. There are other broad and continuing concerns related to the potential effects of COVID-19 on international trade (including supply chain disruptions and export levels), travel, restrictions on our ability to access our facilities or aircraft, requirements to collect additional passenger data, employee productivity, employee illness, increased unemployment levels, securities markets, and other economic activities, particularly for airlines, that may have a destabilizing effect on financial markets and economic activity. In addition, our operations could be negatively affected if essential employees are required to be quarantined as the result of an actual or suspected exposure to COVID-19. In the case of a COVID-19-related shutdown involving us or any of our subsidiaries, our contractors, suppliers, customers and other business partners, our business, results of operations and financial condition may also be materially adversely affected. Furthermore, any actions taken by governmental authorities and other third parties in response to the pandemic may negatively impact our business, results of operations and financial condition.

As of the date of this report, COVID-19 continues to be one of the biggest risks not only in public health issues, but also in the economic environment. The governments in the markets in which we operate have implemented, and continue to implement, measures to control COVID-19, such as COVID-19 vaccination programs. These measures have stimulated growth in the tourism sector and the demand for air travel. For the year ended December 31, 2021, our ASMs increased by 53.7% and 14.7% compared to the years ended December 31, 2020 and 2019, respectively. We managed to recover our pre-pandemic capacity despite spikes in COVID-19 cases, especially during the first half of 2021. In addition, we restarted our operations in Costa Rica, Guatemala and El Salvador, as the governments in these countries eased restrictions on air travel.

We can offer no assurance that additional travel restrictions, requirements or border closures will not be enacted or reenacted in the countries where we operate, which could result in reduced passenger demand, revenue, and further capacity reductions. In addition, if governments in the markets in which we operate impose total or partial lockdowns in all or part of their respective jurisdictions or shut down airports in response to the COVID-19 pandemic, it may result in our inability to operate flights, which would have a material adverse effect on our business, results of operation and financial condition.

The growth in the Mexican domestic and international air traffic since the third quarter of 2020 has been led by leisure and VFR travelers, while business travel remains reduced as a large percentage of the workforce continues to work from home. Equity research analysts and other industry executives believe that the positive trends in leisure and VFR travel will continue as the global markets recover from the pandemic and the business markets strengthen its recovery towards normal levels. However, we can offer no assurance that we will benefit from a rebound in travel demand.

24

Our business and the airline industry have experienced material adverse impacts due to the COVID-19 pandemic. We cannot offer any assurance that these impacts will not intensify to the extent that COVID-19 persists throughout Mexico. Further, additional government COVID-19 response measures remain unknown and depend on future developments with respect to COVID-19, including the scope and duration of the pandemic, which are highly fluid, uncertain and cannot be predicted. It is not yet possible to determine when the adverse effects of COVID-19 will abate and the extent to which they will further decrease demand for air travel, which could continue to materially and negatively affect our business, results of operations and financial condition. Furthermore, although our cash flows from operations and our available capital have been sufficient to meet our obligations and commitments to date, our liquidity has been, and may in the future be, negatively affected by the risk factors discussed herein, including risks related to future results arising from the COVID-19 pandemic. If our liquidity is materially diminished, we might not be able to timely pay our leases and debts or comply with certain operating and financial covenants under our financing agreements or with other material provisions of our contractual obligations.

Furthermore, the COVID-19 pandemic has also resulted in increased volatility in both the local and the international financial markets and economic indicators, such as exchange rates, interest rates, credit spreads and commodity prices. Any shocks or unexpected movements in these market factors could result in financial losses.

For more information about the current status of COVID-19 in Mexico and the impact on us, see “Item 5. Operating and Financial Review and Prospects—Recent Developments” and “Item 5. Operating and Financial Review and Prospects—Trends and Uncertainties Affecting Our Business.”

Risks related to our business

We may not be able to implement our growth strategy.

Our growth strategy includes increasing the flights to markets we currently serve, expanding the number of markets served where we expect our ultra-low-cost structure to be successful and acquiring additional aircraft. Effectively implementing our growth strategy is critical for our business to achieve economies of scale and to sustain or increase our profitability.

We face numerous challenges in implementing our growth strategy, including our ability to:

maintain profitability;
access airports located in our targeted geographic markets where we can operate routes in a manner that is consistent with our cost strategy;
maintain our high level of service notwithstanding the number of different ground transportation services and airport companies that we use in the course of our business;
maintain satisfactory economic arrangements (including benefits) with our executives and our union;
access sufficient gates, slots and other services at airports we currently serve or may seek to serve;
obtain authorization of new routes;
manage through, and have adequate response for, global or local pandemics, such as the COVID-19 pandemic;
comply with environmental regulations;
renew or maintain our Concessions;
gain access to international routes;
hire, train and retain qualified pilots, flight attendants, maintenance technicians, ground personnel and other personnel; and
obtain financing to acquire new aircraft and in connection with our operations.

25

Our growth depends upon our ability to maintain a safe and secure operation. An inability to hire and retain trained personnel, maintain suitable arrangements with our union, timely secure the required equipment, facilities and airport services in a cost-effective manner, operate our business efficiently or obtain or maintain the necessary regulatory approvals may adversely affect our ability to achieve our growth strategy, which could harm our business. In addition, expansion to new international markets may have other risks due to factors specific to those markets. We may be unable to foresee all of the risks attendant upon entering certain new international markets or respond adequately to these risks, and our growth strategy and our business may suffer as a result. In addition, our competitors may reduce their fares and/or offer special promo