CONTROLADORA VUELA COMPANIA DE AVIACION, S.A.B. DE C.V., 20-F filed on 4/27/2022
Annual and Transition Report (foreign private issuer)
v3.22.1
Document and Entity Information - shares
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
IFRS Statement [Line Items]    
Entity Registrant Name Controladora Vuela Compania de Aviacion, S.A.B. de C.V.  
Document Registration Statement false  
Document Annual Report true  
Document Transition Report false  
Document Shell Company Report false  
Entity Central Index Key 0001520504  
Entity File Number 001-36059  
Entity Incorporation, State or Country Code O5  
Entity Address, Address Line One Av. Antonio Dovalí Jaime  
Entity Address, Address Line Two No. 70, 13 Floor, Tower B  
Entity Address, Address Line Three Colonia Zedec Santa Fe  
Entity Address, City or Town Mexico City  
Entity Address, Postal Zip Code 01210  
Entity Address, Country MX  
Document Type 20-F  
Document Period End Date Dec. 31, 2021  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Well-known Seasoned Issuer Yes  
Entity Voluntary Filers No  
Entity Current Reporting Status Yes  
Entity Filer Category Large Accelerated Filer  
Entity Emerging Growth Company false  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus FY  
Entity Shell Company false  
Entity Interactive Data Current Yes  
ICFR Auditor Attestation Flag false  
Document Accounting Standard International Financial Reporting Standards  
Auditor Name KPMG Cardenas Dosal S.C. MANCERA, S.C.
Auditor Firm ID 1141 1284
Auditor Location Ciudad de Mexico, Mexico Mexico City, Mexico
Business Contact [Member]    
IFRS Statement [Line Items]    
Entity Address, Address Line One Av. Antonio Dovalí Jaime  
Entity Address, Address Line Two No. 70, 13 Floor, Tower B  
Entity Address, Address Line Three Colonia Zedec Santa Fe  
Entity Address, City or Town Mexico City  
Entity Address, Postal Zip Code 01210  
Entity Address, Country MX  
Contact Personnel Name Renato Duarte Salomone  
Contact Personnel Email Address ir@volaris.com  
American Depositary Shares    
IFRS Statement [Line Items]    
Title of 12(b) Security American Depositary Shares (ADSs)  
Trading Symbol VLRS  
Security Exchange Name NYSE  
Ordinary Participation Certificates    
IFRS Statement [Line Items]    
Title of 12(b) Security Ordinary Participation Certificates (Certificados de Participación Ordinarios or CPOs)  
Trading Symbol VLRS  
Security Exchange Name NYSE  
Entity Common Stock, Shares Outstanding 964,200,367  
Series A shares    
IFRS Statement [Line Items]    
Title of 12(b) Security Series A shares of common stock, no par value  
Trading Symbol VOLARA  
Security Exchange Name MIAX  
Entity Common Stock, Shares Outstanding 1,108,462,804  
v3.22.1
Consolidated Statements of Financial Position
$ in Thousands, $ in Thousands
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Current assets:      
Cash, cash equivalents and restricted cash (Note 6) $ 741,122 $ 15,254,876 $ 10,103,385
Accounts receivable:      
Related parties (Note 7) 4,662 95,951 72,629
Other accounts receivable, net (Note 8) 50,264 1,034,604 560,640
Recoverable value added tax and others 35,862 738,162 922,458
Recoverable income tax 15,296 314,845 471,652
Inventories (Note 9) 14,397 296,345 278,959
Prepaid expenses and other current assets (Note 10) 38,387 790,138 850,425
Derivative Financial instruments (Notes 3 and 5)     206
Guarantee deposits (Note 11) 78,990 1,625,886 1,141,956
Total current assets 978,980 20,150,807 14,402,310
Non-current assets:      
Rotable spare parts, furniture and equipment, net (Note 12) 454,602 9,357,304 7,281,157
Right-of-use assets (Note 14) 1,917,235 39,463,408 34,316,217
Intangible assets, net (Note 13) 12,632 260,015 191,562
Derivative Financial instruments (Notes 3 and 5) 1,398 28,771 326
Deferred income taxes (Note 20) 141,272 2,907,879 3,128,555
Guarantee deposits (Note 11) 455,372 9,373,154 8,424,738
Other long-term assets 23,077 475,023 444,248
Total non-current assets 3,005,588 61,865,554 53,786,803
Total assets 3,984,568 82,016,361 68,189,113
Current liabilities:      
Unearned transportation revenue (Note 21) 303,982 6,257,008 5,850,917
Suppliers 108,164 2,226,400 2,239,736
Related parties (Note 7) 10,547 217,103 124,993
Accrued liabilities (Note 15a) 178,096 3,665,841 2,356,287
Lease liabilities (Note 14) 283,843 5,842,492 6,484,092
Other taxes and fees payable (Note 1r) 131,182 2,700,183 2,236,161
Income taxes payable 4,187 86,187 4,005
Derivative Financial instruments (Notes 3 and 5)     9,657
Financial debt (Note 5) 196,898 4,052,859 1,558,884
Other liabilities (Note 16) 34,635 712,903 101,218
Total current liabilities 1,251,534 25,760,976 20,965,950
Non-current liabilities:      
Financial debt (Note 5) 108,039 2,223,821 3,795,749
Accrued liabilities (Note 15b) 1,475 30,363 66,698
Lease liabilities (Note 14) 2,128,294 43,807,747 37,646,450
Other liabilities (Note 16) 166,930 3,436,001 2,667,683
Employee benefits (Note 17) 3,968 81,673 50,627
Deferred income taxes (Note 20) 11,191 230,342 199,771
Total non-current liabilities 2,419,897 49,809,947 44,426,978
Total liabilities 3,671,431 75,570,923 65,392,928
Equity (Note 19):      
Capital stock 166,464 3,426,406 3,426,406
Treasury shares (10,172) (209,383) (223,744)
Contributions for future capital increases   1 1
Legal reserve 14,146 291,178 291,178
Additional paid-in capital 226,120 4,654,340 4,720,221
Accumulated deficit (84,282) (1,734,828) (3,855,379)
Accumulated other comprehensive income (loss) 861 17,724 (1,562,498)
Total equity 313,137 6,445,438 2,796,185
Total liabilities and equity $ 3,984,568 $ 82,016,361 $ 68,189,113
v3.22.1
Consolidated Statements of Financial Position (Parenthetical)
Apr. 26, 2022
$ / $
Dec. 31, 2021
₡ / $
Dec. 31, 2021
Q / $
Dec. 31, 2021
USD ($)
Dec. 31, 2021
$ / $
Dec. 31, 2020
₡ / $
Dec. 31, 2020
Q / $
Dec. 31, 2020
USD ($)
Dec. 31, 2020
$ / $
Dec. 31, 2019
₡ / $
Dec. 31, 2019
Q / $
Dec. 31, 2019
USD ($)
Dec. 31, 2019
$ / $
Consolidated Statements of Financial Position                          
Convenience translation to U.S. dollars 20.3183 645.9000 7.7285 20.5835 20.5835 615.7800 7.8095 19.9487 19.9487 573.4400 7.6988 18.8452 18.8452
v3.22.1
Consolidated Statements of Operations
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
$ / shares
Dec. 31, 2021
MXN ($)
$ / shares
Dec. 31, 2020
MXN ($)
$ / shares
Dec. 31, 2019
MXN ($)
$ / shares
Operating revenues (Notes 21 and 26):        
Fare revenues $ 1,248,726 $ 25,703,144 $ 12,873,174 $ 23,129,991
Other passenger revenues 854,773 17,594,223 8,613,398 10,569,208
Passenger revenues 2,103,499 43,297,367 21,486,572 33,699,199
Other non-passenger revenues (Note 21) 75,696 1,558,092 882,360 897,586
Cargo 11,718 241,202 201,881 228,836
Non-derivatives financial instruments (21,110) (434,522) (411,222) (72,949)
Operating revenues 2,169,803 44,662,139 22,159,591 34,752,672
Other operating income (Note 22) (10,583) (217,838) (730,333) (327,208)
Fuel expense, net 601,271 12,376,263 6,640,820 11,626,069
Landing, take-off and navigation expenses 292,500 6,020,681 4,090,864 5,108,489
Depreciation of right of use assets (Note 14) 265,389 5,462,625 5,048,976 4,702,971
Salaries and benefits 235,970 4,857,083 3,453,382 3,600,762
Sales, marketing and distribution expenses 95,316 1,961,936 1,840,819 1,447,637
Maintenance expenses 94,843 1,952,202 1,167,720 1,488,431
Aircraft and engine variable lease expenses 81,953 1,686,875 1,845,254 961,657
Other operating expenses (Note 22) 64,944 1,336,792 1,157,240 1,112,927
Depreciation and amortization (Notes 12 and 13) 56,318 1,159,224 898,445 675,514
Operating income (loss) 391,882 8,066,296 (3,253,596) 4,355,423
Finance income (Note 23) 3,477 71,578 101,511 207,799
Finance cost (Note 23) (137,585) (2,831,989) (3,018,484) (2,269,829)
Foreign exchange (loss) gain, net (Note 3 b (i)) (125,897) (2,591,406) 470,594 1,440,501
Income (loss) before income tax 131,877 2,714,479 (5,699,975) 3,733,894
Income tax (expense) benefit (Note 20) (28,855) (593,928) 1,406,184 (1,094,831)
Net income (loss) $ 103,022 $ 2,120,551 $ (4,293,791) $ 2,639,063
Earnings (loss) per share basic: | (per share) $ 0.088 $ 1.819 $ (4.203) $ 2.608
Earnings (loss) per share diluted: | (per share) $ 0.088 $ 1.819 $ (4.203) $ 2.608
v3.22.1
Consolidated Statements of Operations (Parenthetical)
Apr. 26, 2022
$ / $
Dec. 31, 2021
₡ / $
Dec. 31, 2021
Q / $
Dec. 31, 2021
USD ($)
Dec. 31, 2021
$ / $
Dec. 31, 2020
₡ / $
Dec. 31, 2020
Q / $
Dec. 31, 2020
USD ($)
Dec. 31, 2020
$ / $
Dec. 31, 2019
₡ / $
Dec. 31, 2019
Q / $
Dec. 31, 2019
USD ($)
Dec. 31, 2019
$ / $
Consolidated Statements of Operations                          
Convenience translation to U.S. dollars 20.3183 645.9000 7.7285 20.5835 20.5835 615.7800 7.8095 19.9487 19.9487 573.4400 7.6988 18.8452 18.8452
v3.22.1
Consolidated Statements of Comprehensive Income
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Consolidated Statements of Comprehensive Income        
Net income (loss) for the year $ 103,022 $ 2,120,551 $ (4,293,791) $ 2,639,063
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods:        
Discontinuation of hedge relationships (Note 24 b) 76,638 1,577,473    
Net gain (loss) on cash flow hedges (Note 24 b) 916 18,854 (1,747,686) 263,495
Income tax effect (Note 20) (275) (5,655) 46,835 (74,820)
Exchange differences on translation of foreign operations (195) (4,021) 23,970 8,045
Other comprehensive (loss) income not to be reclassified to profit or (loss) in subsequent periods:        
Remeasurement loss of employee benefits (Note 17) (451) (9,279) (2,651) (10,192)
Income tax effect (Note 20) 138 2,850 794 3,058
Other comprehensive income (loss) for the year, net of tax 76,771 1,580,222 (1,678,738) 189,586
Total comprehensive income (loss) for the year $ 179,793 $ 3,700,773 $ (5,972,529) $ 2,828,649
v3.22.1
Consolidated Statements of Comprehensive Income (Parenthetical)
Apr. 26, 2022
$ / $
Dec. 31, 2021
₡ / $
Dec. 31, 2021
Q / $
Dec. 31, 2021
USD ($)
Dec. 31, 2021
$ / $
Dec. 31, 2020
₡ / $
Dec. 31, 2020
Q / $
Dec. 31, 2020
USD ($)
Dec. 31, 2020
$ / $
Dec. 31, 2019
₡ / $
Dec. 31, 2019
Q / $
Dec. 31, 2019
USD ($)
Dec. 31, 2019
$ / $
Consolidated Statements of Comprehensive Income                          
Convenience translation to U.S. dollars 20.3183 645.9000 7.7285 20.5835 20.5835 615.7800 7.8095 19.9487 19.9487 573.4400 7.6988 18.8452 18.8452
v3.22.1
Consolidated Statements of Changes in Equity
$ in Thousands, $ in Thousands
Capital stock
USD ($)
Capital stock
MXN ($)
Treasury Shares
USD ($)
Treasury Shares
MXN ($)
Contributions for future capital increases
MXN ($)
Legal reserve
USD ($)
Legal reserve
MXN ($)
Additional paid-in capital
USD ($)
Additional paid-in capital
MXN ($)
Accumulated Deficit
USD ($)
Accumulated Deficit
MXN ($)
Other comprehensive (loss) income
USD ($)
Other comprehensive (loss) income
MXN ($)
USD ($)
MXN ($)
Balance as of beginning of the year at Dec. 31, 2018   $ 2,973,559   $ (122,661) $ 1   $ 291,178   $ 1,837,073   $ (2,200,651)   $ (73,346)   $ 2,705,153
Treasury shares       (75,375)         56,483           (18,892)
Exercise of stock options (Note 18)       14,773                     14,773
Long-term incentive plan cost (Note 18)       13,549         (13,549)            
Net income (loss) for the period                     2,639,063       2,639,063
Other comprehensive income (loss) items                         189,586   189,586
Total comprehensive income (loss) for the year                     2,639,063   189,586   2,828,649
Balance as of end of the year at Dec. 31, 2019   2,973,559   (169,714) 1   291,178   1,880,007   438,412   116,240   5,529,683
Capital stock increase (Note 19)   452,847             2,819,985           3,272,832
Treasury shares       (94,564)         60,763           (33,801)
Long-term incentive plan cost (Note 18)       40,534         (40,534)            
Net income (loss) for the period                     (4,293,791)       (4,293,791)
Other comprehensive income (loss) items                         (1,678,738)   (1,678,738)
Total comprehensive income (loss) for the year                     (4,293,791)   (1,678,738)   (5,972,529)
Balance as of end of the year at Dec. 31, 2020   3,426,406   (223,744) 1   291,178   4,720,221   (3,855,379)   (1,562,498)   2,796,185
Treasury shares       (89,209)         (19,215)           (108,424)
Exercise of stock options (Note 18)       56,904                     56,904
Long-term incentive plan cost (Note 18)       46,666         (46,666)            
Net income (loss) for the period                     2,120,551     $ 103,022 2,120,551
Other comprehensive income (loss) items                         1,580,222 76,771 1,580,222
Total comprehensive income (loss) for the year                     2,120,551   1,580,222 179,793 3,700,773
Balance as of end of the year at Dec. 31, 2021 $ 166,464 $ 3,426,406 $ (10,172) $ (209,383) $ 1 $ 14,146 $ 291,178 $ 226,120 $ 4,654,340 $ (84,282) $ (1,734,828) $ 861 $ 17,724 $ 313,137 $ 6,445,438
v3.22.1
Consolidated Statements of Changes in Equity (Parenthetical)
Apr. 26, 2022
$ / $
Dec. 31, 2021
₡ / $
Dec. 31, 2021
Q / $
Dec. 31, 2021
USD ($)
Dec. 31, 2021
$ / $
Dec. 31, 2020
₡ / $
Dec. 31, 2020
Q / $
Dec. 31, 2020
USD ($)
Dec. 31, 2020
$ / $
Dec. 31, 2019
₡ / $
Dec. 31, 2019
Q / $
Dec. 31, 2019
USD ($)
Dec. 31, 2019
$ / $
Consolidated Statements of Changes in Equity                          
Convenience translation to U.S. dollars 20.3183 645.9000 7.7285 20.5835 20.5835 615.7800 7.8095 19.9487 19.9487 573.4400 7.6988 18.8452 18.8452
v3.22.1
Consolidated Statements of Cash Flows
$ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Operating activities        
Income (loss) before income tax $ 131,877,000 $ 2,714,479 $ (5,699,975) $ 3,733,894
Non-cash adjustment to reconcile income (loss) before income tax to net cash flows from operating activities:        
Depreciation and amortization (including right-of-use-assets) (Notes 12, 13 and 14) 321,706,000 6,621,849 5,947,421 5,378,485
Allowance for credit losses (Note 8) 783,000 16,118 13,664 40,393
Finance income (Note 23) (3,477,000) (71,578) (101,511) (207,799)
Finance cost (Note 23) 137,107,000 2,822,147 2,561,526 2,265,242
Net foreign exchange gain (loss) differences 79,192,000 1,630,050 (573,591) (1,722,985)
Derivative Financial instruments (Notes 3 and 4) 681,000 14,019 1,306,557 67,629
Amortized Cost (CEBUR) 408,000 8,400 6,930 3,306
Net gain on disposal of rotable spare parts, furniture and equipment and gain on sale of aircraft (Note 22) (9,376,000) (192,981) (707,918) (275,805)
Employee benefits (Note 17) 542,000 11,152 11,079 10,086
Aircraft and engine lease extension benefit and other benefits from service agreements (512,000) (10,545) (10,633) (10,634)
Management incentive and long-term incentive plans (1,395,000) (28,715) 48,772 32,257
Cash flows from operating activities before changes in working capital 657,536,000 13,534,395 2,802,321 9,314,069
Changes in operating assets and liabilities:        
Related parties 3,342,000 68,788 17,252 25,603
Other accounts receivable (15,555,000) (320,183) 793,045 (367,603)
Recoverable and prepaid taxes 16,669,000 343,116 (22,010) (425,410)
Inventories (845,000) (17,386) 22,949 (4,637)
Prepaid expenses 636,000 13,086 73,220 (369,860)
Other assets 3,385,000 69,674 56,717 (10,789)
Guarantee deposits (51,284,000) (1,055,594) (1,397,131) (1,168,537)
Suppliers 6,077,000 125,087 892,232 518,189
Accrued liabilities 44,397,000 913,736 (561,229) 352,475
Other taxes and fees payable 12,782,000 263,094 164,777 119,700
Unearned transportation revenue 19,729,000 406,091 2,170,991 1,241,410
Derivative Financial instruments (1,827,000) (37,602) (1,271,904) (18,943)
Other liabilities 75,561,000 1,555,310 771,229 191,099
Cash generated from operating activities 770,603,000 15,861,612 4,512,459 9,396,766
Interest received 3,477,000 71,578 101,511 207,799
Income taxes paid (3,141,000) (64,658) (254,525) (94,922)
Net cash flows provided by operating activities 770,939,000 15,868,532 4,359,445 9,509,643
Investing activities        
Acquisitions of rotable spare parts, furniture and equipment (Note 12) (183,390,000) (3,774,799) (3,376,576) (3,483,368)
Acquisitions of intangible assets (Note 13) (9,915,000) (204,095) (124,724) (77,325)
Acquisitions of subsidiaries net cash acquired (78,000) (1,597)    
Pre-delivery payments reimbursements 43,037,000 885,855 1,710,338 704,852
Proceeds from disposals of rotable spare parts, furniture and equipment 17,677,000 363,850 1,723,205 976,500
Net cash flows used in investing activities (132,669,000) (2,730,786) (67,757) (1,879,341)
Financing activities        
Net proceeds from public offering (Note 19)     3,272,832  
Proceeds from exercised stock options (Note 18) 2,765,000 56,904   14,773
Treasury shares purchase (4,334,000) (89,209) (94,564) (75,375)
Interest paid (12,319,000) (253,567) (291,637) (277,842)
Payments of principal portion of lease liabilities (Note 14) (452,230,000) (9,308,477) (6,110,569) (6,499,802)
Payments of financial debt (75,808,000) (1,560,367) (2,140,194) (1,181,726)
Proceeds from financial debt 113,020,000 2,326,339 2,323,292 2,781,132
Net cash flows used in financing activities (428,906,000) (8,828,377) (3,040,840) (5,238,840)
Increase in cash, cash equivalents and restricted cash 209,364,000 4,309,369 1,250,848 2,391,462
Net foreign exchange differences on cash balance 40,909,000 842,122 872,565 (274,432)
Cash, cash equivalents and restricted cash at beginning of year 490,849,000 10,103,385 7,979,972 5,862,942
Cash, cash equivalents and restricted cash at end of year $ 741,122,000 $ 15,254,876 $ 10,103,385 $ 7,979,972
v3.22.1
Consolidated Statements of Cash Flows (Parenthetical)
Apr. 26, 2022
$ / $
Dec. 31, 2021
₡ / $
Dec. 31, 2021
Q / $
Dec. 31, 2021
USD ($)
Dec. 31, 2021
$ / $
Dec. 31, 2020
₡ / $
Dec. 31, 2020
Q / $
Dec. 31, 2020
USD ($)
Dec. 31, 2020
$ / $
Dec. 31, 2019
₡ / $
Dec. 31, 2019
Q / $
Dec. 31, 2019
USD ($)
Dec. 31, 2019
$ / $
Consolidated Statements of Cash Flows                          
Convenience translation to U.S. dollars 20.3183 645.9000 7.7285 20.5835 20.5835 615.7800 7.8095 19.9487 19.9487 573.4400 7.6988 18.8452 18.8452
v3.22.1
Description of the business and summary of significant accounting policies
12 Months Ended
Dec. 31, 2021
Description of the business and summary of significant accounting policies  
Description of the business and summary of significant accounting policies

1.  Description of the business and summary of significant accounting policies

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (“Controladora” or the “Company”) was incorporated in Mexico in accordance with the laws of Mexico on October 27, 2005.

Controladora is domiciled in Mexico City at Av. Antonio Dovali Jaime No. 70, 13th Floor, Tower B, Colonia Zedec Santa Fe, Mexico City, Mexico, 01210.

The Company, through its subsidiary Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (“Concesionaria”), has a concession to provide air transportation services for passengers, cargo and mail throughout Mexico and abroad.

Concesionaria’s concession was granted by the Mexican federal government through the Mexican Communications and Transportation Ministry (Secretaría de Comunicaciones y Transportes) on May 9, 2005 initially for a period of five years and was extended on February 17, 2010 for an additional period of ten years. On February 24, 2020, Concesionaria’s concession was extended for a 20-year term starting on May 9, 2020.

Concesionaria made its first commercial flight as a low-cost airline on March 13, 2006. Concesionaria operates under the trade name of “Volaris”. On June 11, 2013, Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. changed its corporate name to Controladora Vuela Compañía de Aviación, S.A.B. de C.V.

On September 23, 2013, the Company completed its dual listing Initial Public Offering on the New York Stock Exchange (“NYSE”) and on the Mexican Stock Exchange (Bolsa Mexicana de Valores, or “BMV”), and on September 18, 2013 its shares started trading under the ticker symbol “VLRS” and “VOLAR”, respectively.

On November 16, 2015, certain shareholders of the Company completed a secondary follow-on equity offering on the NYSE.

On November 10, 2016, the Company, through its subsidiary Vuela Aviación, S.A. (“Volaris Costa Rica”), obtained from the Costa Rica Civil Aviation Authority an Air Operator Certificate to provide air transportation services for passengers, cargo and mail, in scheduled and non-scheduled flights for an initial period of five years. On December 20, 2021 Volaris Costa Rica´s Air Operator Certificate was renewed, modified and extended for an additional 15- year term. Volaris Costa Rica started operations on December 1, 2016.

On June 20, 2019, Concesionaria, issued 15,000,000 asset backed trust notes (certificados bursátiles fiduciarios; the “ Trust Notes ”), under the ticker symbol VOLARCB 19 for the amount of Ps.1.5 billion Mexican pesos by CIBanco, S.A., Institución de Banca Multiple, acting as Trustee under the Irrevocable Trust number CIB/3249 created by Concesionaria in the first issuance under a program approved by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) for an amount of up to Ps.3.0 billion Mexican pesos. The Trust Notes are backed by future receivables under agreements entered into with credit card processors with respect to funds received from the sale of airplane tickets and ancillaries denominated in Mexican pesos, through credit cards VISA and Mastercard, via the Company’s website, mobile app and travel agencies. The Trust Notes were listed on the Mexican Stock Exchange, have a maturity of five years and will pay an interest rate of Tasa de Interes Interbancaria de Equilibrio (“TIIE”) 28 plus 175 percentage points.

On December 11, 2020, the Company announced the closing of an upsized primary follow-on equity offering in which the Company

offered 134,000,000 of its Ordinary Participation Certificates (Certificados de Participación Ordinarios), or CPOs, in the form of American Depositary Shares, or ADSs, at a price to the public of USD$.11.25 per ADS in the United States and other countries outside of Mexico, pursuant to the Company’s shelf registration statement filed with the Securities and Exchange Commission (the “SEC”). In connection with the offering, the underwriters exercised their option to purchase up to 20,100,000 additional CPOs in the form of ADSs. Each ADS represents 10 CPOs and each CPO represents a financial interest in one Series A share of common stock of the Company.

The accompanying consolidated financial statements and notes were approved by the Company's Board of Directors on April 20, 2022 and by the Shareholders on April 26, 2022. These consolidated financial statements were also approved for issuance in the Company's annual report on Form 20-F by the Company's Vice President and Chief Executive Officer, Enrique Beltranena, and the Senior Vice President and Chief Financial Officer, Jaime E. Pous, on April 26, 2022 and subsequent events were considered through that date.

a)  Relevant events

Change in functional currency

An entity’s functional currency is the currency of the primary economic environment in which it operates. During the second half of 2021 management identified indicators of changes in the primary economic environment in which its main subsidiary Concesionaria 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 US dollars. As a result, the Company 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 US dollar as of December 31, 2021.

In addition, considering the dependency of Controladora in its operations related to its wholly owned subsidiary Concesionaria, management has evaluated and concluded that its functional currency has also changed from the Mexican peso to US dollar as of December 31, 2021.The change in functional currency is prospectively applied from the date of the change.

As of December 31,2021,the Company´s presentation currency remains Mexican pesos, consequently there is no impact on any comparative financial information presented.

Derived from the foregoing, once reviewed and authorized by the Board of Directors and its Audit and Corporate Governance Committee, as well as informed to the corresponding regulators, as of December 31, 2021, the Company and Concesionaria changed prospectively its functional currency from the Mexican peso to the US dollar (Note 3b).

New purchase order for 39 A321NEO aircraft

On November 15, 2021, the Company executed an amendment to its purchase agreement with Airbus to purchase 39 A321NEO aircraft, securing its growth on the upcoming years. In addition to the acquisition of these 39 aircraft, the Company exercised its rights under the purchase agreement with Airbus to convert 20 aircraft from A320NEO to A321NEO aircraft of its current order.

Obtention of the Operation Permit of Vuela El Salvador, S.A. de C.V. (“Volaris El Salvador”)

On August 25, 2021, the Company through its subsidiary Vuela El Salvador, S.A. de C.V. (“Volaris El Salvador”) obtained from the El Salvadorian Civil Aviation Authority an Operation Permit, for scheduled and non-scheduled international public air transportation services for passengers, cargo and mail valid until May 30, 2024. Volaris El Salvador started operations on September 15, 2021.

Merger between subsidiaries

The Company analyzed the impacts resulting from the amendments to certain laws regarding labor subcontracting, or outsourcing matters, published in the Official Gazette of the Federation (Diario Oficial de la Federacion) on April 23, 2021, which prohibits the subcontracting or outsourcing activities in Mexico, that is, when any individual or legal entity provides or make available its own employees for the benefit of third parties. As the only exception, it is established that the rendering of specialized services or the execution of specialized works, which are not part of the corporate purpose or the economic activity of the beneficiary of the services, will not be considered subcontracting of personnel. The modifications became effective on April 24, 2021, the day following date of its publication in the Official Gazette of the Federation.

According to the foregoing, the management concluded that the employees of the subsidiary “Servicios Administrativos Volaris, S.A. de C.V.” directly participate in the main activity of the subsidiary “Concesionaria”, therefore, to comply with the guidelines of the reform, the corresponding employer substitution was performed.

On July 14, 2021, the Subsidiaries “Concesionaria”, and “Servicios Administrativos”, agreed to merge, the first being “the merging company” and the second “the merged company”, respectively. The merger takes full effect against third parties after three months from the date of registration of the merger agreements in the Public Registry of Property and Commerce of Mexico City, in accordance with the provisions of Article 224 of the General Corporations Law.

The merger entered into full legal, accounting and tax effects on August 31, 2021. Any intercompany assets and liabilities between the “Merging company” and the “Merged company” were extinguished on the effective date of the merger. Serving as an accounting basis for this merger the statements of financial position of the entities, this transaction was carried out between subsidiaries of the Company, therefore it did not affect the consolidated financial statements.

Covid-19 commentary

During 2021 the Company managed to recover its pre-pandemic capacity despite spikes in the COVID19 cases, especially during the 1st half of the year. As the vaccination program evolved in the markets the Company operates, the Company achieved an important recovery in capacity. As the national authorities eased the migratory requirements the Company restarted operations to and from Costa Rica, Guatemala and El Salvador. In fact, during September 2021 the Company effectively started operations of a new operating subsidiary Volaris El Salvador.

As of December 31, 2021, the Company´s capacity as measured by available seat miles (“ASMs”) was increased 53.7% compared to the previous year and a 14.7% growth compared with 2019. The Company has taken actions to preserve liquidity and sustain its operations during the period and certain other measures.

Customers and employees

The Company has made a great effort in 2021 to face health contingency of COVID-19 internally (with all employees) and externally (with all clients) through the implementation of different strategies like: sanitation programs in work centers, placement of “entrance, exit and safe distance” signs, manuals and training courses with sanitary protocols, implementation “home office scheme”, medical follow up to employees, routine application of random Rapid Tests to employees, some trips to USA with employees to facilitate vaccination.

Second issuance asset backed trust notes

On October 13, 2021, “Concesionaria”, completed the issuance of fifteen million (15,000,000) of asset backed trust notes (certificados bursátiles fiduciarios) (the “Trust Notes”) issued under the ticker VOLARCB 21L for an amount of Ps.1.5 billion Mexican pesos, issued by CIBanco, S.A., Institución de Banca Múltiple, acting as Trustee of the Irrevocable Trust number CIB/3249 created by Concesionaria, in the second offering under the program authorized by the Mexican National Banking and Securities Commission for an amount of up to Ps.3.0 billion (three billion pesos 00/100 national currency).

The Trust Notes are backed by future receivables under agreements entered into with credit card processors with respect to funds received from the sale of airplane tickets and ancillaries denominated in Mexican pesos, through credit cards VISA and Mastercard, via the Company’s website, mobile app and travel agencies.

The Trust Notes were rated “HR AA (E)”and “AA+/M(e)” by the rating agencies HR Ratings de México, S.A. de C.V. and Verum Calificadora de Valores, S.A.P.I. de C.V., respectively, will have a maturity term of 5 (five) years and will pay an interest rate of TIIE + two hundred (200) basis points.

The Trust Notes comply with the Sustainability-Linked Bond Principles 2020, administered by the International Capital Market Association (ICMA) and has Sustainability Objectives (SPT) for the KPI, to reduce carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer (gCO2 / RPK) by 21.54%, 24.08% and 25.53% by 2022, 2023 and 2024, respectively,

compared to 2015. This offering will help the Company to accomplish its long-term sustainable goals, among which are to reduce CO2 emissions by 35.42% by 2030.

A feature of the asset backed trust notes is that they will pay an additional (25) basis points to the interest rate if the sustainability goals are not met, with the possibility of mitigating the additional rate if the 2023 or 2024 targets are met.

Shares conversion

On December 20, 2021, one of the Company´s shareholders concluded the conversion of 30,538,000 Series B Shares for the equivalent number of Series A Shares. This conversion has no impact either on the total number of outstanding shares nor on the earnings-per-share calculation.

b)  Basis of preparation

Statement of compliance

These consolidated financial statements comprise the financial statements of the Company and its subsidiaries at December 31, 2021 and 2020 and for each of the three years ended December 31, 2021, and were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which each entity operates (“functional currency”). The functional currency of Controladora and its subsidiary Concesionaria was the Mexican peso until December 31, 2021, and since such date changed to US dollar.

The presentation currency of the Company’s consolidated financial statements is the Mexican peso, which is used also for compliance with its legal obligations. All values in the consolidated financial statements are rounded to the nearest thousand (Ps.000), except when otherwise indicated.

The Company has consistently applied its accounting policies to all periods presented in these consolidated financial statements and provide comparative information in respect of the previous period.

Basis of measurement and presentation

The accompanying consolidated financial statements have been prepared under the historical-cost convention, except for derivative financial instruments that are measured at fair value.

The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from those estimates.

c)  Basis of consolidation

The accompanying consolidated financial statements comprise the financial statements of the Company and its subsidiaries. On December 31, 2021 and 2020, for accounting purposes the companies included in the consolidated financial statements are as follows:

Principal

% Equity interest

Name

    

Activities

    

Country

    

2021

    

2020

 

Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V.

 

Air transportation services for passengers, cargo and mail throughout Mexico and abroad

 

Mexico

 

100

%  

100

%

Vuela Aviación, S.A.

 

Air transportation services for passengers, cargo and mail in Costa Rica and abroad

 

Costa Rica

 

100

%  

100

%

Vuela, S.A. (“Vuela”) *

 

Air transportation services for passengers, cargo and mail in Guatemala and abroad

 

Guatemala

 

100

%  

100

%

Vuela El Salvador, S.A. de C.V.

Air transportation services for passengers, cargo and mail in El Salvador and abroad

El Salvador

100

%  

100

%

Comercializadora Volaris, S.A. de C.V. ("Comercializadora")

 

Merchandising of services

 

Mexico

 

100

%  

100

%

Servicios Earhart, S.A.*

 

Recruitment and payroll

 

Guatemala

 

100

%  

100

%

Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”)

 

Recruitment and payroll

 

Mexico

 

100

%  

100

%

Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) (3)

 

Recruitment and payroll

 

Mexico

 

100

%

Comercializadora V Frecuenta, S.A. de C.V. (“Loyalty Program”) **

Loyalty Program

Mexico

100

%  

100

%

Viajes Vuela, S.A. de C.V. (“Viajes Vuela”)

Travel agency

Mexico

100

%  

100

%

Guatemala Dispatch Service, S.A., (“GDS, S.A.”) (4)

Aeronautical Technical Services

Guatemala

100

%

CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso
1710 (1)

Pre-delivery payments financing (Note 5)

Mexico

100

%

100

%

CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso
1711 (2)

Pre-delivery payments financing (Note 5)

Mexico

100

%

100

%

Fideicomiso Irrevocable de Administración número F/307750 “Administrative Trust”

 

Share administration trust (Note 18)

 

Mexico

 

100

%  

100

%

Fideicomiso Irrevocable de Administración número F/745291 “Administrative Trust”

 

Share administration trust (Note 18)

 

Mexico

 

100

%  

100

%

Fideicomiso de Administración número CIB/3081 “Administrative Trust”

Share administration trust (Note 18)

Mexico

100

%  

100

%  

Fideicomiso Irrevocable de Administración número CIB/3249 “Administrative Trust”

Asset backed securities trustor & administrator (Note 5)

Mexico

100

%  

100

%

*The Companies have not started operations yet in Guatemala

**The Company has not started operations yet

(1)With effect from October 16, 2020, the Successor of the Trust 1710 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple.
(2)With effect from October 16, 2020, the Successor of the Trust 1711 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple.
(3)With effect from August 31,2021, the Company merged with Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V.
(4)The Company was acquired in October 5, 2021.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent Company, using consistent accounting policies.

Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, the Company has:

(i)Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee).
(ii)Exposure, or rights, to variable returns from its involvement with the investee.
(iii)The ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(i)The contractual arrangement with the other vote holders of the investee.
(ii)Rights arising from other contractual arrangements.
(iii)The Company’s voting rights and potential voting rights.

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Company gains control until the date the Company ceases to control the subsidiary.

All intercompany balances, transactions, unrealized gains and losses resulting from intercompany transactions are eliminated in full on consolidation in the consolidated financial statements.

On consolidation, the assets and liabilities of foreign operations are translated into Mexican pesos at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at the average exchange rates prevailing at the time. The exchange differences arising on translation for consolidation are recognized in other comprehensive income (“OCI”). On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognized in profit or loss.

d)  Revenue recognition

Passenger revenues

Revenues from the air transportation of passengers are recognized at the earlier of when the service is provided or when the non-refundable ticket expires at the date of the scheduled travel.

Ticket sales for future flights are initially recognized as contract liabilities under the caption “unearned transportation revenue” and, once the transportation service is provided by the Company or when the non-refundable ticket expires at the date of the scheduled travel, the earned revenue is recognized as passenger ticket revenues and the unearned transportation revenue is reduced by the same amount. All the Company’s tickets are non-refundable and are subject to change upon a payment of a fee. Additionally, the Company does not operate a frequent flier program.

The most significant passenger revenue includes revenues generated from: (i) fare revenue and (ii) other passenger revenues. Other passenger services include but are not limited to fees charged for excess baggage, bookings through the call center or third-party agencies, advanced seat selection, itinerary changes and charters. They are recognized as revenue when the obligation of passenger transportation service is provided by the Company or when the non-refundable ticket expires at the date of the scheduled travel.

The Company also classifies as other passenger revenue “V Club” and other similar services, which are recognized as revenue over time when the service is provided.

Non-passenger revenues

The most significant non-passenger revenues include revenues generated from: (i) revenues from other non-passenger services described below and (ii) cargo services.

Revenues from other non-passenger services mainly include but are not limited to commissions charged to third parties for the sale of hotel reservations, trip insurance, rental cars and advertising spaces to third parties. They are recognized as revenue at the time the service is provided.

The Company also evaluated the principal versus agent considerations as it relates to certain non-air travel services arrangements with third party providers. No changes were identified under this analysis as the Company is agent for those services provided by third parties.

Code-share agreement

The Company sells certain tickets with connecting flights with one or more segments operated by its other airline partner. For segments operated by its other airline partner, the Company has determined that it is acting as an agent on behalf of the other airline, as is

responsible for its portion of the contract (i.e., transportation of the passenger). The Company, as the agent, recognizes revenue within Other operating revenue at the time of the travel, for the net amount retained by the Company for any segments flown by other airline.

On January 16, 2018, the Company and Frontier Airlines (herein after Frontier) entered into a code-share operations agreement, which started operations in September 2018.

Through this alliance, the Company´s customers gain access to additional cities in the U.S. beyond the current available destinations as the Company’s customers are able to buy a ticket throughout any of Frontier’s actual destinations; and Frontier customers gain first-time access to new destinations in Mexico through Volaris presence in Mexican airports.

Code-share tickets can be purchased directly from the Volaris’ website. The airline that provides the transportation recognize the revenue when the service is provided.

Other considerations analyzed as part of revenue from contracts with customers

All revenues offered by the Company including sales of tickets for future flights, other passenger related services and non-passenger revenue must be paid through a full cash settlement. The payment of the transaction price is equal to the cash settlement from the client at the sales time (using different payment options like credit or debit cards, paying through a third party or directly at the counter in cash). There is little or no judgment to determine the point in time of the revenue recognition, and the amount of it. Even if mainly all the sales of services are initially recognized as contract liabilities, there is no financing component in these transactions.

The cost to obtain a contract is represented by the commissions paid to the travel agencies and the bank commissions charged by the financial institutions for processing electronic transactions (Note 10). The Company does not incur any additional costs to obtain and fulfill a contract that is eligible for capitalization.

Trade receivables are mainly with financial institutions due to transactions with credit and debit cards, and therefore they are non-interest bearing and are mainly on terms of 24 to 48 hours. The Company has the right of collection at the beginning of the contracts and there are no discounts, payment incentives, bonuses, or other variable considerations subsequent to the purchase that could modify the amount of the transaction price.

The Company´s tickets are non-refundable. However, if the Company cancels a flight for causes attributable to the airline, including as a result of the COVID-19 pandemic, then the passenger is entitled to either move their flight at no cost, receive a refund or a voucher. No revenue is recognized until either the voucher is redeemed, and the associate flight occurs, or the voucher expires. When vouchers issued exceed the amount of the original amount paid by the passenger the excess is recorded as reduction of the operating revenues. All of the Company´s revenues related to future services are rendered through an approximate period of 12 months.

e)  Cash, cash equivalents and restricted cash

Cash and cash equivalents are represented by bank deposits and highly liquid investments with maturities of 90 days or less at the original purchase date. For the purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash and short-term investments as defined above.

The Company has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. These credit card processing agreements don’t have significant cash reserve requirements.

Restricted cash are used to constitute the debt service reserves and cannot be used for purposes other than those established.

f)  Financial instruments -initial recognition and subsequent measurement

A financial instrument is any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity.

i)  Financial assets

Initial recognition

Classification of financial assets and initial recognition

The Company determines the classification and measurement of financial assets, in accordance with the categories in IFRS 9, which are based on both: the characteristics of the contractual cash flows of these assets and the business model objective for holding them.

Financial assets include those carried at FVTPL, whose objective to hold them is for trading purposes (short-term investments), or at amortized cost, for accounts receivables held to collect the contractual cash flows, which are characterized by solely payments of principal and interest (“SPPI”). Derivative financial instruments are also considered financial assets when these represent contractual rights to receive cash or another financial asset. All the Company’s financial assets are initially recognized at fair value, including derivative financial instruments.

Subsequent measurement

The subsequent measurement of financial assets depends on their initial classification, as is described below:

1.Financial assets at FVTPL which include financial assets held for trading.
2.Financial assets at amortized cost, whose characteristics meet the SPPI criterion and were originated to be held to collect principal and interest in accordance with the Company’s business model.
3.Financial assets at fair value through OCI with recycling of cumulative gains and losses.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when:

a)The rights to receive cash flows from the asset have expired;
b)The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset.

In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

ii)  Impairment of financial assets

The Company assesses at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is credit - impaired. A financial asset is credit- impaired when one or more events have occurred since the initial recognition of an asset (an incurred ‘loss event’), that has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

Evidence that a financial asset is credit – impaired may of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in receivable, the probability that they will enter bankruptcy or other financial reorganization and observable data indicating that there is a measurable decrease in the estimated cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Further disclosures related to impairment of financial assets are also provided in Note 8.

For trade receivables, the Company applies a simplified approach in calculating expected credit losses (ECLs). Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date.

Based on this evaluation, allowances are taken into account for the expected losses of these receivables. For the years ended December 31, 2021 and 2020 the Company recorded expected credit losses on accounts receivable of Ps.16,118 and Ps.13,664, respectively (Note 8).

iii)  Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, including loans and borrowings, accounts payables to suppliers, unearned transportation revenue, other accounts payable and financial instruments.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

Subsequent measurement

The measurement of financial liabilities depends on their classification as described below:

Financial liabilities at amortized cost

Accounts payable, are subsequently measured at amortized cost and do not bear interest or result in gains and losses due to their short-term nature.

Loans and borrowings are the category most relevant to the Company. After initial recognition at fair value (consideration received), interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method (EIR). Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on issuance and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the consolidated statements of operations. This amortized cost category generally applies to interest-bearing loans and borrowings (Note 5).

Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities under the fair value option, which are classified as held for trading, if they are acquired for the purpose of selling them in the near future. This category includes derivative financial instruments that are not designated as hedging instruments in hedge relationships as defined by IFRS 9.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability.

The difference in the respective carrying amounts is recognized in the consolidated statements of operations.

Offsetting of financial instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of financial position if there is:

(i)A currently enforceable legal right to offset the recognized amounts, and
(ii)An intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

g)  Other accounts receivable

Other accounts receivables are due primarily from major credit card processors associated with the sales of tickets and are stated at cost less allowances made for credit losses, which approximates fair value given their short-term nature.

h)  Inventories

Inventories consist primarily of flight equipment expendable parts, materials and supplies, and are initially recorded at acquisition cost. Inventories are carried at the lower of cost and their net realization value. The cost is determined based on the method of specific identification and expensed when used in operations. The Company recognizes the necessary estimates for decreases in the value of its inventories due to impairment, obsolescence, slow movement and causes that indicate that the use or realization of the aircraft spare parts and flight equipment accessories that are part of the inventory will be less than recorded value. The cost of inventories is determined based on the specific identification method and is recorded as an expense as it is used in operations.

i)  Intangible assets

Cost related to the purchase or development of computer software that is separable from an item of related hardware is capitalized separately measured at cost and amortized over the period in which it will generate benefits not exceeding five years on a straight-line basis. The Company annually reviews the estimated useful lives and salvage values of intangible assets and any changes are accounted for prospectively.

The Company records impairment charges on intangible assets used in operations when events and circumstances indicate that the assets or related cash generating unit may be impaired and the carrying amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of (i) its fair value less cost to sell, and (ii) its value in use.

The value in use calculation is based on a discounted cash flow model, using our projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation. For the years ended December 31, 2021, and 2020, the Company did not record any impairment loss in the value of its intangible assets.

Software

Acquired computer software licenses are capitalized on the basis of cost incurred to acquire, implement and bring the software into use. Costs associated with maintaining computer software programs are expensed as incurred. In case of development or improvement to systems that will generate probable future economic benefits, the Company capitalizes software development costs, including directly attributable expenditures on materials, labor, and other direct costs.

Acquired software cost is amortized on a straight-line basis over its useful life. Licenses and software rights acquired by the Company have finite useful lives and are amortized on a straight–line basis over the term of the contract. Amortization expense is recognized in the consolidated statements of operations.

j)  Guarantee deposits

Guarantee deposits consist primarily of aircraft maintenance deposits paid to lessors, deposits for rent of flight equipment and other guarantee deposits. Aircraft and engine deposits are held by lessors in U.S. dollars and are presented as current assets and non-current assets, based on the recovery dates of each deposit established in the related agreements (Note 11).

Deposits for flight equipment maintenance paid to lessors

Most of the Company’s lease contracts stipulate the obligation to pay maintenance deposits to aircraft lessors, in order to guarantee major maintenance work.

These lease agreements establish that maintenance deposits are reimbursable to the Company at the time the major maintenance event is concluded for an amount equal to: (i) the maintenance deposit held by the lessor associated with the specific maintenance event, or (ii) the qualifying costs related to the specific maintenance event.

Substantially all major maintenance deposits are generally calculated based on the use of leased aircraft and engines (flight hours or operating cycles). The sole purpose of these deposits is to guarantee to the lessor the execution of maintenance work on the aircraft and engines.

Maintenance deposits that the Company expects to recover from lessors are presented as security deposits in the consolidated statement of financial position. These deposits are registered as a monetary asset and are revalued to record changes in foreign currency in each reporting period.

According to the term of the lease, in each contract it is evaluated whether major maintenance of the leased aircraft and engines is expected to be carried out. In the event that major maintenance is not expected to be performed on its own account, it is recorded as a variable lease payment, since it represents part of the use of the leased goods and is determined based on time or flight cycles. For the years ended December 31, 2021, 2020 and 2019, the Company made a supplemental lease payment of Ps.775,579, Ps.421,030 and Ps.295,720, respectively.

When modifications are made to the contracts that entail an extension of the lease term, said maintenance deposits can be converted into recoverable deposits, in that case, to the date of modification of the agreement. Deposits are considered a recoverable asset that is recognized as a decrease in the expense recognized for variable leases.

During the years ended December 31, 2021, 2020 and 2019, the Company added fifteen, seven and seven net new aircrafts to its fleet, respectively (Note 14). During the year ended December 31, 2021, the Company extended the lease period for aircrafts and engines, through lease agreements for fifteen aircraft and three engines. During the year ended December 31, 2020, the Company did not extend the period of lease contracts for aircrafts and engines. During the year ended December 31, 2019, the Company extended the lease period, through lease agreements, of one aircraft. Additionally, the Company extended the lease period for a spare engine in 2019. Certain other aircraft lease agreements do not require the obligation to pay maintenance deposits in advance to lessors to guarantee important maintenance activities; therefore, the Company does not record or make payments for guarantee deposits with respect to these aircrafts. However, some of these lease agreements include the obligation to make maintenance adjustment payments to lessors at the end of the lease period. These maintenance adjustments cover maintenance events that are not expected to be performed before the termination of the lease; for such agreements, the Company accumulates a liability related to the amount of the costs that will be incurred at the end of the lease, since no maintenance deposits have been made (Note 16).

k)  Aircraft and engine maintenance

The Company is required to conduct various levels of aircraft maintenance. Maintenance requirements depend on the type of aircraft, age and the route network over which it operates.

Fleet maintenance requirements may involve short cycle engineering checks, for example, component checks, monthly checks, annual airframe checks and periodic major maintenance and engine checks.

Aircraft maintenance and repair consists of routine and non-routine works, divided into three general categories: (i) routine maintenance, (ii) major maintenance and (iii) component service.

(i)  Routine maintenance requirements consist of scheduled maintenance checks on the Company’s aircraft, including pre-flight, daily, weekly and overnight checks, any diagnostics and routine repairs and any unscheduled tasks performed as required. These type of

maintenance events are currently serviced by Company mechanics and are primarily completed at the main airports that the Company currently serves.

All other maintenance activities are sub-contracted to qualified maintenance business partner, repair and overhaul organizations. Routine maintenance also includes scheduled tasks that can take from seven to 14 days to accomplish and are required approximately every 24 or 36 months, such as 24 month checks and C checks. All routine maintenance costs are expensed as incurred.

(ii)  Major maintenance consists of a series of more complex tasks that can take up to six weeks to accomplish and typically are required every five to six years.

Major maintenance is accounted for under the deferral method, whereby the cost of major maintenance and major overhaul and repair is capitalized (leasehold improvements to flight equipment) and amortized over the shorter of the period to the next major maintenance event or the remaining contractual lease term. The next major maintenance event is estimated based on assumptions including estimated time of usage. The United States Federal Aviation Administration (“FAA”) and the Mexican Federal Civil Aviation Agency (Agencia Federal de Aviación Civil - AFAC) mandate maintenance intervals and average removal times as suggested by the manufacturer.

These assumptions may change based on changes in the utilization of aircraft, changes in government regulations and suggested manufacturer maintenance intervals. In addition, these assumptions can be affected by unplanned incidents that could damage an airframe, engine, or major component to a level that would require a heavy maintenance event prior to a scheduled maintenance event. To the extent the planned usage increases, the estimated life would decrease before the next maintenance event, resulting in additional expense over a shorter period.

During the years ended December 31, 2021 and 2020, the Company capitalized major maintenance events as part of leasehold improvements to flight equipment for an amount of Ps.1,742,979 and Ps.646,219, respectively. For the years ended December 31, 2021, 2020 and 2019, the amortization of major maintenance leasehold improvement costs was Ps.838,433, Ps.652,091 and Ps.450,371 respectively. The amortization of deferred maintenance costs is recorded as part of depreciation and amortization in the consolidated statements of operations.

(iii)  The Company has a power-by-the hour agreement for component services, which guarantees the availability of aircraft parts for the Company’s fleet when they are required. It also provides aircraft parts that are included in the redelivery conditions of the contract (hard time) without constituting an additional cost at the time of redelivery. The monthly maintenance cost associated with this agreement is recognized as incurred in the consolidated statements of operations.

The Company has an engine flight hour agreement (component repair agreement), that guarantees a cost per overhaul, provides miscellaneous engines coverage, caps the cost of foreign objects damage events, ensures there is protection from annual escalations, and grants an annual credit for scrapped components. The cost associated with the miscellaneous engines’ coverage is recorded monthly as incurred in the consolidated statements of operations.

l)  Rotable spare parts, furniture and equipment, net

Rotable spare parts, furniture and equipment, are recorded at cost and are depreciated to estimated residual values over their estimated useful lives using the straight-line method.

Aircraft spare engines have significant components with different useful lives; therefore, they are accounted for as separate items (major components) of spare engine parts (Note 12).

Pre-delivery payments refer to prepayments made to aircraft and engine manufacturers during the manufacturing stage of the aircraft. The borrowing costs related to the acquisition or construction of a qualifying asset are capitalized as part of the cost of that asset.

Depreciation rates are as follows:

    

Annual

    

depreciation rate

Flight equipment

4.0-16.7%

Constructions and improvements

 

Remaining contractual lease term

Computer equipment

 

25%

Workshop tools

 

33.3%

Electric power equipment

 

10%

Communications equipment

 

10%

Workshop machinery and equipment

 

10%

Motorized transport equipment platform

25%

Service carts on board

 

20%

Office furniture and equipment

 

10%

Leasehold improvements to flight equipment

 

The shorter of: (i) remaining contractual lease term, or (ii) the next major maintenance event

The Company reviews annually the useful lives of these assets and any changes are accounted for prospectively.

The Company identified one Cash Generating Unit (CGU), which includes the entire aircraft fleet and flight equipment. The Company assesses at each reporting date, whether there is objective evidence that rotable spare parts, furniture and equipment and right of use asset are impaired in the CGU. The Company records impairment charges on rotable spare parts, furniture and equipment and right of use assets used in operations when events and circumstances indicate that the assets may be impaired or when the carrying amount of a long-lived asset or related cash generating unit exceeds its recoverable amount, which is the higher of (i) its fair value less cost to sell and (ii) its value in use.

The value in use calculation is based on a discounted cash flow model, using projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation.

On December 2021, the Company reviewed through an analysis if there were signs of impairment, according to the result it was concluded there were not sings of impairment. On December 2020, the Company performed its annual impairment test. The recoverable amount of the CGU was determined based on a value in use calculation using cash flow projections from financial budgets approved by senior management, covering a five-year period. The projected cash flows have been updated to reflect the future operating cashflows. It was concluded that the carrying amount of the CGU did not exceed the value in use.

m)  Foreign currency transactions and exchange differences

The Company’s consolidated financial statements are presented in Mexican pesos, which is the presentation currency of the parent company. For each subsidiary, the Company determines the functional currency and items included in the financial statements of each entity are measured using the currency of the primary economic environment in which each entity operates (“the functional currency”).

The financial statements of foreign subsidiaries prepared under IFRS and denominated in their respective local currencies different from its functional currency are translated into their functional currency as follows:

Transactions in foreign currencies are translated into the respective functional currencies at the exchange rates at the dates of the transactions.
All monetary assets and liabilities are translated into the functional currency at the exchange rate at the consolidated statement of financial reporting date.
All non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.
Equity accounts are translated at the prevailing exchange rate at the time the capital contributions were made, and the profits were generated.
Revenues, costs and expenses are translated at the average exchange rate during the applicable period.

Any differences resulting from the currency functional translation are recognized in the consolidated statements of operations.

For the year ended December 31, 2021, 2020 and 2019, the exchange rates of local currencies translated to functional currencies are as follows:

Exchange rates of local

Exchange rates of local

 

Exchange rates of local

currencies translated to 

currencies translated to 

currencies translated to 

functional currencies

 functional currencies

 

 functional currencies

 

Average

Average

 

Average

Local

Functional

exchange rate

Exchange rate

exchange rate

Exchange rate

exchange rate

Exchange rate

Country

    

currency

    

currency

    

for 2021

    

as of 2021

    

for 2020

    

as of 2020

    

for 2019

    

as of 2019

Costa Rica

 

Colon

 

U.S. dollar

 

₵.

641.2439

₵.

645.9000

₵.

588.4240

₵.

615.7800

₵.

590.9574

 

₵.

573.4400

Guatemala

 

Quetzal

 

U.S. dollar

 

Q.

7.75370

Q.

7.7285

Q.

7.7292

Q.

7.8095

Q.

7.7066

 

Q.

7.6988

El Salvador

U.S Dollar

U.S. dollar

$.

20.9853

$.

20.5835

$.

21.4961

$.

19.9487

$.

19.2618

$.

18.8452

The exchange rates used to translate the above amounts to Mexican pesos on December 31, 2021, 2020 and 2019, were Ps.20.5835, Ps.19.9487 and Ps.18.8452, respectively, per U.S. dollar.

The Company’s consolidated financial statements are presented in Mexican pesos. Assets and liabilities from foreign subsidiaries are converted from the functional currency to the presentation currency at the exchange rate on the reporting date; revenues and expenses are translated at the average exchange rate.

Foreign currency differences arising on translation into the presentation currency are recognized in OCI. Exchange differences on translation of foreign entities for the years ended December 31, 2021, 2020 and 2019, were Ps.(4,021), Ps.23,970 and Ps.8,045, respectively.

n)  Liabilities and provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

o)  Employee benefits

i)  Personnel vacations

The Company and its subsidiaries in Mexico and Central America recognize a reserve for the costs of paid absences, such as vacation time, based on the accrual method.

ii)  Termination benefits

The Company recognizes a liability and expense for termination benefits at the earlier of the following dates:

a)  When it can no longer withdraw the offer of those benefits; and

b)  When it recognizes costs for a restructuring that is within the scope of IAS 37, Provisions, Contingent Liabilities and Contingent Assets, and involves the payment of termination benefits.

The Company is demonstrably committed to a termination when, and only when, it has a detailed formal plan for the termination and is without realistic possibility of withdrawal.

For the years ended December 31, 2021 and 2020, no termination benefits provision has been recognized.

iii)  Seniority premiums

In accordance with Mexican Labor Law, the Company provides seniority premium benefits to the employees which rendered services to its Mexican subsidiaries under certain circumstances. These benefits consist of a one-time payment equivalent to 12 days’ wages for each year of service (at the employee’s most recent salary, but not to exceed twice the legal minimum wage), payable to all employees with 15 or more years of service, as well as to certain employees terminated involuntarily prior to the vesting of their seniority premium benefit.

Obligations relating to seniority premiums other than those arising from restructurings, are recognized based upon actuarial calculations and are determined using the projected unit credit method.

The latest actuarial computation was prepared as of December 31, 2021. Remeasurement gains and losses are recognized in full in the period in which they occur in OCI. Such remeasurement gains and losses are not reclassified to profit or loss in subsequent periods.

The defined benefit asset or liability comprises the present value of the defined benefit obligation using a discount rate based on government bonds, less the fair value of plan assets out of which the obligations are to be settled.

For entities in Costa Rica, Guatemala and El Salvador there is no obligation to pay seniority premium, these countries have Post- Employee Benefits.

iv)  Incentives

The Company has a quarterly incentive plan for certain personnel whereby cash bonuses are awarded for meeting certain performance targets. These incentives are payable shortly after the end of each quarter and are accounted for as a short-term benefit under IAS 19, Employee Benefits. A provision is recognized based on the estimated amount of the incentive payment. During the years ended December 31, 2021, 2020 and 2019 the Company expensed Ps.75,418, Ps.25,918 and Ps.62,825, respectively, as quarterly incentive bonuses, recorded under the caption salaries and benefits.

The Company has a short-term benefit plan for certain key personnel whereby cash bonuses are awarded when certain Company’s performance targets are met. These incentives are payable shortly after the end of each year and also are accounted for as a short-term benefit under IAS 19. A provision is recognized based on the estimated amount of the incentive payment (Note 7).

v)  Long-term incentive plan (“LTIP”) and long-term retention plan (LTRP)

The Company has adopted a Long-term incentive plan (“LTIP”). This plan consists of a share purchase plan (equity-settled) and a share appreciation rights “SARs” plan (cash settled), and therefore accounted under IFRS 2 “Shared based payments”. This incentive plan has been granting annual extensions in the same terms from the original granted in 2014.

The Company measures the cost of its equity-settled transactions at fair value at the date the equity benefits are conditionally granted to employees. The cost of equity-settled transactions is recognized in the statement of operations, together with a corresponding increase in treasury shares, over the period in which the performance and/or service conditions are fulfilled. For grants that vest on meeting performance conditions, compensation cost is recognized when it becomes probable that the performance condition will be met.

During 2021, 2020 and 2019, the Company approved a new long-term retention plan (“LTRP”), which consisted in a purchase plan (equity-settled). This plan does not include cash compensations granted through appreciation rights on the Company’s shares. The retention plans granted in previous periods will continue in full force and effect until their respective due dates and the cash compensation derived from them will be settled according to the conditions established in each plan.

vi)  Share-based payments

a)  LTIP

- Share purchase plan (equity-settled)

Certain key employees of the Company receive additional benefits through a share purchase plan denominated in Restricted Stock Units (“RSUs”), which has been classified as an equity-settled share-based payment. The cost of the equity-settled share purchase plan is measured at grant date, taking into account the terms and conditions on which the share options were granted. The equity-settled compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the requisite service period (Note 18).

During the years ended December 31, 2021, 2020 and 2019, the Company expensed Ps.89,464, Ps.75,040 and Ps.49,659, respectively, related to RSUs granted under the LTIP and LTRP. The expenses were recorded under the caption salaries and benefits.

- SARs plan (cash settled)

The Company granted SARs to key employees, which entitle them to a cash payment after a service period.

The amount of the cash payment is determined based on the increase in the share price of the Company between the grant date and the time of exercise. The liability for the SARs is measured, initially and at the end of each reporting period until settled, at the fair value of the SARs, taking into account the terms and conditions on which the SARs were granted. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the requisite service period (Note 18). As of December 31, 2021 the Company did not record an expense or benefit related to the SARs included in the LTIP. During the years ended December 31, 2020 and 2019, the Company recorded a (benefit) expense for Ps.(1,901) and Ps.2,964, respectively, related to the SARs included in the LTIP. These amounts were recorded under the caption salaries and benefits.

The cost of the SARs plan is measured initially at fair value at the grant date, further details of which are given in (Note 18). This fair value is expensed over the period until the vesting date with recognition of a corresponding liability. As with the equity settled awards described above, the valuation of cash settled award also requires using similar inputs, as appropriate.

b)  Management incentive plan (“MIP”)

- MIP I

Certain key employees of the Company receive additional benefits through a share purchase plan, which has been classified as an equity-settled share-based payment. The equity-settled compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the 20. requisite service period (Note 18). The total cost of this plan has been totally recognized during the required service period.

- MIP II

On February 19, 2016, the Board of Directors of the Company authorized an extension to the MIP for certain key employees, this plan was named MIP II. In accordance with this plan, the Company granted SARs to key employees, which entitle them to a cash payment after a service period. The amount of the cash payment is determined based on the increase in the share price of the Company between the grant date and the time of exercise. The liability for the SARs is measured initially and at the end of each reporting period until settled at the fair value of the SARs, taking into account the terms and conditions on which the SARs were granted. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the requisite service period (Note 18).

During the years ended December 31, 2021, 2020 and 2019, the Company recorded a (benefit) expense for Ps. (62,262), Ps.107,204 and Ps.37,760, respectively, related to MIP II into the consolidated statement of operations.

c)  Board of Directors Incentive Plan (BoDIP)

Certain members of the Board of Directors of the Company receive additional benefits through a share-based plan, which has been classified as an equity-settled share-based payment and therefore accounted under IFRS 2 “Shared based payments”.

In April 2018, the Board of Directors of the Company authorized a Board of Directors Incentive Plan “BoDIP”, for the benefit of certain board members. The BoDIP grants options to acquire shares of the Company or CPOs during a five- year period, which was determined on the grant date. Under this plan, no service or performance conditions are required to the board members for exercise the option to acquire shares, and therefore, they have the right to request the delivery of those shares at the time they pay for them.

vii)  Employee profit sharing

The Mexican Income Tax Law (“MITL”), establishes that the base for computing current year employee profit sharing shall be the taxpayer’s taxable income of the year for income tax purposes, including certain adjustments established in the Income Tax Law, at the rate of 10%. For the years ended December 31, 2021, 2020 and 2019, the employee profit sharing is Ps.262,667, Ps.13,458 and Ps.22,134, respectively, and is presented as an operating expense in the consolidated statements of operations. Subsidiaries in Central America do not have such profit -sharing benefit, as it is not required by local regulations.

p)  Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration.

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognizes lease liabilities for payments to be made under the lease term and right-of-use assets representing the right to use the underlying assets.

i.  Right-of-use assets

The Company recognizes right-of-use assets at the commencement date of the lease.  Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, an estimate of costs to be incurred by the Company in dismantling and removing the underlying asset to the condition required by the terms and conditions of the lease, and lease payments made at or before the commencement date less any lease incentives received.

Components of the right-of-use assets are depreciated on a straight-line basis over the shorter of the remining lease term and the estimated useful lives of the assets, as follows:

Aircraft and engines

    

up to 18

years

Spare engines

 

up to 18

years

Buildings leases

 

one to ten

years

Maintenance component

 

up to eight

years

ii.   Lease Liabilities

At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.

The short-term leases and leases of low value assets are recognized as expense on a straight-line basis over the lease term.

During the years ended December 31, 2021, 2020 and 2019, there were no impairment charges recorded in respect of the Company right-of-use asset.

iii.  Sale and leaseback

The Company enters into sale and leaseback agreements whereby an aircraft or engine is sold to a lessor upon delivery and the lessor agrees to lease such aircraft or engine back to the Company.

The Company measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained by the seller-lessee. Accordingly, the Company recognizes in the Statement of Operations only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. If the fair value of the consideration for the sale of an asset does not equal the fair value of the asset, or if the payments for the lease are not at market rates, then the Company adjusts the difference to measure the sale proceeds at fair value and accounts for any below-market terms as a prepayment of lease payments an any above market terms as additional financing provided by the buyer-lessor to the seller-lessee.

First, the sale and leaseback transactions are analyzed within the scope of IFRS 15 - Revenue from Contracts with Customers, in order to verify whether the performance obligation has been satisfied and, therefore, are accounted for the sale of the asset. If this requirement is not met, it is a financing with the asset given as collateral. If the requirements related to the performance obligation established in IFRS 15 are met, the Company measures an asset for right of use that arises from the sale transaction with subsequent lease in proportion to the book value of the asset related to the right-of-use assets retained by the Company. Consequently, only the gains or losses related to the rights transferred to the lessor-buyer are recognized.

q)   Return obligations

The aircraft lease agreements of the Company also require that the aircraft components (airframe, APU and landing gears) and engines (overhaul and limited life parts) be returned to lessors under specific conditions of maintenance. The costs of return, which in no case are related to scheduled major maintenance, are estimated, and recognized ratably as a provision from the time it becomes likely such costs will be incurred and can be estimated reliably. These return costs are recognized on a straight-line basis as a component of variable lease expenses and the provision is included as part of other liabilities, through the remaining lease term. The Company estimates the

provision related to aircraft components and engines using certain assumptions including the projected usage of the aircraft and the expected costs of maintenance tasks to be performed. This provision is made in relation to the present value of the expected future costs of meeting the return conditions (Note 14 and 16).

r)   Other taxes and fees payable

The Company is required to collect certain taxes and fees from customers on behalf of government agencies and airports and to remit these to the applicable governmental entity or airport on a periodic basis. These taxes and fees include federal transportation taxes, federal security charges, airport passenger facility charges, and foreign arrival and departure fees. These charges are collected from customers at the time they purchase their tickets but are not included in passenger revenue. The Company records a liability upon collection from the customer and discharges the liability when payments are remitted to the applicable governmental entity or airport.

s)   Income taxes

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current income tax relating to items recognized directly in equity is recognized in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is recognized in respect of temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except, in respect of taxable temporary differences associated with investments in subsidiaries when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, the carry-forward of unused tax credits and any available tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and available tax losses can be utilized, except, in respect of deductible temporary differences associated with investments in subsidiaries deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilized.

The Company considers the following criteria in assessing the probability that taxable profit will be available against which the unused tax losses or unused tax credits can be utilized: (a) whether the entity has sufficient taxable temporary differences relating to the same taxation authority and the same taxable entity, which will result in taxable amounts against which the unused tax losses or unused tax credits can be utilized before they expire; (b) whether it is probable that the Company will have taxable profits before the unused tax losses or unused tax credits expire; (c) whether the unused tax losses result from identifiable causes which are unlikely to recur; and (d) whether tax planning opportunities are available to the Company that will create taxable profit in the period in which the unused tax losses or unused tax credits can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction in OCI.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Income taxes are computed based on tax laws approved in Mexico, Costa Rica, Guatemala and El Salvador at the date of the consolidated statement of financial position.

The IFRIC Interpretation 23 Uncertainty over Income Tax Treatment addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 Income Taxes. It does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:

Whether an entity considers uncertain tax treatments separately.
The assumptions an entity makes about the examination of tax treatments by taxation authorities.
How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.
How an entity considers changes in facts and circumstances.

The Company determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty.

The Company applies significant judgement in identifying uncertainties over income tax treatments. Since the Company operates in a complex multinational environment, it assessed whether the Interpretation had an impact on its consolidated financial statements.

Upon adoption of the Interpretation, the Company considered whether it has any uncertain tax positions, particularly those relating to transfer pricing. The Company’s and the subsidiaries’ tax filings in different jurisdictions include deductions related to transfer pricing and the taxation authorities may challenge those tax treatments. The Company determined, based on its tax compliance and transfer pricing studies, that it is probable that its tax treatments (including those for the subsidiaries) will be accepted by the taxation authorities. As of December 31, 2021 and 2020 the Interpretation did not have an impact on the consolidated financial statements of the Company.

t)   Derivative and non-derivative financial instruments and hedge accounting

The Company mitigates certain financial risks, such as volatility in the price of jet fuel, adverse changes in interest rates and exchange rate fluctuations, through a risk management program that includes the use of derivative financial instruments and non-derivative financial instrument.

In accordance with IFRS 9, derivative financial instruments and non-derivative financial instruments are recognized in the consolidated statement of financial position at fair value. At inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which it wishes to apply hedge accounting, as well as the risk management objective and strategy for undertaking the hedge. The documentation includes the hedging strategy and objective, identification of the hedging instrument, the hedged item or transaction, the nature of the risks being hedged and how the entity will assess the effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk(s).

Only if such hedges are expected to be effective in achieving offsetting changes in fair value or cash flows of the hedge item(s) and are assessed on an ongoing basis to determine that they have been effective throughout the financial reporting periods for which they were designated, hedge accounting treatment can be used.

Under the cash flow hedge (CFH) accounting model, the effective portion of the hedging instrument’s changes in fair value is recognized in OCI, while the ineffective portion is recognized in current year earnings in the statement of profit or loss. The cash flow hedge reserve

is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. The amounts recognized in OCI are transferred to earnings in the period in which the hedged transaction affects earnings. During the year ended December 31, 2021, the Company did not recognize an ineffective portion with respect to derivative financial instruments. As of December 31,2020, the Company recorded the ineffective portion of Ps.448.6 million, with respect to derivative financial instruments. During the year ended December 31, 2019, there was no ineffectiveness with respect to derivative financial instruments.

The realized gain or loss of derivative financial instruments and non-derivative financial instruments that qualify as CFH are recorded in the same caption of the hedged item in the consolidated statement of operations (Note 3 b (i)).

Accounting for the time value of options

The Company accounts for the time value of options in accordance with IFRS 9, which requires all derivative financial instruments to be initially recognized at fair value. Subsequent measurement for options purchased and designated as CFH requires that the option’s changes in fair value be segregated into its intrinsic value (which will be considered the hedging instrument’s effective portion in OCI) and its correspondent changes in extrinsic value (time value and volatility). The extrinsic value changes will be considered as a cost of hedging (recognized in OCI in a separate component of equity) and accounted for in income when the hedged items also are recognized in income.

u)   Financial instruments — Disclosures

IFRS 7 requires a three-level hierarchy for fair value measurement disclosures and requires entities to provide additional disclosures about the relative reliability of fair value measurements (Notes 4 and 5).

v)   Treasury shares

The Company’s equity instruments that are reacquired (treasury shares), are recognized at cost and deducted from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of treasury shares. Any difference between the carrying amount and the consideration received, if reissued, is recognized in additional paid in capital. Share-based payment options exercised during the reporting period were settled with treasury shares (Note 18).

w)   Operating segments

Management of Controladora monitors the Company as a single business unit that provides air transportation and related services, accordingly it has only one operating segment.

The Company has two geographic areas identified as domestic (Mexico) and international (United States of America, Central America and South America) Note 26.

x)   Current versus non-current classification

The Company presents assets and liabilities in the consolidated statement of financial position based on current/non-current classification. An asset is current when it is: (i) expected to be realized or intended to be sold or consumed in normal operating cycle, (ii) expected to be realized within twelve months after the reporting period, or, (iii) cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.

A liability is current when: (i) it is expected to be settled in normal operating cycle, (ii) it is due to be settled within twelve months after the reporting period, or, (iii) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

y)   Impact of new International Financial Reporting Standards

New and amended standards and interpretations already effective

The Company applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after January 1, 2021. The Company has not early adopted any other standard interpretation or amendment that has been issued but is not yet effective.

The nature and the effect of these changes are disclosed below:

Covid-19-Related Rent Concessions beyond June 30, 2021 Amendments to IFRS 16

On May 28, 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the Covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification.

The amendment was intended to apply until June 30, 2021, but as the impact of the Covid-19 pandemic is continuing, on March 31, 2021, the IASB extended the period of application of the practical expedient to June 30, 2022.The amendment applies to annual reporting periods beginning on or after April 1st, 2021. As of December 31, 2021 this amendment did not have impact on the consolidated financial statements of the Company (Note 14).

Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR).

The amendments include the following practical expedients:

A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest
Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued
Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk component.

These amendments had no impact on the consolidated financial statements of the Company (Note 3c).

Standards issued but not yet effective

Annual Improvements to IFRS Standards 2018–2020

IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities

As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is effective for annual reporting periods beginning on or after January 1st, 2022 with earlier adoption permitted. The Company expects to adopt the improvements in their effective dates considering preliminarily no significant effects.

Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16

In May 2020, the IASB issued Property, Plant and Equipment - Proceeds before Intended Use, which prohibits entities deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the costs of producing those items, in profit or loss.

The amendment is effective for annual reporting periods beginning on or after January 1st, 2022 and must be applied retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The Company expects to adopt the amendments in their effective dates considering preliminarily no significant effects.

Reference to the Conceptual Framework – Amendments to IFRS 3

In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements.

The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately.

At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements. The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively. The Company expects to adopt the amendments  in their effective dates considering preliminarily no significant effects.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

What is meant by a right to defer settlement.
That a right to defer must exist at the end of the reporting period.
That classification is unaffected by the likelihood that an entity will exercise its deferral right.
That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

The amendments are effective for annual reporting periods beginning on or after January 1st, 2023 and must be applied retrospectively. The Company is currently assessing the impact of these amendments which expects to adopt in their effective date.

Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2

In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments to IAS 1 are applicable for annual periods beginning on or after January 1st, 2023 with earlier application permitted. Since the amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the definition of material to accounting policy information, an effective date for these amendments is not necessary.

The Company is currently assessing the impact of these amendments which expects to adopt in their effective date.

Definition of Accounting Estimates – Amendments to IAS 8

In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of “accounting Estimates”. The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates.

The amendments are effective for annual reporting periods beginning on or after January 1st, 2023 and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Earlier application is permitted as long as this fact is disclosed. The Company is currently assessing the impact of these amendments which expects to adopt in their effective date.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

The amendments to IAS 12 Income Taxes require companies to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations and will require the recognition of additional deferred tax assets and liabilities. The amendment is effective for annual reporting periods beginning on January 1st, 2023 and should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, entities should recognize deferred tax assets (to the extent that it is probable that they can be utilized) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary differences associated with:

Right-of-use assets and lease liabilities, and
Decommissioning, restoration and similar liabilities, and the corresponding amounts recognized as part of the cost of the related assets.

The cumulative effect of recognizing these adjustments is recognized in retained earnings, or another component of equity, as appropriate.

IAS 12 did not previously address how to account for the tax effects of on-balance sheet leases and similar transactions and various approaches were considered acceptable.

At the date of adoption of IFRS 16, the Company applied the criterion of recognizing the deferred assets and liabilities associated with the lease liability and the right of use, which is consistent with this amendment to IAS 12, and therefore this will not generate effects in the Company. (Note 20).

z)  Convenience translation

U.S. dollar amounts on December 31, 2021 shown in the consolidated financial statements have been included solely for the convenience of the reader and are translated from Mexican pesos, using an exchange rate of Ps.20.5835 per U.S. dollar, 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 in effect on December 31, 2021. Such translation should not be construed as a representation that the peso amounts have been or could be converted into U.S. dollars at this or any other rate. The referred information in U.S. dollars is not audited, is solely for information purposes and does not represent that the amounts are in accordance with IAS 21 Effects of variations in foreign currency exchange rates or the equivalent in U.S. dollars in which the transactions were conducted or in which the amounts presented in Mexican pesos can be translated or realized.

v3.22.1
Significant accounting judgments, estimates and assumptions
12 Months Ended
Dec. 31, 2021
Significant accounting judgments, estimates and assumptions  
Significant accounting judgments, estimates and assumptions

2.  Significant accounting judgments, estimates and assumptions

The preparation of these financial statements requires management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities at the date of the Company’s consolidated financial statements. Note 1 to the Company’s consolidated financial statements provides a detailed discussion of the significant accounting policies.Certain of the Company’s accounting policies reflect significant judgments, assumptions or estimates about matters that are both inherently uncertain and material to the Company’s financial position or results of operations.

Actual results could differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimate is revised. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

For Leases significant accounting judgments, estimates and assumptions refer to Note 1q.

i)  Return obligations

The aircraft lease agreements of the Company also require that the aircraft components (airframe, APU and landing gears) and engines (overhaul and limited life parts) be returned to lessors under specific conditions of maintenance. The costs of return, which in no case are related to scheduled major maintenance, are estimated and recognized ratably as a provision from the time it becomes likely such costs will be incurred and can be estimated reliably. These return costs are recognized on a straight-line basis as a component of variable lease expenses and the provision is included as part of other liabilities, through the remaining lease term. The Company estimates the provision related to aircraft components and engines using certain assumptions including the projected usage of the aircraft and the expected costs of maintenance tasks to be performed. This provision is made in relation to the present value of the expected future costs of meeting the return conditions (Note 14 and 16).

ii)  Deferred taxes

Deferred tax assets are recognized for all available tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Management’s judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning opportunities to advance taxable profit before expiration of available tax losses.

Tax losses relate to operations of the Company on a stand-alone basis, in conformity with current Tax Law and may be carried forward against taxable income generated in the succeeding years at each country and may not be used to offset taxable income elsewhere in the Company’s consolidated group (Note 20).

During the years ended December 31, 2021, 2020 and 2019, the Company utilized Ps.1,944,922, Ps.0 and Ps.214,460, respectively, of the available tax loss carry-forwards.

iii)  Fair value measurement of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the consolidated statements of financial position cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flows model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values.

The judgments include considerations of inputs such as liquidity risk, credit risk and expected volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments (Note 4).

iv)  Impairment of long-lived assets

The Company assesses whether there are indicators of impairment for long-lived assets and right of use assets, annually and at other times when such indicators exist in the related CGU. Impairment exists when the carrying amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less cost to sell and its value-in-use.

In making these determinations, the Company uses certain assumptions, including, but not limited to estimated, undiscounted future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company’s operations, excluding additions and extensions.

The Company’s assumptions about future conditions important to its assessment of potential impairment of its long-lived assets, including the impact of the COVID-19 pandemic to its business, are subject to uncertainty, and the Company will continue to monitor these conditions in future periods as new information becomes available, and will updated its analyses accordingly.

For the year ended December 31, 2021 the Company has evaluated whether there were indications of impairment in its long-lived assets and right-of-use assets and concluded that there are no triggering events.

For the year ended December 31, 2020 the Company evaluated whether there were indications of impairment and concluded that there were triggering events. Therefore, performed a quantitative impairment test and estimated the recoverable amount of the CGU by calculating the CGU value in use. As a result of this analysis, the Company determined the recoverable amount was in excess of the CGU book value and, therefore, no impairment was recorded.

v)  Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in its leases, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating).

v3.22.1
Financial instruments and risk management
12 Months Ended
Dec. 31, 2021
Financial instruments and risk management  
Financial instruments and risk management

3.  Financial instruments and risk management

Financial risk management

The Company’s activities are exposed to different financial risks stemmed from exogenous variables which are not under their control but whose effects might be potentially adverse such as: (i) market risk, (ii) credit risk, and (iii) liquidity risk.

The Company’s global risk management program is focused on uncertainty in the financial markets and tries to minimize the potential adverse effects on net earnings and working capital requirements. The Company uses derivative financial instruments to hedge part of such risks. The Company does not enter into derivatives for trading or speculative purposes. The sources of these financial risk exposures

are included in both “on balance sheet” exposures, such as recognized financial assets and liabilities, as well as in “off-balance sheet” contractual agreements and on highly expected forecasted transactions.

These on and off-balance sheet exposures, depending on their profiles, do represent potential cash flow variability exposure, in terms of receiving less inflows or facing the need to meet outflows which are higher than expected, therefore increase the working capital requirements.

Since adverse movements erode the value of recognized financial assets and liabilities, as well some other off-balance sheet financial exposures, there is a need for value preservation, by transforming the profiles of these fair value exposures. The Company has a Finance and Risk Management department, which identifies and measures financial risk exposures, in order to design strategies to mitigate or transform the profile of certain risk exposures, which are taken up to the corporate governance level for approval.

Market risk

a)  Jet fuel price risk

Since the contractual agreements with jet fuel suppliers include reference to jet fuel index, the Company is exposed to fuel price risk which might have an impact on the forecasted consumption volumes. The Company’s jet fuel risk management policy aims to provide the Company with protection against increases in jet fuel prices. In an effort to achieve the aforesaid, the risk management policy allows the use of derivative financial instruments available on over the counter (“OTC”) markets with approved counterparties and within approved limits. Aircraft jet fuel consumed in the years ended December 31, 2021, 2020 and 2019 represented 34%, 26% and 38% (includes derivative and non-derivative financial instruments) of the Company’s operating expenses, respectively. The foreign currency risk is disclosed within subsection b) in this note.

During the year ended December 31, 2021, the Company did not enter into derivative financial instruments to hedge US Gulf Coast Jet Fuel 54 Asian call options and US Gulf Coast Jet Fuel 54 Asian Zero-Cost collar options. As of the year ended December 31, 2020, the Company entered into US Gulf Coast Jet fuel 54 Asian call options designated to hedge 23,967 thousand gallons. Such hedges represented a portion of the projected consumption for the 2Q20, 3Q20 & 1Q21. Additionally, during the year ended December 31, 2020, the Company entered into US Gulf Coast Jet Fuel 54 Asian Zero-Cost collar options designated to hedge 81,646 thousand gallons. Such hedges represented a portion of the projected consumption for the 2Q20, 2H20 & 2Q21.

As of the year ended December 31, 2020 the Company recognized an unwind of the Zero cost collar of Ps.42,643 which was recognized as part of finance cost.

In accordance with IFRS 9 the Company separates the intrinsic value from the extrinsic value of an option contract; as such, the change in the intrinsic value can be designated as hedge accounting. Because extrinsic value (time and volatility values) of the Asian call options is related to a “transaction related hedged item”, it is required to be segregated and accounted for as a cost of hedging in OCI and accrued as a separate component of stockholders’ equity until the related hedged item matures and therefore impacts profit and loss.

The underlying (US Gulf Coast Jet Fuel 54) of the options held by the Company is a consumption asset (energy commodity), which is not in the Company’s inventory. Instead, it is directly consumed by the Company’s fleet at different airport terminals. Therefore, although a non-financial asset is involved, its initial recognition does not generate an adjustment in the Company’s inventories.

Rather, it is initially accounted for in the Company’s OCI and a reclassification adjustment is made from OCI to profit and loss and recognized in the same period or periods in which the hedged item is expected to be allocated to profit and loss. Furthermore, the Company hedges its forecasted jet fuel consumption month after month, which is congruent with the maturity date of the monthly serial “Asian call options and Zero-Cost Collars”.

All the Company’s Asian calls matured throughout the first quarter of 2021. The Zero-Cost Collars matured throughout the second quarter of 2021, leaving no outstanding fuel position going forward as of December 31, 2021.

As of December 31, 2020, the fair value of the outstanding US Gulf Coast Jet Fuel Asian call options was an unrealized gain of Ps.206; as for the Zero-Cost Collars it was an unrealized loss of Ps.9,657 and is presented as part of the derivative financial assets and derivative financial liabilities in the consolidated statement of financial position. (See Note 4).

During the year ended December 31, 2021, the intrinsic value of the Asian call options recycled to the fuel cost was an expense of Ps.12,577.

During the year ended December 31, 2020, the intrinsic value of the Asian call options recycled to the fuel cost was an expense of Ps.33,627 (Ps.20,646 which was recognized in the fuel cost and an expense of Ps.12,981 in finance cost). During the year ended December 31, 2019, the intrinsic value of the Asian call options recycled to the fuel cost was an expense of Ps.61,069.

During the year ended December 31, 2021, there was no cash flow to recycle for the Zero-Cost collar position.

During the year ended December 31, 2020, the intrinsic value of the Zero-Cost Collars recycled to the fuel cost was an expense of Ps.1,271,462 (Ps.835,884 which was recognized in the fuel cost and an expense of Ps.435,578 in finance cost) and for the year ended December 2019 the intrinsic value of the Zero-Cost Collars recycled to the fuel cost was an expense of Ps.9,477.

The cost of hedging derived from the extrinsic value changes of the jet fuel hedged position as of December 31, 2020 recognized in other comprehensive income totals Ps.21,650. As of December 31, 2019 the benefits of the hedges was Ps.(133,567), and was recycled to the fuel cost in 2021, as these options were expired on a monthly basis and the jet fuel was consumed.

During the year ended December 31, 2021, all the derivative financial instruments were effective.

For the period ended December 31, 2021, there was no cost of hedging as all the derivatives position matured all through 2Q21.

As of December 31,2021, the Company didn´t hold any outstanding fuel position.

The following table includes the notional amounts and strike prices of the derivative financial instruments outstanding as of the end of December 2020:

Position as of December 31, 2020

Jet fuel Asian call and Zero-Cost

collars option contracts maturities

    

1 Half 2021

    

2 Half 2021

    

2021 Total

Jet fuel risk Asian Calls

 

  

 

  

 

  

 

Notional volume in gallons (thousands)*

 

7,280

 

 

7,280

 

Strike price agreed rate per gallon (U.S.dollars) **

 

US$

1.90

 

 

US$

1.90

 

Approximate percentage of hedge (of expected consumption value)

 

6

%  

%  

3

%

Jet fuel risk Zero-Cost collars

Notional volume in gallons (thousands)*

7,556

7,556

Strike price agreed rate per gallon (U.S. dollars) **

US$

1.23/1.93

US$

US$

1.23/1.93

Approximate percentage of hedge (of expected consumption value)

6

%  

%  

3

%

All-in

Approximate percentage of hedge (of expected consumption value)

12

%  

%  

6

%

* US Gulf Coast Jet 54 as underlying asset

** Weighted average

Fuel Sensitivity

The sensitivity analysis provided below presents the impact of a change of US$0.01 per gallon in fuel market spot price in the Company´s financial performance. Considering these figures, an increase of US$0.01 per gallon in the fuel prices during 2021 and 2020 would have impacted the Company’s operating costs in US$2,731 and US$1,762, respectively.

As of December 31, 

2021

2020

    

Operating costs

    

Operating costs

(In thousands of U.S. dollars)

+ US$0.01 per gallon

2,731

1,762

- US$0.01 per gallon

(2,731)

(1,762)

The Company has been proactively trying to mitigate this impact over our business through revenue yielding and a continued effort towards a reduced fuel consumption. Nonetheless, our ability to pass on any significant increases in fuel costs through fare increases is also limited by our ultra-low-cost business model and market high elasticity to price.

b)  Foreign currency risk

On December 31, 2021 the Company and its main subsidiary Concesionaria changed their functional currency from the Mexican Pesos to the US Dollar. The change of functional currency was accounted for prospectively with no impact on prior period information (Note 1m).

Through the year ending December 31, 2021 and before the change, the Mexican peso was the functional currency of Controladora and its main subsidiary Concesionaria, a significant portion of its operating expenses are denominated in U.S. dollar; thus, the Company relies on sustained U.S. dollar cash flows coming from operations in the United States of America, Central America and South America to support part of its commitments in such currency.

Foreign currency risk arises from possible unfavorable movements in the exchange rate which could have a negative impact in the Company’s cash flows. To mitigate this risk, the Company may use foreign exchange derivative financial instruments and non-derivative financial instruments.

Company’s expenditures, particularly those related to aircraft leasing and acquisition, are denominated in U.S. dollar. In addition, although jet fuel for those flights originated in Mexico are paid in Mexican pesos, the price formula is impacted by the Mexican peso /U.S. dollar exchange rate.

The Company’s exposure to currency risk as of December 31, 2021 is as set forth below:

    

USD

    

Mexican Pesos

    

Others*

    

Total

Assets:

Cash, cash equivalents and restricted cash

 

Ps.

14,311,541

Ps.

817,735

Ps.

125,600

Ps.

15,254,876

Other accounts receivable, net

 

830,688

 

193,727

 

10,189

 

1,034,604

Guarantee deposits

 

10,992,268

 

 

6,772

 

10,999,040

Total assets

 

Ps.

26,134,497

Ps.

1,011,462

Ps.

142,561

Ps.

27,288,520

Liabilities:

 

  

 

  

 

  

 

  

Financial debt

 

Ps.

3,552,092

Ps.

2,724,588

Ps.

Ps.

6,276,680

Lease liabilities

 

53,326,884

 

 

1,588

 

53,328,472

Suppliers

 

2,504,827

 

3,290,110

 

127,667

 

5,922,604

Other taxes and fees payable

 

62,533

 

2,300,533

 

337,117

 

2,700,183

Total liabilities

 

Ps.

59,446,336

Ps.

8,315,231

Ps.

466,372

Ps.

68,227,939

Net foreign currency position

 

Ps.

(33,311,839)

Ps.

(7,303,769)

Ps.

(323,811)

Ps.

(40,939,419)

*The foreign exchange exposure includes: Quetzales, Colombian pesos and Colones.

The Company’s foreign exchange exposure as of December 31, 2020  is as set forth below:

Thousands of U.S. dollars

    

2020

Assets:

 

  

Cash, cash equivalents and restricted cash

 

US$

495,612

Other accounts receivable, net

 

39,997

Guarantee deposits

 

479,566

Derivative financial instruments

 

10

Total assets

 

US$

1,015,185

Liabilities:

 

Financial debt (Note 5)

 

US$

183,806

Lease liabilities

2,334,153

Suppliers

 

174,553

Other taxes and fees payable

 

16,105

Derivative financial instruments

 

484

Total liabilities

 

2,709,101

Net foreign currency position

 

US$

(1,693,916)

At April 26, 2022, date of issuance of these financial statements, the exchange rate was Ps.20.3183 per U.S. dollar.

In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company initially recognizes the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Company determines the transaction date for each payment or receipt of advance consideration.

As of December 31, 2021 and 2020, the Company did not enter into foreign exchange rate derivatives financial instruments. All the Company’s remaining position in FX plain vanilla forwards matured throughout the first quarter of 2019 (January).

For the year ended December 31, 2019, the net gains on the foreign currency forward contracts were Ps.4,199, which were recognized as part of rental expense in the consolidated statements of operations.

Foreign currency sensitivity

On December 31, 2021, the Company and its main subsidiary Concesionaria changed its functional currency from the Mexican peso to the US dollar. The following table demonstrates the sensitivity of a possible change in Mexican peso exchange rate to US dollar that would affect the Company prospectively from December 31, 2021 considering the change in functional currency, with all other variables held constant. The movement in the pre-tax effect shown below represents the result of a change in the fair value of assets and liabilities denominated in Mexican peso. The Company’s exposure to foreign currency exchange rates for all other currencies is not material.

    

Change in

    

Effect on profit

 MXN$ rate

 before tax

2021

 

+5

%  

Ps.

(69,942)

 

-5

%  

69,942

The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rates that would have occurred as of December 31, 2021 before consideration of the change in functional currency of Concesionaria and Controladora, with all other variables held constant. The movement in the pre-tax effect is a result of a change in the fair value of assets and liabilities denominated in US dollars before the change in functional currency. The Company’s exposure to foreign currency changes for all other currencies is not material.

    

Change in 

    

Effect on profit

USD$ rate

before tax

2021

 

+5

%  

Ps.

(1,439,653)

 

-5

%  

1,439,653

2020

 

+5

%  

Ps.

(253,763)

 

-5

%  

253,763

i)  Hedging relationships designating non-derivative financial instruments as hedging instruments for Foreign Exchange (FX) risk

Regarding the foreign currency risk effective since January 1st, 2019, the Company implemented two hedging strategies associated to forecasted FX exposures, by using non-derivatives financial assets and liabilities denominated in USD as hedging instruments.

In the first FX hedging strategy, the Company designated a hedge to mitigate the variability in FX fluctuation denominated in USD associated to forecasted revenues by using a portion of USD denominated financial liabilities associated to a portfolio of leasing liabilities up until the terms of the remaining leasing arrangements.

As of December 31, 2021, there was not outstanding USD balance designated under this hedging strategy due to the discontinuation of the hedge relationships. The outstanding USD balance designated under this hedging strategy as of December 31, 2020 amount to USD $1.5 billion, represented by recognized leasing liabilities, which have been designated as hedging instruments tagged to USD denominated forecasted revenues over the remaining lease term.

Additionally, during the year ended December 31, 2021 and 2020, the impact of these hedges was Ps.434,522 and Ps.411,222, respectively, which has been presented as part of the total operating revenue.

The second FX strategy consisted on designating a hedging relationship by using a portion of USD denominated non-derivative financial assets as hedging instruments, to mitigate the FX variability (MXN/USD) contractually included as a component in the purchase of a portion of future Jet Fuel consumption. For this strategy designated in 2019, a portion of the Jet Fuel consumption over the two following years was designated as hedged item; while the hedging instrument was represented by USD denominated recognized assets, including guaranteed deposits and cash and cash equivalents equivalent to USD$410 million, which represent a portion of the financial assets denominated in USD.

During the first quarter of 2021, the designated hedging instrument back in 2019 for USD$410 million expired consistent with the same foreign exchange strategy, the Company decided to designate a new hedging relationship, like the one concluded. For this new strategy a portion of the Jet Fuel consumption over the two following years has been designated as hedged item; while the hedging instrument was represented by USD denominated recognized assets, including guaranteed deposits and cash and cash equivalents equivalent to USD$350 million, which represent a portion of the financial assets denominated in USD.

As of December 31, 2021, there was not outstanding USD balance designated under this hedging strategy due to the discontinuation of the hedge relationships.The outstanding USD balance designated under this hedging strategy as of December 31, 2020 amount to USD$60.5 million, which does represent a portion of the recognized financial assets.

During the year ended December 31, 2021 and 2020, the impact of these hedges was Ps.182,190 and Ps.409,174, respectively, which has been presented as part of the total fuel expense.

Since the hedged items on for both hedging strategies were targeted at mitigating the cash flow variability of highly expected forecasted transactions, these were represented by multiple hedging relationships which do follow the Cash Flow Hedge Accounting Model.

The effective portion of the hedging instrument’s changes in fair value, were taken to the hedge reserve within the OCI, presented as a separate caption within the Company’s Stakeholders Equity, which is in accordance with IFRS 9 criteria.

The amounts recorded in OCI were recycled to profit and loss on a timely basis as corresponding USD denominated Income and/or Jet Fuel consumptions also affected the Company’s operating margin and are presented as adjustments to both operating income and expense, with respect to each FX hedging strategy in a timely manner, as USD denominated income and jet fuel consumption were recognized within operating earnings, hence reflecting a portion of both operating income and expenses amounts, net of both FX Hedging activities.

As of December 31, 2021, as a result of the change in functional currency from the Mexican peso to the US dollar, the Company concluded that these hedging strategies will no longer be effective, for which reason it accounted for the discontinuation of the hedge relationships. Accordingly, the cash flow hedge reserve in other comprehensive income at the date of the change of Ps.2,251,442 or US$109 million was reclassified to the income statement, which represented a loss within the foreign exchange (loss) gain, net caption.

c)  Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations and flight equipment lease agreements with floating interest rates.

The Company’s results are affected by fluctuations in certain benchmark market interest rates due to the impact that such changes may have on operational lease payments indexed to the London Inter Bank Offered Rate (“LIBOR”).

For the replacement of the USD LIBOR by the Secured Overnight Financing Rate (“SOFR”) the company is taking the necessary measures to adopt the new benchmark rates. Although USD LIBOR was planned to be discontinued by the end of 2021, in November 2020 the ICE Benchmark Administration (“IBA”), the FCA-regulated and authorized administrator of LIBOR, announced that it had started to consult on its intention to cease the publication of certain USD LIBORs after June 2023. As of 31 December 2021, it is still unclear when the announcement that will set a date for the termination of the publication of US dollar LIBOR will take place.

The Company uses derivative financial instruments to reduce its exposure to fluctuations in market interest rates and accounts for these instruments as an accounting hedge.

In most cases, when a derivative can be tailored within the terms and it perfectly matches cash flows of a leasing agreement, it may be designated as a CFH and the effective portion of fair value variations are recorded in equity until the date the cash flow of the hedged lease payment is recognized in the consolidated statements of operations.

The Irrevocable Trust number CIB/3249, whose trustor is the Company, entered a cap to mitigate the risk due to interest rate increases on the CEBUR (VOLARCB19) coupon payments. The floating rate coupons reference to TIIE 28 are limited under the cap to 10% on the reference rate for the life of the CEBUR (VOLARCB19) and have the same amortization schedule. Thus, the cash flows of the CEBUR (VOLARCB19) are perfectly matched by the hedging instrument.

The sensitivity analysis of the change in the fair value of the interest hedging instrument on the CEBUR (VOLARCB19) as a result of a reasonably possible change in rates, keeping all other variables constant is as set forth below:

    

Change in 

    

    

MX$ rate

Effect on cap

 

2021

 

+0.01

%  

Ps.

(30.86)

 

-0.01

%  

30.86

2020

 

+0.01

%  

Ps.

(0.28)

 

-0.01

%  

0.28

The cap start date was July 19, 2019, and the maturity date is June 20, 2024; consisting of 59 “caplets” with the same specifications as the CEBUR (VOLARCB19) coupons for reference rate determination, coupon term, and fair value.

In addition, during November 2021 the Trust entered into a cap to mitigate the risk due to interest rate increases on the CEBUR (VOLARCB21L) coupon payments. The floating rate coupons reference to TIIE 28 are limited under the cap to 10% on the reference rate for the life of the CEBUR (VOLARCB21L) and have the same amortization schedule. Thus, the cash flows of the CEBUR (VOLARCB21L) are perfectly matched by the hedging instrument.

The cap start date was November 3, 2021, and the maturity date is October 20, 2026; consisting of 59 “caplets” with the same specifications as the CEBUR (VOLARCB21L) coupons for reference rate determination, coupon term, and fair value.

The sensitivity analysis of the change in the fair value of the interest hedging instrument on the CEBUR (VOLARCB21L) as a result of a reasonably possible change in rates, keeping all other variables constant is as set forth below:

    

    

Change in 

MX$ rate

Effect on cap

2021

 

+0.01

%  

Ps.

(165.44)

 

-0.01

%  

165.44

As of December 31, 2021 and December 31, 2020, the Company’s outstanding hedging contracts in the form of interest rate caps with original notional amount of Ps.3.0 billion and Ps.1.5 billion, respectively, had fair values of Ps.28,771 and Ps.326, respectively, and are presented as part of the financial assets in the consolidated statement of financial position. As of December 31, 2021, the effect allocated in OCI in relation to the interest rate caps amounts to Ps.5,407.

Debt Sensitivity Analysis

The following sensitivity analysis considers the position exposed to variable interest rates.

The target interest rate of the Banco de Mexico increased 125 bp in 2021, going from 4.25% to 5.50%. In addition to the reference changes, if the interest rate had changed on an annual average in the magnitude shown, the impact on results would have been as shown below:

    

As of December 31, 2021

    

As of December 31, 2020

+ 100 BP

- 100 BP

+ 100 BP

- 100 BP

Banco Nacional de Comercio Exterior, S.N.C. (“Bancomext”)

 

138,476

 

(138,476)

 

155,332

 

(155,332)

Asset backed trust notes (“CEBUR”)

 

133,173

 

(133,173)

 

131,054

 

(131,054)

Banco Sabadell S.A., Institución de Banca Múltiple (“Sabadell”)

 

16,064

 

(16,064)

 

18,086

 

(18,086)

d)  Liquidity risk

Liquidity risk represents the risk that the Company has insufficient funds to meet its obligations.Because of the cyclical nature of the business, the operations, and its investment and financing needs related to the acquisition of new aircraft and renewal of its fleet, the Company requires liquid funds to meet its obligations.

The Company attempts to manage its cash and cash equivalents and its financial assets, relating the term of investments with those of its obligations. Its policy is that the average term of its investments may not exceed the average term of its obligations. This cash and cash equivalents position is invested in highly liquid short-term instruments through financial entities.

The Company has future obligations related to maturities of bank borrowings, lease liabilities and derivative contracts. The Company’s off-balance sheet exposure represents the future obligations related to aircraft purchase contracts. The Company concluded that it has a low concentration of risk since it has access to alternate sources of funding.

As of December 31, 2021, our cash, cash equivalents and restricted cash were Ps.15,254,876.

The table below presents the Company’s contractual principal payments required on its financial liabilities and the derivative financial instruments fair value:

    

December 31, 2021

Within one 

One to five 

    

year

    

years

    

Total

Interest-bearing borrowings:

Pre-delivery payments facilities (Note 5)

 

Ps.

3,535,649

 

Ps.

 

Ps.

3,535,649

Asset backed trust note (“CEBUR”) (Note 5)

500,000

2,250,000

 

  

2,750,000

Lease liabilities:

  

 

  

  

 

  

  

Aircraft, engines, land and buildings leases

5,842,492

43,807,747

 

  

49,650,239

Aircraft and engine lease return obligation

451,788

3,436,001

 

  

3,887,789

Total

 

Ps.

10,329,929

 

Ps.  

49,493,748

 

Ps.  

59,823,677

December 31, 2020

Within one

    

One to five

    

    

year

    

years

    

Total

Interest-bearing borrowings:

Pre-delivery payments facilities (Note 5)

Ps.

1,096,543

Ps.

2,554,069

Ps.

3,650,612

Short-term working capital facilities (Note 5)

 

200,000

 

 

200,000

Asset backed trust note (“CEBUR”) (Note 5)

250,000

1,250,000

1,500,000

Derivative financial instruments:

Jet fuel Asian Zero-Cost collars options contracts

9,657

9,657

Lease liabilities:

Aircraft, engines, land and buildings leases

6,484,092

37,646,450

44,130,542

Aircraft and engine lease return obligation

86,801

2,417,683

2,504,484

Total

Ps.

8,127,093

Ps.

43,868,202

Ps.

51,995,295

e)  Credit risk

Credit risk is the risk that any counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments including derivatives.

Financial instruments that expose the Company to credit risk involve mainly cash equivalents and accounts receivable. Credit risk on cash equivalents relate to amounts invested with major financial institutions.

Credit risk on accounts receivable relates primarily to amounts receivable from the major international credit card companies. The Company has a high receivable turnover; hence management believes credit risk is minimal due to the nature of its businesses, which have a large portion of their sales settled in credit cards.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

Some of the outstanding derivative financial instruments expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. However, the Company does not expect any of its counterparties to fail to meet their obligations. The amount of such credit exposure is generally the unrealized gain, if any, in such contracts.

To manage credit risk, the Company selects counterparties based on credit assessments, limits overall exposure to any single counterparty and monitors the market position with each counterparty. The Company does not purchase or hold derivative financial instruments for trading purposes. On December 31, 2021, the Company concluded that its credit risk related to its outstanding derivative financial instruments is low, since it has no significant concentration with any single counterparty and it only enters into derivative financial instruments with banks with high credit-rating assigned by international credit-rating agencies.

f)  Capital management

Management believes that the resources available to the Company are enough for its present requirements and will be sufficient to meet its anticipated requirements for capital expenditures and other cash requirements for the next fiscal year.

The primary objective of the Company’s capital management is to ensure that it maintains healthy capital ratios to support its business and maximize the shareholder’s value. No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2021 and 2020. The Company is not subject to any externally imposed capital requirement, other than the legal reserve (Note 19).

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

v3.22.1
Fair value measurements
12 Months Ended
Dec. 31, 2021
Fair value measurements  
Fair value measurements

4.  Fair value measurements

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

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

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

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

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

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

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

Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

Set out below, is a comparison by class of the carrying amounts and fair values of the Company’s financial instruments, other than those for which carrying amounts are reasonable approximations of fair values:

Carrying amount

Fair value

December 31, 

December 31, 

December 31, 

December 31, 

    

2021

    

2020

    

2021

    

2020

Assets

Derivative financial instruments

Ps.

28,771

Ps.

532

Ps.

28,771

Ps.

532

Liabilities

 

 

 

  

 

  

Financial debt (Interest-bearing loans and borrowings)

 

(6,285,649)

 

(5,350,612)

 

(6,234,241)

 

(5,527,332)

Derivative financial instruments

 

 

(9,657)

 

 

(9,657)

Total

Ps.

(6,256,878)

Ps.

(5,359,737)

Ps.

(6,205,470)

Ps.

(5,536,457)

The following table summarizes the fair value measurements on December 31, 2021:

Fair value measurement

    

Quoted prices

    

Significant

    

Significant

    

in active

observable

unobservable

markets

inputs

inputs

    

Level 1

    

Level 2

    

Level 3

    

Total

Assets

Derivatives financial instruments:

 

  

 

  

 

  

 

  

Interest rate Caps

Ps.

Ps.

28,771

Ps.

Ps.

28,771

Liabilities

 

  

 

  

 

  

 

  

Liabilities for which fair values are disclosed:

 

  

 

  

 

  

 

  

Interest-bearing loans and borrowings**

 

 

(6,234,241)

 

 

(6,234,241)

Net

Ps.

Ps.

(6,205,470)

Ps.

Ps.

(6,205,470)

** LIBOR, SOFR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt.

There were no transfers between level 1 and level 2 during the period.

The following table summarizes the fair value measurements on December 31, 2020:

Fair value measurement

    

Quoted prices

    

Significant

    

Significant

    

 

in active

observable

unobservable

 

markets

inputs

inputs

 

Level 1

Level 2

Level 3

Total

Assets

 

  

 

  

 

  

 

  

Derivatives financial instruments:

 

  

 

  

 

  

 

  

Jet fuel Asian call options contracts*

 

Ps.

 

Ps.

206

 

Ps.

 

Ps.

206

Interest rate Caps

 

 

326

 

 

326

Liabilities

 

  

 

 

  

 

Derivatives financial instruments:Jet fuel Asian Zero-Cost collars options contracts*

(9,657)

(9,657)

Liabilities for which fair values are disclosed:

 

  

 

 

  

 

Interest-bearing loans and borrowings**

 

 

(5,527,332)

 

 

(5,527,332)

Net

 

Ps.

 

Ps.

(5,536,457)

 

Ps.

 

Ps.

(5,536,457)

* Jet fuel forwards levels and LIBOR curve.

** LIBOR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt.

There were no transfers between level 1 and level 2 during the period.

The following table summarizes the losses from derivatives financial instruments recognized in the consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019:

    

    

    

    

Instrument

    

Financial statements line

    

2021

    

2020

    

2019

Jet fuel Asian call options contracts

 

Fuel

Ps.

(12,577)

Ps.

(20,646)

Ps.

(61,069)

Jet fuel Zero-Cost collars contracts

 

Fuel

(835,884)

(9,477)

Jet fuel Asian call options contracts

Finance cost

(12,981)

Jet fuel Zero-Cost collars contracts

Finance cost

(435,578)

Foreign currency forward

Aircraft and engine rent expenses

4,199

Interest rate cap

Finance cost

(1,443)

(1,468)

(1,282)

Total

 

  

Ps.

(14,020)

Ps.

(1,306,557)

Ps.

(67,629)

The following table summarizes the net gain (loss) on CFH before taxes recognized in the consolidated statements of comprehensive income for the years ended December 31, 2021, 2020 and 2019:

Consolidated statements of other comprehensive income (loss)

    

Financial 

    

    

    

Instrument

    

statements line

    

2021

    

2020

    

2019

Jet fuel Asian call options contracts

 

OCI

Ps.

11,997

Ps.

(11,993)

Ps.

11,148

Jet fuel Zero cost collars

OCI

9,657

(143,224)

256,515

Foreign currency contracts

 

OCI

 

 

 

(14,241)

Interest rate cap

OCI

(2,800)

(900)

(4,023)

Non derivative financial instruments*

OCI

1,577,473

(1,591,569)

14,096

Total

 

Ps.

1,596,327

Ps.

(1,747,686)

Ps.

263,495

*As of December 31, 2021, includes the effect of the discontinuation of the hedging strategies by Ps.2,251,442 as described in note 3b (i).

The exchange rates used to translate the above amounts to Mexican pesos at December 31, 2021, 2020 and 2019 were Ps.20.5835, Ps.19.9487 and Ps.18.8452, respectively, per U.S. dollar.

v3.22.1
Financial assets and liabilities
12 Months Ended
Dec. 31, 2021
Financial assets and liabilities  
Financial assets and liabilities

5.  Financial assets and liabilities

As of December 31, 2021 and 2020, the Company’s financial assets are represented by cash, cash equivalents and restricted cash, trade and other accounts receivable, accounts receivable for which their carrying amount is a reasonable approximation of fair value.

a) Financial assets

December 31, 

December 31, 

    

2021

    

2020

Derivative financial instruments designated as cash flow hedges (effective portion recognized within OCI)

 

  

 

  

Jet fuel Asian call options

Ps.

Ps.

206

Interest rate cap

28,771

326

Total derivative financial assets

Ps.

28,771

Ps.

532

Presented on the consolidated statements of financial position as follows:

 

 

Current

Ps.

Ps.

206

Non-current

Ps.

28,771

Ps.

326

b) Financial debt

(i) As of December 31, 2021 and 2020, the Company’s short-term and long-term debt consists of the following:

December 31, 

December 31, 

    

2021

    

2020

I.

Revolving line of credit with Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander (“Santander”) and Banco Nacional de Comercio Exterior, S.N.C. (“Bancomext”), in U.S. dollars, to finance pre-delivery payments, maturing on October 31, 2022, bearing annual interest rate at the three-month LIBOR plus a spread of 260 basis points.

Ps.

3,535,649

Ps.

3,650,612

II.

In June 2019 the Company issued in the Mexico market Asset backed trust notes (“CEBUR”), in Mexican pesos, maturing on June 20th, 2024 bearing annual interest rate at TIIE 28 days plus 175 basis points.

1,250,000

1,500,000

III.

In October 2021 the Company issued in the Mexico market a second tranche of its Asset backed trust notes (“CEBUR”), in Mexican pesos, maturing on October 20th, 2026 bearing annual interest rate at TIIE 28 days plus 200 basis points.

 

1,500,000

 

IV.

In December 2019, the Company entered into a short-term working capital facility with Banco Sabadell S.A., Institución de Banca Multiple (“Sabadell”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a spread of 300 basis points.

 

 

200,000

V.

Amortized transaction costs

(31,408)

(15,542)

VI.

Accrued interest and other financial cost

 

22,439

 

19,563

  

 

6,276,680

 

5,354,633

Less: Short-term maturities

 

4,052,859

 

1,558,884

Long-term

Ps.

2,223,821

Ps.

3,795,749

TIIE: Mexican interbank rate

(ii) The following table provides a summary of the Company’s scheduled principal payments of financial debt and accrued interest on December 31, 2021:

January 2023-

January 2024-

Within one

December

December

January 2025

    

year

    

2023

    

2024

    

onwards

    

Total

Santander/Bancomext

Ps.

3,552,091

Ps.

Ps.

Ps.

3,552,091

CEBUR program

505,997

583,333

750,000

916,667

2,755,997

Total

Ps.

4,058,088

Ps.

583,333

Ps.

750,000

Ps.

916,667

6,308,088

iii) Since 2011, the Company has financed the pre-delivery payments with Santander/Bancomext for the acquisition of its aircraft through a revolving financing facility.

The “Santander/Bancomext” loan agreement provides for certain covenants, including limits to the ability to, among others:

i)Incur debt above a specified debt basket unless certain financial ratios are met.
ii)Create liens.
iii)Merge with or acquire any other entity without the previous authorization of the Banks.
iv)Dispose of certain assets.
v)Declare and pay dividends or make any distribution on the Company’s share capital unless certain financial ratios ( that the long-term adjusted net debt is less than or equal to 6.5 ( six point five) times the EBITDAR, which on any determination date) are met.

On December 31, 2021, the Company was in compliance with the covenants under the above-mentioned loan agreement. On December 31, 2020, the Company was not in compliance with the financial ratio, therefore, the Company requested a waiver to the banks. The company received a waiver dated October 23, 2020, for the covenant regarding the financial ratio for the PDP financing facility that included the third and fourth quarter of 2020 and the first and second quarter of 2021. The waiver was provided by both banks, Santander and Bancomext.

For purposes of financing the pre-delivery payments, Mexican trusts were created whereby, the Company assigned its rights and obligations under the Airbus Purchase Agreement with Airbus S.A.S. (“Airbus”), including its obligation to make pre-delivery payments to the Mexican trusts, and the Company guaranteed the obligations of the Mexican trusts under the financing agreement (CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso (previously Deutsche Bank México, S.A. Fideicomisos 1710 and 1711)).

As of December 31, 2021, the financial debt related to finance pre-delivery payments of aircraft amounts to Ps.3,535,649, the company covers this short-term obligation through the celebration of the sale and the collection made by the transaction denominated as sale and leaseback at the time of delivery, therefore, it does not represent a disbursement that directly impacts the company’s working capital.

As of December 31, 2021, the Company has committed credit lines totaling Ps.9,949,640 of which Ps.6,967,530 were related to financial debt (Ps.200,000 were undrawn) and Ps.2,982,110 were related to letters of credit (Ps.476,689 were undrawn). As of December 31, 2020, the Company had available credit lines totaling Ps.9,256,978 of which Ps.6,851,338 were related to financial debt (Ps.1,500,726 were undrawn) and Ps.2,405,640 were related to letters of credit (Ps.214,012 were undrawn).

On June 20, 2019, the Company, through its subsidiary Concesionaria issued 15,000,000 asset backed trust notes (“CEBUR”) under the ticket VOLARCB 19 for Ps.1.5 billion Mexican pesos through the Fideicomiso Irrevocable de Administración número CIB/3249 created by Concesionaria. The issuance amount is part of a program approved by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) for an amount of up to Ps.3.0 billion Mexican pesos.

The notes have a five-year maturity annual reduction of Ps.250,000, Ps.500,000, Ps.500,000 and Ps.250,000 in 2021, 2022, 2023 and 2024, respectively, with a floating one-month coupon rate referenced to TIIE 28 plus with a 175 basis point spread. The notes start amortizing at the end of the second year.

On October 13, 2021, the Company, through its subsidiary Concesionaria issued in the Mexico market a second issuance of 15,000,000 asset backed trust notes (“CEBUR”) under the ticket VOLARCB 21L for Ps.1.5 billion Mexican pesos through the Fideicomiso Irrevocable de Administración número CIB/3249 created by Concesionaria. The issuance amount is part of a program approved by the

Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) for an amount of up to Ps.3.0 billion Mexican pesos. With this second issuance the total amount approved for the program has been reached.

The Trust Notes comply with the Sustainability-Linked Bond Principles 2020, administered by the International Capital Market Association (ICMA). Which has Sustainability Objectives (SPT) for the KPI, to reduce carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer (gCO2 / RPK) by 21.54%, 24.08% and 25.53% by 2022, 2023 and 2024, respectively, compared to 2015. This offering will help the Company to accomplish its long-term sustainable goals, among which are to reduce CO2 emissions by 35.42% by 2030.

A feature of the asset backed trust notes is that they will pay an additional twenty-five (25) basis points to the interest rate if the sustainability goals are not met, with the possibility of mitigating the additional rate if the 2023 or 2024 targets are met.

The notes have a five -year maturity annual reductions of Ps.83,333, Ps.500,000, Ps.500,000 and Ps.416,667 in 2023, 2024, 2025 and 2026, respectively, with a floating one-month coupon rate referenced to TIIE 28 plus with a 200 basis point spread. The notes start amortizing at the end of the second year.

The asset backed trust note’s structure operate on specific rules and provide a DSCR “Debt Service Coverage Ratio” which is computed by comparing the Mexican Peso collections over the previous six months to the next 6 months of debt service. In general, not retention of funds exists if the ratio exceeds 2.5 times. Amortization on the asset backed trust notes began in July of 2021 for the first issuance and the second issuance will begin in October of 2023. In addition, early amortization applies if:

i)The Debt Coverage Ratio is less than 1.75x on any of the determination dates;
ii)An event of retention is not covered in a period of 90 consecutive days;
iii)The debt service reserve account of any series maintains on deposit an amount less than the required balance of the debt service reserve account for a period that includes two or more consecutive payment methods;
iv)Insolvency event of Concesionaria;
v)The update of a new insolvency event in relation to the Concesionaria;
vi)Updating a new event of default.

In the event of default, the Trustee will refrain from delivering any amount that it would otherwise be to require to deliver to Concesionaria and will dedicate use such cash flow to amortize the principal of the  trust notes (“CEBUR”).

In December 2021, the Company renewed the working capital facility with Banco Sabadell S.A., Institución de Banca Multiple (“Sabadell”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a 240 basis points. As of December 31, 2021, the company paid the dispositions made during the year, therefore, it does not have a balance pending settlement.

In December 2019, the Company entered into a short-term working capital facility with Banco Sabadell S.A., Institución de Banca Multiple (“Sabadell”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a 300 basis points. The “Sabadell” working capital facility has the following covenant:

i)Joint obligor (Concesionaria) must represent 85% of EBITDA of the holding.

At December 31, 2021 and 2020, the Company was in compliance with the covenants under the terms and conditions of the asset backed trusted notes and short-term working capital facilities.

Changes in liabilities arising from financing activities

For the years ended December 31, 2021 and 2020, the changes in liabilities from financing activities from the Company are summarized in the following table:

Current vs non-

January 1,  

Net cash

Accrued*

Foreign exchange 

 current 

December 31, 

    

2021

    

Flows

    

Interest

    

 movement

    

 reclassification

    

Other

    

2021

Current interest-bearing loans and borrowings

Ps.

1,558,884

Ps.

(1,223,402)

Ps.

2,876

Ps.

76,942

Ps.

3,637,559

Ps.

Ps.

4,052,859

Non-current interest -bearing loans and borrowings

 

3,795,749

 

2,023,240

 

35,171

 

(3,637,559)

 

7,220

 

2,223,821

Total liabilities from financing activities

 

Ps.

5,354,633

 

Ps.

799,838

Ps.

2,876

 

Ps.

112,113

 

Ps.

 

Ps.

7,220

 

Ps.

6,276,680

Foreign

Current vs non-

January 1, 

Net cash 

Accrued*

 exchange 

 current 

December 31, 

    

2020

    

Flows

    

Interest

    

 movement

    

 reclassification 

    

Other

    

2020

Current interest-bearing loans and borrowings

Ps.

2,086,017

Ps.

(1,231,695)

Ps.

(10,498)

Ps.

(32,491)

Ps.

747,551

Ps.

-

Ps.

1,558,884

Non-current interest -bearing loans and borrowings

 

2,889,952

 

1,374,678

 

231,612

 

(747,551)

 

47,058

 

3,795,749

Total liabilities from financing activities

 

Ps.

4,975,969

 

Ps.

142,983

Ps.

(10,498)

 

Ps.

199,121

 

Ps.

 

Ps.

47,058

 

Ps.

5,354,633

* This balance is net of interest provisions and interest effectively paid as of December 31, 2021 and 2020, respectively.

c)  Other financial liabilities

At December 31, 2021 and 2020, the derivative financial instruments designated as CFH from the Company are summarized in the following table:

    

2021

    

2020

Derivative financial instruments designated as CFH (effective portion recognized within OCI):

 

  

 

  

Zero-Cost Collar options

Ps.

Ps.

9,657

Total derivative financial liabilities

Ps.

Ps.

9,657

Presented on the consolidated statements of financial position as follows:

 

 

Current

Ps.

Ps.

9,657

Non-current

Ps.

Ps.

v3.22.1
Cash and cash equivalents
12 Months Ended
Dec. 31, 2021
Cash and cash equivalents  
Cash and cash equivalents

6.  Cash, cash equivalents and restricted cash

An analysis of this caption is as follows:

    

2021

    

2020

Cash in banks

Ps.

9,543,860

Ps.

6,907,295

Short-term investments

5,558,131

3,068,618

Restricted funds held in trust related to debt service reserves

147,415

91,040

Cash on hand

5,470

36,432

Total cash, cash equivalents and restricted cash

Ps.

15,254,876

Ps.

10,103,385

As of December 31, 2021 and 2020, the Company recorded a portion of advance ticket sales by an amount of Ps.147,415 and Ps.91,040, respectively, as a restricted fund (Note 1e). The restricted funds held in Trusts are used to constitute the debt service reserves and cannot be used for purposes other than those established in the contracts of the Trusts.

v3.22.1
Related parties
12 Months Ended
Dec. 31, 2021
Related parties  
Related parties

7.  Related parties

a)  An analysis of balances due from/to related parties at December 31, 2021 and 2020 is provided below. All companies are considered affiliates, since the Company’s primary shareholders or directors are also direct or indirect shareholders of the related parties:

    

    

Country 

    

    

    

Type of transaction

of origin

2021

2020

Terms

Due from:

 

  

 

  

 

  

 

  

 

  

Frontier Airlines Inc. (“Frontier”)

 

Code-share

 

USA

 

Ps.

95,951

 

Ps.

72,629

 

30 days

Due to:

Grupo Aeroportuario del Centro Norte (“OMA”)

Airport Services

Mexico

Ps.

199,393

Ps.

80,681

30 days

Chevez, Ruiz, Zamarripa y Cía., S.C.

Professional fees

Mexico

9,373

4,823

30 days

Aeromantenimiento, S.A. (“Aeroman”)

Aircraft maintenance and technical support

El Salvador

8,295

39,284

30 days

Mijares, Angoitia, Cortés y Fuentes, S.C.

Professional fees

Mexico

166

30 days

Frontier Airlines Inc. (“Frontier”)

Code-share

USA

42

39

30 days

Ps.

217,103

Ps.

124,993

b)  During the years ended December 31, 2021, 2020 and 2019, the Company had the following transactions with related parties:

Related party transactions

    

Country of origin 

    

2021

    

2020

    

2019

Revenues:

Transactions with affiliates

Frontier Airlines Inc

Code-share

USA

Ps.

71,210

Ps.

148,964

Ps.

208,968

Expenses:

Transactions with affiliates

 

 

  

 

  

 

  

Aeromantenimiento, S.A.

Aircraft maintenance

El Salvador

Ps.

160,632

Ps.

239,118

Ps.

201,624

Technical support

 

El Salvador

2,882

3,945

5,815

Grupo Aeroportuario del Centro Norte

Airport services

Mexico

133,296

32,193

Chevez, Ruiz, Zamarripa y Cía, S.C.

 

 

 

 

Professional fees

Mexico

4,798

4,823

Mijares, Angoitia, Cortés y Fuentes, S.C.

 

 

 

 

Professional fees

Mexico

4,311

5,582

1,321

Servprot, S.A. de C.V.Security services

Mexico

3,531

3,464

3,120

Onelink, S.A. de C.V.

Call center fees

Mexico/El Salvador

73,167

37,026

Frontier started having transactions with the Company in August 2018. As of December 31, 2021 and 2020, there have been no guarantees provided or received for any related party receivables or payables. For the years ended December 31, 2021 and 2020, no provision for expected credit losses has been recognized, due to the Company considers the credit risk is minimal, and these balances are current accounts.

c)  Servprot

Servprot S.A. de C.V. (“Servprot”) is a related party because Enrique Beltranena, the Company’s President and Chief Executive Officer and director, is shareholder of such company. Servprot provides security services for Mr. Beltranena and his family. As of December 31,2021, and 2020 there are not outstanding balances due to Servprot under this agreement.

During the years ended December 31, 2021, 2020 and 2019 the Company expensed Ps.3,531, Ps.3,464 and Ps.3,120, respectively for this concept.

d)  Aeroman

Aeroman is a related party, because Marco Baldocchi a member of the board of the Company’s board of directors is an alternate director of Aeroman. The Company entered into an aircraft repair and maintenance service agreement with Aeroman on January 1, 2017. This agreement provides that the Company must use Aeroman, exclusively for aircraft repair and maintenance services, subject to availability. Under this agreement, Aeroman provides inspection, maintenance, repair and overhaul services for aircraft. The Company makes payments under this agreement depending on the services performed. This agreement is for a 5-year term. As of December 31, 2021 and 2020, the balances due under the agreement to Aeroman were Ps.8,295 and Ps.39,284, respectively. The Company incurred expenses in aircraft maintenance and technical support under this agreement amounted to Ps.163,514, Ps.243,063 and Ps.207,439 for the years ended December 31, 2021, 2020 and 2019, respectively.

e)  OneLink

Onelink, S.A. de C.V. (“Onelink”) was a related party until December 31, 2017, because Marco Baldocchi, a member of the board, was a director of Onelink. As of October 24, 2019 and until June 30, 2020 Onelink Holdings, S.A. (“Onelink Holdings”) and its subsidiary Onelink were related parties, because Mr. Rodrigo Antonio Escobar Nottebohm, a former alternate board member of Onelink Holdings, became an alternate Director of the Company. Pursuant to this agreement, Onelink received calls from the customers to book flights and provides customers with information about fares, schedules and availability.

As of December 31, 2021 and 2020, the Company did not recognize any outstanding balances, from Onelink as related party transaction. During the year ended December 31, 2021, the Company did not recognize any revenue and expense transactions as a related party. During the years ended December 31, 2020 and 2019, Company recognized an expense under this agreement of Ps.73,167 and Ps.37,026, respectively.

f)  Mijares, Angoitia, Cortés y Fuentes

Mijares, Angoitia, Cortés y Fuentes, S.C. (“MACF”) is a related party because Ricardo Maldonado Yañez and Eugenio Macouzet de León, member and alternate member, respectively, of the board of the Company since April 2018, are partners of MACF which provides legal services to us. As of December 31, 2021, the Company did not have outstanding balance due to MACF and December 31, 2020, the balance due for the services received from MACF was Ps. 166. During the years ended December 31, 2021, 2020 and 2019, the Company recognize expense transactions with this related party of Ps.4,311, Ps.5,582 and Ps.1,321, respectively.

g)  Frontier

Frontier is a related party because Mr. William A. Franke and Brian H. Franke are members of the board of the Company and Frontier as well as Indigo Partners, the later has investments in both companies. As of December 31, 2021 and 2020, the accounts receivable from Frontier were Ps.95,951 and Ps.72,629, respectively. Additionally, as of December 31, 2021 and 2020, the account payable was Ps.42 and Ps.39, respectively. During the years ended December 31, 2021, 2020 and 2019 the Company recognized revenue under this agreement of Ps.71,210, Ps.148,964 and Ps.208,968, respectively.

h)  Grupo Aeroportuario del Centro Norte (“OMA”)

On April 22, 2020, Grupo Aeroportuario del Centro Norte (“OMA”) became a related party because Mrs. Guadalupe Phillips Margain is an independent member of the board of directors of the Company and member of the board of directors of OMA. Mr. Ricardo Maldonado Yañez is also an independent member of the board of directors of the Company and OMA. As of December 31, 2021 and 2020, the account payable with OMA was Ps.199,393 and Ps.80,681, respectively. During the years ended December 31, 2021 and 2020, the Company recognized expenses with OMA of Ps.133,296 and Ps.32,193, respectively.

i)  Chevez, Ruiz, Zamarripa y Cia, S.C. (“Chevez”)

Chevez, Ruiz, Zamarripa y Cia, S.C. (“Chevez”) is a related party because Mr. José Luis Fernández Fernández is an independent member of the board of directors, as well as the chairman of the Audit and Corporate Governance Committee of the Company and non-managing partner of Chevez. Chevez provides tax advisory services to us. As of December 31, 2021 and 2020, the account payable with Chevez was Ps.9,373 and Ps.4,823, respectively. During the years ended December 31, 2021 and 2020, the Company recognized expenses with Chevez of Ps.4,798 and Ps.4,823, respectively.

j)  Directors and officers

During the years ended December 31, 2021, 2020 and 2019, the chairman and the independent members of the Company’s board of directors received a net compensation of Ps.12,598, Ps.5,762 and Ps.8,085, respectively, and the rest of the directors received a net compensation of Ps.3,620, Ps.3,692 and Ps.4,367, respectively.

During the years ended December 31, 2021, 2020 and 2019, all the Company’s senior managers received an aggregate compensation of short and long-term benefits of Ps.383,838, Ps.253,681 and Ps.237,846, respectively, these amounts were recognized in salaries and benefits in the consolidated statement of operations.

During the years ended December 31, 2021, 2020 and 2019 the cost of the share-based payments transactions (MIP and LTIP) was Ps.89,464, Ps.75,040 and Ps.49,659, respectively. The (benefit) cost of the cash-settled payments transactions MIP II and SARs were Ps. (62,262), Ps.105,303 and Ps.40,724, respectively (Note 18).

The Company has a short-term benefit plan for certain personnel whereby cash bonuses are awarded for meeting certain Company’s performance targets.  During the year ended December 31, 2021 the Company recorded a provision in the amount of Ps.155,388. During

the year ended December 31,2020 the Company did not record a provision. During the year ended December 31, 2019 the Company recorded a provision in the amount of Ps.80,634.

During the years ended December 31, 2021, 2020 and 2019 the Company recorded an expense for an amount of Ps.155,388, Ps.0 and Ps.80,634, respectively, under the caption salaries and benefits.

v3.22.1
Other accounts receivable, net
12 Months Ended
Dec. 31, 2021
Other accounts receivable, net  
Other accounts receivable, net

8.  Other accounts receivable, net

An analysis of other accounts receivable as of December 31, 2021 and 2020, is detailed below:

    

2021

    

2020

Current:

Credit cards

Ps.

760,016

Ps.

231,260

Other points of sales

140,952

67,315

Cargo clients

51,790

45,201

Travel agencies and insurance commissions

 

33,864

 

16,099

Other accounts receivable

 

33,688

 

87,204

Employees

 

15,637

 

36,287

Benefits from suppliers

10,616

105,947

Marketing services receivable

 

706

 

4,020

Airport services

15

1,047,269

593,348

Allowance for expected credit losses

 

(12,665)

 

(32,708)

Ps.

1,034,604

Ps.

560,640

Accounts receivable have the following aging:

    

2021

    

2021

    

Total

    

2020

    

2020

    

Total

Days

    

Impaired 

    

Not impaired 

    

2021

    

Impaired 

    

Not impaired 

    

2020

0–30

Ps.

10,347

Ps.

976,313

Ps.

986,660

Ps.

4,090

Ps.

486,001

Ps.

490,091

31–60

 

 

27,411

 

27,411

 

 

13,872

 

13,872

61–90

 

 

8,453

 

8,453

 

 

6,081

 

6,081

91–120

 

2,318

 

22,427

 

24,745

 

28,618

 

54,686

 

83,304

Ps.

12,665

Ps.

1,034,604

Ps.

1,047,269

Ps.

32,708

Ps.

560,640

Ps.

593,348

The movement in the allowance for credit losses from January 1, 2019 to December 31, 2021 is as follows:

Balance as of January 1st, 2019

    

Ps.

(11,304)

Write-offs

 

11,389

Increase in allowance

 

(40,393)

Balance as of December 31, 2019

 

(40,308)

Write-offs

 

21,264

Increase in allowance

 

(13,664)

Balance as of December 31, 2020

 

(32,708)

Write-offs

 

36,161

Increase in allowance

 

(16,118)

Balance as of December 31, 2021

Ps.

(12,665)

An allowance for expected credit losses on accounts receivables is established in accordance with the information mentioned in Note 1f) ii).

v3.22.1
Inventories
12 Months Ended
Dec. 31, 2021
Inventories.  
Inventories

9.  Inventories

An analysis of inventories as of December 31, 2021 and 2020 is as follows:

    

2021

    

2020

Spare parts and accessories of flight equipment

Ps.

296,345

Ps.

271,454

Miscellaneous supplies

 

 

7,505

Ps.

296,345

Ps.

278,959

The inventory items are consumed during or used mainly in delivery of in-flight services and for maintenance services by the Company and are valued at the lower of cost or replacement value. The Company recognizes the necessary estimates for decreases in the value of its inventories due to impairment, obsolescence, slow movement and causes that indicate that the use or realization of the aircraft spare parts and flight equipment accessories that are part of the inventory will be less than recorded value. During the years ended as of December 31, 2021, 2020 and 2019, the amount of consumption of inventories, recorded as an operating expense as part of maintenance expense was Ps.312,462, Ps.234,691 and Ps.284,687, respectively.

v3.22.1
Prepaid expenses and other current assets
12 Months Ended
Dec. 31, 2021
Prepaid expenses and other current assets  
Prepaid expenses and other current assets

10.  Prepaid expenses and other current assets

An analysis of prepaid expenses and other current assets at December 31, 2021 and 2020 is as follows:

    

2021

    

2020

Other prepaid expenses

Ps.

214,874

Ps.

81,803

Sales commission to travel agencies (Note 1d)

190,052

151,342

Advances to suppliers

 

175,830

 

163,044

Flight credits

 

123,964

 

389,927

Prepaid insurance

 

85,418

 

64,309

Ps.

790,138

Ps.

850,425

v3.22.1
Guarantee deposits
12 Months Ended
Dec. 31, 2021
Guarantee deposits  
Guarantee deposits

11.  Guarantee deposits

An analysis of this caption as of December 31, 2021 and 2020 is as follows:

    

2021

    

2020

Current asset:

 

  

 

  

Credit letters deposits

Ps.

1,127,302

Ps.

829,918

Aircraft maintenance deposits paid to lessors (Note 1j)

434,866

279,390

Deposits for rental of flight equipment

 

34,723

 

23,584

Other guarantee deposits

 

28,995

 

9,064

 

1,625,886

 

1,141,956

Non-current asset:

 

 

Aircraft maintenance deposits paid to lessors (Note 1j)

 

8,320,612

 

7,641,544

Deposits for rental of flight equipment

 

1,029,323

 

741,871

Other guarantee deposits

 

23,219

 

41,323

 

9,373,154

 

8,424,738

Ps.

10,999,040

Ps.

9,566,694

v3.22.1
Rotable spare parts, furniture and equipment, net
12 Months Ended
Dec. 31, 2021
Rotable spare parts, furniture and equipment, net  
Rotable spare parts, furniture and equipment, net

12.  Rotable spare parts, furniture and equipment, net

Gross value 

Accumulated depreciation 

Net carrying value 

    

At December

    

At December

    

At December

    

At December

    

At December

    

At December

    

31, 2021

    

31, 2020

    

31, 2021

    

31, 2020

    

31, 2021

    

31, 2020

Leasehold improvements to flight equipment

Ps.

5,328,605

Ps.

5,092,049

Ps.

(2,696,788)

Ps.

(3,354,166)

Ps.

2,631,817

Ps.

1,737,883

Pre-delivery payments*

 

5,224,632

 

4,920,126

 

 

 

5,224,632

 

4,920,126

Flight equipment

 

2,193,686

 

1,689,473

 

(1,330,958)

 

(1,223,560)

 

862,728

 

465,913

Construction and improvements in process

 

545,941

 

53,545

 

 

 

545,941

 

53,545

Constructions and improvements

 

153,485

 

175,407

 

(127,845)

 

(148,391)

 

25,640

 

27,016

Office furniture and equipment

60,362

67,035

(34,596)

(35,309)

25,766

31,726

Computer equipment

 

28,813

 

49,945

 

(24,693)

 

(42,126)

 

4,120

 

7,819

Workshop machinery and equipment

 

22,679

 

20,574

 

(8,243)

 

(7,641)

 

14,436

 

12,933

Communications equipment

 

12,049

 

14,803

 

(7,453)

 

(9,038)

 

4,596

 

5,765

Motorized transport equipment platform

 

11,542

 

15,247

 

(3,358)

 

(7,924)

 

8,184

 

7,323

Electric power equipment

 

11,011

 

20,448

 

(5,057)

 

(12,773)

 

5,954

 

7,675

Service carts on board

 

9,216

 

9,216

 

(6,874)

 

(6,112)

 

2,342

 

3,104

Workshop tools

 

8,664

 

27,727

 

(7,516)

 

(24,398)

 

1,148

 

3,329

Allowance for obsolescence

(3,000)

(3,000)

Total

Ps.

13,610,685

Ps.

12,152,595

Ps.

(4,253,381)

Ps.

(4,871,438)

Ps.

9,357,304

Ps.

7,281,157

* During the years ended December 31, 2021 and 2020, the Company capitalized borrowing costs of Ps.143,966 and Ps.384,038, respectively. The amount of this line is net of disposals of capitalized borrowing costs related to sale and leaseback transactions of Ps.84,273 and Ps.401,862, respectively.

   

   

   

   

   

   

   

Motorized

   

   

Workshop

   

   

   

   

   

Constructions

transport

machinery

Service

Construction and

Leasehold

Flight

and

Computer

Office furniture

Electric power

Workshop

equipment

Communications

and

carts on

Allowance for

Pre-delivery

improvements

improvements to

equipment

improvements 

equipment 

and equipment

equipment 

Tools 

platform 

equipment 

equipment 

board 

obsolescence

payments 

in process 

flight equipment 

Total 

Net balance as of December 31, 2019

Ps.

733,250

Ps.

40,950

Ps.

13,071

Ps.

36,660

Ps.

9,012

Ps.

4,852

Ps.

9,634

Ps.

5,777

Ps.

10,209

Ps.

2,121

Ps.

(3,000)

Ps.

4,507,770

Ps.

474,240

Ps.

1,540,788

Ps.

7,385,334

Additions

668,376

128

1,648

733

851

1,541

2,185,902

176,607

646,219

 

3,682,005

Disposals and transfers

(861,761)

(1,755,724)

(354,146)

 

(2,971,631)

Borrowing costs, net*

(17,822)

 

(17,822)

Other movements

2,317

713

101

36

222

1,083

4,273

(243,156)

235,509

 

1,098

Depreciation

(73,952)

(16,379)

(7,613)

(5,768)

(1,373)

(2,374)

(2,533)

(1,095)

(1,549)

(558)

(684,633)

 

(797,827)

As of December 31, 2020

 

465,913

 

27,016

 

7,819

 

31,726

 

7,675

 

3,329

 

7,323

 

5,765

 

12,933

 

3,104

 

(3,000)

 

4,920,126

 

53,545

 

1,737,883

 

7,281,157

Cost

 

1,689,473

 

175,407

 

49,945

 

67,035

 

20,448

 

27,727

 

15,247

 

14,803

 

20,574

 

9,216

 

(3,000)

 

4,920,126

 

53,545

 

5,092,049

 

12,152,595

Accumulated depreciation

 

(1,223,560)

 

(148,391)

 

(42,126)

 

(35,309)

 

(12,773)

 

(24,398)

 

(7,924)

 

(9,038)

 

(7,641)

 

(6,112)

 

 

 

 

(3,354,166)

 

(4,871,438)

Net balance as of December 31, 2020

 

465,913

 

27,016

 

7,819

 

31,726

 

7,675

 

3,329

 

7,323

 

5,765

 

12,933

 

3,104

 

(3,000)

 

4,920,126

 

53,545

 

1,737,883

 

7,281,157

Additions

517,234

1,470

63

1,938

1,708

4,796

 

 

4,173

 

1,130,669

547,220

 

1,755,614

 

3,964,885

Disposals and transfers

(2,781)

(14)

(61)

(3,462)

(2,491)

 

(277)

 

(5,078)

 

(587)

 

(872)

 

 

3,000

 

(885,855)

 

(28,088)

 

 

(926,566)

Borrowing costs, net*

 

 

 

 

 

 

 

59,692

 

 

 

59,692

Other movements

14,899

522

3,010

 

 

3,579

 

431

 

130

 

 

 

 

(26,736)

 

4,313

 

148

Depreciation

(117,638)

(16,261)

 

(5,630)

 

(5,571)

 

(1,168)

 

(3,612)

 

(2,436)

 

(1,013)

 

(1,928)

 

(762)

 

 

 

 

(865,993)

 

(1,022,012)

As of December 31, 2021

 

862,728

 

25,640

 

4,120

 

25,766

 

5,954

 

1,148

 

8,184

 

4,596

 

14,436

 

2,342

 

 

5,224,632

 

545,941

 

2,631,817

 

9,357,304

Cost

 

2,193,686

 

153,485

 

28,813

 

60,362

 

11,011

 

8,664

 

11,542

 

12,049

 

22,679

 

9,216

 

 

5,224,632

 

545,941

 

5,328,605

 

13,610,685

Accumulated depreciation

 

(1,330,958)

 

(127,845)

 

(24,693)

 

(34,596)

 

(5,057)

 

(7,516)

 

(3,358)

 

(7,453)

 

(8,243)

 

(6,874)

 

 

 

 

(2,696,788)

 

(4,253,381)

Net balance as of December 31, 2021

Ps.

862,728

Ps.

25,640

Ps.

4,120

Ps.

25,766

Ps.

5,954

Ps.

1,148

Ps.

8,184

Ps.

4,596

Ps.

14,436

Ps.

2,342

Ps.

Ps.

5,224,632

Ps.

545,941

Ps.

2,631,817

Ps.

9,357,304

a)  On 2021, the Company acquired two NEO spare engines (based on the terms of the Pratt & Whitney purchase agreement FMP), which were accounted for a cost for a total amount of Ps.394,254 (US$19,082). The Company had identified the major components as separate parts at their respective cost. These major components of the engine are presented as part of the flight equipment and depreciated over their useful life.
b)  During the years ended December 31, 2021, 2020 and 2019, the Company capitalized borrowing costs which amounted to Ps.143,966, Ps.384,038 and Ps.456,313, respectively (Note 23). The rate used to determine the amount of borrowing cost was 2.76%, 3.58% and 5.10%, for the years ended December 31, 2021, 2020 and 2019, respectively.
c)  Depreciation expense for the years ended December 31, 2021, 2020 and 2019, was Ps.1,022,012, Ps.797,827 and Ps.587,849, respectively. Depreciation charges for the year are recognized as a component of operating expenses in the consolidated statements of operations.
d)  In October 2005 and December 2006, the Company entered into purchase agreements with Airbus and International Aero Engines AG (“IAE”) for the purchase of aircraft and engines, respectively. Under such agreements and prior to the delivery of each aircraft and engine, the Company agreed to make pre-delivery payments, which were calculated based on the reference price of each aircraft and engine, and following a formula established for such purpose in the agreements.

In 2011, the Company amended the agreement with Airbus for the purchase of 44 A320 family aircraft to be delivered from 2015 to 2020. The new order includes 14 A320CEO (“Current Engine Option Aircraft”) and 30 A320NEO. Additionally, during December 2017, the Company amended the agreement with Airbus for the purchase of 80 A320 family aircraft to be delivered from 2022 to 2026. The new order includes 46 A320NEO and 34 A321NEO. Under such agreement and prior to the delivery of each aircraft, the Company agreed to make pre-delivery payments, which shall be calculated based on the reference price of each aircraft, and following a formula established for such purpose in the agreement.

In November 2018, the Company amended the agreement with Airbus to reschedule the remaining 26 fleet deliveries between 2019 and 2022. Also, in this amendment the Company used its rights on the Airbus Purchase Agreement to convert six A320NEO into A321NEO. In July 2020, the Company amended the agreement with Airbus to reschedule the 80 aircraft deliveries between 2023 and 2028. In October 2020, the Company amended the agreement with Airbus to reschedule the remaining 18 fleet deliveries between 2020 and 2022.

In 2021, the Company amended the agreement with Airbus for the purchase of 39 A320 family aircraft to be delivered from 2023 to 2029. The new order includes only A321NEO aircraft. Under such agreement and prior to the delivery of each aircraft, the Company agreed to make pre-delivery payments, which shall be calculated based on the reference price of each aircraft, and following a formula established for such purpose in the agreement. Also, in this agreement the Company used its rights on the Airbus Purchase Agreement to convert twenty A320NEO into A321NEO.

On August 16, 2013, the Company entered into certain agreements with IAE and United Technologies Corporation Pratt & Whitney Division (“P&W”), which included the purchase of the engines for 14 A320CEO and 30 A320NEO respectively, to be delivered between 2014 and 2022. This agreement also included the purchase of one spare engine for the A320CEO fleet (which was received during the fourth quarter of 2016) and six spare engines for the A320NEO fleet to be received from 2017 to 2022. In November 2015, the Company amended the agreement with the engine supplier to provide major maintenance services for the engines of sixteen aircrafts (10 A320NEO and 6 A321NEO). This agreement also includes the purchase of three spare engines, two of them for the A320NEO fleet, and one for the A321NEO fleet. In April 2021, the Company amended the agreement with the engine supplier to provide major maintenance services for the engines of two aircrafts A320NEO.

On May 12, 2020, the Company entered into certain agreements with IAE and United Technologies Corporation Pratt & Whitney Division (“P&W”), which included the purchase of the engines for 46 A320NEO and 34 A321NEO respectively, to be delivered between 2022 and 2028. This agreement also included the purchase of eleven firm spare engines for the A320NEO fleet to be received from 2022 to 2029.

In October 2021, the Company amended the agreement with the engine supplier to provide major maintenance services for the engines of thirteen aircrafts (all A320NEO). This agreement also includes the purchase of one spare engine for the A320NEO fleet.

The Company received credit notes from P&W in December 2017 of Ps.58,530 (USD$3.06 million), which are being amortized on a straight-line basis, prospectively during the term of the agreement. As of December 31, 2021 and 2020, the Company amortized a corresponding benefit from these credit notes of Ps.4,878 and Ps.4,878, respectively, which is recognized as an offset to maintenance expenses in the consolidated statements of operations.

During the years ended December 31, 2021 and 2020, the amounts paid for aircraft and spare engine pre-delivery payments were of Ps.1,130,669 (USD$55,639 million) and Ps.2,185,902 (USD$102.7 million), respectively.

The current purchase agreement with Airbus requires the Company to accept delivery of 132 Airbus A320 family aircraft during a period of nine years (from January 2022 to November 2029). The agreement provides for the addition of 132 Aircraft to its fleet as follows: thirteen in 2022, five in 2023, seventeen in 2024, sixteen in 2025, twenty-seven in 2026, twenty-one in 2027, nineteen 2028 and fourteen in 2029. Commitments to acquisitions of property and equipment are disclosed in Note 25.

During the years ended December 31, 2021, 2020 and 2019 the Company entered into aircraft and spare engines sale and leaseback transactions, resulting in gains of Ps.195,552, Ps.710,522 and Ps.284,759, respectively, these were recorded under the caption other operating income in the consolidated statement of operations, that represented only the amount of gains that relate to the rights transferred to the buyer-lessor. (Note 22).

d)  During December 2017, the Company entered into an updated total support agreement with Lufthansa for 66 months, with an effective date on July 1, 2018. This agreement includes similar terms and conditions as the original agreement.

As part of this agreement, the Company received credit notes of Ps.28,110 (USD$1.5 million), which are being amortized on a straight-line basis, prospectively during the term of the agreement. As of December 31, 2021, 2020 and 2019, the Company amortized a corresponding benefit from these credit notes of Ps.5,230, Ps.5,230 and Ps.5,230, respectively, recognized as an offset to maintenance expenses in the consolidated statements of operations.

e)  On September 5, 2019, the Company acquired one previously leased A319 aircraft from the lessor, which was accounted for a cost for a total amount of Ps.392,076 (USD$19,600). This transaction did not generate any gain or loss in our consolidated statements of operations.

The Company identified the major components as separate parts at their respective cost. These major components of the aircraft are presented as part of the aircraft and depreciated over their useful life. During December 2019, the Company sold acquired aircraft engines in a sale and lease back transaction.

As of December 31, 2021 and 2020 the carrying amount of the remaining owned aircraft was Ps.7,859 and Ps.47,039, respectively, and for the years ended December 31, 2021, 2020 and 2019 the depreciation expense was Ps.39,179, Ps.5,946, and 1,787, respectively.

v3.22.1
Intangible assets, net
12 Months Ended
Dec. 31, 2021
Intangible assets, net  
Intangible assets, net

13.  Intangible assets, net

The composition and movement of intangible assets is as follows:

Useful

Gross value 

Accumulated amortization

Net carrying amount

Life

At December 31,

    

years

    

2021

    

2020

    

2021

    

2020

    

2021

    

2020

Software

 

1 - 4

Ps.

844,917

Ps.

704,257

Ps.

(584,902)

Ps.

(512,695)

Ps.

260,015

Ps.

191,562

Balance as of January 1st, 2020

    

Ps.

167,397

Additions

 

124,724

Disposals

 

Amortization

 

(100,618)

Exchange differences

59

Balance as of December 31, 2020

191,562

Additions

 

205,692

Disposals

 

(25)

Amortization

 

(137,212)

Exchange differences

 

(2)

Balance as of December 31, 2021

Ps.

260,015

The Company had implemented the SAP4HANA software. As a result of the analysis carried out, it was concluded that the Company controls the software, therefore it is the only beneficiary with respect to the configuration, since the settings made were customized according to the needs of the business. The costs directly attributable to the implementation were recognized as an intangible asset, the other costs different to the implementation were recognized in Net Income As of December 31, 2021, the capitalization for this implementation was Ps.90,187.

Software amortization expense for the years ended December 31, 2021, 2020 and 2019 was Ps.137,212, Ps.100,618 and Ps.87,667, respectively. These amounts were recognized in depreciation and amortization caption on the consolidated statements of operations.

v3.22.1
Leases
12 Months Ended
Dec. 31, 2021
Leases  
Leases

14.   Leases

As of December 31, 2021 and 2020 the most significant leases are as follows:

a)  Aircraft and engines represent the Company’s most significant lease agreements. On December 31, 2021, the Company leases 100 aircraft (85 as of December 31, 2020) and 20 spare engines under lease agreements (18 as of December 31, 2020) that have maximum terms through 2033. These leases are generally guaranteed by either deposit in cash or letters of credits.

Composition of the fleet and spare engines, leases*:

Aircraft

    

    

At December

    

At December

Type

    

Model 

    

31, 2021

    

31, 2020

A319

 

132

 

3

 

3

A319

 

133

 

2

 

2

A320

 

233

 

39

 

39

A320

 

232

 

1

 

1

A320NEO

 

271N

 

39

 

24

A321

 

231

 

10

 

10

A321NEO

271N

6

6

 

  

 

100

 

85

Engine spare

    

    

At December

    

At December

Type

    

Model 

    

31, 2021

    

31, 2020

V2500

V2524-A5

2

2

V2500

 

V2527M-A5

 

3

 

3

V2500

 

V2527E-A5

 

5

 

5

V2500

 

V2527-A5

 

4

 

2

PW1100

PW1127G-JM

5

5

PW1100

PW1133G-JM

1

1

 

  

 

20

 

18

* Certain of the Company’s aircraft and engine lease agreements include an option to extend the lease term period. Management evaluates extensions based on the market conditions at the time of renewal.

During the year ended December 31, 2021, the Company added fifteen new leased aircraft to its fleet (five A320 NEO´s acquired through sale and leaseback transactions under our existing Airbus purchase agreement and ten obtained directly from the lessor’s aircraft order book). Also, the Company extended the lease term of thirteen A320CEO (effective from 2022, 2023 and 2025) and two A319CEO (effective from 2021). All the aircraft incorporated through the lessor´s aircraft order were not subject to sale and leaseback transactions.

During the year ended December 31, 2021, the Company also incorporated two NEO spare engines. Such leases were not subject to sale and leaseback transactions. Also, the Company extended the lease term of three spare engines (two of them effective from February 2021 and the other from October 2021).

During the year ended December 31, 2020, the Company added seven new leased aircraft to its fleet (seven A320 NEO´s acquired through sale and leaseback transactions under our existing Airbus purchase agreement). Also, the Company returned three aircraft to their respective lessors.

During the year ended December 31, 2020, the Company also incorporated two NEO spare engines (based on the terms of the Pratt & Whitney purchase agreement FMP) and two CEO spare engines to its fleet. These four engines incorporated were subject to sale and leaseback transactions and their respective lease agreements were accounted for leases.

Set out below are the carrying amounts of right-of-use assets recognized and the movements during the period:

    

    

Spare engine

    

Land and

    

    

Aircraft leases

    

leases

    

building leases

    

Total

As of January 1st, 2020

 

Ps.

33,312,089

Ps.

677,198

 

Ps.

139,479

Ps.

34,128,766

Additions

 

 

4,876,071

 

362,081

 

 

15,222

 

5,253,374

Disposals

(17,742)

(17,742)

Foreign exchange effect

795

795

Depreciation on right of use assets

 

 

(4,763,928)

 

(210,079)

 

 

(74,969)

 

(5,048,976)

As of December 31, 2020

 

 

33,406,490

 

829,200

 

 

80,527

 

34,316,217

Additions

8,869,694

59,374

281,790

9,210,858

Modifications

1,221,718

42,267

140,514

1,404,499

Disposals

 

 

 

 

 

(5,536)

 

(5,536)

Foreign exchange effect

(5)

(5)

Depreciation on right of use assets

(5,124,774)

(235,732)

(102,119)

(5,462,625)

As of December 31, 2021

 

Ps.

38,373,128

Ps.

695,109

 

Ps.

395,171

Ps.

39,463,408

Set out below are the carrying amounts of lease liabilities and the movements during the period:

    

2021

    

2020

As of January 1st,

 

Ps.

44,130,542

Ps.

40,517,045

Additions

 

9,411,524

5,572,764

Modifications

1,370,795

Disposals

(5,898)

(231,566)

Accretion of interest

 

2,582,391

2,218,982

Foreign exchange effect

 

1,469,362

2,163,886

Payments

(9,308,477)

(6,110,569)

As of 31 December,

Ps.

49,650,239

Ps.

44,130,542

Current

 

Ps.

5,842,492

Ps.

6,484,092

Non-current

Ps.

43,807,747

Ps.

37,646,450

The Company had total cash outflows for leases of Ps.9,308,477 in 2021 (Ps.6,110,569 in 2020 and Ps.6,499,802 in 2019).

The Company applied practical expedients to leases in accordance with IFRS 16 guidance on lease modification accounting for rent concessions for those lease modifications arising as a direct result of COVID-19.

The net impact on the consolidated statements of operations for 2020 was Ps.190,811, which reflects the changes to lease payments that arose from such concessions. During the year ended of December 31, 2021, the Company have not rent concessions for lease modifications arising as a direct result of COVID-19.

For the years ended December 31, 2021, 2020 and 2019 the amounts recognized in profit or loss were as follow:

    

For the year ended

December 31, 2021

    

December 31, 2020

    

December 31, 2019

Depreciation of right-of-use assets

Ps.

(5,462,625)

Ps.

(5,048,976)

Ps.

(4,702,971)

Interest expense on lease liabilities and aircraft and engine lease return obligation (Note 23)

 

(2,603,820)

 

(2,350,250)

 

(2,128,162)

Aircraft and engine variable expenses

 

(1,686,875)

 

(1,845,254)

 

(961,657)

Total amount recognized in profit or loss

Ps.

(9,753,320)

Ps.

(9,244,480)

Ps.

(7,792,790)

i)      Return obligations

The aircraft lease agreements of the Company also require that the aircraft and engines be returned to lessors under specific conditions of maintenance. The costs of return, which no case are related to scheduled major maintenance, are estimated and recognized ratably as a provision from the time it becomes likely such costs will be incurred and can be estimated reliably. These return costs are recognized on a straight-line basis as a component of variable lease expenses and the provision is included as part of other liabilities, through the remaining lease term.

The Company estimates the provision related to airframe, engine overhaul and limited life parts using certain assumptions including the projected usage of the aircraft and the expected costs of maintenance tasks to be performed. For the years ended December 31, 2021, 2020 and 2019, in relation with this provision the Company expensed as supplemental rent Ps.1,131,107, Ps.1,428,179 and Ps.680,964, respectively.

Extension options

Some lease contracts contain extension options, which the Company evaluates exercising once the lease period comes to its end based on the market conditions at such moment. The lease liabilities corresponding to leases on which it was decided to extend are remeasured for the period negotiated between the Company and the lessor.

For the leases which it was decided to exercise the extension options during 2021, resulted in an increase in the lease liability and corresponding right of use assets by Ps.1,376,005.

v3.22.1
Accrued liabilities
12 Months Ended
Dec. 31, 2021
Accrued liabilities  
Accrued liabilities

15.  Accrued liabilities

a)  The detail of current accrued liabilities as of December 31, 2021 and 2020 is as follows:

    

2021

    

2020

Fuel and traffic accrued expenses

 

Ps.

1,819,353

 

Ps.

1,285,931

Salaries and benefits

432,596

337,467

Maintenance and aircraft parts accrued expenses

466,566

98,942

Sales, marketing and distribution accrued expenses

 

386,388

 

179,342

Accrued administrative expenses

196,856

122,729

Maintenance deposits

 

170,158

 

174,549

Deferred revenue from V Club membership

75,434

20,830

Others

45,987

86,374

Information and communication accrued expenses

 

40,899

 

35,359

Supplier services agreement

 

23,763

 

10,634

Benefits from suppliers

 

7,776

 

3,888

Advances from travel agencies

 

65

 

242

 

Ps.

3,665,841

 

Ps.

2,356,287

b)  Non-current accrued liabilities as of December 31, 2021 and 2020 is as follows:

    

2021

    

2020

Supplier services agreement

Ps.

15,704

Ps.

45,270

Benefits from suppliers

 

9,071

 

16,847

Other

 

5,588

 

4,581

Ps.

30,363

Ps.

66,698

v3.22.1
Other liabilities
12 Months Ended
Dec. 31, 2021
Other liabilities.  
Other liabilities

16. Other liabilities

    

Balance as of

    

    

    

Balance as of

January 1,

Increase for

December 31, 

    

2021

    

the year 

    

Payments 

    

2021

Aircraft and engine lease return obligation (Note 1q and 2i)

Ps.

2,504,484

Ps.

1,422,133

Ps.

(38,828)

Ps.

3,887,789

Guarantee deposit (Note 1j)

250,000

(250,000)

Employee profit sharing (Note 17)

 

14,417

 

262,667

 

(15,969)

 

261,115

Ps.

2,768,901

Ps.

1,684,800

Ps.

(304,797)

Ps.

4,148,904

Current maturities

 

  

 

  

 

  

Ps.

712,903

Non-current

 

  

 

  

 

  

Ps.

3,436,001

    

Balance as of

    

    

    

Balance as of

January 1,

Increase for

December 31, 

    

2020

    

the year 

    

Payments 

    

2020

Aircraft and engine lease return obligation (Note 1q and 2i)

Ps.

1,852,688

Ps.

2,126,401

Ps.

(1,474,605)

Ps.

2,504,484

Guarantee deposit (Note 1j)

250,000

250,000

Employee profit sharing (Note 17)

 

24,097

 

20,810

 

(30,490)

 

14,417

Ps.

1,876,785

Ps.

2,397,211

Ps.

(1,505,095)

Ps.

2,768,901

Current maturities

 

  

 

  

 

  

Ps.

101,218

Non-current

 

  

 

  

 

  

Ps.

2,667,683

During the years ended December 31, 2021 and 2020 no cancellations or write-offs related to these liabilities were recorded. Since 2012, the Company holds a cobrand credit card agreement with Banco Invex, S.A., Institución de Banca Múltiple, Invex, Grupo Financiero Invex “Invex”. Through this agreement, Invex pays certain commissions to Volaris related to the cobrand credit card and Invex’s clients receive vouchers to be redeemed in different Volaris services under certain conditions. A portion of the voucher cost is paid by Volaris and the remaining amount by Invex. During the years ended December 31, 2021 and December 31, 2020, Invex prepaid certain commissions to Volaris, which were recorder in guarantee deposit as part of other liabilities.

v3.22.1
Employee benefits
12 Months Ended
Dec. 31, 2021
Employee benefits  
Employee benefits

17.  Employee benefits

The components of net period cost recognized in the consolidated statement of operations and the obligations for seniority premium for the years ended December 31, 2021, 2020 and 2019, are as follows:

    

2021

    

2020

    

2019

Analysis of net period cost:

 

  

 

  

 

  

Current service cost

Ps.

8,611

Ps.

8,449

Ps.

8,214

Interest cost on benefit obligation

 

2,585

 

2,630

 

1,872

Net period cost

Ps.

11,196

Ps.

11,079

Ps.

10,086

Changes in the defined benefit obligation are as follows:

    

2021

    

2020

Defined benefit obligation on January 1,

Ps.

50,627

Ps.

38,151

Net period cost charged to profit or loss:

 

 

  

Current service cost

 

8,611

 

8,449

Interest cost on benefit obligation

 

2,585

 

2,630

Remeasurement losses in other comprehensive income:

 

 

Actuarial changes arising from changes in assumptions

 

9,279

 

2,651

Payments made

 

(1,452)

 

(1,254)

Others

12,023

Defined benefit obligation on December 31, 

Ps.

81,673

Ps.

50,627

The significant assumptions used in the computation of the seniority premium obligations are shown below:

    

2021

    

2020

    

2019

 

Financial:

 

  

 

  

 

  

Discount rate

 

7.84

%  

7.04

%  

7.18

%

Expected rate of salary increases

 

5.50

%  

5.50

%  

5.50

%

Annual increase in minimum salary

 

19.00%/4.50

% *

4.00

%  

4.00

%

*19.00% applies to the General Zone and 4.50% to the Border Zone

Biometric:

 

 

 

Mortality (1)

 

EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA

 

EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA

 

EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA

Disability (2)

 

IMSS-97

 

IMSS-97

 

IMSS-97

(1)Mexican Experience of social security (EMSSA), Economic Commission for Latin America and the Caribbean (CEPAL for its Spanish acronym).
(2)Mexican Experience of Instituto Mexicano del Seguro Social (IMSS).

Accruals for short-term employee benefits (included as part of other liabilities). As of December 31, 2021 and 2020, respectively, are as follows:

    

2021

    

2020

Employee profit-sharing (Note 16)

Ps.

261,115

Ps.

14,417

The key management personnel of the Company include the members of the Board of Directors (Note 7).

Sensitivity analysis

The reasonably possible variations at the date of the report, in one of the most significant actuarial assumptions, and assuming that the rest of the variables had remained constant, would have affected the benefit obligations defined as of December 31, 2021 in the amounts shown below:

    

Present value of the defined benefit obligation

(Thousands Mexican pesos)

Assumptions

Increase

Decrease

Discount rate:

50 basis points

Ps.

78,054

Ps.

85,856

Salary increase rate:

 

50 basis points

 

Ps.

82,294

 

Ps.

81,164

v3.22.1
Share-based payments
12 Months Ended
Dec. 31, 2021
Share-based payments  
Share-based payments

18.  Share-based payments

a)  LTRP

On November 6, 2014, the shareholders of the Company and the shareholders of its subsidiary Servicios Corporativos, approved an amendment to the current LTRP for the benefit of certain key employees, based on the recommendations of the Board of Directors of the Company at its meetings held on July 24 and August 29, 2014. For such purposes on November 10, 2014 an irrevocable Administrative Trust was created by Servicios Corporativos and the key employees. The new plan was restructured and named LTIP, which consists of a share purchase plan (equity-settled transaction) and SARs plan (cash settled).

On October 18, 2018, the Board of Directors of the Company approved a new long-term retention plan LTRP for certain executives of the Company, through which the beneficiaries of the plan, will receive shares of the Company once the service conditions are met. This plan does not include cash compensations granted through appreciation rights on the Company’s shares. The retention plans granted in previous periods under LTRP will continue in full force and effect until their respective due dates and the cash compensation derived from them will be settled according to the conditions established in each plan.

b)  LTIP

- Share purchase plan (equity-settled)

Under the share purchase plan (equity- settled), in November 2014 certain key employees of the Company were granted with a special bonus by an amount of Ps.10,831, to be used to purchase Company’s shares. The plan consisted in:

(i)Servicios Corporativos granted a bonus to each key executive;
(ii)The bonus amount by Ps.7,059, net of withheld taxes, was transferred on November 11, 2014, as per the written instructions of each key employees, to the Administrative Trust for the acquisition of Series A shares of the Company through an intermediary authorized by the BMV based on the Administration Trust’s Technical Committee instructions;
(iii)Subject to specified terms and conditions set forth in the Administrative Trust, the acquired shares were in escrow under the Administrative Trust for its administration until the vesting period date for each key executive, date as of which the key executive can fully dispose of the shares and instruct as desired.
(iv)The share purchase plan provides that if the terms and conditions are not met by the vesting period date, then the shares would be sold in the BMV, and Servicios Corporativos would be entitled to receive the proceeds of the sale of shares.
(v)The key employees’ account balance will be tracked by the Administrative Trust. The Administrative Trust’s objectives are to acquire Series A shares on behalf of the key employees and to manage the shares granted to such key executive based on instructions set forth by the Technical Committee.

As the Administrative Trust is controlled and therefore consolidated by Controladora, shares purchased in the market and held within the Administrative Trust are presented for accounting purposes as treasury stock in the consolidated statement of changes in equity.

In November 2021, 2020 and 2019, the extensions to the LTIP were approved, respectively by the Company’s shareholder’s and Company’s Board of Directors, respectively. The total cost of the extensions approved were Ps.104,698 (Ps.68,066 net of withheld taxes), Ps.92,132 (Ps.59,899 net of withheld taxes) and Ps.86,772 (Ps.56,407 net of withheld taxes), respectively. Under the terms of the incentive plan, certain key employees of the Company were granted a special bonus that was transferred to the Administrative Trust for the acquisition of Series A shares of the Company.

As of December 31, 2021, 2020 and 2019, the number of shares into the Administrative Trust associated with the Company’s share purchase payment plans is as follows:

    

Number of Series A

    

shares 

Outstanding as of January 1st, 2019

 

3,553,295

*

Purchased during the year

 

2,694,600

Granted during the year

 

Exercised/vested during the year

 

(959,614)

Forfeited during the year

(173,090)

Outstanding as of December 31, 2019

 

5,115,191

Purchased during the year

 

3,159,763

Granted during the year

 

Exercised/vested during the year

 

(2,142,426)

Forfeited during the year

(327,217)

Outstanding as of December 31, 2020

 

5,805,311

*

Purchased during the year

 

1,849,417

Granted during the year

 

Exercised/vested during the year

 

(2,612,575)

Forfeited during the year

 

(551,732)

Outstanding as of December 31, 2021

 

4,490,421

*

* These shares are presented as treasury shares in the consolidated statement of financial position as of December 31, 2021, 2020 and 2019.

The vesting period of the shares granted under the Company’s share purchase plans is as follows:

Number of Series A

    

shares

    

Vesting period 

2,408,277

 

November  2022

1,485,802

 

November 2023

596,342

 

November  2024

4,490,421

 

  

In accordance with IFRS 2, the share purchase plans are classified as equity-settled transactions on the grant date. This valuation is the result of multiplying the total number of Series A shares deposited in the Administrative Trust and the price per share, plus the balance in cash deposited in the Administrative Trust.

For the years ended December 31, 2021, 2020 and 2019, the compensation expense recorded in the consolidated statement of operations amounted to Ps.89,464, Ps.75,040 and Ps.49,659, respectively. All shares held in the Administrative Trust are considered outstanding for both basic and diluted earnings (loss) per share purposes, since the shares are entitled to dividend if and when declared by the Company.

During 2021, 2020 and 2019, some key employees left the Company; therefore, the vesting conditions were not fulfilled. In accordance with the terms of the plan, Servicios Corporativos is entitled to receive the proceeds of the sale of such shares, the number of forfeited shares as of December 31, 2021, 2020 and 2019, were (551,732), (327,217) and (173,090), respectively.

- SARs (cash settled)

On November 6, 2014, the Company granted 4,315,264 SARs to key employees that entitle them to a cash payment and vest as long as the employee continues to be employed by the Company at the end of each anniversary, during a three - years period. The total amount of the appreciation rights granted under this plan at the grant date was Ps.10,831.

Fair value of the SARs was measured at each reporting date. The carrying amount of the liability relating to the SARs as of December 31, 2019 was Ps.1,901. The retention plan granted in previous periods expired in November 2020.

The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits over the service period. During the years ended December 31, 2021, 2020 and 2019, the Company recorded an expense (benefit) of Ps.0, Ps. (1,901) and Ps.2,964, respectively, in the consolidated statement of operations.

The fair value of these SARs was estimated at the grant date and at each reporting date using the Black-Scholes option pricing model, taking into account the terms and conditions on which the SARs were granted.

During the year ended December 31, 2019, the Company made a cash payment to key employees related to the SARs plan in the amount of Ps.2,395.

Such payment was determined based on the increase in the share price of the Company from the grant date to the exercisable date.

During the year ended December 31, 2021 and 2020 the Company did not make a cash payment to key employees related to the SARs plan.

c)  MIP

- MIP I

In April 2012, the Board of Directors authorized a MIP for the benefit of certain key employees, subject to shareholders’ approval. On December 21, 2012, the shareholders approved the MIP consisting of: (i) the issuance of an aggregate of 25,164,126 Series A and Series B shares, representing 3.0% of the Company’s fully diluted capital stock; (ii) a grant of options to acquire shares of the Company or CPOs having shares as underlying securities for which, as long as certain conditions occur, the employees will have the right to request the delivery of those shares (iii) the creation of an Administrative Trust to deposit such shares in escrow until they are delivered to the officers or returned to the Company in the case that certain conditions do not occur; and (iv) the execution of share sale agreements setting forth the terms and conditions upon which the officers may exercise its shares at Ps.5.31 (five Mexican pesos 31/100) per share.

On December 24, 2012, the Administrative Trust was created, and the share sale agreements were executed. On December 27, 2012, the trust borrowed Ps.133,723 from the Company and immediately after; the trust paid the Company the same amount borrowed as purchase price for the shares.

The share sale agreements provide that the officers may pay for the shares at the same price upon the occurrence of either an initial public offering of the Company’s capital stock or a change of control and as long as they remain employees until the options are exercised, with a maximum term of ten years. Upon payment of the shares by the officers to the Management Trust, it must pay such amount back to the Company as repayment of the loan, for which the Company charges no interest.

The MIP has been classified as equity-settled, by which, the grant date, fair value is fixed and is not adjusted by subsequent changes in the fair value of capital instruments. Equity-settled transactions are measured at fair value at the date the equity benefits are conditionally granted to employees. The total cost of the MIP determined by the Company was Ps.2,722 to be recognized from the time it becomes probable the performance condition will be met over the vesting period. Total cost of the MIP related to the vested shares has been fully recognized in the consolidated statements of operations during the vesting years.

This cost was determined by using the improved Binomial valuation model from Hull and White, on the date in which the plan had already been approved by the shareholders and a shared understanding of the terms and conditions of the plan was reached with the employees (December 24, 2012, defined as the grant date), with the following assumptions:

    

2012

 

Dividend yield (%)

 

0.00

%

Volatility (%)

 

37.00

%

Risk—free interest rate (%)

 

5.96

%

Expected life of share options (years)

 

8.8

Exercise share price (in Mexican pesos Ps.)

 

5.31

Exercise multiple

 

1.1

Fair value of the stock at grant date

 

1.73

The expected volatility reflects the assumption that the historical volatility of comparable companies is indicative of future trends, which may not necessarily be the actual outcome.

Under the methodology followed by the Company, at the grant date and December 31, 2012, the granted shares had no positive intrinsic value.

In 2019, the key employees exercised 2,780,000 Series A shares. As a result, the key employees paid to the Management Trust Ps.14,773 corresponding to the exercised shares for the year ended December 31, 2019. During 2020, there were no exercised shares under the MIP. For the year ended December 31, 2021, the key employees exercised 7,653,981 Series A shares. As a result, the key employees paid to the Management Trust Ps.40,668 corresponding to the exercised shares for the year ended December 31, 2021.

Thereafter, the Company has received from the Management Trust the payment related to the exercised shares by the key employees as a repayment of the loan between the Company and the Management Trust.

Movements in share options

The following table illustrates the number of shares options and fixed exercise prices during the years 2021 and 2020:

    

    

    

Total in

Number of share

Exercise price

thousands of

    

options 

    

in Mexican pesos 

    

Mexican pesos 

Outstanding as of December 31, 2019

 

Ps.

7,653,981

 

Ps.

5.31

 

Ps.

40,668

Granted during the year

 

 

 

Forfeited during the year

 

 

 

Exercised during the year

 

 

 

Outstanding as of December 31, 2020

 

7,653,981

5.31

40,668

Granted during the year

 

 

 

Forfeited during the year

 

 

 

Exercised during the year

 

(7,653,981)

 

5.31

 

(40,668)

Outstanding as of December 31, 2021

 

Ps.

Ps.

Ps.

As of December 31, 2021 all the share options were exercised. As of December 31, 2020, 7,653,981 share options pending to exercise were considered as treasury shares.

- MIP II

On February 19, 2016, the Board of Directors of the Company authorized an extension to the MIP for certain key employees. Such extension was modified as of November 6, 2016. Under MIP II, 13,536,960 share appreciation rights of our Series A shares were granted to be settled annually in cash in a period of five years in accordance with the established

service conditions. In addition, a five-year extension to the period in which the employees can exercise MIP II once the SARs are vested was approved.

Fair value of the SARs is measured at each reporting period using a Black-Scholes option pricing model, taking into consideration the terms and conditions granted to the employees. The amount of the cash payment is determined based on the increase in our share price between the grant date and the settlement date.

The carrying amount of the liability relating to the SARs as of December 31, 2021 and 2020 was Ps.115,508 and Ps.177,770, respectively. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits over the service period.

During the years ended December 31, 2021 and 2020, the Company recorded a (benefit) expense of Ps. (62,262) and Ps. 107,204, respectively, in the consolidated statement of operations. No SARs were exercised during 2021 and 2020.

The (benefit) expense recognized for the Company’s retention plans during the years 2021, 2020 and 2019 is shown in the following table:

    

2021

    

2020

    

2019

(Benefit) expense arising from cash-settled share-based payments transactions

Ps.

(62,262)

Ps.

105,303

Ps.

40,724

Expense arising from equity-settled share-based payments transactions

 

89,464

 

75,040

 

49,659

Total expense arising from share-based payments transactions

Ps.

27,202

Ps.

180,343

Ps.

90,383

d) Board of Directors Incentive Plan (BoDIP)

Certain members of the Board of Directors of the Company receive additional benefits through a share-based plan, which has been classified as an equity-settled share-based payment and therefore accounted under IFRS 2 “Shared based payments”.

In April 2018, the Board of Directors of the Company authorized a Board of Directors Incentive Plan “BoDIP”, for the benefit of certain board members. The BoDIP grants options to acquire shares of the Company or CPOs during a five - year period with an exercise share price at Ps.32.23, Ps.9.74 and Ps.16.80 for the years ended 2021, 2020 and 2019, respectively, which was determined on the grant date. Under this plan, no service or performance conditions are required to the board members for exercise the option to acquire shares, and therefore, they have the right to request the delivery of those shares at the time they pay for them.

For such purposes on August 29, 2018 the Fideicomiso Irrevocable de Administración número CIB/3081 was created by Controladora Vuela Compañía de Aviación S.A.B de C.V as trustee and CIBanco, S.A., Institucion de Banco Multiple as trustor. The number of shares held as of December 31, 2021 and 2020 available to be exercised is 4,589,726 and 5,233,693, respectively.

v3.22.1
Equity
12 Months Ended
Dec. 31, 2021
Equity  
Equity

19.  Equity

As of December 31, 2021, the total number of the Company’s authorized shares was 1,165,976,677; represented by common registered shares, issued and with no par value, fully subscribed and paid, comprised as follows:

Shares 

    

Fixed

    

Variable

    

    

Class I 

    

Class II 

    

Total shares 

Series A shares (1)

 

10,478

 

1,108,452,326

 

1,108,462,804

Series B shares (1)

 

13,702

 

57,500,171

 

57,513,873

 

24,180

 

1,165,952,497

 

1,165,976,677

Treasury shares (Note 18)

 

 

(9,904,197)

 

(9,904,197)

(1)

 

24,180

 

1,156,048,300

 

1,156,072,480

(1) The number of forfeited shares as of December 31, 2021 were 551,732, which are include in treasury shares.

As of December 31, 2020, the total number of the Company’s authorized shares was 1,165,976,677; represented by common registered shares, issued and with no par value, fully subscribed and paid, comprised as follows:

Shares 

    

Fixed

    

Variable

    

    

Class I 

    

Class II 

    

Total shares 

Series A shares (1)

 

10,478

 

1,077,914,326

 

1,077,924,804

Series B shares (1)

 

13,702

 

88,038,171

 

88,051,873

 

24,180

 

1,165,952,497

 

1,165,976,677

Treasury shares (Note 18)

 

 

(19,020,202)

 

(19,020,202)

(1)

 

24,180

 

1,146,932,295

 

1,146,956,475

(1)The number of forfeited shares as of December 31, 2020, were 327,217, which are include in treasury shares.

On December 20, 2021, one of the Company’s shareholders concluded the conversion of 30,538,000 Series B Shares for the equivalent number of Series A Shares. This conversion had not impact either on the total number of outstanding shares nor on the earnings-per-share calculation.

On December 11, 2020, the Company announced the closing of an upsized primary follow-on equity offering in which the Company offered 134,000,000 of its Ordinary Participation Certificates (Certificados de Participación Ordinarios), or CPOs, in the form of American Depositary Shares, or ADSs, at a price to the public of USD11.25 per ADS in the United States and other countries outside of Mexico, pursuant to the Company’s shelf registration statement filed with the Securities and Exchange Commission. In connection with the offering, the underwriters exercised their option to purchase up to 20,100,000 additional CPOs in the form of ADSs. Each ADS represents 10 CPOs and each CPO represents a financial interest in one Series A share of common stock of the Company.

The net proceeds of USD$164,419,000 (after the deduction of the underwriters´ commission and expenses payable by the Company) obtained from the offering for general corporate purposes. The increase in capital stock amounted Ps.3,272,832.

All shares representing the Company’s capital stock, either Series A shares or Series B shares, grant the holders the same economic rights and there are no preferences and/or restrictions attaching to any class of shares on the distribution of dividends and the repayment of capital. Holders of the Company’s Series A common stock and Series B common stock are entitled to dividends when, and if, declared by a shareholders’ resolution. The Company’s revolving line of credit with Santander and Bancomext limits the Company’s ability to declare and pay dividends if the Company fails to comply with the payment terms thereunder. Only Series A shares from the Company are listed.

During the years ended December 31, 2021, 2020 and 2019 the Company did not declare any dividends.

a)  Earnings (loss) per share

Basic earnings (loss) per share (“EPS or LPS”) amounts are calculated by dividing the net earnings (loss) for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period.

Diluted EPS (LPS) amounts are calculated by dividing the earnings (loss) attributable to ordinary equity holders of the parent (after adjusting for interest on the convertible preference shares, if any), by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares (to the extent that their effect is dilutive).

The following table shows the calculations of the basic and diluted earnings (loss) income per share for the years ended December 31, 2021, 2020 and 2019.

As of  December 31, 

2021

2020

2019

Net income (loss) for the period

Ps.

2,120,551

Ps.

(4,293,791)

Ps.

2,639,063

Weighted average number of shares outstanding (in thousands):

 

 

 

Basic

 

1,165,977

 

1,021,561

 

1,011,877

Diluted

 

1,165,977

 

1,021,561

 

1,011,877

EPS - LPS:

 

 

 

  

Basic

Ps.

1.819

Ps.

(4.203)

Ps.

2.608

Diluted

Ps.

1.819

Ps.

(4.203)

Ps.

2.608

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorization of these financial statements.

b)  In accordance with the Mexican Corporations Act, the Company is required to allocate at least 5% of the net income of each year to increase the legal reserve. This practice must be continued until the legal reserve reaches 20% of capital stock. As of December 31, 2021, 2020 and 2019, the Company’s legal reserve was Ps.291,178, or 8.5%, 8.5% and 9.8% respectively of our capital stock. For the years ended December 31, 2021, 2020 and 2019, we did not allocate any amount to our legal reserve fund.

As of December 31, 2021, 2020 and 2019 the Company’s legal reserve has not reached the 20% of its capital stock.

c)  Any distribution of earnings in excess of the net tax profit account (Cuenta de utilidad fiscal neta or “CUFIN”) balance will be subject to corporate income tax, payable by the Company, at the enacted income tax rate at that time. A 10% withholding tax is imposed on dividends distributions to individuals and foreign shareholders from earnings generated starting January 1, 2014.Dividends paid will be free of Income taxes if they come from the (“CUFIN”). Dividends that exceed the CUFIN and the CUFINRE will cause a tax equivalent to 42.86%. Dividends paid that come from profits by the ISR will not be subject to any withholding or additional payment of taxes.

d)  Shareholders may contribute certain amounts for future increases in capital stock, either in the fixed or variable capital. Said contributions will be kept in a special account until the shareholders meeting authorizes an increase in the capital stock of the Company, at which time each shareholder will have a preferential right to subscribe and pay the increase with the contributions previously made. As it is not strictly regulated in Mexican law, the shareholders meeting may agree to return the contributions to the shareholders or even set a term in which the increase in the capital stock must be authorized.

v3.22.1
Income tax
12 Months Ended
Dec. 31, 2021
Income tax  
Income tax

20.  Income tax

a)  In accordance with the MITL, the Company and its Mexican subsidiaries are subject to income tax and each files its tax returns on an individual entity basis and the related tax results are included in the accompanying consolidated financial statements. The income tax is computed taking into consideration the taxable and deductible effects of inflation, such as

depreciation calculated on Adjusted assets values. Taxable income is increased or reduced by the effects of inflation on certain monetary assets and liabilities through the annual inflation adjustment.

(i)Based on the approved law, corporate income tax current rate for 2021, 2020 and 2019 and thereafter is 30%.
(ii)The tax rules include limits in the deductions of the exempt compensation amount certain items, as follows: Wages and benefits paid to workers 47% of income paid to workers and in certain cases up to 53% (holiday bonus, savings fund, employee profit sharing, seniority premiums) will be deductible for employers. As a result, certain wage and salary provisions have difference between tax and book values at year-end.
(iii)The MITL sets forth criteria and limits for applying some deductions, such as: the deduction of payments which, in turn, are exempt income for workers, contributions for creating or increasing provisions for pension funds, contributions to the Mexican Institute of Social Security payable by the worker that are paid by the employer, as well as the possible non-deduction of payments made to related parties in the event of failing to meet certain requirements.
(iv)Taxable income for purposes of the employee profit sharing is the same used for the Corporate Income Tax except for certain items.
(v)A 10% withholding tax is imposed on dividends distributions to individuals and foreign shareholders from earnings generated starting January 1, 2014.

The income tax rates for 2021, 2020 and 2019 in Guatemala, Costa Rica and El Salvador are 25%, 30% and 30%, respectively.

b)  For the years ended December 31, 2021, 2020 and 2019, the Company reported on a combined basis taxable income of Ps.1,224,156, Ps.302,029 and Ps.938,304, respectively, which was partially offset by tax losses from prior years.

In accordance with the MITL and Costa Rican Income Tax Law (CRITL), tax losses may be carried forward against taxable income generated in the succeeding ten and three years, respectively. Carryforward tax losses are adjusted based on inflation.

In accordance with Guatemala Income Tax Law (GITL) and El Salvador Income Tax Law (ESITL), tax losses cannot be carried forward against taxable income generated.

c)  An analysis of consolidated income tax expense for the years ended December 31, 2021, 2020 and 2019 is as follows:

Consolidated statements of operations

    

2021

    

2020

    

2019

 

Current year income tax expense

Ps.

(347,803)

Ps.

(90,609)

Ps.

(281,491)

Deferred income tax (expense) benefit

 

(246,125)

(1)

1,496,793

(2)

 

(813,340)

(3)

Total income tax benefit (expense)

Ps.

(593,928)

Ps.

1,406,184

Ps.

(1,094,831)

(1)    Includes translation effect by Ps. (2,015)

(2)    Includes translation effect by Ps.2,035

(3)    Includes translation effect by Ps. (2,278)

Consolidated statements of comprehensive income

    

2021

    

2020

    

2019

Deferred income tax related to items recognized in OCI during the year

 

  

 

  

 

  

Net (loss) gain cash flow hedges

Ps.

(5,655)

Ps.

46,835

Ps.

(74,820)

Remeasurement gain of employee benefits

 

2,850

 

794

 

3,058

Deferred income tax recognized in OCI

Ps.

(2,805)

Ps.

47,629

Ps.

(71,762)

d)  A reconciliation of the statutory corporate income tax rate to the Company’s effective tax rate for financial reporting purposes is as follows:

The Company’s using domestic tax rate

    

2021

    

%

    

2020

    

%

    

2019

    

%

 

Statutory income tax rate

 

814,344

30.00

%  

(1,709,992)

30.00

%  

1,120,168

30.00

%

Amendment tax return effects and other tax adjustments

 

93

(0.01)

%  

(53,192)

0.92

%  

(18,770)

(0.51)

%

Inflation on furniture, intangible and equipment

 

(48,751)

(1.79)

%  

(17,442)

0.29

%  

(17,839)

(0.48)

%

Inflation of tax losses

(41,375)

(1.52)

%

(13,512)

0.23

%

(8,018)

(0.21)

%

Foreign countries difference with Mexican statutory rate

2,609

0.10

%

3,509

(0.06)

%

4,143

0.11

%

Annual inflation adjustment

 

(167,294)

(6.16)

%  

51,768

(0.91)

%  

(1,882)

(0.05)

%

Recorded deferred taxes on tax losses

(9,123)

(0.34)

%

74,597

(1.29)

%

10,025

0.27

%

Non-deductible expenses

43,425

1.60

%

258,080

(4.51)

%

7,004

0.19

%

 

593,928

21.88

%  

(1,406,184)

24.67

%  

1,094,831

29.32

%

Mexican income tax matters

For Mexican purposes, corporate income tax is computed on accrued basis. MITL requires taxable profit to be determined by considering revenue net of tax deductions. Prior years’ tax losses can be utilized to offset current year taxable income. Income tax is determined by applying the 30% rate on the net amount after tax losses utilization. For tax purposes, income is considered taxable at the earlier of: (i) the time the revenue is collected, (ii) the service is provided or (iii) the time of the issuance of the invoice. Expenses are deductible for tax purposes generally on accrual basis, with some exceptions, once the requirements established in the tax law are fulfilled.

Central America (Guatemala, Costa Rica and El Salvador)

According to Guatemala Corporate Income tax law, under the regime on profits from business activities, net operating losses cannot offset taxable income in prior or future years. For the years ended December 31, 2021, 2020 and 2019, our subsidiary in Guatemala generated net operating losses of Ps.664, Ps.1,835 and Ps.1,085, respectively. According to Costa Rica Corporate Income tax law, under the regime on profits from business activities, net operating losses can offset taxable income in a term of three years. For the years ended December 31, 2021, 2020 and 2019, our subsidiary in Costa Rica generated net operating losses for an amount of Ps.122,427, Ps.55,751 and Ps.50,246, respectively, for which no deferred tax asset has been recognized. According to El Salvador Corporate Income tax law, under the regime on profits from business activities, net operating losses cannot offset taxable income in prior or future years. For the year ended December 31, 2021, 2020 and 2019, our subsidiary in El Salvador generated net operating losses for an amount of Ps.53,550, Ps.16,619, Ps.32,494 respectively.

e)  An analysis of consolidated deferred taxes is as follows:

2021

2020

Consolidated

Consolidated

Consolidated

Consolidated

statement of

statement of

statement of

statement of

    

financial position

    

operations 

    

financial position 

    

operations 

Deferred income tax assets:

 

  

 

  

 

  

 

  

Lease liability

Ps.

13,969,589

Ps.

730,335

Ps.

13,239,254

Ps.

1,084,140

Unearned transportation revenue

 

201,436

 

(1,032,225)

 

1,233,661

436,598

Extension lease agreement

 

1,073,547

 

300,104

 

773,443

 

314,100

Tax losses available for offsetting against future taxable income

 

100,472

 

(475,950)

 

576,422

 

272,452

Intangible

395,752

(25,156)

420,908

(25,941)

Allowance for doubtful accounts

 

131,486

 

69,921

 

61,565

 

47,476

Employee benefits

 

10,432

 

(7,609)

 

15,191

 

2,934

Derivative Financial instruments

2,293

7,948

(22)

Employee profit sharing

 

1,870

 

(2,453)

 

4,323

 

(2,904)

Non derivative financial instruments

473,242

(473,242)

(477,471)

 

15,886,877

 

30,209

 

15,859,473

 

1,651,362

Deferred income tax liabilities:

 

 

  

 

  

 

  

Right of use asset

9,552,956

(739,797)

10,292,753

55,824

Supplemental rent

 

1,303,975

 

(574,890)

 

1,878,865

 

171,916

Rotable spare parts, furniture and equipment, net

 

1,270,758

 

563,666

 

707,092

 

(177,384)

Provisions

539,911

448,658

91,253

442,598

Inventories

 

87,592

 

4,190

 

83,402

 

(6,885)

Other prepayments

 

22,907

 

13,121

 

9,786

 

(17,942)

Prepaid expenses and other assets

431,241

563,703

(132,462)

(311,523)

 

13,209,340

 

278,651

 

12,930,689

 

156,604

Ps.

2,677,537

Ps.

(248,442)

Ps.

2,928,784

Ps.

1,494,758

Reflected in the consolidated statement of financial position as follows:

    

2021

    

2020

 

  

 

  

Deferred tax assets

Ps.

2,907,879

Ps.

3,128,555

Deferred tax liabilities

 

(230,342)

 

(199,771)

Deferred tax assets, net

Ps.

2,677,537

Ps.

2,928,784

A reconciliation of deferred tax asset, net is as follows:

    

2021

    

2020

Opening balance as of January 1,

Ps.

2,928,784

Ps.

1,386,397

Deferred income tax (expense) benefit during the current year recorded on profits*

 

(248,442)

 

1,494,758

Deferred income tax (expense) benefit during the current year recorded in accumulated other comprehensive income (loss)

 

(2,805)

 

47,629

Closing balance as of December 31, 

Ps.

2,677,537

Ps.

2,928,784

*Includes the tax effect of the discontinuation of the hedging reserve by 473 million.

On December 31, 2021 and 2020 the table shown above includes deferred income tax asset recognized by Comercializadora (2021 and 2020) for tax losses carry-forwards to the extent that the realization of the related tax benefit through future taxable profits is probable. The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

According to IAS 12, Income Taxes, a deferred tax asset should be recognized for the carry-forward of available tax losses to the extent that it is probable that future taxable income will be available against which the available tax losses can be utilized. In these regards, the Company has recognized on December 31, 2021, 2020 and 2019 a deferred tax asset for tax losses of Ps.100,472, Ps.576,422 and Ps.303,970 respectively.

During 2020, the Company recognized a deferred tax asset for the carry-forward of available tax losses of Concesionaria and Comercializadora, based on the positive evidence of the Company to generate taxable profit related to the same taxation authority against which the available tax losses can be utilized before they expire. Positive evidence includes Concesionaria’s actions to increase its aircraft fleet in the following years, increase in flight frequencies, and routes, inside and outside of Mexico; the profit of Comercializadora, is derived directly from Concesionaria’s operations.

The temporary differences associated with investments in the Company’s subsidiaries, for which a deferred tax liability has not been recognized in the periods presented, aggregate to Ps.157,422 (2020: Ps.150,683). The Company has determined that the undistributed profits of its subsidiaries will not be distributed in the foreseeable future. The Company has an agreement with its associate that the profits of the associate will not be distributed until it obtains the consent of the Company. The Company does not anticipate giving such consent at the reporting date. Furthermore, the Group’s joint venture will not distribute its profits until it obtains the consent of all venture partners.

An analysis of the available tax losses carry-forward of the Company at December 31, 2021 is as follows:

Year

    

Historical

    

Inflation adjusted

    

    

Total remaining

    

Year of

of loss

    

Loss

    

tax loss

    

Utilized

    

amount

    

expiration

2017

Ps.

1,067,836

Ps.

1,278,913

Ps.

1,278,913

Ps.

2027

2018

1,142

1,142

1,142

 

2021

2019

 

4,922

 

5,568

 

 

5,568

 

2029

2019

 

30,918

 

30,918

 

 

30,918

 

2022

2020

 

863,847

 

943,026

 

883,401

 

59,625

 

2030

2020

103,541

103,541

103,541

 

2023

2021

122,427

122,427

122,427

2031

2021

11,324

11,684

11,684

2024

Ps.

2,205,957

Ps.

2,497,219

Ps.

2,162,314

Ps.

334,905

A breakdown of available tax loss carry-forward of Controladora and its subsidiaries on December 31, 2021 is as follows:

Historical

Inflation adjusted

Total

 

    

loss

    

tax loss

    

Utilized

    

remaining amount

 

Comercializadora

Ps.

54,101

Ps.

58,580

Ps.

Ps.

58,580

Concesionaria

 

1,875,180

 

2,160,330

 

2,160,330

 

Viajes Vuela

258,028

258,028

258,028

Vuela Aviación

 

18,648

 

20,281

 

1,984

 

18,297

Ps.

2,205,957

Ps.

2,497,219

Ps.

2,162,314

Ps.

334,905

Unrecognized NOLs

Ps.

334,905

Tax rate

30

%

Deferred income tax

Ps.

100,472

f)  At December 31, 2021 the Company had the following tax balances:

    

2021

Adjusted contributed capital account (Cuenta de capital de aportación or “CUCA”)

Ps.

4,946,422

CUFIN*

 

4,151,805

*The calculation comprises all the subsidiaries of the Company.

v3.22.1
Operating Revenues
12 Months Ended
Dec. 31, 2021
Operating Revenues  
Operating Revenues

21. Operating Revenues

As of December 31, 2021, 2020 and 2019, the revenues from contracts with customers is described as follows:

    

At the flight time

At the sale

    

Total

Revenue recognition as of December 31, 2021

    

Domestic

    

International

    

Domestic

    

International

    

Revenues

Passenger Revenues

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

Fare Revenues

 

Ps.

17,466,759

Ps.

8,236,385

 

Ps.

Ps.

 

Ps.

25,703,144

Other Passenger Revenues

 

14,376,043

3,049,608

135,992

 

32,580

 

17,594,223

 

31,842,802

11,285,993

135,992

32,580

43,297,367

Non-Passenger Revenues

 

  

  

 

  

 

  

 

  

 

  

 

  

Other Non-Passenger revenues

 

1,546,600

11,492

 

 

1,558,092

Cargo

 

231,653

9,549

 

 

241,202

Total

 

Ps.

33,621,055

Ps.

11,307,034

 

Ps.

135,992

Ps.

32,580

 

Ps.

45,096,661

Non-derivative financial instruments

 

 

  

 

  

 

  

 

  

 

  

(434,522)

 

Ps.

44,662,139

    

At the flight time

    

At the sale

Total

Revenue recognition as of December 31, 2020

    

Domestic

    

International

    

Domestic

    

International

    

Revenues

Passenger Revenues

 

Ps.

8,455,647

  

Ps.

4,417,527

 

Ps.

  

Ps.

 

Ps.

12,873,174

Fare Revenues

 

6,920,141

1,536,206

124,450

32,601

8,613,398

Other Passenger Revenues

 

15,375,788

5,953,733

124,450

32,601

21,486,572

 

  

  

  

Non-Passenger Revenues

 

Other Non-Passenger revenues

 

875,610

6,750

882,360

Cargo

 

196,349

5,532

201,881

Total

 

Ps.

16,447,747

Ps.

5,966,015

Ps.

124,450

Ps.

32,601

Ps.

22,570,813

Non-derivative financial instruments

 

(411,222)

 

Ps.

22,159,591

    

At the flight time

    

At the sale

    

Total

Revenue recognition as of December 31, 2019

    

Domestic

    

International

    

Domestic

    

International

    

Revenues

Passenger Revenues

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

Fare Revenues

 

Ps.

15,833,878

Ps.

7,296,113

 

Ps.

Ps.

 

Ps.

23,129,991

Other Passenger Revenues

 

7,531,725

 

2,865,555

 

119,466

52,462

 

  

10,569,208

 

23,365,603

 

10,161,668

 

119,466

  

52,462

 

  

33,699,199

Non-Passenger Revenues

 

  

  

 

  

 

  

 

  

  

 

  

 

Other Non-Passenger revenues

 

888,353

 

9,233

 

 

  

897,586

Cargo

 

221,375

 

7,461

 

 

  

228,836

Total

 

Ps.

24,475,331

Ps.

10,178,362

 

Ps.

119,466

Ps.

52,462

 

Ps.

34,825,621

Non-derivative financial instruments

 

 

  

 

  

 

  

 

  

 

  

(72,949)

 

  

 

  

 

  

 

  

 

  

 

Ps.

34,752,672

Transactions from unearned transportation revenues

    

2021

    

2020

January 1,

Ps.

5,850,917

Ps.

3,679,926

Deferred

 

43,703,458

23,657,563

Recognized in revenue during the year

 

(43,297,367)

(21,486,572)

December 31,

 

Ps.

6,257,008

Ps.

5,850,917

The performance obligations related to contract liability are recognized over the following 12 months and are related to the scheduled flights and other passenger services purchased by the client in advance.

v3.22.1
Other operating income and expenses
12 Months Ended
Dec. 31, 2021
Other operating income and expenses  
Other operating income and expenses

22.  Other operating income and expenses

An analysis of other operating income is as follows:

    

2021

    

2020

    

2019

Gain on sale and leaseback (Note 12)

Ps.

195,552

Ps.

710,522

Ps.

284,759

Loss on sale of rotable spare parts, furniture and equipment

(2,571)

(2,604)

(8,954)

Other income

 

24,857

 

22,415

 

51,403

Ps.

217,838

Ps.

730,333

Ps.

327,208

An analysis of other operating expenses is as follows:

    

2021

    

2020

    

2019

Administrative and operational support expenses

Ps.

752,434

Ps.

632,041

Ps.

581,181

Technology and communications

 

431,855

 

383,648

 

381,055

Passenger services

 

76,107

 

87,850

 

65,477

Insurance

 

74,499

 

53,507

 

74,661

Others

 

1,897

 

194

 

10,553

Ps.

1,336,792

Ps.

1,157,240

Ps.

1,112,927

v3.22.1
Finance income and cost
12 Months Ended
Dec. 31, 2021
Finance income and cost  
Finance income and cost

23.  Finance income and cost

An analysis of finance income is as follows:

    

2021

    

2020

    

2019

Interest on cash and equivalents

Ps.

58,269

Ps.

93,122

Ps.

201,191

Interest on asset backed trust notes

 

5,714

 

6,342

 

6,525

Interest on recovery of guarantee deposits

 

7,595

 

2,047

 

83

Ps.

71,578

Ps.

101,511

Ps.

207,799

An analysis of finance cost is as follows:

    

2021

    

2020

    

2019

Interest expense on lease liabilities and aircraft and engine lease return obligation

Ps.

2,603,820

Ps.

2,350,250

Ps.

2,128,162

Derivative financial instruments loss

448,559

Interest on asset backed trust notes

115,578

116,240

80,314

Cost of letter credit notes

61,549

73,141

49,856

Bank fees and others

 

4,574

 

3,707

 

3,607

Interest on debts and borrowings*

 

14,222

 

16,368

 

1,660

Other finance costs

 

32,246

 

10,219

 

6,230

Ps.

2,831,989

Ps.

3,018,484

Ps.

2,269,829

* The borrowing costs related to the acquisition or construction of qualifying assets are capitalized as part of the cost of the asset (Note 12). Interest expense not capitalized is related to the short-term working capital facility from Citibanamex.

    

2021

    

2020

    

2019

Interest on debts and borrowings

Ps.

158,188

Ps.

400,406

Ps.

457,973

Capitalized interest (Note 12)

 

(143,966)

 

(384,038)

 

(456,313)

Net interest on debts and borrowing in the consolidated statements of operations

Ps.

14,222

Ps.

16,368

Ps.

1,660

v3.22.1
Components of other comprehensive (loss) income
12 Months Ended
Dec. 31, 2021
Components of other comprehensive (loss) income  
Components of other comprehensive (loss) income

24.  Components of other comprehensive (loss) income

a.An analysis of the other comprehensive (loss) income for the years ended December 31, 2021, 2020 and 2019 is as follows:

    

    

Derivative and

    

Exchange

    

Remeasurements

non-derivative

differences on

of employee

financial

the translation

benefits

instruments

of foreign

Total

Other comprehensive (loss) income:

 

 

  

 

  

 

  

 

Balance as of December 31, 2019

 

Ps.

(6,798)

 

Ps.

104,772

Ps.

18,266

Ps.

116,240

Comprehensive (loss) income of the year

 

(2,651)

 

(1,747,686)

23,970

(1,726,367)

Deferred Tax effect

 

794

 

46,835

47,629

Balance as of December 31, 2020

(8,655)

(1,596,079)

42,236

(1,562,498)

Comprehensive (loss) income of the year

 

(9,279)

 

1,596,327

(4,021)

1,583,027

Deferred Tax effect

 

2,850

 

(5,655)

(2,805)

Net balances as of December 31, 2021

 

Ps.

(15,084)

 

Ps.

(5,407)

Ps.

38,215

Ps.

17,724

b.An analysis of the derivative financial instruments other comprehensive income (loss) for the years ended December 31, 2021, 2020 and 2019 is as follows:

    

2021

    

2020

    

2019

Derivative and non-derivative financial instruments:

 

  

 

  

 

  

Extrinsic value of changes on jet fuel Asian call options

Ps.

11,997

Ps.

(11,993)

Ps.

11,148

Extrinsic value of changes on jet fuel Zero cost collars

9,657

 

(143,224)

 

256,515

loss gain of the matured foreign currency forward contracts

(14,241)

Loss of the interest rate Cap

(2,800)

(900)

(4,023)

Non derivative financial instruments*

1,577,473

(1,591,569)

14,096

Total

Ps.

1,596,327

Ps.

(1,747,686)

Ps.

263,495

*As of December 31, 2021, includes the effect of the discontinuation of the hedging strategies by Ps.2,251,442 as described in note 3b (i).

v3.22.1
Commitments and contingencies
12 Months Ended
Dec. 31, 2021
Commitments and contingencies  
Commitments and contingencies

25.  Commitments and contingencies

Aircraft related commitments and financing arrangements

Committed expenditures for aircraft purchase and related flight equipment related to the Airbus purchase agreement, including estimated amounts for contractual prices escalations and pre-delivery payments, will be as follows:

    

    

Commitment

Commitment

expenditures

expenditures in 

equivalent in

thousands of U.S.

thousands of

    

dollars

    

Mexican pesos(1)

2022

 

US$

114,563

Ps.

2,358,108

2023

 

314,660

 

6,476,797

2024

 

903,776

 

18,602,869

2025

981,657

20,205,930

2026 and thereafter

 

4,362,996

 

89,805,726

 

US$

6,677,652

Ps.

137,449,430

(1)Using the exchange rate as of December 31, 2021 of Ps.20.5835.

All aircraft acquired by the Company through the Airbus purchase agreement through December 31, 2021, have been executed through sale and leaseback transactions.

In addition, we have commitments to execute sale and leaseback over the next two years. The estimated proceeds from these commitments are as follows:

    

Aircraft sale prices estimated 

in thousands of U.S. dollars

    

In thousands of Mexican pesos (1)

2022

US$

705,500

Ps. 

14,521,659

2023

 

108,000

 

2,223,018

US$

813,500

Ps.

16,744,677

(1)Using the exchange rate as of December 31, 2021 of Ps.20.5835.

For future aircraft deliveries the Company will review the lease and financing structure applicable based on the then current market conditions.

The future lease payments for these non-cancellable sale and leaseback contracts are as follows:

Aircraft leases

in thousands of U.S. 

    

In thousands of Mexican 

dollars

pesos (1)

2022

US$

40,589

Ps.

835,464

2023

 

75,098

 

1,545,780

2024

 

79,244

 

1,631,119

2025

 

79,244

 

1,631,119

2026 and thereafter

 

676,748

 

13,929,842

US$

950,923

Ps.

19,573,324

(1)Using the exchange rate as of December 31, 2021 of Ps.20.5835.

Purchase of additional A320 New Engine Option (“NEO”) family aircraft

On December 28, 2017, the Company amended the agreement with Airbus, S.A.S. (“Airbus”) for the purchase of additional 80 A320NEO family aircraft to be delivered from 2022 to 2026, which was further amended in July 2020 to reschedule the deliveries between 2023 and 2028. Additionally, in November 2021 the Company entered into a new amendment to the referred agreement to purchase 39 additional A32O New Engine Option family Aircraft to be delivered between 2023 and 2029, all to support the Company’s targeted growth markets in Mexico, United States, Central America and South America.

Litigation

The Company is a party to legal proceedings and claims that arise during the ordinary course of business. Certain proceedings are considered possible obligations. Based on the plaintiffs’ claims, as of December 31, 2021 and 2020, these possible contingencies amount to a total of Ps.163 million and Ps.125 million respectively.

v3.22.1
Operating segments
12 Months Ended
Dec. 31, 2021
Operating segments  
Operating segments

26.  Operating segments

The Company is managed as a single business unit that provides air transportation services. The Company has two geographic segments identified below:

    

2021

    

2020

    

2019

Operating revenues:

 

  

 

  

 

  

Domestic (Mexico)

Ps.

33,754,354

Ps.

16,572,198

Ps.

24,594,797

International:

 

 

  

 

  

United States of America, Central America and South America (1)

 

11,342,307

 

5,998,615

 

10,230,824

Non-derivative financial instruments

(434,522)

(411,222)

(72,949)

Total operating revenues

Ps.

44,662,139

Ps.

22,159,591

Ps.

34,752,672

(1)For the year ended December 31, 2021, the total revenue from international customers increased of Ps.5,343,692 compared to the year ended December 31, 2020.

Revenues are allocated by geographic segments based upon the origin of each flight. The Company does not have material non-current assets located in foreign countries.

v3.22.1
Subsequent events
12 Months Ended
Dec. 31, 2021
Subsequent events  
Subsequent events

27.  Subsequent events

Subsequent to December 31, 2021 and through April 26, 2022:

a.Conflict between Russia and Ukraine

Following the recent geopolitical crisis in Eastern Europe, as of February 21st, 2022, the Russian Federation recognized the independence of the Ukrainian separatist regions of Donetsk and Luhansk in the Donbas region. On the day after, the Federal Council of Russia authorized use of military force abroad, which triggered an invasion of Ukraine by the Russian Armed Forces on February 24th, 2022.

The invasion was widely condemned internationally with several sanctions being imposed against Russia and Belarus. As a result, the global markets reacted negatively, with the fuel prices touching the highest price since 2008, amid global concerns on the commodity supply.

The airline industry has been impacted by the price and availability of fuel. However, the airline industry and the Company are implementing strategies to mitigate these effects.

b.On April 1st, 2022, the Company entered into an agreement with JSA International U.S. Holdings, LLC, which provides financing for pre-delivery payments in connection with our purchase of four A320 family aircraft.

c.At April 26, 2022, the Company has obtained financing for the pre-delivery payments with certain lessors in respect of 18 aircraft (including the four aircraft referenced in b) above) to be delivered in the years 2023 and 2024.

v3.22.1
Description of the business and summary of significant accounting policies (Policies)
12 Months Ended
Dec. 31, 2021
Description of the business and summary of significant accounting policies  
Basis of preparation

b)  Basis of preparation

Statement of compliance

These consolidated financial statements comprise the financial statements of the Company and its subsidiaries at December 31, 2021 and 2020 and for each of the three years ended December 31, 2021, and were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which each entity operates (“functional currency”). The functional currency of Controladora and its subsidiary Concesionaria was the Mexican peso until December 31, 2021, and since such date changed to US dollar.

The presentation currency of the Company’s consolidated financial statements is the Mexican peso, which is used also for compliance with its legal obligations. All values in the consolidated financial statements are rounded to the nearest thousand (Ps.000), except when otherwise indicated.

The Company has consistently applied its accounting policies to all periods presented in these consolidated financial statements and provide comparative information in respect of the previous period.

Basis of measurement and presentation

The accompanying consolidated financial statements have been prepared under the historical-cost convention, except for derivative financial instruments that are measured at fair value.

The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from those estimates.

Basis of consolidation

c)  Basis of consolidation

The accompanying consolidated financial statements comprise the financial statements of the Company and its subsidiaries. On December 31, 2021 and 2020, for accounting purposes the companies included in the consolidated financial statements are as follows:

Principal

% Equity interest

Name

    

Activities

    

Country

    

2021

    

2020

 

Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V.

 

Air transportation services for passengers, cargo and mail throughout Mexico and abroad

 

Mexico

 

100

%  

100

%

Vuela Aviación, S.A.

 

Air transportation services for passengers, cargo and mail in Costa Rica and abroad

 

Costa Rica

 

100

%  

100

%

Vuela, S.A. (“Vuela”) *

 

Air transportation services for passengers, cargo and mail in Guatemala and abroad

 

Guatemala

 

100

%  

100

%

Vuela El Salvador, S.A. de C.V.

Air transportation services for passengers, cargo and mail in El Salvador and abroad

El Salvador

100

%  

100

%

Comercializadora Volaris, S.A. de C.V. ("Comercializadora")

 

Merchandising of services

 

Mexico

 

100

%  

100

%

Servicios Earhart, S.A.*

 

Recruitment and payroll

 

Guatemala

 

100

%  

100

%

Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”)

 

Recruitment and payroll

 

Mexico

 

100

%  

100

%

Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) (3)

 

Recruitment and payroll

 

Mexico

 

100

%

Comercializadora V Frecuenta, S.A. de C.V. (“Loyalty Program”) **

Loyalty Program

Mexico

100

%  

100

%

Viajes Vuela, S.A. de C.V. (“Viajes Vuela”)

Travel agency

Mexico

100

%  

100

%

Guatemala Dispatch Service, S.A., (“GDS, S.A.”) (4)

Aeronautical Technical Services

Guatemala

100

%

CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso
1710 (1)

Pre-delivery payments financing (Note 5)

Mexico

100

%

100

%

CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso
1711 (2)

Pre-delivery payments financing (Note 5)

Mexico

100

%

100

%

Fideicomiso Irrevocable de Administración número F/307750 “Administrative Trust”

 

Share administration trust (Note 18)

 

Mexico

 

100

%  

100

%

Fideicomiso Irrevocable de Administración número F/745291 “Administrative Trust”

 

Share administration trust (Note 18)

 

Mexico

 

100

%  

100

%

Fideicomiso de Administración número CIB/3081 “Administrative Trust”

Share administration trust (Note 18)

Mexico

100

%  

100

%  

Fideicomiso Irrevocable de Administración número CIB/3249 “Administrative Trust”

Asset backed securities trustor & administrator (Note 5)

Mexico

100

%  

100

%

*The Companies have not started operations yet in Guatemala

**The Company has not started operations yet

(1)With effect from October 16, 2020, the Successor of the Trust 1710 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple.
(2)With effect from October 16, 2020, the Successor of the Trust 1711 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple.
(3)With effect from August 31,2021, the Company merged with Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V.
(4)The Company was acquired in October 5, 2021.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent Company, using consistent accounting policies.

Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, the Company has:

(i)Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee).
(ii)Exposure, or rights, to variable returns from its involvement with the investee.
(iii)The ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(i)The contractual arrangement with the other vote holders of the investee.
(ii)Rights arising from other contractual arrangements.
(iii)The Company’s voting rights and potential voting rights.

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Company gains control until the date the Company ceases to control the subsidiary.

All intercompany balances, transactions, unrealized gains and losses resulting from intercompany transactions are eliminated in full on consolidation in the consolidated financial statements.

On consolidation, the assets and liabilities of foreign operations are translated into Mexican pesos at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at the average exchange rates prevailing at the time. The exchange differences arising on translation for consolidation are recognized in other comprehensive income (“OCI”). On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognized in profit or loss.

Revenue recognition

d)  Revenue recognition

Passenger revenues

Revenues from the air transportation of passengers are recognized at the earlier of when the service is provided or when the non-refundable ticket expires at the date of the scheduled travel.

Ticket sales for future flights are initially recognized as contract liabilities under the caption “unearned transportation revenue” and, once the transportation service is provided by the Company or when the non-refundable ticket expires at the date of the scheduled travel, the earned revenue is recognized as passenger ticket revenues and the unearned transportation revenue is reduced by the same amount. All the Company’s tickets are non-refundable and are subject to change upon a payment of a fee. Additionally, the Company does not operate a frequent flier program.

The most significant passenger revenue includes revenues generated from: (i) fare revenue and (ii) other passenger revenues. Other passenger services include but are not limited to fees charged for excess baggage, bookings through the call center or third-party agencies, advanced seat selection, itinerary changes and charters. They are recognized as revenue when the obligation of passenger transportation service is provided by the Company or when the non-refundable ticket expires at the date of the scheduled travel.

The Company also classifies as other passenger revenue “V Club” and other similar services, which are recognized as revenue over time when the service is provided.

Non-passenger revenues

The most significant non-passenger revenues include revenues generated from: (i) revenues from other non-passenger services described below and (ii) cargo services.

Revenues from other non-passenger services mainly include but are not limited to commissions charged to third parties for the sale of hotel reservations, trip insurance, rental cars and advertising spaces to third parties. They are recognized as revenue at the time the service is provided.

The Company also evaluated the principal versus agent considerations as it relates to certain non-air travel services arrangements with third party providers. No changes were identified under this analysis as the Company is agent for those services provided by third parties.

Code-share agreement

The Company sells certain tickets with connecting flights with one or more segments operated by its other airline partner. For segments operated by its other airline partner, the Company has determined that it is acting as an agent on behalf of the other airline, as is

responsible for its portion of the contract (i.e., transportation of the passenger). The Company, as the agent, recognizes revenue within Other operating revenue at the time of the travel, for the net amount retained by the Company for any segments flown by other airline.

On January 16, 2018, the Company and Frontier Airlines (herein after Frontier) entered into a code-share operations agreement, which started operations in September 2018.

Through this alliance, the Company´s customers gain access to additional cities in the U.S. beyond the current available destinations as the Company’s customers are able to buy a ticket throughout any of Frontier’s actual destinations; and Frontier customers gain first-time access to new destinations in Mexico through Volaris presence in Mexican airports.

Code-share tickets can be purchased directly from the Volaris’ website. The airline that provides the transportation recognize the revenue when the service is provided.

Other considerations analyzed as part of revenue from contracts with customers

All revenues offered by the Company including sales of tickets for future flights, other passenger related services and non-passenger revenue must be paid through a full cash settlement. The payment of the transaction price is equal to the cash settlement from the client at the sales time (using different payment options like credit or debit cards, paying through a third party or directly at the counter in cash). There is little or no judgment to determine the point in time of the revenue recognition, and the amount of it. Even if mainly all the sales of services are initially recognized as contract liabilities, there is no financing component in these transactions.

The cost to obtain a contract is represented by the commissions paid to the travel agencies and the bank commissions charged by the financial institutions for processing electronic transactions (Note 10). The Company does not incur any additional costs to obtain and fulfill a contract that is eligible for capitalization.

Trade receivables are mainly with financial institutions due to transactions with credit and debit cards, and therefore they are non-interest bearing and are mainly on terms of 24 to 48 hours. The Company has the right of collection at the beginning of the contracts and there are no discounts, payment incentives, bonuses, or other variable considerations subsequent to the purchase that could modify the amount of the transaction price.

The Company´s tickets are non-refundable. However, if the Company cancels a flight for causes attributable to the airline, including as a result of the COVID-19 pandemic, then the passenger is entitled to either move their flight at no cost, receive a refund or a voucher. No revenue is recognized until either the voucher is redeemed, and the associate flight occurs, or the voucher expires. When vouchers issued exceed the amount of the original amount paid by the passenger the excess is recorded as reduction of the operating revenues. All of the Company´s revenues related to future services are rendered through an approximate period of 12 months.

Cash and cash equivalents

e)  Cash, cash equivalents and restricted cash

Cash and cash equivalents are represented by bank deposits and highly liquid investments with maturities of 90 days or less at the original purchase date. For the purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash and short-term investments as defined above.

The Company has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. These credit card processing agreements don’t have significant cash reserve requirements.

Restricted cash are used to constitute the debt service reserves and cannot be used for purposes other than those established.

Financial instruments initial recognition and subsequent measurement

f)  Financial instruments -initial recognition and subsequent measurement

A financial instrument is any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity.

i)  Financial assets

Initial recognition

Classification of financial assets and initial recognition

The Company determines the classification and measurement of financial assets, in accordance with the categories in IFRS 9, which are based on both: the characteristics of the contractual cash flows of these assets and the business model objective for holding them.

Financial assets include those carried at FVTPL, whose objective to hold them is for trading purposes (short-term investments), or at amortized cost, for accounts receivables held to collect the contractual cash flows, which are characterized by solely payments of principal and interest (“SPPI”). Derivative financial instruments are also considered financial assets when these represent contractual rights to receive cash or another financial asset. All the Company’s financial assets are initially recognized at fair value, including derivative financial instruments.

Subsequent measurement

The subsequent measurement of financial assets depends on their initial classification, as is described below:

1.Financial assets at FVTPL which include financial assets held for trading.
2.Financial assets at amortized cost, whose characteristics meet the SPPI criterion and were originated to be held to collect principal and interest in accordance with the Company’s business model.
3.Financial assets at fair value through OCI with recycling of cumulative gains and losses.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when:

a)The rights to receive cash flows from the asset have expired;
b)The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset.

In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

ii)  Impairment of financial assets

The Company assesses at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is credit - impaired. A financial asset is credit- impaired when one or more events have occurred since the initial recognition of an asset (an incurred ‘loss event’), that has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

Evidence that a financial asset is credit – impaired may of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in receivable, the probability that they will enter bankruptcy or other financial reorganization and observable data indicating that there is a measurable decrease in the estimated cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Further disclosures related to impairment of financial assets are also provided in Note 8.

For trade receivables, the Company applies a simplified approach in calculating expected credit losses (ECLs). Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date.

Based on this evaluation, allowances are taken into account for the expected losses of these receivables. For the years ended December 31, 2021 and 2020 the Company recorded expected credit losses on accounts receivable of Ps.16,118 and Ps.13,664, respectively (Note 8).

iii)  Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, including loans and borrowings, accounts payables to suppliers, unearned transportation revenue, other accounts payable and financial instruments.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

Subsequent measurement

The measurement of financial liabilities depends on their classification as described below:

Financial liabilities at amortized cost

Accounts payable, are subsequently measured at amortized cost and do not bear interest or result in gains and losses due to their short-term nature.

Loans and borrowings are the category most relevant to the Company. After initial recognition at fair value (consideration received), interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method (EIR). Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on issuance and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the consolidated statements of operations. This amortized cost category generally applies to interest-bearing loans and borrowings (Note 5).

Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities under the fair value option, which are classified as held for trading, if they are acquired for the purpose of selling them in the near future. This category includes derivative financial instruments that are not designated as hedging instruments in hedge relationships as defined by IFRS 9.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability.

The difference in the respective carrying amounts is recognized in the consolidated statements of operations.

Offsetting of financial instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of financial position if there is:

(i)A currently enforceable legal right to offset the recognized amounts, and
(ii)An intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
Other accounts receivable

g)  Other accounts receivable

Other accounts receivables are due primarily from major credit card processors associated with the sales of tickets and are stated at cost less allowances made for credit losses, which approximates fair value given their short-term nature.

Inventories

h)  Inventories

Inventories consist primarily of flight equipment expendable parts, materials and supplies, and are initially recorded at acquisition cost. Inventories are carried at the lower of cost and their net realization value. The cost is determined based on the method of specific identification and expensed when used in operations. The Company recognizes the necessary estimates for decreases in the value of its inventories due to impairment, obsolescence, slow movement and causes that indicate that the use or realization of the aircraft spare parts and flight equipment accessories that are part of the inventory will be less than recorded value. The cost of inventories is determined based on the specific identification method and is recorded as an expense as it is used in operations.

Intangible assets

i)  Intangible assets

Cost related to the purchase or development of computer software that is separable from an item of related hardware is capitalized separately measured at cost and amortized over the period in which it will generate benefits not exceeding five years on a straight-line basis. The Company annually reviews the estimated useful lives and salvage values of intangible assets and any changes are accounted for prospectively.

The Company records impairment charges on intangible assets used in operations when events and circumstances indicate that the assets or related cash generating unit may be impaired and the carrying amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of (i) its fair value less cost to sell, and (ii) its value in use.

The value in use calculation is based on a discounted cash flow model, using our projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation. For the years ended December 31, 2021, and 2020, the Company did not record any impairment loss in the value of its intangible assets.

Software

Acquired computer software licenses are capitalized on the basis of cost incurred to acquire, implement and bring the software into use. Costs associated with maintaining computer software programs are expensed as incurred. In case of development or improvement to systems that will generate probable future economic benefits, the Company capitalizes software development costs, including directly attributable expenditures on materials, labor, and other direct costs.

Acquired software cost is amortized on a straight-line basis over its useful life. Licenses and software rights acquired by the Company have finite useful lives and are amortized on a straight–line basis over the term of the contract. Amortization expense is recognized in the consolidated statements of operations.

Guarantee deposits

j)  Guarantee deposits

Guarantee deposits consist primarily of aircraft maintenance deposits paid to lessors, deposits for rent of flight equipment and other guarantee deposits. Aircraft and engine deposits are held by lessors in U.S. dollars and are presented as current assets and non-current assets, based on the recovery dates of each deposit established in the related agreements (Note 11).

Deposits for flight equipment maintenance paid to lessors

Most of the Company’s lease contracts stipulate the obligation to pay maintenance deposits to aircraft lessors, in order to guarantee major maintenance work.

These lease agreements establish that maintenance deposits are reimbursable to the Company at the time the major maintenance event is concluded for an amount equal to: (i) the maintenance deposit held by the lessor associated with the specific maintenance event, or (ii) the qualifying costs related to the specific maintenance event.

Substantially all major maintenance deposits are generally calculated based on the use of leased aircraft and engines (flight hours or operating cycles). The sole purpose of these deposits is to guarantee to the lessor the execution of maintenance work on the aircraft and engines.

Maintenance deposits that the Company expects to recover from lessors are presented as security deposits in the consolidated statement of financial position. These deposits are registered as a monetary asset and are revalued to record changes in foreign currency in each reporting period.

According to the term of the lease, in each contract it is evaluated whether major maintenance of the leased aircraft and engines is expected to be carried out. In the event that major maintenance is not expected to be performed on its own account, it is recorded as a variable lease payment, since it represents part of the use of the leased goods and is determined based on time or flight cycles. For the years ended December 31, 2021, 2020 and 2019, the Company made a supplemental lease payment of Ps.775,579, Ps.421,030 and Ps.295,720, respectively.

When modifications are made to the contracts that entail an extension of the lease term, said maintenance deposits can be converted into recoverable deposits, in that case, to the date of modification of the agreement. Deposits are considered a recoverable asset that is recognized as a decrease in the expense recognized for variable leases.

During the years ended December 31, 2021, 2020 and 2019, the Company added fifteen, seven and seven net new aircrafts to its fleet, respectively (Note 14). During the year ended December 31, 2021, the Company extended the lease period for aircrafts and engines, through lease agreements for fifteen aircraft and three engines. During the year ended December 31, 2020, the Company did not extend the period of lease contracts for aircrafts and engines. During the year ended December 31, 2019, the Company extended the lease period, through lease agreements, of one aircraft. Additionally, the Company extended the lease period for a spare engine in 2019. Certain other aircraft lease agreements do not require the obligation to pay maintenance deposits in advance to lessors to guarantee important maintenance activities; therefore, the Company does not record or make payments for guarantee deposits with respect to these aircrafts. However, some of these lease agreements include the obligation to make maintenance adjustment payments to lessors at the end of the lease period. These maintenance adjustments cover maintenance events that are not expected to be performed before the termination of the lease; for such agreements, the Company accumulates a liability related to the amount of the costs that will be incurred at the end of the lease, since no maintenance deposits have been made (Note 16).

Aircraft and engine maintenance

k)  Aircraft and engine maintenance

The Company is required to conduct various levels of aircraft maintenance. Maintenance requirements depend on the type of aircraft, age and the route network over which it operates.

Fleet maintenance requirements may involve short cycle engineering checks, for example, component checks, monthly checks, annual airframe checks and periodic major maintenance and engine checks.

Aircraft maintenance and repair consists of routine and non-routine works, divided into three general categories: (i) routine maintenance, (ii) major maintenance and (iii) component service.

(i)  Routine maintenance requirements consist of scheduled maintenance checks on the Company’s aircraft, including pre-flight, daily, weekly and overnight checks, any diagnostics and routine repairs and any unscheduled tasks performed as required. These type of

maintenance events are currently serviced by Company mechanics and are primarily completed at the main airports that the Company currently serves.

All other maintenance activities are sub-contracted to qualified maintenance business partner, repair and overhaul organizations. Routine maintenance also includes scheduled tasks that can take from seven to 14 days to accomplish and are required approximately every 24 or 36 months, such as 24 month checks and C checks. All routine maintenance costs are expensed as incurred.

(ii)  Major maintenance consists of a series of more complex tasks that can take up to six weeks to accomplish and typically are required every five to six years.

Major maintenance is accounted for under the deferral method, whereby the cost of major maintenance and major overhaul and repair is capitalized (leasehold improvements to flight equipment) and amortized over the shorter of the period to the next major maintenance event or the remaining contractual lease term. The next major maintenance event is estimated based on assumptions including estimated time of usage. The United States Federal Aviation Administration (“FAA”) and the Mexican Federal Civil Aviation Agency (Agencia Federal de Aviación Civil - AFAC) mandate maintenance intervals and average removal times as suggested by the manufacturer.

These assumptions may change based on changes in the utilization of aircraft, changes in government regulations and suggested manufacturer maintenance intervals. In addition, these assumptions can be affected by unplanned incidents that could damage an airframe, engine, or major component to a level that would require a heavy maintenance event prior to a scheduled maintenance event. To the extent the planned usage increases, the estimated life would decrease before the next maintenance event, resulting in additional expense over a shorter period.

During the years ended December 31, 2021 and 2020, the Company capitalized major maintenance events as part of leasehold improvements to flight equipment for an amount of Ps.1,742,979 and Ps.646,219, respectively. For the years ended December 31, 2021, 2020 and 2019, the amortization of major maintenance leasehold improvement costs was Ps.838,433, Ps.652,091 and Ps.450,371 respectively. The amortization of deferred maintenance costs is recorded as part of depreciation and amortization in the consolidated statements of operations.

(iii)  The Company has a power-by-the hour agreement for component services, which guarantees the availability of aircraft parts for the Company’s fleet when they are required. It also provides aircraft parts that are included in the redelivery conditions of the contract (hard time) without constituting an additional cost at the time of redelivery. The monthly maintenance cost associated with this agreement is recognized as incurred in the consolidated statements of operations.

The Company has an engine flight hour agreement (component repair agreement), that guarantees a cost per overhaul, provides miscellaneous engines coverage, caps the cost of foreign objects damage events, ensures there is protection from annual escalations, and grants an annual credit for scrapped components. The cost associated with the miscellaneous engines’ coverage is recorded monthly as incurred in the consolidated statements of operations.

Rotable spare parts, furniture and equipment, net

l)  Rotable spare parts, furniture and equipment, net

Rotable spare parts, furniture and equipment, are recorded at cost and are depreciated to estimated residual values over their estimated useful lives using the straight-line method.

Aircraft spare engines have significant components with different useful lives; therefore, they are accounted for as separate items (major components) of spare engine parts (Note 12).

Pre-delivery payments refer to prepayments made to aircraft and engine manufacturers during the manufacturing stage of the aircraft. The borrowing costs related to the acquisition or construction of a qualifying asset are capitalized as part of the cost of that asset.

Depreciation rates are as follows:

    

Annual

    

depreciation rate

Flight equipment

4.0-16.7%

Constructions and improvements

 

Remaining contractual lease term

Computer equipment

 

25%

Workshop tools

 

33.3%

Electric power equipment

 

10%

Communications equipment

 

10%

Workshop machinery and equipment

 

10%

Motorized transport equipment platform

25%

Service carts on board

 

20%

Office furniture and equipment

 

10%

Leasehold improvements to flight equipment

 

The shorter of: (i) remaining contractual lease term, or (ii) the next major maintenance event

The Company reviews annually the useful lives of these assets and any changes are accounted for prospectively.

The Company identified one Cash Generating Unit (CGU), which includes the entire aircraft fleet and flight equipment. The Company assesses at each reporting date, whether there is objective evidence that rotable spare parts, furniture and equipment and right of use asset are impaired in the CGU. The Company records impairment charges on rotable spare parts, furniture and equipment and right of use assets used in operations when events and circumstances indicate that the assets may be impaired or when the carrying amount of a long-lived asset or related cash generating unit exceeds its recoverable amount, which is the higher of (i) its fair value less cost to sell and (ii) its value in use.

The value in use calculation is based on a discounted cash flow model, using projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation.

On December 2021, the Company reviewed through an analysis if there were signs of impairment, according to the result it was concluded there were not sings of impairment. On December 2020, the Company performed its annual impairment test. The recoverable amount of the CGU was determined based on a value in use calculation using cash flow projections from financial budgets approved by senior management, covering a five-year period. The projected cash flows have been updated to reflect the future operating cashflows. It was concluded that the carrying amount of the CGU did not exceed the value in use.

Foreign currency transactions and exchange differences

m)  Foreign currency transactions and exchange differences

The Company’s consolidated financial statements are presented in Mexican pesos, which is the presentation currency of the parent company. For each subsidiary, the Company determines the functional currency and items included in the financial statements of each entity are measured using the currency of the primary economic environment in which each entity operates (“the functional currency”).

The financial statements of foreign subsidiaries prepared under IFRS and denominated in their respective local currencies different from its functional currency are translated into their functional currency as follows:

Transactions in foreign currencies are translated into the respective functional currencies at the exchange rates at the dates of the transactions.
All monetary assets and liabilities are translated into the functional currency at the exchange rate at the consolidated statement of financial reporting date.
All non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.
Equity accounts are translated at the prevailing exchange rate at the time the capital contributions were made, and the profits were generated.
Revenues, costs and expenses are translated at the average exchange rate during the applicable period.

Any differences resulting from the currency functional translation are recognized in the consolidated statements of operations.

For the year ended December 31, 2021, 2020 and 2019, the exchange rates of local currencies translated to functional currencies are as follows:

Exchange rates of local

Exchange rates of local

 

Exchange rates of local

currencies translated to 

currencies translated to 

currencies translated to 

functional currencies

 functional currencies

 

 functional currencies

 

Average

Average

 

Average

Local

Functional

exchange rate

Exchange rate

exchange rate

Exchange rate

exchange rate

Exchange rate

Country

    

currency

    

currency

    

for 2021

    

as of 2021

    

for 2020

    

as of 2020

    

for 2019

    

as of 2019

Costa Rica

 

Colon

 

U.S. dollar

 

₵.

641.2439

₵.

645.9000

₵.

588.4240

₵.

615.7800

₵.

590.9574

 

₵.

573.4400

Guatemala

 

Quetzal

 

U.S. dollar

 

Q.

7.75370

Q.

7.7285

Q.

7.7292

Q.

7.8095

Q.

7.7066

 

Q.

7.6988

El Salvador

U.S Dollar

U.S. dollar

$.

20.9853

$.

20.5835

$.

21.4961

$.

19.9487

$.

19.2618

$.

18.8452

The exchange rates used to translate the above amounts to Mexican pesos on December 31, 2021, 2020 and 2019, were Ps.20.5835, Ps.19.9487 and Ps.18.8452, respectively, per U.S. dollar.

The Company’s consolidated financial statements are presented in Mexican pesos. Assets and liabilities from foreign subsidiaries are converted from the functional currency to the presentation currency at the exchange rate on the reporting date; revenues and expenses are translated at the average exchange rate.

Foreign currency differences arising on translation into the presentation currency are recognized in OCI. Exchange differences on translation of foreign entities for the years ended December 31, 2021, 2020 and 2019, were Ps.(4,021), Ps.23,970 and Ps.8,045, respectively.

Liabilities and provisions

n)  Liabilities and provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Employee benefits

o)  Employee benefits

i)  Personnel vacations

The Company and its subsidiaries in Mexico and Central America recognize a reserve for the costs of paid absences, such as vacation time, based on the accrual method.

ii)  Termination benefits

The Company recognizes a liability and expense for termination benefits at the earlier of the following dates:

a)  When it can no longer withdraw the offer of those benefits; and

b)  When it recognizes costs for a restructuring that is within the scope of IAS 37, Provisions, Contingent Liabilities and Contingent Assets, and involves the payment of termination benefits.

The Company is demonstrably committed to a termination when, and only when, it has a detailed formal plan for the termination and is without realistic possibility of withdrawal.

For the years ended December 31, 2021 and 2020, no termination benefits provision has been recognized.

iii)  Seniority premiums

In accordance with Mexican Labor Law, the Company provides seniority premium benefits to the employees which rendered services to its Mexican subsidiaries under certain circumstances. These benefits consist of a one-time payment equivalent to 12 days’ wages for each year of service (at the employee’s most recent salary, but not to exceed twice the legal minimum wage), payable to all employees with 15 or more years of service, as well as to certain employees terminated involuntarily prior to the vesting of their seniority premium benefit.

Obligations relating to seniority premiums other than those arising from restructurings, are recognized based upon actuarial calculations and are determined using the projected unit credit method.

The latest actuarial computation was prepared as of December 31, 2021. Remeasurement gains and losses are recognized in full in the period in which they occur in OCI. Such remeasurement gains and losses are not reclassified to profit or loss in subsequent periods.

The defined benefit asset or liability comprises the present value of the defined benefit obligation using a discount rate based on government bonds, less the fair value of plan assets out of which the obligations are to be settled.

For entities in Costa Rica, Guatemala and El Salvador there is no obligation to pay seniority premium, these countries have Post- Employee Benefits.

iv)  Incentives

The Company has a quarterly incentive plan for certain personnel whereby cash bonuses are awarded for meeting certain performance targets. These incentives are payable shortly after the end of each quarter and are accounted for as a short-term benefit under IAS 19, Employee Benefits. A provision is recognized based on the estimated amount of the incentive payment. During the years ended December 31, 2021, 2020 and 2019 the Company expensed Ps.75,418, Ps.25,918 and Ps.62,825, respectively, as quarterly incentive bonuses, recorded under the caption salaries and benefits.

The Company has a short-term benefit plan for certain key personnel whereby cash bonuses are awarded when certain Company’s performance targets are met. These incentives are payable shortly after the end of each year and also are accounted for as a short-term benefit under IAS 19. A provision is recognized based on the estimated amount of the incentive payment (Note 7).

v)  Long-term incentive plan (“LTIP”) and long-term retention plan (LTRP)

The Company has adopted a Long-term incentive plan (“LTIP”). This plan consists of a share purchase plan (equity-settled) and a share appreciation rights “SARs” plan (cash settled), and therefore accounted under IFRS 2 “Shared based payments”. This incentive plan has been granting annual extensions in the same terms from the original granted in 2014.

The Company measures the cost of its equity-settled transactions at fair value at the date the equity benefits are conditionally granted to employees. The cost of equity-settled transactions is recognized in the statement of operations, together with a corresponding increase in treasury shares, over the period in which the performance and/or service conditions are fulfilled. For grants that vest on meeting performance conditions, compensation cost is recognized when it becomes probable that the performance condition will be met.

During 2021, 2020 and 2019, the Company approved a new long-term retention plan (“LTRP”), which consisted in a purchase plan (equity-settled). This plan does not include cash compensations granted through appreciation rights on the Company’s shares. The retention plans granted in previous periods will continue in full force and effect until their respective due dates and the cash compensation derived from them will be settled according to the conditions established in each plan.

vi)  Share-based payments

a)  LTIP

- Share purchase plan (equity-settled)

Certain key employees of the Company receive additional benefits through a share purchase plan denominated in Restricted Stock Units (“RSUs”), which has been classified as an equity-settled share-based payment. The cost of the equity-settled share purchase plan is measured at grant date, taking into account the terms and conditions on which the share options were granted. The equity-settled compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the requisite service period (Note 18).

During the years ended December 31, 2021, 2020 and 2019, the Company expensed Ps.89,464, Ps.75,040 and Ps.49,659, respectively, related to RSUs granted under the LTIP and LTRP. The expenses were recorded under the caption salaries and benefits.

- SARs plan (cash settled)

The Company granted SARs to key employees, which entitle them to a cash payment after a service period.

The amount of the cash payment is determined based on the increase in the share price of the Company between the grant date and the time of exercise. The liability for the SARs is measured, initially and at the end of each reporting period until settled, at the fair value of the SARs, taking into account the terms and conditions on which the SARs were granted. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the requisite service period (Note 18). As of December 31, 2021 the Company did not record an expense or benefit related to the SARs included in the LTIP. During the years ended December 31, 2020 and 2019, the Company recorded a (benefit) expense for Ps.(1,901) and Ps.2,964, respectively, related to the SARs included in the LTIP. These amounts were recorded under the caption salaries and benefits.

The cost of the SARs plan is measured initially at fair value at the grant date, further details of which are given in (Note 18). This fair value is expensed over the period until the vesting date with recognition of a corresponding liability. As with the equity settled awards described above, the valuation of cash settled award also requires using similar inputs, as appropriate.

b)  Management incentive plan (“MIP”)

- MIP I

Certain key employees of the Company receive additional benefits through a share purchase plan, which has been classified as an equity-settled share-based payment. The equity-settled compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the 20. requisite service period (Note 18). The total cost of this plan has been totally recognized during the required service period.

- MIP II

On February 19, 2016, the Board of Directors of the Company authorized an extension to the MIP for certain key employees, this plan was named MIP II. In accordance with this plan, the Company granted SARs to key employees, which entitle them to a cash payment after a service period. The amount of the cash payment is determined based on the increase in the share price of the Company between the grant date and the time of exercise. The liability for the SARs is measured initially and at the end of each reporting period until settled at the fair value of the SARs, taking into account the terms and conditions on which the SARs were granted. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the requisite service period (Note 18).

During the years ended December 31, 2021, 2020 and 2019, the Company recorded a (benefit) expense for Ps. (62,262), Ps.107,204 and Ps.37,760, respectively, related to MIP II into the consolidated statement of operations.

c)  Board of Directors Incentive Plan (BoDIP)

Certain members of the Board of Directors of the Company receive additional benefits through a share-based plan, which has been classified as an equity-settled share-based payment and therefore accounted under IFRS 2 “Shared based payments”.

In April 2018, the Board of Directors of the Company authorized a Board of Directors Incentive Plan “BoDIP”, for the benefit of certain board members. The BoDIP grants options to acquire shares of the Company or CPOs during a five- year period, which was determined on the grant date. Under this plan, no service or performance conditions are required to the board members for exercise the option to acquire shares, and therefore, they have the right to request the delivery of those shares at the time they pay for them.

vii)  Employee profit sharing

The Mexican Income Tax Law (“MITL”), establishes that the base for computing current year employee profit sharing shall be the taxpayer’s taxable income of the year for income tax purposes, including certain adjustments established in the Income Tax Law, at the rate of 10%. For the years ended December 31, 2021, 2020 and 2019, the employee profit sharing is Ps.262,667, Ps.13,458 and Ps.22,134, respectively, and is presented as an operating expense in the consolidated statements of operations. Subsidiaries in Central America do not have such profit -sharing benefit, as it is not required by local regulations.

Leases

p)  Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration.

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognizes lease liabilities for payments to be made under the lease term and right-of-use assets representing the right to use the underlying assets.

i.  Right-of-use assets

The Company recognizes right-of-use assets at the commencement date of the lease.  Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, an estimate of costs to be incurred by the Company in dismantling and removing the underlying asset to the condition required by the terms and conditions of the lease, and lease payments made at or before the commencement date less any lease incentives received.

Components of the right-of-use assets are depreciated on a straight-line basis over the shorter of the remining lease term and the estimated useful lives of the assets, as follows:

Aircraft and engines

    

up to 18

years

Spare engines

 

up to 18

years

Buildings leases

 

one to ten

years

Maintenance component

 

up to eight

years

ii.   Lease Liabilities

At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.

The short-term leases and leases of low value assets are recognized as expense on a straight-line basis over the lease term.

During the years ended December 31, 2021, 2020 and 2019, there were no impairment charges recorded in respect of the Company right-of-use asset.

iii.  Sale and leaseback

The Company enters into sale and leaseback agreements whereby an aircraft or engine is sold to a lessor upon delivery and the lessor agrees to lease such aircraft or engine back to the Company.

The Company measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained by the seller-lessee. Accordingly, the Company recognizes in the Statement of Operations only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. If the fair value of the consideration for the sale of an asset does not equal the fair value of the asset, or if the payments for the lease are not at market rates, then the Company adjusts the difference to measure the sale proceeds at fair value and accounts for any below-market terms as a prepayment of lease payments an any above market terms as additional financing provided by the buyer-lessor to the seller-lessee.

First, the sale and leaseback transactions are analyzed within the scope of IFRS 15 - Revenue from Contracts with Customers, in order to verify whether the performance obligation has been satisfied and, therefore, are accounted for the sale of the asset. If this requirement is not met, it is a financing with the asset given as collateral. If the requirements related to the performance obligation established in IFRS 15 are met, the Company measures an asset for right of use that arises from the sale transaction with subsequent lease in proportion to the book value of the asset related to the right-of-use assets retained by the Company. Consequently, only the gains or losses related to the rights transferred to the lessor-buyer are recognized.

q)   Return obligations

The aircraft lease agreements of the Company also require that the aircraft components (airframe, APU and landing gears) and engines (overhaul and limited life parts) be returned to lessors under specific conditions of maintenance. The costs of return, which in no case are related to scheduled major maintenance, are estimated, and recognized ratably as a provision from the time it becomes likely such costs will be incurred and can be estimated reliably. These return costs are recognized on a straight-line basis as a component of variable lease expenses and the provision is included as part of other liabilities, through the remaining lease term. The Company estimates the

provision related to aircraft components and engines using certain assumptions including the projected usage of the aircraft and the expected costs of maintenance tasks to be performed. This provision is made in relation to the present value of the expected future costs of meeting the return conditions (Note 14 and 16).

Other taxes and fees payable

r)   Other taxes and fees payable

The Company is required to collect certain taxes and fees from customers on behalf of government agencies and airports and to remit these to the applicable governmental entity or airport on a periodic basis. These taxes and fees include federal transportation taxes, federal security charges, airport passenger facility charges, and foreign arrival and departure fees. These charges are collected from customers at the time they purchase their tickets but are not included in passenger revenue. The Company records a liability upon collection from the customer and discharges the liability when payments are remitted to the applicable governmental entity or airport.

Income taxes

s)   Income taxes

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current income tax relating to items recognized directly in equity is recognized in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is recognized in respect of temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except, in respect of taxable temporary differences associated with investments in subsidiaries when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, the carry-forward of unused tax credits and any available tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and available tax losses can be utilized, except, in respect of deductible temporary differences associated with investments in subsidiaries deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilized.

The Company considers the following criteria in assessing the probability that taxable profit will be available against which the unused tax losses or unused tax credits can be utilized: (a) whether the entity has sufficient taxable temporary differences relating to the same taxation authority and the same taxable entity, which will result in taxable amounts against which the unused tax losses or unused tax credits can be utilized before they expire; (b) whether it is probable that the Company will have taxable profits before the unused tax losses or unused tax credits expire; (c) whether the unused tax losses result from identifiable causes which are unlikely to recur; and (d) whether tax planning opportunities are available to the Company that will create taxable profit in the period in which the unused tax losses or unused tax credits can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction in OCI.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Income taxes are computed based on tax laws approved in Mexico, Costa Rica, Guatemala and El Salvador at the date of the consolidated statement of financial position.

The IFRIC Interpretation 23 Uncertainty over Income Tax Treatment addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 Income Taxes. It does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:

Whether an entity considers uncertain tax treatments separately.
The assumptions an entity makes about the examination of tax treatments by taxation authorities.
How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.
How an entity considers changes in facts and circumstances.

The Company determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty.

The Company applies significant judgement in identifying uncertainties over income tax treatments. Since the Company operates in a complex multinational environment, it assessed whether the Interpretation had an impact on its consolidated financial statements.

Upon adoption of the Interpretation, the Company considered whether it has any uncertain tax positions, particularly those relating to transfer pricing. The Company’s and the subsidiaries’ tax filings in different jurisdictions include deductions related to transfer pricing and the taxation authorities may challenge those tax treatments. The Company determined, based on its tax compliance and transfer pricing studies, that it is probable that its tax treatments (including those for the subsidiaries) will be accepted by the taxation authorities. As of December 31, 2021 and 2020 the Interpretation did not have an impact on the consolidated financial statements of the Company.

Derivative and non-derivative financial instruments and hedge accounting

t)   Derivative and non-derivative financial instruments and hedge accounting

The Company mitigates certain financial risks, such as volatility in the price of jet fuel, adverse changes in interest rates and exchange rate fluctuations, through a risk management program that includes the use of derivative financial instruments and non-derivative financial instrument.

In accordance with IFRS 9, derivative financial instruments and non-derivative financial instruments are recognized in the consolidated statement of financial position at fair value. At inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which it wishes to apply hedge accounting, as well as the risk management objective and strategy for undertaking the hedge. The documentation includes the hedging strategy and objective, identification of the hedging instrument, the hedged item or transaction, the nature of the risks being hedged and how the entity will assess the effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk(s).

Only if such hedges are expected to be effective in achieving offsetting changes in fair value or cash flows of the hedge item(s) and are assessed on an ongoing basis to determine that they have been effective throughout the financial reporting periods for which they were designated, hedge accounting treatment can be used.

Under the cash flow hedge (CFH) accounting model, the effective portion of the hedging instrument’s changes in fair value is recognized in OCI, while the ineffective portion is recognized in current year earnings in the statement of profit or loss. The cash flow hedge reserve

is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. The amounts recognized in OCI are transferred to earnings in the period in which the hedged transaction affects earnings. During the year ended December 31, 2021, the Company did not recognize an ineffective portion with respect to derivative financial instruments. As of December 31,2020, the Company recorded the ineffective portion of Ps.448.6 million, with respect to derivative financial instruments. During the year ended December 31, 2019, there was no ineffectiveness with respect to derivative financial instruments.

The realized gain or loss of derivative financial instruments and non-derivative financial instruments that qualify as CFH are recorded in the same caption of the hedged item in the consolidated statement of operations (Note 3 b (i)).

Accounting for the time value of options

The Company accounts for the time value of options in accordance with IFRS 9, which requires all derivative financial instruments to be initially recognized at fair value. Subsequent measurement for options purchased and designated as CFH requires that the option’s changes in fair value be segregated into its intrinsic value (which will be considered the hedging instrument’s effective portion in OCI) and its correspondent changes in extrinsic value (time value and volatility). The extrinsic value changes will be considered as a cost of hedging (recognized in OCI in a separate component of equity) and accounted for in income when the hedged items also are recognized in income.

Financial instruments - Disclosures

u)   Financial instruments — Disclosures

IFRS 7 requires a three-level hierarchy for fair value measurement disclosures and requires entities to provide additional disclosures about the relative reliability of fair value measurements (Notes 4 and 5).

Treasury shares

v)   Treasury shares

The Company’s equity instruments that are reacquired (treasury shares), are recognized at cost and deducted from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of treasury shares. Any difference between the carrying amount and the consideration received, if reissued, is recognized in additional paid in capital. Share-based payment options exercised during the reporting period were settled with treasury shares (Note 18).

Operating segments

w)   Operating segments

Management of Controladora monitors the Company as a single business unit that provides air transportation and related services, accordingly it has only one operating segment.

The Company has two geographic areas identified as domestic (Mexico) and international (United States of America, Central America and South America) Note 26.

Current versus non-current classification

x)   Current versus non-current classification

The Company presents assets and liabilities in the consolidated statement of financial position based on current/non-current classification. An asset is current when it is: (i) expected to be realized or intended to be sold or consumed in normal operating cycle, (ii) expected to be realized within twelve months after the reporting period, or, (iii) cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.

A liability is current when: (i) it is expected to be settled in normal operating cycle, (ii) it is due to be settled within twelve months after the reporting period, or, (iii) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

Impact of new International Financial Reporting Standards

y)   Impact of new International Financial Reporting Standards

New and amended standards and interpretations already effective

The Company applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after January 1, 2021. The Company has not early adopted any other standard interpretation or amendment that has been issued but is not yet effective.

The nature and the effect of these changes are disclosed below:

Covid-19-Related Rent Concessions beyond June 30, 2021 Amendments to IFRS 16

On May 28, 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the Covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification.

The amendment was intended to apply until June 30, 2021, but as the impact of the Covid-19 pandemic is continuing, on March 31, 2021, the IASB extended the period of application of the practical expedient to June 30, 2022.The amendment applies to annual reporting periods beginning on or after April 1st, 2021. As of December 31, 2021 this amendment did not have impact on the consolidated financial statements of the Company (Note 14).

Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR).

The amendments include the following practical expedients:

A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest
Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship being discontinued
Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated as a hedge of a risk component.

These amendments had no impact on the consolidated financial statements of the Company (Note 3c).

Standards issued but not yet effective

Annual Improvements to IFRS Standards 2018–2020

IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities

As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is effective for annual reporting periods beginning on or after January 1st, 2022 with earlier adoption permitted. The Company expects to adopt the improvements in their effective dates considering preliminarily no significant effects.

Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16

In May 2020, the IASB issued Property, Plant and Equipment - Proceeds before Intended Use, which prohibits entities deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the costs of producing those items, in profit or loss.

The amendment is effective for annual reporting periods beginning on or after January 1st, 2022 and must be applied retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The Company expects to adopt the amendments in their effective dates considering preliminarily no significant effects.

Reference to the Conceptual Framework – Amendments to IFRS 3

In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements.

The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately.

At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements. The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively. The Company expects to adopt the amendments  in their effective dates considering preliminarily no significant effects.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

What is meant by a right to defer settlement.
That a right to defer must exist at the end of the reporting period.
That classification is unaffected by the likelihood that an entity will exercise its deferral right.
That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

The amendments are effective for annual reporting periods beginning on or after January 1st, 2023 and must be applied retrospectively. The Company is currently assessing the impact of these amendments which expects to adopt in their effective date.

Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2

In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments to IAS 1 are applicable for annual periods beginning on or after January 1st, 2023 with earlier application permitted. Since the amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the definition of material to accounting policy information, an effective date for these amendments is not necessary.

The Company is currently assessing the impact of these amendments which expects to adopt in their effective date.

Definition of Accounting Estimates – Amendments to IAS 8

In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of “accounting Estimates”. The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates.

The amendments are effective for annual reporting periods beginning on or after January 1st, 2023 and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Earlier application is permitted as long as this fact is disclosed. The Company is currently assessing the impact of these amendments which expects to adopt in their effective date.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

The amendments to IAS 12 Income Taxes require companies to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations and will require the recognition of additional deferred tax assets and liabilities. The amendment is effective for annual reporting periods beginning on January 1st, 2023 and should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, entities should recognize deferred tax assets (to the extent that it is probable that they can be utilized) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary differences associated with:

Right-of-use assets and lease liabilities, and
Decommissioning, restoration and similar liabilities, and the corresponding amounts recognized as part of the cost of the related assets.

The cumulative effect of recognizing these adjustments is recognized in retained earnings, or another component of equity, as appropriate.

IAS 12 did not previously address how to account for the tax effects of on-balance sheet leases and similar transactions and various approaches were considered acceptable.

At the date of adoption of IFRS 16, the Company applied the criterion of recognizing the deferred assets and liabilities associated with the lease liability and the right of use, which is consistent with this amendment to IAS 12, and therefore this will not generate effects in the Company. (Note 20).

Convenience translation

z)  Convenience translation

U.S. dollar amounts on December 31, 2021 shown in the consolidated financial statements have been included solely for the convenience of the reader and are translated from Mexican pesos, using an exchange rate of Ps.20.5835 per U.S. dollar, 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 in effect on December 31, 2021. Such translation should not be construed as a representation that the peso amounts have been or could be converted into U.S. dollars at this or any other rate. The referred information in U.S. dollars is not audited, is solely for information purposes and does not represent that the amounts are in accordance with IAS 21 Effects of variations in foreign currency exchange rates or the equivalent in U.S. dollars in which the transactions were conducted or in which the amounts presented in Mexican pesos can be translated or realized.

v3.22.1
Description of the business and summary of significant accounting policies (Tables)
12 Months Ended
Dec. 31, 2021
Description of the business and summary of significant accounting policies  
Schedule of companies included in the consolidated financial statements

Principal

% Equity interest

Name

    

Activities

    

Country

    

2021

    

2020

 

Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V.

 

Air transportation services for passengers, cargo and mail throughout Mexico and abroad

 

Mexico

 

100

%  

100

%

Vuela Aviación, S.A.

 

Air transportation services for passengers, cargo and mail in Costa Rica and abroad

 

Costa Rica

 

100

%  

100

%

Vuela, S.A. (“Vuela”) *

 

Air transportation services for passengers, cargo and mail in Guatemala and abroad

 

Guatemala

 

100

%  

100

%

Vuela El Salvador, S.A. de C.V.

Air transportation services for passengers, cargo and mail in El Salvador and abroad

El Salvador

100

%  

100

%

Comercializadora Volaris, S.A. de C.V. ("Comercializadora")

 

Merchandising of services

 

Mexico

 

100

%  

100

%

Servicios Earhart, S.A.*

 

Recruitment and payroll

 

Guatemala

 

100

%  

100

%

Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”)

 

Recruitment and payroll

 

Mexico

 

100

%  

100

%

Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) (3)

 

Recruitment and payroll

 

Mexico

 

100

%

Comercializadora V Frecuenta, S.A. de C.V. (“Loyalty Program”) **

Loyalty Program

Mexico

100

%  

100

%

Viajes Vuela, S.A. de C.V. (“Viajes Vuela”)

Travel agency

Mexico

100

%  

100

%

Guatemala Dispatch Service, S.A., (“GDS, S.A.”) (4)

Aeronautical Technical Services

Guatemala

100

%

CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso
1710 (1)

Pre-delivery payments financing (Note 5)

Mexico

100

%

100

%

CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso
1711 (2)

Pre-delivery payments financing (Note 5)

Mexico

100

%

100

%

Fideicomiso Irrevocable de Administración número F/307750 “Administrative Trust”

 

Share administration trust (Note 18)

 

Mexico

 

100

%  

100

%

Fideicomiso Irrevocable de Administración número F/745291 “Administrative Trust”

 

Share administration trust (Note 18)

 

Mexico

 

100

%  

100

%

Fideicomiso de Administración número CIB/3081 “Administrative Trust”

Share administration trust (Note 18)

Mexico

100

%  

100

%  

Fideicomiso Irrevocable de Administración número CIB/3249 “Administrative Trust”

Asset backed securities trustor & administrator (Note 5)

Mexico

100

%  

100

%

*The Companies have not started operations yet in Guatemala

**The Company has not started operations yet

(1)With effect from October 16, 2020, the Successor of the Trust 1710 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple.
(2)With effect from October 16, 2020, the Successor of the Trust 1711 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple.
(3)With effect from August 31,2021, the Company merged with Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V.
(4)The Company was acquired in October 5, 2021.
Schedule of depreciation rates

    

Annual

    

depreciation rate

Flight equipment

4.0-16.7%

Constructions and improvements

 

Remaining contractual lease term

Computer equipment

 

25%

Workshop tools

 

33.3%

Electric power equipment

 

10%

Communications equipment

 

10%

Workshop machinery and equipment

 

10%

Motorized transport equipment platform

25%

Service carts on board

 

20%

Office furniture and equipment

 

10%

Leasehold improvements to flight equipment

 

The shorter of: (i) remaining contractual lease term, or (ii) the next major maintenance event

Schedule of exchange rates of local currencies translated to functional currencies

Exchange rates of local

Exchange rates of local

 

Exchange rates of local

currencies translated to 

currencies translated to 

currencies translated to 

functional currencies

 functional currencies

 

 functional currencies

 

Average

Average

 

Average

Local

Functional

exchange rate

Exchange rate

exchange rate

Exchange rate

exchange rate

Exchange rate

Country

    

currency

    

currency

    

for 2021

    

as of 2021

    

for 2020

    

as of 2020

    

for 2019

    

as of 2019

Costa Rica

 

Colon

 

U.S. dollar

 

₵.

641.2439

₵.

645.9000

₵.

588.4240

₵.

615.7800

₵.

590.9574

 

₵.

573.4400

Guatemala

 

Quetzal

 

U.S. dollar

 

Q.

7.75370

Q.

7.7285

Q.

7.7292

Q.

7.8095

Q.

7.7066

 

Q.

7.6988

El Salvador

U.S Dollar

U.S. dollar

$.

20.9853

$.

20.5835

$.

21.4961

$.

19.9487

$.

19.2618

$.

18.8452

Summary of estimated useful lives of the assets

Aircraft and engines

    

up to 18

years

Spare engines

 

up to 18

years

Buildings leases

 

one to ten

years

Maintenance component

 

up to eight

years

v3.22.1
Financial instruments and risk management (Tables)
12 Months Ended
Dec. 31, 2021
Financial instruments and risk management  
Schedule of notional amounts and strike prices of derivative financial instruments

Position as of December 31, 2020

Jet fuel Asian call and Zero-Cost

collars option contracts maturities

    

1 Half 2021

    

2 Half 2021

    

2021 Total

Jet fuel risk Asian Calls

 

  

 

  

 

  

 

Notional volume in gallons (thousands)*

 

7,280

 

 

7,280

 

Strike price agreed rate per gallon (U.S.dollars) **

 

US$

1.90

 

 

US$

1.90

 

Approximate percentage of hedge (of expected consumption value)

 

6

%  

%  

3

%

Jet fuel risk Zero-Cost collars

Notional volume in gallons (thousands)*

7,556

7,556

Strike price agreed rate per gallon (U.S. dollars) **

US$

1.23/1.93

US$

US$

1.23/1.93

Approximate percentage of hedge (of expected consumption value)

6

%  

%  

3

%

All-in

Approximate percentage of hedge (of expected consumption value)

12

%  

%  

6

%

* US Gulf Coast Jet 54 as underlying asset

** Weighted average

Schedule of Fuel Sensitivity

As of December 31, 

2021

2020

    

Operating costs

    

Operating costs

(In thousands of U.S. dollars)

+ US$0.01 per gallon

2,731

1,762

- US$0.01 per gallon

(2,731)

(1,762)

Schedule of foreign exchange exposure

    

USD

    

Mexican Pesos

    

Others*

    

Total

Assets:

Cash, cash equivalents and restricted cash

 

Ps.

14,311,541

Ps.

817,735

Ps.

125,600

Ps.

15,254,876

Other accounts receivable, net

 

830,688

 

193,727

 

10,189

 

1,034,604

Guarantee deposits

 

10,992,268

 

 

6,772

 

10,999,040

Total assets

 

Ps.

26,134,497

Ps.

1,011,462

Ps.

142,561

Ps.

27,288,520

Liabilities:

 

  

 

  

 

  

 

  

Financial debt

 

Ps.

3,552,092

Ps.

2,724,588

Ps.

Ps.

6,276,680

Lease liabilities

 

53,326,884

 

 

1,588

 

53,328,472

Suppliers

 

2,504,827

 

3,290,110

 

127,667

 

5,922,604

Other taxes and fees payable

 

62,533

 

2,300,533

 

337,117

 

2,700,183

Total liabilities

 

Ps.

59,446,336

Ps.

8,315,231

Ps.

466,372

Ps.

68,227,939

Net foreign currency position

 

Ps.

(33,311,839)

Ps.

(7,303,769)

Ps.

(323,811)

Ps.

(40,939,419)

*The foreign exchange exposure includes: Quetzales, Colombian pesos and Colones.

Thousands of U.S. dollars

    

2020

Assets:

 

  

Cash, cash equivalents and restricted cash

 

US$

495,612

Other accounts receivable, net

 

39,997

Guarantee deposits

 

479,566

Derivative financial instruments

 

10

Total assets

 

US$

1,015,185

Liabilities:

 

Financial debt (Note 5)

 

US$

183,806

Lease liabilities

2,334,153

Suppliers

 

174,553

Other taxes and fees payable

 

16,105

Derivative financial instruments

 

484

Total liabilities

 

2,709,101

Net foreign currency position

 

US$

(1,693,916)

Schedule of contractual principal payments required on financial liabilities and derivative instruments fair value

    

December 31, 2021

Within one 

One to five 

    

year

    

years

    

Total

Interest-bearing borrowings:

Pre-delivery payments facilities (Note 5)

 

Ps.

3,535,649

 

Ps.

 

Ps.

3,535,649

Asset backed trust note (“CEBUR”) (Note 5)

500,000

2,250,000

 

  

2,750,000

Lease liabilities:

  

 

  

  

 

  

  

Aircraft, engines, land and buildings leases

5,842,492

43,807,747

 

  

49,650,239

Aircraft and engine lease return obligation

451,788

3,436,001

 

  

3,887,789

Total

 

Ps.

10,329,929

 

Ps.  

49,493,748

 

Ps.  

59,823,677

December 31, 2020

Within one

    

One to five

    

    

year

    

years

    

Total

Interest-bearing borrowings:

Pre-delivery payments facilities (Note 5)

Ps.

1,096,543

Ps.

2,554,069

Ps.

3,650,612

Short-term working capital facilities (Note 5)

 

200,000

 

 

200,000

Asset backed trust note (“CEBUR”) (Note 5)

250,000

1,250,000

1,500,000

Derivative financial instruments:

Jet fuel Asian Zero-Cost collars options contracts

9,657

9,657

Lease liabilities:

Aircraft, engines, land and buildings leases

6,484,092

37,646,450

44,130,542

Aircraft and engine lease return obligation

86,801

2,417,683

2,504,484

Total

Ps.

8,127,093

Ps.

43,868,202

Ps.

51,995,295

Summary of impact on the equity due to changes in the fair value of forward exchange contracts

    

Change in

    

Effect on profit

 MXN$ rate

 before tax

2021

 

+5

%  

Ps.

(69,942)

 

-5

%  

69,942

    

Change in 

    

Effect on profit

USD$ rate

before tax

2021

 

+5

%  

Ps.

(1,439,653)

 

-5

%  

1,439,653

2020

 

+5

%  

Ps.

(253,763)

 

-5

%  

253,763

Schedule of sensitivity analysis of change in fair value of interest hedging instrument

    

Change in 

    

    

MX$ rate

Effect on cap

 

2021

 

+0.01

%  

Ps.

(30.86)

 

-0.01

%  

30.86

2020

 

+0.01

%  

Ps.

(0.28)

 

-0.01

%  

0.28

    

    

Change in 

MX$ rate

Effect on cap

2021

 

+0.01

%  

Ps.

(165.44)

 

-0.01

%  

165.44

Schedule of debt sensitivity analysis

    

As of December 31, 2021

    

As of December 31, 2020

+ 100 BP

- 100 BP

+ 100 BP

- 100 BP

Banco Nacional de Comercio Exterior, S.N.C. (“Bancomext”)

 

138,476

 

(138,476)

 

155,332

 

(155,332)

Asset backed trust notes (“CEBUR”)

 

133,173

 

(133,173)

 

131,054

 

(131,054)

Banco Sabadell S.A., Institución de Banca Múltiple (“Sabadell”)

 

16,064

 

(16,064)

 

18,086

 

(18,086)

v3.22.1
Fair value measurements (Tables)
12 Months Ended
Dec. 31, 2021
Fair value measurements  
Schedule of carrying amounts and fair values of financial instruments

Carrying amount

Fair value

December 31, 

December 31, 

December 31, 

December 31, 

    

2021

    

2020

    

2021

    

2020

Assets

Derivative financial instruments

Ps.

28,771

Ps.

532

Ps.

28,771

Ps.

532

Liabilities

 

 

 

  

 

  

Financial debt (Interest-bearing loans and borrowings)

 

(6,285,649)

 

(5,350,612)

 

(6,234,241)

 

(5,527,332)

Derivative financial instruments

 

 

(9,657)

 

 

(9,657)

Total

Ps.

(6,256,878)

Ps.

(5,359,737)

Ps.

(6,205,470)

Ps.

(5,536,457)

The following table summarizes the fair value measurements on December 31, 2021:

Fair value measurement

    

Quoted prices

    

Significant

    

Significant

    

in active

observable

unobservable

markets

inputs

inputs

    

Level 1

    

Level 2

    

Level 3

    

Total

Assets

Derivatives financial instruments:

 

  

 

  

 

  

 

  

Interest rate Caps

Ps.

Ps.

28,771

Ps.

Ps.

28,771

Liabilities

 

  

 

  

 

  

 

  

Liabilities for which fair values are disclosed:

 

  

 

  

 

  

 

  

Interest-bearing loans and borrowings**

 

 

(6,234,241)

 

 

(6,234,241)

Net

Ps.

Ps.

(6,205,470)

Ps.

Ps.

(6,205,470)

** LIBOR, SOFR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt.

There were no transfers between level 1 and level 2 during the period.

The following table summarizes the fair value measurements on December 31, 2020:

Fair value measurement

    

Quoted prices

    

Significant

    

Significant

    

 

in active

observable

unobservable

 

markets

inputs

inputs

 

Level 1

Level 2

Level 3

Total

Assets

 

  

 

  

 

  

 

  

Derivatives financial instruments:

 

  

 

  

 

  

 

  

Jet fuel Asian call options contracts*

 

Ps.

 

Ps.

206

 

Ps.

 

Ps.

206

Interest rate Caps

 

 

326

 

 

326

Liabilities

 

  

 

 

  

 

Derivatives financial instruments:Jet fuel Asian Zero-Cost collars options contracts*

(9,657)

(9,657)

Liabilities for which fair values are disclosed:

 

  

 

 

  

 

Interest-bearing loans and borrowings**

 

 

(5,527,332)

 

 

(5,527,332)

Net

 

Ps.

 

Ps.

(5,536,457)

 

Ps.

 

Ps.

(5,536,457)

* Jet fuel forwards levels and LIBOR curve.

** LIBOR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt.

There were no transfers between level 1 and level 2 during the period.

Schedule of (loss) gain on derivatives recognized in consolidated statements of operations and comprehensive income

The following table summarizes the losses from derivatives financial instruments recognized in the consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019:

    

    

    

    

Instrument

    

Financial statements line

    

2021

    

2020

    

2019

Jet fuel Asian call options contracts

 

Fuel

Ps.

(12,577)

Ps.

(20,646)

Ps.

(61,069)

Jet fuel Zero-Cost collars contracts

 

Fuel

(835,884)

(9,477)

Jet fuel Asian call options contracts

Finance cost

(12,981)

Jet fuel Zero-Cost collars contracts

Finance cost

(435,578)

Foreign currency forward

Aircraft and engine rent expenses

4,199

Interest rate cap

Finance cost

(1,443)

(1,468)

(1,282)

Total

 

  

Ps.

(14,020)

Ps.

(1,306,557)

Ps.

(67,629)

The following table summarizes the net gain (loss) on CFH before taxes recognized in the consolidated statements of comprehensive income for the years ended December 31, 2021, 2020 and 2019:

Consolidated statements of other comprehensive income (loss)

    

Financial 

    

    

    

Instrument

    

statements line

    

2021

    

2020

    

2019

Jet fuel Asian call options contracts

 

OCI

Ps.

11,997

Ps.

(11,993)

Ps.

11,148

Jet fuel Zero cost collars

OCI

9,657

(143,224)

256,515

Foreign currency contracts

 

OCI

 

 

 

(14,241)

Interest rate cap

OCI

(2,800)

(900)

(4,023)

Non derivative financial instruments*

OCI

1,577,473

(1,591,569)

14,096

Total

 

Ps.

1,596,327

Ps.

(1,747,686)

Ps.

263,495

*As of December 31, 2021, includes the effect of the discontinuation of the hedging strategies by Ps.2,251,442 as described in note 3b (i).

v3.22.1
Financial assets and liabilities (Tables)
12 Months Ended
Dec. 31, 2021
Financial assets and liabilities  
Schedule of financial assets

December 31, 

December 31, 

    

2021

    

2020

Derivative financial instruments designated as cash flow hedges (effective portion recognized within OCI)

 

  

 

  

Jet fuel Asian call options

Ps.

Ps.

206

Interest rate cap

28,771

326

Total derivative financial assets

Ps.

28,771

Ps.

532

Presented on the consolidated statements of financial position as follows:

 

 

Current

Ps.

Ps.

206

Non-current

Ps.

28,771

Ps.

326

Schedule of short-term and long-term debt

December 31, 

December 31, 

    

2021

    

2020

I.

Revolving line of credit with Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander (“Santander”) and Banco Nacional de Comercio Exterior, S.N.C. (“Bancomext”), in U.S. dollars, to finance pre-delivery payments, maturing on October 31, 2022, bearing annual interest rate at the three-month LIBOR plus a spread of 260 basis points.

Ps.

3,535,649

Ps.

3,650,612

II.

In June 2019 the Company issued in the Mexico market Asset backed trust notes (“CEBUR”), in Mexican pesos, maturing on June 20th, 2024 bearing annual interest rate at TIIE 28 days plus 175 basis points.

1,250,000

1,500,000

III.

In October 2021 the Company issued in the Mexico market a second tranche of its Asset backed trust notes (“CEBUR”), in Mexican pesos, maturing on October 20th, 2026 bearing annual interest rate at TIIE 28 days plus 200 basis points.

 

1,500,000

 

IV.

In December 2019, the Company entered into a short-term working capital facility with Banco Sabadell S.A., Institución de Banca Multiple (“Sabadell”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a spread of 300 basis points.

 

 

200,000

V.

Amortized transaction costs

(31,408)

(15,542)

VI.

Accrued interest and other financial cost

 

22,439

 

19,563

  

 

6,276,680

 

5,354,633

Less: Short-term maturities

 

4,052,859

 

1,558,884

Long-term

Ps.

2,223,821

Ps.

3,795,749

TIIE: Mexican interbank rate

Summary of scheduled principal payments of financial debt and accrued interest

January 2023-

January 2024-

Within one

December

December

January 2025

    

year

    

2023

    

2024

    

onwards

    

Total

Santander/Bancomext

Ps.

3,552,091

Ps.

Ps.

Ps.

3,552,091

CEBUR program

505,997

583,333

750,000

916,667

2,755,997

Total

Ps.

4,058,088

Ps.

583,333

Ps.

750,000

Ps.

916,667

6,308,088

Schedule of changes in liabilities from financing activities

Current vs non-

January 1,  

Net cash

Accrued*

Foreign exchange 

 current 

December 31, 

    

2021

    

Flows

    

Interest

    

 movement

    

 reclassification

    

Other

    

2021

Current interest-bearing loans and borrowings

Ps.

1,558,884

Ps.

(1,223,402)

Ps.

2,876

Ps.

76,942

Ps.

3,637,559

Ps.

Ps.

4,052,859

Non-current interest -bearing loans and borrowings

 

3,795,749

 

2,023,240

 

35,171

 

(3,637,559)

 

7,220

 

2,223,821

Total liabilities from financing activities

 

Ps.

5,354,633

 

Ps.

799,838

Ps.

2,876

 

Ps.

112,113

 

Ps.

 

Ps.

7,220

 

Ps.

6,276,680

Foreign

Current vs non-

January 1, 

Net cash 

Accrued*

 exchange 

 current 

December 31, 

    

2020

    

Flows

    

Interest

    

 movement

    

 reclassification 

    

Other

    

2020

Current interest-bearing loans and borrowings

Ps.

2,086,017

Ps.

(1,231,695)

Ps.

(10,498)

Ps.

(32,491)

Ps.

747,551

Ps.

-

Ps.

1,558,884

Non-current interest -bearing loans and borrowings

 

2,889,952

 

1,374,678

 

231,612

 

(747,551)

 

47,058

 

3,795,749

Total liabilities from financing activities

 

Ps.

4,975,969

 

Ps.

142,983

Ps.

(10,498)

 

Ps.

199,121

 

Ps.

 

Ps.

47,058

 

Ps.

5,354,633

* This balance is net of interest provisions and interest effectively paid as of December 31, 2021 and 2020, respectively.

Schedule of other financial liabilities

At December 31, 2021 and 2020, the derivative financial instruments designated as CFH from the Company are summarized in the following table:

    

2021

    

2020

Derivative financial instruments designated as CFH (effective portion recognized within OCI):

 

  

 

  

Zero-Cost Collar options

Ps.

Ps.

9,657

Total derivative financial liabilities

Ps.

Ps.

9,657

Presented on the consolidated statements of financial position as follows:

 

 

Current

Ps.

Ps.

9,657

Non-current

Ps.

Ps.

v3.22.1
Cash and cash equivalents (Tables)
12 Months Ended
Dec. 31, 2021
Cash and cash equivalents  
Summary of cash and cash equivalents

    

2021

    

2020

Cash in banks

Ps.

9,543,860

Ps.

6,907,295

Short-term investments

5,558,131

3,068,618

Restricted funds held in trust related to debt service reserves

147,415

91,040

Cash on hand

5,470

36,432

Total cash, cash equivalents and restricted cash

Ps.

15,254,876

Ps.

10,103,385

v3.22.1
Related parties (Tables)
12 Months Ended
Dec. 31, 2021
Related parties  
Schedule of balances due from/to related parties

    

    

Country 

    

    

    

Type of transaction

of origin

2021

2020

Terms

Due from:

 

  

 

  

 

  

 

  

 

  

Frontier Airlines Inc. (“Frontier”)

 

Code-share

 

USA

 

Ps.

95,951

 

Ps.

72,629

 

30 days

Due to:

Grupo Aeroportuario del Centro Norte (“OMA”)

Airport Services

Mexico

Ps.

199,393

Ps.

80,681

30 days

Chevez, Ruiz, Zamarripa y Cía., S.C.

Professional fees

Mexico

9,373

4,823

30 days

Aeromantenimiento, S.A. (“Aeroman”)

Aircraft maintenance and technical support

El Salvador

8,295

39,284

30 days

Mijares, Angoitia, Cortés y Fuentes, S.C.

Professional fees

Mexico

166

30 days

Frontier Airlines Inc. (“Frontier”)

Code-share

USA

42

39

30 days

Ps.

217,103

Ps.

124,993

Schedule of transactions with related parties

Related party transactions

    

Country of origin 

    

2021

    

2020

    

2019

Revenues:

Transactions with affiliates

Frontier Airlines Inc

Code-share

USA

Ps.

71,210

Ps.

148,964

Ps.

208,968

Expenses:

Transactions with affiliates

 

 

  

 

  

 

  

Aeromantenimiento, S.A.

Aircraft maintenance

El Salvador

Ps.

160,632

Ps.

239,118

Ps.

201,624

Technical support

 

El Salvador

2,882

3,945

5,815

Grupo Aeroportuario del Centro Norte

Airport services

Mexico

133,296

32,193

Chevez, Ruiz, Zamarripa y Cía, S.C.

 

 

 

 

Professional fees

Mexico

4,798

4,823

Mijares, Angoitia, Cortés y Fuentes, S.C.

 

 

 

 

Professional fees

Mexico

4,311

5,582

1,321

Servprot, S.A. de C.V.Security services

Mexico

3,531

3,464

3,120

Onelink, S.A. de C.V.

Call center fees

Mexico/El Salvador

73,167

37,026

v3.22.1
Other accounts receivable, net (Tables)
12 Months Ended
Dec. 31, 2021
Other accounts receivable, net  
Schedule of other accounts receivables

    

2021

    

2020

Current:

Credit cards

Ps.

760,016

Ps.

231,260

Other points of sales

140,952

67,315

Cargo clients

51,790

45,201

Travel agencies and insurance commissions

 

33,864

 

16,099

Other accounts receivable

 

33,688

 

87,204

Employees

 

15,637

 

36,287

Benefits from suppliers

10,616

105,947

Marketing services receivable

 

706

 

4,020

Airport services

15

1,047,269

593,348

Allowance for expected credit losses

 

(12,665)

 

(32,708)

Ps.

1,034,604

Ps.

560,640

Schedule of aging of accounts receivable

    

2021

    

2021

    

Total

    

2020

    

2020

    

Total

Days

    

Impaired 

    

Not impaired 

    

2021

    

Impaired 

    

Not impaired 

    

2020

0–30

Ps.

10,347

Ps.

976,313

Ps.

986,660

Ps.

4,090

Ps.

486,001

Ps.

490,091

31–60

 

 

27,411

 

27,411

 

 

13,872

 

13,872

61–90

 

 

8,453

 

8,453

 

 

6,081

 

6,081

91–120

 

2,318

 

22,427

 

24,745

 

28,618

 

54,686

 

83,304

Ps.

12,665

Ps.

1,034,604

Ps.

1,047,269

Ps.

32,708

Ps.

560,640

Ps.

593,348

Schedule of movement in the allowance for doubtful accounts

Balance as of January 1st, 2019

    

Ps.

(11,304)

Write-offs

 

11,389

Increase in allowance

 

(40,393)

Balance as of December 31, 2019

 

(40,308)

Write-offs

 

21,264

Increase in allowance

 

(13,664)

Balance as of December 31, 2020

 

(32,708)

Write-offs

 

36,161

Increase in allowance

 

(16,118)

Balance as of December 31, 2021

Ps.

(12,665)

v3.22.1
Inventories (Tables)
12 Months Ended
Dec. 31, 2021
Inventories.  
Schedule of inventories

An analysis of inventories as of December 31, 2021 and 2020 is as follows:

    

2021

    

2020

Spare parts and accessories of flight equipment

Ps.

296,345

Ps.

271,454

Miscellaneous supplies

 

 

7,505

Ps.

296,345

Ps.

278,959

v3.22.1
Prepaid expenses and other current assets (Tables)
12 Months Ended
Dec. 31, 2021
Prepaid expenses and other current assets  
Schedule of prepaid expenses and other current assets

    

2021

    

2020

Other prepaid expenses

Ps.

214,874

Ps.

81,803

Sales commission to travel agencies (Note 1d)

190,052

151,342

Advances to suppliers

 

175,830

 

163,044

Flight credits

 

123,964

 

389,927

Prepaid insurance

 

85,418

 

64,309

Ps.

790,138

Ps.

850,425

v3.22.1
Guarantee deposits (Tables)
12 Months Ended
Dec. 31, 2021
Guarantee deposits  
Schedule of guarantee deposits

    

2021

    

2020

Current asset:

 

  

 

  

Credit letters deposits

Ps.

1,127,302

Ps.

829,918

Aircraft maintenance deposits paid to lessors (Note 1j)

434,866

279,390

Deposits for rental of flight equipment

 

34,723

 

23,584

Other guarantee deposits

 

28,995

 

9,064

 

1,625,886

 

1,141,956

Non-current asset:

 

 

Aircraft maintenance deposits paid to lessors (Note 1j)

 

8,320,612

 

7,641,544

Deposits for rental of flight equipment

 

1,029,323

 

741,871

Other guarantee deposits

 

23,219

 

41,323

 

9,373,154

 

8,424,738

Ps.

10,999,040

Ps.

9,566,694

v3.22.1
Rotable spare parts, furniture and equipment, net (Tables)
12 Months Ended
Dec. 31, 2021
Rotable spare parts, furniture and equipment, net  
Summary of rotable spare parts, furniture and equipment, net

Gross value 

Accumulated depreciation 

Net carrying value 

    

At December

    

At December

    

At December

    

At December

    

At December

    

At December

    

31, 2021

    

31, 2020

    

31, 2021

    

31, 2020

    

31, 2021

    

31, 2020

Leasehold improvements to flight equipment

Ps.

5,328,605

Ps.

5,092,049

Ps.

(2,696,788)

Ps.

(3,354,166)

Ps.

2,631,817

Ps.

1,737,883

Pre-delivery payments*

 

5,224,632

 

4,920,126

 

 

 

5,224,632

 

4,920,126

Flight equipment

 

2,193,686

 

1,689,473

 

(1,330,958)

 

(1,223,560)

 

862,728

 

465,913

Construction and improvements in process

 

545,941

 

53,545

 

 

 

545,941

 

53,545

Constructions and improvements

 

153,485

 

175,407

 

(127,845)

 

(148,391)

 

25,640

 

27,016

Office furniture and equipment

60,362

67,035

(34,596)

(35,309)

25,766

31,726

Computer equipment

 

28,813

 

49,945

 

(24,693)

 

(42,126)

 

4,120

 

7,819

Workshop machinery and equipment

 

22,679

 

20,574

 

(8,243)

 

(7,641)

 

14,436

 

12,933

Communications equipment

 

12,049

 

14,803

 

(7,453)

 

(9,038)

 

4,596

 

5,765

Motorized transport equipment platform

 

11,542

 

15,247

 

(3,358)

 

(7,924)

 

8,184

 

7,323

Electric power equipment

 

11,011

 

20,448

 

(5,057)

 

(12,773)

 

5,954

 

7,675

Service carts on board

 

9,216

 

9,216

 

(6,874)

 

(6,112)

 

2,342

 

3,104

Workshop tools

 

8,664

 

27,727

 

(7,516)

 

(24,398)

 

1,148

 

3,329

Allowance for obsolescence

(3,000)

(3,000)

Total

Ps.

13,610,685

Ps.

12,152,595

Ps.

(4,253,381)

Ps.

(4,871,438)

Ps.

9,357,304

Ps.

7,281,157

* During the years ended December 31, 2021 and 2020, the Company capitalized borrowing costs of Ps.143,966 and Ps.384,038, respectively. The amount of this line is net of disposals of capitalized borrowing costs related to sale and leaseback transactions of Ps.84,273 and Ps.401,862, respectively.

   

   

   

   

   

   

   

Motorized

   

   

Workshop

   

   

   

   

   

Constructions

transport

machinery

Service

Construction and

Leasehold

Flight

and

Computer

Office furniture

Electric power

Workshop

equipment

Communications

and

carts on

Allowance for

Pre-delivery

improvements

improvements to

equipment

improvements 

equipment 

and equipment

equipment 

Tools 

platform 

equipment 

equipment 

board 

obsolescence

payments 

in process 

flight equipment 

Total 

Net balance as of December 31, 2019

Ps.

733,250

Ps.

40,950

Ps.

13,071

Ps.

36,660

Ps.

9,012

Ps.

4,852

Ps.

9,634

Ps.

5,777

Ps.

10,209

Ps.

2,121

Ps.

(3,000)

Ps.

4,507,770

Ps.

474,240

Ps.

1,540,788

Ps.

7,385,334

Additions

668,376

128

1,648

733

851

1,541

2,185,902

176,607

646,219

 

3,682,005

Disposals and transfers

(861,761)

(1,755,724)

(354,146)

 

(2,971,631)

Borrowing costs, net*

(17,822)

 

(17,822)

Other movements

2,317

713

101

36

222

1,083

4,273

(243,156)

235,509

 

1,098

Depreciation

(73,952)

(16,379)

(7,613)

(5,768)

(1,373)

(2,374)

(2,533)

(1,095)

(1,549)

(558)

(684,633)

 

(797,827)

As of December 31, 2020

 

465,913

 

27,016

 

7,819

 

31,726

 

7,675

 

3,329

 

7,323

 

5,765

 

12,933

 

3,104

 

(3,000)

 

4,920,126

 

53,545

 

1,737,883

 

7,281,157

Cost

 

1,689,473

 

175,407

 

49,945

 

67,035

 

20,448

 

27,727

 

15,247

 

14,803

 

20,574

 

9,216

 

(3,000)

 

4,920,126

 

53,545

 

5,092,049

 

12,152,595

Accumulated depreciation

 

(1,223,560)

 

(148,391)

 

(42,126)

 

(35,309)

 

(12,773)

 

(24,398)

 

(7,924)

 

(9,038)

 

(7,641)

 

(6,112)

 

 

 

 

(3,354,166)

 

(4,871,438)

Net balance as of December 31, 2020

 

465,913

 

27,016

 

7,819

 

31,726

 

7,675

 

3,329

 

7,323

 

5,765

 

12,933

 

3,104

 

(3,000)

 

4,920,126

 

53,545

 

1,737,883

 

7,281,157

Additions

517,234

1,470

63

1,938

1,708

4,796

 

 

4,173

 

1,130,669

547,220

 

1,755,614

 

3,964,885

Disposals and transfers

(2,781)

(14)

(61)

(3,462)

(2,491)

 

(277)

 

(5,078)

 

(587)

 

(872)

 

 

3,000

 

(885,855)

 

(28,088)

 

 

(926,566)

Borrowing costs, net*

 

 

 

 

 

 

 

59,692

 

 

 

59,692

Other movements

14,899

522

3,010

 

 

3,579

 

431

 

130

 

 

 

 

(26,736)

 

4,313

 

148

Depreciation

(117,638)

(16,261)

 

(5,630)

 

(5,571)

 

(1,168)

 

(3,612)

 

(2,436)

 

(1,013)

 

(1,928)

 

(762)

 

 

 

 

(865,993)

 

(1,022,012)

As of December 31, 2021

 

862,728

 

25,640

 

4,120

 

25,766

 

5,954

 

1,148

 

8,184

 

4,596

 

14,436

 

2,342

 

 

5,224,632

 

545,941

 

2,631,817

 

9,357,304

Cost

 

2,193,686

 

153,485

 

28,813

 

60,362

 

11,011

 

8,664

 

11,542

 

12,049

 

22,679

 

9,216

 

 

5,224,632

 

545,941

 

5,328,605

 

13,610,685

Accumulated depreciation

 

(1,330,958)

 

(127,845)

 

(24,693)

 

(34,596)

 

(5,057)

 

(7,516)

 

(3,358)

 

(7,453)

 

(8,243)

 

(6,874)

 

 

 

 

(2,696,788)

 

(4,253,381)

Net balance as of December 31, 2021

Ps.

862,728

Ps.

25,640

Ps.

4,120

Ps.

25,766

Ps.

5,954

Ps.

1,148

Ps.

8,184

Ps.

4,596

Ps.

14,436

Ps.

2,342

Ps.

Ps.

5,224,632

Ps.

545,941

Ps.

2,631,817

Ps.

9,357,304

a)  On 2021, the Company acquired two NEO spare engines (based on the terms of the Pratt & Whitney purchase agreement FMP), which were accounted for a cost for a total amount of Ps.394,254 (US$19,082). The Company had identified the major components as separate parts at their respective cost. These major components of the engine are presented as part of the flight equipment and depreciated over their useful life.
b)  During the years ended December 31, 2021, 2020 and 2019, the Company capitalized borrowing costs which amounted to Ps.143,966, Ps.384,038 and Ps.456,313, respectively (Note 23). The rate used to determine the amount of borrowing cost was 2.76%, 3.58% and 5.10%, for the years ended December 31, 2021, 2020 and 2019, respectively.
c)  Depreciation expense for the years ended December 31, 2021, 2020 and 2019, was Ps.1,022,012, Ps.797,827 and Ps.587,849, respectively. Depreciation charges for the year are recognized as a component of operating expenses in the consolidated statements of operations.
d)  In October 2005 and December 2006, the Company entered into purchase agreements with Airbus and International Aero Engines AG (“IAE”) for the purchase of aircraft and engines, respectively. Under such agreements and prior to the delivery of each aircraft and engine, the Company agreed to make pre-delivery payments, which were calculated based on the reference price of each aircraft and engine, and following a formula established for such purpose in the agreements.
v3.22.1
Intangible assets, net (Tables)
12 Months Ended
Dec. 31, 2021
Intangible assets, net  
Schedule of intangible assets, net

Useful

Gross value 

Accumulated amortization

Net carrying amount

Life

At December 31,

    

years

    

2021

    

2020

    

2021

    

2020

    

2021

    

2020

Software

 

1 - 4

Ps.

844,917

Ps.

704,257

Ps.

(584,902)

Ps.

(512,695)

Ps.

260,015

Ps.

191,562

Balance as of January 1st, 2020

    

Ps.

167,397

Additions

 

124,724

Disposals

 

Amortization

 

(100,618)

Exchange differences

59

Balance as of December 31, 2020

191,562

Additions

 

205,692

Disposals

 

(25)

Amortization

 

(137,212)

Exchange differences

 

(2)

Balance as of December 31, 2021

Ps.

260,015

The Company had implemented the SAP4HANA software. As a result of the analysis carried out, it was concluded that the Company controls the software, therefore it is the only beneficiary with respect to the configuration, since the settings made were customized according to the needs of the business. The costs directly attributable to the implementation were recognized as an intangible asset, the other costs different to the implementation were recognized in Net Income As of December 31, 2021, the capitalization for this implementation was Ps.90,187.

v3.22.1
Leases (Tables)
12 Months Ended
Dec. 31, 2021
Leases  
Schedule of composition of fleet and spare engines, operating leases

Aircraft

    

    

At December

    

At December

Type

    

Model 

    

31, 2021

    

31, 2020

A319

 

132

 

3

 

3

A319

 

133

 

2

 

2

A320

 

233

 

39

 

39

A320

 

232

 

1

 

1

A320NEO

 

271N

 

39

 

24

A321

 

231

 

10

 

10

A321NEO

271N

6

6

 

  

 

100

 

85

Engine spare

    

    

At December

    

At December

Type

    

Model 

    

31, 2021

    

31, 2020

V2500

V2524-A5

2

2

V2500

 

V2527M-A5

 

3

 

3

V2500

 

V2527E-A5

 

5

 

5

V2500

 

V2527-A5

 

4

 

2

PW1100

PW1127G-JM

5

5

PW1100

PW1133G-JM

1

1

 

  

 

20

 

18

* Certain of the Company’s aircraft and engine lease agreements include an option to extend the lease term period. Management evaluates extensions based on the market conditions at the time of renewal.

Summary of carrying amounts of right-of-use assets recognized and the movements during the period

    

    

Spare engine

    

Land and

    

    

Aircraft leases

    

leases

    

building leases

    

Total

As of January 1st, 2020

 

Ps.

33,312,089

Ps.

677,198

 

Ps.

139,479

Ps.

34,128,766

Additions

 

 

4,876,071

 

362,081

 

 

15,222

 

5,253,374

Disposals

(17,742)

(17,742)

Foreign exchange effect

795

795

Depreciation on right of use assets

 

 

(4,763,928)

 

(210,079)

 

 

(74,969)

 

(5,048,976)

As of December 31, 2020

 

 

33,406,490

 

829,200

 

 

80,527

 

34,316,217

Additions

8,869,694

59,374

281,790

9,210,858

Modifications

1,221,718

42,267

140,514

1,404,499

Disposals

 

 

 

 

 

(5,536)

 

(5,536)

Foreign exchange effect

(5)

(5)

Depreciation on right of use assets

(5,124,774)

(235,732)

(102,119)

(5,462,625)

As of December 31, 2021

 

Ps.

38,373,128

Ps.

695,109

 

Ps.

395,171

Ps.

39,463,408

Summary of carrying amounts of lease liabilities and the movements during the period

    

2021

    

2020

As of January 1st,

 

Ps.

44,130,542

Ps.

40,517,045

Additions

 

9,411,524

5,572,764

Modifications

1,370,795

Disposals

(5,898)

(231,566)

Accretion of interest

 

2,582,391

2,218,982

Foreign exchange effect

 

1,469,362

2,163,886

Payments

(9,308,477)

(6,110,569)

As of 31 December,

Ps.

49,650,239

Ps.

44,130,542

Current

 

Ps.

5,842,492

Ps.

6,484,092

Non-current

Ps.

43,807,747

Ps.

37,646,450

Summary of amounts recognized in profit or loss

    

For the year ended

December 31, 2021

    

December 31, 2020

    

December 31, 2019

Depreciation of right-of-use assets

Ps.

(5,462,625)

Ps.

(5,048,976)

Ps.

(4,702,971)

Interest expense on lease liabilities and aircraft and engine lease return obligation (Note 23)

 

(2,603,820)

 

(2,350,250)

 

(2,128,162)

Aircraft and engine variable expenses

 

(1,686,875)

 

(1,845,254)

 

(961,657)

Total amount recognized in profit or loss

Ps.

(9,753,320)

Ps.

(9,244,480)

Ps.

(7,792,790)

v3.22.1
Accrued liabilities (Tables)
12 Months Ended
Dec. 31, 2021
Accrued liabilities  
Schedule of analysis of accrued liabilities short - term

    

2021

    

2020

Fuel and traffic accrued expenses

 

Ps.

1,819,353

 

Ps.

1,285,931

Salaries and benefits

432,596

337,467

Maintenance and aircraft parts accrued expenses

466,566

98,942

Sales, marketing and distribution accrued expenses

 

386,388

 

179,342

Accrued administrative expenses

196,856

122,729

Maintenance deposits

 

170,158

 

174,549

Deferred revenue from V Club membership

75,434

20,830

Others

45,987

86,374

Information and communication accrued expenses

 

40,899

 

35,359

Supplier services agreement

 

23,763

 

10,634

Benefits from suppliers

 

7,776

 

3,888

Advances from travel agencies

 

65

 

242

 

Ps.

3,665,841

 

Ps.

2,356,287

Schedule of accrued liabilities long term

    

2021

    

2020

Supplier services agreement

Ps.

15,704

Ps.

45,270

Benefits from suppliers

 

9,071

 

16,847

Other

 

5,588

 

4,581

Ps.

30,363

Ps.

66,698

v3.22.1
Other liabilities (Tables)
12 Months Ended
Dec. 31, 2021
Other liabilities.  
Schedule of other liabilities

    

Balance as of

    

    

    

Balance as of

January 1,

Increase for

December 31, 

    

2021

    

the year 

    

Payments 

    

2021

Aircraft and engine lease return obligation (Note 1q and 2i)

Ps.

2,504,484

Ps.

1,422,133

Ps.

(38,828)

Ps.

3,887,789

Guarantee deposit (Note 1j)

250,000

(250,000)

Employee profit sharing (Note 17)

 

14,417

 

262,667

 

(15,969)

 

261,115

Ps.

2,768,901

Ps.

1,684,800

Ps.

(304,797)

Ps.

4,148,904

Current maturities

 

  

 

  

 

  

Ps.

712,903

Non-current

 

  

 

  

 

  

Ps.

3,436,001

    

Balance as of

    

    

    

Balance as of

January 1,

Increase for

December 31, 

    

2020

    

the year 

    

Payments 

    

2020

Aircraft and engine lease return obligation (Note 1q and 2i)

Ps.

1,852,688

Ps.

2,126,401

Ps.

(1,474,605)

Ps.

2,504,484

Guarantee deposit (Note 1j)

250,000

250,000

Employee profit sharing (Note 17)

 

24,097

 

20,810

 

(30,490)

 

14,417

Ps.

1,876,785

Ps.

2,397,211

Ps.

(1,505,095)

Ps.

2,768,901

Current maturities

 

  

 

  

 

  

Ps.

101,218

Non-current

 

  

 

  

 

  

Ps.

2,667,683

v3.22.1
Employee benefits (Tables)
12 Months Ended
Dec. 31, 2021
Employee benefits  
Schedule of analysis of net period cost

    

2021

    

2020

    

2019

Analysis of net period cost:

 

  

 

  

 

  

Current service cost

Ps.

8,611

Ps.

8,449

Ps.

8,214

Interest cost on benefit obligation

 

2,585

 

2,630

 

1,872

Net period cost

Ps.

11,196

Ps.

11,079

Ps.

10,086

Schedule of changes in defined benefit obligation

    

2021

    

2020

Defined benefit obligation on January 1,

Ps.

50,627

Ps.

38,151

Net period cost charged to profit or loss:

 

 

  

Current service cost

 

8,611

 

8,449

Interest cost on benefit obligation

 

2,585

 

2,630

Remeasurement losses in other comprehensive income:

 

 

Actuarial changes arising from changes in assumptions

 

9,279

 

2,651

Payments made

 

(1,452)

 

(1,254)

Others

12,023

Defined benefit obligation on December 31, 

Ps.

81,673

Ps.

50,627

Summary of significant assumptions used in the computation of the seniority premium obligations

    

2021

    

2020

    

2019

 

Financial:

 

  

 

  

 

  

Discount rate

 

7.84

%  

7.04

%  

7.18

%

Expected rate of salary increases

 

5.50

%  

5.50

%  

5.50

%

Annual increase in minimum salary

 

19.00%/4.50

% *

4.00

%  

4.00

%

*19.00% applies to the General Zone and 4.50% to the Border Zone

Biometric:

 

 

 

Mortality (1)

 

EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA

 

EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA

 

EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA

Disability (2)

 

IMSS-97

 

IMSS-97

 

IMSS-97

(1)Mexican Experience of social security (EMSSA), Economic Commission for Latin America and the Caribbean (CEPAL for its Spanish acronym).
(2)Mexican Experience of Instituto Mexicano del Seguro Social (IMSS).

    

Present value of the defined benefit obligation

(Thousands Mexican pesos)

Assumptions

Increase

Decrease

Discount rate:

50 basis points

Ps.

78,054

Ps.

85,856

Salary increase rate:

 

50 basis points

 

Ps.

82,294

 

Ps.

81,164

Schedule of accruals for short-term employee benefits

    

2021

    

2020

Employee profit-sharing (Note 16)

Ps.

261,115

Ps.

14,417

v3.22.1
Share-based payments (Tables)
12 Months Ended
Dec. 31, 2021
Share-based payments  
Schedule of movement in number of shares under share purchase payment plans

    

Number of Series A

    

shares 

Outstanding as of January 1st, 2019

 

3,553,295

*

Purchased during the year

 

2,694,600

Granted during the year

 

Exercised/vested during the year

 

(959,614)

Forfeited during the year

(173,090)

Outstanding as of December 31, 2019

 

5,115,191

Purchased during the year

 

3,159,763

Granted during the year

 

Exercised/vested during the year

 

(2,142,426)

Forfeited during the year

(327,217)

Outstanding as of December 31, 2020

 

5,805,311

*

Purchased during the year

 

1,849,417

Granted during the year

 

Exercised/vested during the year

 

(2,612,575)

Forfeited during the year

 

(551,732)

Outstanding as of December 31, 2021

 

4,490,421

*

* These shares are presented as treasury shares in the consolidated statement of financial position as of December 31, 2021, 2020 and 2019.

Schedule of weighted average assumptions used to estimate the fair market value of the MIP at the date of grant

    

2012

 

Dividend yield (%)

 

0.00

%

Volatility (%)

 

37.00

%

Risk—free interest rate (%)

 

5.96

%

Expected life of share options (years)

 

8.8

Exercise share price (in Mexican pesos Ps.)

 

5.31

Exercise multiple

 

1.1

Fair value of the stock at grant date

 

1.73

Schedule of movement in number of shares options and fixed exercise prices

    

    

    

Total in

Number of share

Exercise price

thousands of

    

options 

    

in Mexican pesos 

    

Mexican pesos 

Outstanding as of December 31, 2019

 

Ps.

7,653,981

 

Ps.

5.31

 

Ps.

40,668

Granted during the year

 

 

 

Forfeited during the year

 

 

 

Exercised during the year

 

 

 

Outstanding as of December 31, 2020

 

7,653,981

5.31

40,668

Granted during the year

 

 

 

Forfeited during the year

 

 

 

Exercised during the year

 

(7,653,981)

 

5.31

 

(40,668)

Outstanding as of December 31, 2021

 

Ps.

Ps.

Ps.

Schedule of retention plan (benefit) expenses recognized

    

2021

    

2020

    

2019

(Benefit) expense arising from cash-settled share-based payments transactions

Ps.

(62,262)

Ps.

105,303

Ps.

40,724

Expense arising from equity-settled share-based payments transactions

 

89,464

 

75,040

 

49,659

Total expense arising from share-based payments transactions

Ps.

27,202

Ps.

180,343

Ps.

90,383

Share purchase plan  
Share-based payments  
Schedule of vesting period of shares granted

Number of Series A

    

shares

    

Vesting period 

2,408,277

 

November  2022

1,485,802

 

November 2023

596,342

 

November  2024

4,490,421

 

  

v3.22.1
Equity (Tables)
12 Months Ended
Dec. 31, 2021
Equity  
Schedule of authorized shares

Shares 

    

Fixed

    

Variable

    

    

Class I 

    

Class II 

    

Total shares 

Series A shares (1)

 

10,478

 

1,108,452,326

 

1,108,462,804

Series B shares (1)

 

13,702

 

57,500,171

 

57,513,873

 

24,180

 

1,165,952,497

 

1,165,976,677

Treasury shares (Note 18)

 

 

(9,904,197)

 

(9,904,197)

(1)

 

24,180

 

1,156,048,300

 

1,156,072,480

(1) The number of forfeited shares as of December 31, 2021 were 551,732, which are include in treasury shares.

Shares 

    

Fixed

    

Variable

    

    

Class I 

    

Class II 

    

Total shares 

Series A shares (1)

 

10,478

 

1,077,914,326

 

1,077,924,804

Series B shares (1)

 

13,702

 

88,038,171

 

88,051,873

 

24,180

 

1,165,952,497

 

1,165,976,677

Treasury shares (Note 18)

 

 

(19,020,202)

 

(19,020,202)

(1)

 

24,180

 

1,146,932,295

 

1,146,956,475

(1)The number of forfeited shares as of December 31, 2020, were 327,217, which are include in treasury shares.
Schedule of basic and diluted earnings (loss) per share

As of  December 31, 

2021

2020

2019

Net income (loss) for the period

Ps.

2,120,551

Ps.

(4,293,791)

Ps.

2,639,063

Weighted average number of shares outstanding (in thousands):

 

 

 

Basic

 

1,165,977

 

1,021,561

 

1,011,877

Diluted

 

1,165,977

 

1,021,561

 

1,011,877

EPS - LPS:

 

 

 

  

Basic

Ps.

1.819

Ps.

(4.203)

Ps.

2.608

Diluted

Ps.

1.819

Ps.

(4.203)

Ps.

2.608

v3.22.1
Income tax (Tables)
12 Months Ended
Dec. 31, 2021
Income tax  
Schedule of income tax in consolidated statements of operations

    

2021

    

2020

    

2019

 

Current year income tax expense

Ps.

(347,803)

Ps.

(90,609)

Ps.

(281,491)

Deferred income tax (expense) benefit

 

(246,125)

(1)

1,496,793

(2)

 

(813,340)

(3)

Total income tax benefit (expense)

Ps.

(593,928)

Ps.

1,406,184

Ps.

(1,094,831)

(1)    Includes translation effect by Ps. (2,015)

(2)    Includes translation effect by Ps.2,035

(3)    Includes translation effect by Ps. (2,278)

Schedule of income tax in consolidated statements of OCI

    

2021

    

2020

    

2019

Deferred income tax related to items recognized in OCI during the year

 

  

 

  

 

  

Net (loss) gain cash flow hedges

Ps.

(5,655)

Ps.

46,835

Ps.

(74,820)

Remeasurement gain of employee benefits

 

2,850

 

794

 

3,058

Deferred income tax recognized in OCI

Ps.

(2,805)

Ps.

47,629

Ps.

(71,762)

Schedule of reconciliation of corporate income tax rate to effective tax rate

    

2021

    

%

    

2020

    

%

    

2019

    

%

 

Statutory income tax rate

 

814,344

30.00

%  

(1,709,992)

30.00

%  

1,120,168

30.00

%

Amendment tax return effects and other tax adjustments

 

93

(0.01)

%  

(53,192)

0.92

%  

(18,770)

(0.51)

%

Inflation on furniture, intangible and equipment

 

(48,751)

(1.79)

%  

(17,442)

0.29

%  

(17,839)

(0.48)

%

Inflation of tax losses

(41,375)

(1.52)

%

(13,512)

0.23

%

(8,018)

(0.21)

%

Foreign countries difference with Mexican statutory rate

2,609

0.10

%

3,509

(0.06)

%

4,143

0.11

%

Annual inflation adjustment

 

(167,294)

(6.16)

%  

51,768

(0.91)

%  

(1,882)

(0.05)

%

Recorded deferred taxes on tax losses

(9,123)

(0.34)

%

74,597

(1.29)

%

10,025

0.27

%

Non-deductible expenses

43,425

1.60

%

258,080

(4.51)

%

7,004

0.19

%

 

593,928

21.88

%  

(1,406,184)

24.67

%  

1,094,831

29.32

%

Schedule of consolidated deferred taxes

2021

2020

Consolidated

Consolidated

Consolidated

Consolidated

statement of

statement of

statement of

statement of

    

financial position

    

operations 

    

financial position 

    

operations 

Deferred income tax assets:

 

  

 

  

 

  

 

  

Lease liability

Ps.

13,969,589

Ps.

730,335

Ps.

13,239,254

Ps.

1,084,140

Unearned transportation revenue

 

201,436

 

(1,032,225)

 

1,233,661

436,598

Extension lease agreement

 

1,073,547

 

300,104

 

773,443

 

314,100

Tax losses available for offsetting against future taxable income

 

100,472

 

(475,950)

 

576,422

 

272,452

Intangible

395,752

(25,156)

420,908

(25,941)

Allowance for doubtful accounts

 

131,486

 

69,921

 

61,565

 

47,476

Employee benefits

 

10,432

 

(7,609)

 

15,191

 

2,934

Derivative Financial instruments

2,293

7,948

(22)

Employee profit sharing

 

1,870

 

(2,453)

 

4,323

 

(2,904)

Non derivative financial instruments

473,242

(473,242)

(477,471)

 

15,886,877

 

30,209

 

15,859,473

 

1,651,362

Deferred income tax liabilities:

 

 

  

 

  

 

  

Right of use asset

9,552,956

(739,797)

10,292,753

55,824

Supplemental rent

 

1,303,975

 

(574,890)

 

1,878,865

 

171,916

Rotable spare parts, furniture and equipment, net

 

1,270,758

 

563,666

 

707,092

 

(177,384)

Provisions

539,911

448,658

91,253

442,598

Inventories

 

87,592

 

4,190

 

83,402

 

(6,885)

Other prepayments

 

22,907

 

13,121

 

9,786

 

(17,942)

Prepaid expenses and other assets

431,241

563,703

(132,462)

(311,523)

 

13,209,340

 

278,651

 

12,930,689

 

156,604

Ps.

2,677,537

Ps.

(248,442)

Ps.

2,928,784

Ps.

1,494,758

Schedule of components of deferred taxes in the consolidated statement of financial position

    

2021

    

2020

 

  

 

  

Deferred tax assets

Ps.

2,907,879

Ps.

3,128,555

Deferred tax liabilities

 

(230,342)

 

(199,771)

Deferred tax assets, net

Ps.

2,677,537

Ps.

2,928,784

Schedule of reconciliation of deferred tax liability, net

    

2021

    

2020

Opening balance as of January 1,

Ps.

2,928,784

Ps.

1,386,397

Deferred income tax (expense) benefit during the current year recorded on profits*

 

(248,442)

 

1,494,758

Deferred income tax (expense) benefit during the current year recorded in accumulated other comprehensive income (loss)

 

(2,805)

 

47,629

Closing balance as of December 31, 

Ps.

2,677,537

Ps.

2,928,784

Schedule of available tax carry-forwards

An analysis of the available tax losses carry-forward of the Company at December 31, 2021 is as follows:

Year

    

Historical

    

Inflation adjusted

    

    

Total remaining

    

Year of

of loss

    

Loss

    

tax loss

    

Utilized

    

amount

    

expiration

2017

Ps.

1,067,836

Ps.

1,278,913

Ps.

1,278,913

Ps.

2027

2018

1,142

1,142

1,142

 

2021

2019

 

4,922

 

5,568

 

 

5,568

 

2029

2019

 

30,918

 

30,918

 

 

30,918

 

2022

2020

 

863,847

 

943,026

 

883,401

 

59,625

 

2030

2020

103,541

103,541

103,541

 

2023

2021

122,427

122,427

122,427

2031

2021

11,324

11,684

11,684

2024

Ps.

2,205,957

Ps.

2,497,219

Ps.

2,162,314

Ps.

334,905

A breakdown of available tax loss carry-forward of Controladora and its subsidiaries on December 31, 2021 is as follows:

Historical

Inflation adjusted

Total

 

    

loss

    

tax loss

    

Utilized

    

remaining amount

 

Comercializadora

Ps.

54,101

Ps.

58,580

Ps.

Ps.

58,580

Concesionaria

 

1,875,180

 

2,160,330

 

2,160,330

 

Viajes Vuela

258,028

258,028

258,028

Vuela Aviación

 

18,648

 

20,281

 

1,984

 

18,297

Ps.

2,205,957

Ps.

2,497,219

Ps.

2,162,314

Ps.

334,905

Unrecognized NOLs

Ps.

334,905

Tax rate

30

%

Deferred income tax

Ps.

100,472

Schedule of tax balances

    

2021

Adjusted contributed capital account (Cuenta de capital de aportación or “CUCA”)

Ps.

4,946,422

CUFIN*

 

4,151,805

*The calculation comprises all the subsidiaries of the Company.

v3.22.1
Operating Revenues (Tables)
12 Months Ended
Dec. 31, 2021
Operating Revenues  
Schedule of revenues from contracts with customers

    

At the flight time

At the sale

    

Total

Revenue recognition as of December 31, 2021

    

Domestic

    

International

    

Domestic

    

International

    

Revenues

Passenger Revenues

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

Fare Revenues

 

Ps.

17,466,759

Ps.

8,236,385

 

Ps.

Ps.

 

Ps.

25,703,144

Other Passenger Revenues

 

14,376,043

3,049,608

135,992

 

32,580

 

17,594,223

 

31,842,802

11,285,993

135,992

32,580

43,297,367

Non-Passenger Revenues

 

  

  

 

  

 

  

 

  

 

  

 

  

Other Non-Passenger revenues

 

1,546,600

11,492

 

 

1,558,092

Cargo

 

231,653

9,549

 

 

241,202

Total

 

Ps.

33,621,055

Ps.

11,307,034

 

Ps.

135,992

Ps.

32,580

 

Ps.

45,096,661

Non-derivative financial instruments

 

 

  

 

  

 

  

 

  

 

  

(434,522)

 

Ps.

44,662,139

    

At the flight time

    

At the sale

Total

Revenue recognition as of December 31, 2020

    

Domestic

    

International

    

Domestic

    

International

    

Revenues

Passenger Revenues

 

Ps.

8,455,647

  

Ps.

4,417,527

 

Ps.

  

Ps.

 

Ps.

12,873,174

Fare Revenues

 

6,920,141

1,536,206

124,450

32,601

8,613,398

Other Passenger Revenues

 

15,375,788

5,953,733

124,450

32,601

21,486,572

 

  

  

  

Non-Passenger Revenues

 

Other Non-Passenger revenues

 

875,610

6,750

882,360

Cargo

 

196,349

5,532

201,881

Total

 

Ps.

16,447,747

Ps.

5,966,015

Ps.

124,450

Ps.

32,601

Ps.

22,570,813

Non-derivative financial instruments

 

(411,222)

 

Ps.

22,159,591

    

At the flight time

    

At the sale

    

Total

Revenue recognition as of December 31, 2019

    

Domestic

    

International

    

Domestic

    

International

    

Revenues

Passenger Revenues

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

Fare Revenues

 

Ps.

15,833,878

Ps.

7,296,113

 

Ps.

Ps.

 

Ps.

23,129,991

Other Passenger Revenues

 

7,531,725

 

2,865,555

 

119,466

52,462

 

  

10,569,208

 

23,365,603

 

10,161,668

 

119,466

  

52,462

 

  

33,699,199

Non-Passenger Revenues

 

  

  

 

  

 

  

 

  

  

 

  

 

Other Non-Passenger revenues

 

888,353

 

9,233

 

 

  

897,586

Cargo

 

221,375

 

7,461

 

 

  

228,836

Total

 

Ps.

24,475,331

Ps.

10,178,362

 

Ps.

119,466

Ps.

52,462

 

Ps.

34,825,621

Non-derivative financial instruments

 

 

  

 

  

 

  

 

  

 

  

(72,949)

 

  

 

  

 

  

 

  

 

  

 

Ps.

34,752,672

Transactions from unearned transportation revenues

    

2021

    

2020

January 1,

Ps.

5,850,917

Ps.

3,679,926

Deferred

 

43,703,458

23,657,563

Recognized in revenue during the year

 

(43,297,367)

(21,486,572)

December 31,

 

Ps.

6,257,008

Ps.

5,850,917

v3.22.1
Other operating income and expenses (Tables)
12 Months Ended
Dec. 31, 2021
Other operating income and expenses  
Schedule of other operating income

    

2021

    

2020

    

2019

Gain on sale and leaseback (Note 12)

Ps.

195,552

Ps.

710,522

Ps.

284,759

Loss on sale of rotable spare parts, furniture and equipment

(2,571)

(2,604)

(8,954)

Other income

 

24,857

 

22,415

 

51,403

Ps.

217,838

Ps.

730,333

Ps.

327,208

Schedule of other operating expenses

    

2021

    

2020

    

2019

Administrative and operational support expenses

Ps.

752,434

Ps.

632,041

Ps.

581,181

Technology and communications

 

431,855

 

383,648

 

381,055

Passenger services

 

76,107

 

87,850

 

65,477

Insurance

 

74,499

 

53,507

 

74,661

Others

 

1,897

 

194

 

10,553

Ps.

1,336,792

Ps.

1,157,240

Ps.

1,112,927

v3.22.1
Finance income and cost (Tables)
12 Months Ended
Dec. 31, 2021
Finance income and cost  
Schedule of finance income

    

2021

    

2020

    

2019

Interest on cash and equivalents

Ps.

58,269

Ps.

93,122

Ps.

201,191

Interest on asset backed trust notes

 

5,714

 

6,342

 

6,525

Interest on recovery of guarantee deposits

 

7,595

 

2,047

 

83

Ps.

71,578

Ps.

101,511

Ps.

207,799

Schedule of finance cost

    

2021

    

2020

    

2019

Interest expense on lease liabilities and aircraft and engine lease return obligation

Ps.

2,603,820

Ps.

2,350,250

Ps.

2,128,162

Derivative financial instruments loss

448,559

Interest on asset backed trust notes

115,578

116,240

80,314

Cost of letter credit notes

61,549

73,141

49,856

Bank fees and others

 

4,574

 

3,707

 

3,607

Interest on debts and borrowings*

 

14,222

 

16,368

 

1,660

Other finance costs

 

32,246

 

10,219

 

6,230

Ps.

2,831,989

Ps.

3,018,484

Ps.

2,269,829

Schedule of capitalized interest

    

2021

    

2020

    

2019

Interest on debts and borrowings

Ps.

158,188

Ps.

400,406

Ps.

457,973

Capitalized interest (Note 12)

 

(143,966)

 

(384,038)

 

(456,313)

Net interest on debts and borrowing in the consolidated statements of operations

Ps.

14,222

Ps.

16,368

Ps.

1,660

v3.22.1
Components of other comprehensive (loss) income (Tables)
12 Months Ended
Dec. 31, 2021
Components of other comprehensive (loss) income  
Schedule of analysis of other comprehensive income

    

    

Derivative and

    

Exchange

    

Remeasurements

non-derivative

differences on

of employee

financial

the translation

benefits

instruments

of foreign

Total

Other comprehensive (loss) income:

 

 

  

 

  

 

  

 

Balance as of December 31, 2019

 

Ps.

(6,798)

 

Ps.

104,772

Ps.

18,266

Ps.

116,240

Comprehensive (loss) income of the year

 

(2,651)

 

(1,747,686)

23,970

(1,726,367)

Deferred Tax effect

 

794

 

46,835

47,629

Balance as of December 31, 2020

(8,655)

(1,596,079)

42,236

(1,562,498)

Comprehensive (loss) income of the year

 

(9,279)

 

1,596,327

(4,021)

1,583,027

Deferred Tax effect

 

2,850

 

(5,655)

(2,805)

Net balances as of December 31, 2021

 

Ps.

(15,084)

 

Ps.

(5,407)

Ps.

38,215

Ps.

17,724

Schedule of components of other comprehensive (loss) income

    

2021

    

2020

    

2019

Derivative and non-derivative financial instruments:

 

  

 

  

 

  

Extrinsic value of changes on jet fuel Asian call options

Ps.

11,997

Ps.

(11,993)

Ps.

11,148

Extrinsic value of changes on jet fuel Zero cost collars

9,657

 

(143,224)

 

256,515

loss gain of the matured foreign currency forward contracts

(14,241)

Loss of the interest rate Cap

(2,800)

(900)

(4,023)

Non derivative financial instruments*

1,577,473

(1,591,569)

14,096

Total

Ps.

1,596,327

Ps.

(1,747,686)

Ps.

263,495

v3.22.1
Commitments and contingencies (Tables)
12 Months Ended
Dec. 31, 2021
Commitments and contingencies  
Schedule of committed expenditures

    

    

Commitment

Commitment

expenditures

expenditures in 

equivalent in

thousands of U.S.

thousands of

    

dollars

    

Mexican pesos(1)

2022

 

US$

114,563

Ps.

2,358,108

2023

 

314,660

 

6,476,797

2024

 

903,776

 

18,602,869

2025

981,657

20,205,930

2026 and thereafter

 

4,362,996

 

89,805,726

 

US$

6,677,652

Ps.

137,449,430

(1)Using the exchange rate as of December 31, 2021 of Ps.20.5835.
Schedule of future minimum lease payments

    

Aircraft sale prices estimated 

in thousands of U.S. dollars

    

In thousands of Mexican pesos (1)

2022

US$

705,500

Ps. 

14,521,659

2023

 

108,000

 

2,223,018

US$

813,500

Ps.

16,744,677

(1)Using the exchange rate as of December 31, 2021 of Ps.20.5835.
Summary of future lease payments from sale and leaseback

Aircraft leases

in thousands of U.S. 

    

In thousands of Mexican 

dollars

pesos (1)

2022

US$

40,589

Ps.

835,464

2023

 

75,098

 

1,545,780

2024

 

79,244

 

1,631,119

2025

 

79,244

 

1,631,119

2026 and thereafter

 

676,748

 

13,929,842

US$

950,923

Ps.

19,573,324

(1)Using the exchange rate as of December 31, 2021 of Ps.20.5835.
v3.22.1
Operating segments (Tables)
12 Months Ended
Dec. 31, 2021
Operating segments  
Schedule of geographic segments

    

2021

    

2020

    

2019

Operating revenues:

 

  

 

  

 

  

Domestic (Mexico)

Ps.

33,754,354

Ps.

16,572,198

Ps.

24,594,797

International:

 

 

  

 

  

United States of America, Central America and South America (1)

 

11,342,307

 

5,998,615

 

10,230,824

Non-derivative financial instruments

(434,522)

(411,222)

(72,949)

Total operating revenues

Ps.

44,662,139

Ps.

22,159,591

Ps.

34,752,672

(1)For the year ended December 31, 2021, the total revenue from international customers increased of Ps.5,343,692 compared to the year ended December 31, 2020.
v3.22.1
Description of the business and summary of significant accounting policies - Relevant events (Details)
$ in Billions
1 Months Ended 12 Months Ended
Dec. 20, 2021
shares
Oct. 13, 2021
MXN ($)
item
Dec. 11, 2020
$ / shares
shares
May 12, 2020
engine
Feb. 24, 2020
Jun. 20, 2019
MXN ($)
item
Nov. 10, 2016
Feb. 17, 2010
May 09, 2005
Nov. 30, 2018
aircraft
Dec. 31, 2017
aircraft
Dec. 31, 2021
aircraft
Dec. 31, 2020
shares
Description of the business and summary of significant accounting policies                          
Maturity of notes                       5 years  
Basis points                       0.25%  
Term of authorization to provide air transportation services         20 years                
Extension term (in years)                       15 years  
A321NEO model                          
Description of the business and summary of significant accounting policies                          
Number of aircraft purchased       34             34 39  
A320NEO Into A321NEO                          
Description of the business and summary of significant accounting policies                          
Number of aircraft purchased | aircraft                   6   20  
Number of aircrafts converted | aircraft                       20  
Concesionaria                          
Description of the business and summary of significant accounting policies                          
Term of authorization to provide air transportation services               10 years 5 years        
Volaris Costa Rica                          
Description of the business and summary of significant accounting policies                          
Term of authorization to provide air transportation services             5 years            
Asset backed trust notes ("CEBUR"), in Mexican pesos                          
Description of the business and summary of significant accounting policies                          
Number of notes issued | item   15,000,000       15,000,000              
Notes issued | $   $ 1.5       $ 1.5              
Authorized amount under the program | $   $ 3.0       $ 3.0              
Maturity of notes   5 years       5 years              
Basis points   200.00%                      
Asset backed trust notes ("CEBUR"), in Mexican pesos | 28-day TIIE                          
Description of the business and summary of significant accounting policies                          
Basis points           175.00%              
Sustainability Linked Bond Principles 2020 [Member] | 2022                          
Description of the business and summary of significant accounting policies                          
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer                       21.54%  
Sustainability Linked Bond Principles 2020 [Member] | 2023                          
Description of the business and summary of significant accounting policies                          
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer                       24.08%  
Sustainability Linked Bond Principles 2020 [Member] | 2024                          
Description of the business and summary of significant accounting policies                          
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer                       25.53%  
Sustainability Linked Bond Principles 2020 [Member] | 2030                          
Description of the business and summary of significant accounting policies                          
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer                       35.42%  
Series B shares                          
Description of the business and summary of significant accounting policies                          
Conversion of equivalent number of shares 30,538,000                       30,538,000
Series A shares                          
Description of the business and summary of significant accounting policies                          
Number of shares per CPO     1                    
American Depositary Shares                          
Description of the business and summary of significant accounting policies                          
Weighted average share price | $ / shares     $ 11.25                    
Number of CPOs per ADS     10                    
Primary follow-on equity offering                          
Description of the business and summary of significant accounting policies                          
Number of shares offered     134,000,000                    
Over-allotment | American Depositary Shares                          
Description of the business and summary of significant accounting policies                          
Number of shares issued     20,100,000                    
v3.22.1
Description of the business and summary of significant accounting policies - Subsidiaries (Details)
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Concesionaria    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Volaris Costa Rica    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Vuela, S.A.    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Vuela El Salvador, S.A. de C.V.    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Comercializadora Volaris, S.A. de C.V.    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Servicios Earhart, S.A.    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Servicios Corporativos    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Servicios Administrativos    
Subsidiaries    
Proportion of ownership interest in subsidiary   100.00%
Loyalty Program    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Viajes Vuela    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Guatemala Dispatch Service, S.A    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00%  
CIBanco, S.A., Institucion de Banca Multiple, Fidecomiso 1710    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
CIBanco, S.A., Institucion de Banca Multiple, Fidecomiso 1711    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Fideicomiso Irrevocable de Administracion numero F/307750    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Fideicomiso Irrevocable de Administracion numero F/745291    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Fideicomiso de Administracion numero CIB/3081    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
Fideicomiso Irrevocable de Administracion numero CIB/3249    
Subsidiaries    
Proportion of ownership interest in subsidiary 100.00% 100.00%
v3.22.1
Description of the business and summary of significant accounting policies - financial instruments (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Revenue recognition    
Discounts, payment incentives, bonuses or other variable considerations $ 0  
Non-ticket revenues    
Expected credit losses on accounts receivable $ 16,118 $ 13,664
Minimum    
Revenue recognition    
Term of trade receivables 1 day  
Maximum    
Revenue recognition    
Term of trade receivables 2 days  
v3.22.1
Description of the business and summary of significant accounting policies - Intangible assets (Details)
12 Months Ended
Dec. 31, 2021
Software  
Intangible assets  
Useful life of intangible assets 5 years
v3.22.1
Description of the business and summary of significant accounting policies - Aircraft, rotable spare parts, furniture and equipment, net (Details)
$ in Thousands
1 Months Ended 12 Months Ended
Oct. 31, 2021
engine
Dec. 31, 2021
Dec. 31, 2021
engine
Dec. 31, 2021
MXN ($)
Dec. 31, 2021
aircraft
Dec. 31, 2021
agreement
Dec. 31, 2021
Dec. 31, 2020
MXN ($)
aircraft
Dec. 31, 2019
MXN ($)
agreement
aircraft
Aircraft, rotable spare parts, furniture and equipment, net                  
Maintenance deposits expensed as supplemental rent       $ 775,579       $ 421,030 $ 295,720
Number of aircraft added to fleet | aircraft         15     7 7
Number of aircraft with lease term extended 1   3     15     1
Number of engine agreements for which lease term extended | agreement           3      
Maintenance deposits expensed to contingent rent prior to lease extensions       0          
Length of time before routine aircraft and engine maintenance is required   24 months              
Maximum length of time before routine aircraft and engine maintenance   36 months              
Depreciation       1,022,012       $ 797,827 $ 587,849
Capitalized borrowing costs       143,966       $ 384,038 $ 456,313
Rate used to determine amount of borrowing cost             2.76% 3.58% 5.10%
Finance pre-delivery payments of aircraft                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Depreciation       117,638       $ 73,952  
Constructions and improvements                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Depreciation       16,261       16,379  
Computer equipment                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Depreciation       5,630       7,613  
Annual depreciation rate             25.00%    
Workshop tools                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Depreciation       3,612       2,374  
Annual depreciation rate             33.30%    
Electric power equipment                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Depreciation       1,168       1,373  
Annual depreciation rate             10.00%    
Communications equipment                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Depreciation       1,013       1,095  
Annual depreciation rate             10.00%    
Workshop machinery and equipment                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Depreciation       1,928       1,549  
Annual depreciation rate             10.00%    
Motorized transport equipment platform.                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Annual depreciation rate             25.00%    
Service carts on board                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Depreciation       762       558  
Annual depreciation rate             20.00%    
Office furniture and equipment                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Depreciation       5,571       5,768  
Annual depreciation rate             10.00%    
Leasehold improvements to flight equipment                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Additions       1,742,979       646,219  
Amortization of major maintenance leasehold improvement       838,433       652,091 $ 450,371
Depreciation       $ 865,993       $ 684,633  
Minimum                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Duration of routine aircraft and engine maintenance   7 days              
Length of time before major aircraft and engine maintenance is required   5 years              
Minimum | Finance pre-delivery payments of aircraft                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Annual depreciation rate             4.00%    
Maximum                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Duration of routine aircraft and engine maintenance   14 days              
Duration of major aircraft and engine maintenance   42 days              
Length of time before major aircraft and engine maintenance is required   6 years              
Maximum | Finance pre-delivery payments of aircraft                  
Aircraft, rotable spare parts, furniture and equipment, net                  
Annual depreciation rate             16.70%    
v3.22.1
Description of the business and summary of significant accounting policies - Foreign currency exchange differences and liabilities and provisions (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
USD ($)
Dec. 31, 2021
₡ / $
USD ($)
Dec. 31, 2021
Q / $
USD ($)
Dec. 31, 2020
USD ($)
Dec. 31, 2020
MXN ($)
USD ($)
Dec. 31, 2020
₡ / $
USD ($)
Dec. 31, 2020
USD ($)
Q / $
Dec. 31, 2019
USD ($)
Dec. 31, 2019
MXN ($)
USD ($)
Dec. 31, 2019
₡ / $
USD ($)
Dec. 31, 2019
Q / $
USD ($)
Apr. 26, 2022
$ / $
Dec. 31, 2021
₡ / $
Dec. 31, 2021
Q / $
Dec. 31, 2021
$ / $
Dec. 31, 2020
₡ / $
Dec. 31, 2020
Q / $
Dec. 31, 2020
$ / $
Dec. 31, 2019
₡ / $
Dec. 31, 2019
Q / $
Dec. 31, 2019
$ / $
Description of the business and summary of significant accounting policies                                            
Average exchange rate for year 20.9853   641.2439 7.75370 21.4961   588.4240 7.7292 19.2618   590.9574 7.7066                    
Exchange rate as of end of the year 20.5835 20.5835 20.5835 20.5835 19.9487 19.9487 19.9487 19.9487 18.8452 18.8452 18.8452 18.8452 20.3183 645.9000 7.7285 20.5835 615.7800 7.8095 19.9487 573.4400 7.6988 18.8452
Exchange differences on translation of foreign operations $ (195,000) $ (4,021)       $ 23,970       $ 8,045                        
v3.22.1
Description of the business and summary of significant accounting policies - Employee benefits (Details)
$ / shares in Units, $ in Thousands, $ in Thousands
1 Months Ended 12 Months Ended
Nov. 06, 2014
Apr. 30, 2018
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
$ / shares
Dec. 31, 2020
MXN ($)
$ / shares
Dec. 31, 2019
MXN ($)
$ / shares
Share-based payments            
Termination benefits provision         $ 0 $ 0
Number of days' wages for each year of service provided as seniority premium benefits     12 days 12 days    
Minimum years of service to receive seniority premium benefits     15 years 15 years    
Salaries and benefits     $ 235,970 $ 4,857,083 3,453,382 3,600,762
Quarterly incentive bonuses            
Share-based payments            
Salaries and benefits       75,418 25,918 62,825
Restricted Stock Units            
Share-based payments            
Salaries and benefits       $ 89,464 75,040 49,659
SARs - cash settled            
Share-based payments            
Salaries and benefits         (1,901) 2,964
Vesting period 3 years          
MIP I            
Share-based payments            
Exercise price | $ / shares       $ 5.31    
MIP II            
Share-based payments            
Salaries and benefits       $ 62,262    
Salaries and benefits         $ 107,204 $ 37,760
Vesting period     5 years 5 years    
BODIP            
Share-based payments            
Vesting period   5 years 5 years 5 years    
Exercise price | $ / shares       $ 32.23 $ 9.74 $ 16.80
Employee profit sharing            
Share-based payments            
Salaries and benefits       $ 262,667 $ 13,458 $ 22,134
v3.22.1
Description of the business and summary of significant accounting policies - Leases (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Disclosure of detailed information about property, plant and equipment [line items]        
Impairment charges recorded in respect of right-of-use asset   $ 0 $ 0 $ 0
Aircraft and engines        
Disclosure of detailed information about property, plant and equipment [line items]        
Estimated useful lives of the assets 18 years      
Spare engines        
Disclosure of detailed information about property, plant and equipment [line items]        
Estimated useful lives of the assets 18 years      
Minimum | Buildings leases        
Disclosure of detailed information about property, plant and equipment [line items]        
Estimated useful lives of the assets 1 year      
Maximum | Buildings leases        
Disclosure of detailed information about property, plant and equipment [line items]        
Estimated useful lives of the assets 10 years      
Maximum | Maintenance component        
Disclosure of detailed information about property, plant and equipment [line items]        
Estimated useful lives of the assets 8 years      
v3.22.1
Description of the business and summary of significant accounting policies - Derivative and non-derivative financial instruments and hedge accounting and Operating segments (Details)
$ in Millions
12 Months Ended
Dec. 31, 2021
segment
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Description of the business and summary of significant accounting policies      
Number of operating segments 1    
Number of geographic segments 2    
Ineffective portion with respect to derivative financial instruments | $   $ 448.6 $ 0.0
v3.22.1
Description of the business and summary of significant accounting policies - Additional details (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Dec. 31, 2018
MXN ($)
IFRS Statement [Line Items]            
Cash and cash equivalents. $ 741,122 $ 490,849 $ 15,254,876 $ 10,103,385 $ 7,979,972 $ 5,862,942
28-day TIIE            
IFRS Statement [Line Items]            
Percentage of Available Seat Miles 53.70% 14.70%        
v3.22.1
Significant accounting judgments, estimates and assumptions (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Significant accounting judgments, estimates and assumptions      
Tax loss carry-forwards used $ 1,944,922 $ 0 $ 214,460
Impairment loss   $ 0  
v3.22.1
Financial instruments and risk management - Jet fuel price risk (Details)
gal in Thousands, $ in Thousands, $ in Millions
12 Months Ended
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
gal
Dec. 31, 2019
MXN ($)
Dec. 31, 2018
MXN ($)
Dec. 31, 2021
USD ($)
gal
$ / gal
Jet fuel price risk          
Fair value of derivative financial liabilities   $ (9,657)      
Intrinsic value recycled to the fuel cost $ 1,271,462        
Loss from derivatives financial instruments recognized in consolidated statements of operations $ (14,020) $ (1,306,557) $ (67,629)    
Jet fuel          
Jet fuel price risk          
Percentage of operating expenses 34.00% 26.00% 38.00%    
Intrinsic value recycled to the fuel cost   $ 33,627      
Fuel cost          
Jet fuel price risk          
Intrinsic value recycled to the fuel cost $ 835,884   $ 9,477 $ 9,477  
Fuel cost | Jet fuel          
Jet fuel price risk          
Intrinsic value recycled to the fuel cost   20,646      
Finance cost          
Jet fuel price risk          
Intrinsic value recycled to the fuel cost 435,578        
Finance cost | Jet fuel          
Jet fuel price risk          
Intrinsic value recycled to the fuel cost   $ 12,981      
Jet fuel Asian call options contracts          
Jet fuel price risk          
Notional volume (in gallons) | gal   23,967      
Fair value of derivative financial assets   $ 206      
Cost of hedging recognized in other comprehensive income   $ (133,567)     $ 21,650
Jet fuel Asian call options contracts | Jet fuel          
Jet fuel price risk          
Intrinsic value recycled to the fuel cost     $ 61,069    
Jet fuel Asian call options contracts | Within one year          
Jet fuel price risk          
Notional volume (in gallons) | gal         7,280
Strike price agreed rate | $ / gal         1.90
Approximate percentage of hedge (of expected consumption value)         3.00%
Jet fuel Asian call options contracts | Within six months          
Jet fuel price risk          
Notional volume (in gallons) | gal         7,280
Strike price agreed rate | $ / gal         1.90
Approximate percentage of hedge (of expected consumption value)         6.00%
Jet fuel Asian call options contracts | Finance cost | Jet fuel          
Jet fuel price risk          
Intrinsic value recycled to the fuel cost $ 12,577        
Jet fuel Zero-Cost collars          
Jet fuel price risk          
Notional volume (in gallons) | gal   81,646      
Fair value of derivative financial liabilities   $ 9,657      
Unwind of Zero cost collar   $ 42,643      
Jet fuel Zero-Cost collars | Within one year          
Jet fuel price risk          
Notional volume (in gallons) | gal         7,556
Approximate percentage of hedge (of expected consumption value)         3.00%
Jet fuel Zero-Cost collars | Within one year | Jet fuel | Minimum          
Jet fuel price risk          
Strike price agreed rate | $ / gal         1.23
Jet fuel Zero-Cost collars | Within one year | Jet fuel | Maximum          
Jet fuel price risk          
Strike price agreed rate | $ / gal         1.93
Jet fuel Zero-Cost collars | Within six months          
Jet fuel price risk          
Notional volume (in gallons) | gal         7,556
Approximate percentage of hedge (of expected consumption value)         6.00%
Jet fuel Zero-Cost collars | Within six months | Jet fuel | Minimum          
Jet fuel price risk          
Strike price agreed rate | $ / gal         1.23
Jet fuel Zero-Cost collars | Within six months | Jet fuel | Maximum          
Jet fuel price risk          
Strike price agreed rate | $ / gal         1.93
All-in | Within one year          
Jet fuel price risk          
Approximate percentage of hedge (of expected consumption value)         6.00%
All-in | Within six months          
Jet fuel price risk          
Approximate percentage of hedge (of expected consumption value)         12.00%
v3.22.1
Financial instruments and risk management - Fuel Sensitivity (Details) - USD ($)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Financial instruments and risk management    
+ US$0.01 per gallon $ 0.01 $ 0.01
- US$0.01 per gallon $ 0.01 $ 0.01
Increase in Operating costs $ 2,731 $ 1,762
Decrease in Operating costs $ (2,731) $ (1,762)
v3.22.1
Financial instruments and risk management - Foreign exchange on and off-balance sheet exposure (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
USD ($)
Apr. 26, 2022
$ / $
Dec. 31, 2021
MXN ($)
Dec. 31, 2021
₡ / $
Dec. 31, 2021
Q / $
Dec. 31, 2021
$ / $
Mar. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2020
₡ / $
Dec. 31, 2020
Q / $
Dec. 31, 2020
$ / $
Dec. 31, 2019
MXN ($)
Dec. 31, 2019
₡ / $
Dec. 31, 2019
Q / $
Dec. 31, 2019
$ / $
Dec. 31, 2018
MXN ($)
Assets                                        
Cash and cash equivalents $ 741,122,000         $ 15,254,876         $ 490,849,000 $ 10,103,385       $ 7,979,972       $ 5,862,942
Other accounts receivable, net 50,264,000         1,034,604           560,640                
Total assets 3,984,568,000         82,016,361           68,189,113                
Liabilities                                        
Financial debt (Note 5)           6,276,680           5,354,633       4,975,969        
Lease liabilities           49,650,239           44,130,542       $ 40,517,045        
Suppliers 108,164,000         2,226,400           2,239,736                
Derivative financial instruments                       9,657                
Total liabilities $ 3,671,431,000         75,570,923           $ 65,392,928                
Exchange rate 20.5835     18.8452 20.3183   645.9000 7.7285 20.5835   19.9487   615.7800 7.8095 19.9487   573.4400 7.6988 18.8452  
Net gains on foreign currency forward contacts       $ 4,199                                
Hedging relationship for foreign exchange rate with non-derivative financial instruments, which represent a portion of the financial assets denominated in USD $ 410,000,000                 $ 350,000,000                    
Recognized leasing liabilities, which have been designated as hedging instruments, forecasted revenues over the remaining lease term                     $ 1,500,000,000                  
Recognized financial assets designated under hedging strategy                     60,500,000                  
Impact of hedges (21,110,000) $ (434,522) $ (411,222) $ (72,949)                                
Financial instruments designated as hedging instruments, at fair value                   410,000,000                    
Reserve of exchange differences on translation, hedging relationships for which hedge accounting is no longer applied 410,000,000                 $ 350,000,000                    
Reclassification amount $ 109,000,000 2,251,442                                    
Fuel cost                                        
Liabilities                                        
Impact of hedges   $ 182,190 $ 409,174                                  
Foreign currency forward contract                                        
Assets                                        
Cash and cash equivalents           15,254,876                            
Other accounts receivable, net           1,034,604                            
Guarantee deposits           10,999,040                            
Total assets           27,288,520                            
Liabilities                                        
Financial debt (Note 5)           6,276,680                            
Lease liabilities           53,328,472                            
Suppliers           5,922,604                            
Other taxes and fees payable           2,700,183                            
Total liabilities           68,227,939                            
Net foreign currency position           (40,939,419)                            
Foreign currency forward contract | USD                                        
Assets                                        
Cash and cash equivalents           14,311,541                            
Other accounts receivable, net           830,688                            
Guarantee deposits           10,992,268                            
Total assets           26,134,497                            
Liabilities                                        
Financial debt (Note 5)           3,552,092                            
Lease liabilities           53,326,884                            
Suppliers           2,504,827                            
Other taxes and fees payable           62,533                            
Total liabilities           59,446,336                            
Net foreign currency position           (33,311,839)                            
Foreign currency forward contract | Denominated in Mexican pesos                                        
Assets                                        
Cash and cash equivalents           817,735                            
Other accounts receivable, net           193,727                            
Total assets           1,011,462                            
Liabilities                                        
Financial debt (Note 5)           2,724,588                            
Suppliers           3,290,110                            
Other taxes and fees payable           2,300,533                            
Total liabilities           8,315,231                            
Net foreign currency position           (7,303,769)                            
Foreign currency forward contract | Others*                                        
Assets                                        
Cash and cash equivalents           125,600                            
Other accounts receivable, net           10,189                            
Guarantee deposits           6,772                            
Total assets           142,561                            
Liabilities                                        
Lease liabilities           1,588                            
Suppliers           127,667                            
Other taxes and fees payable           337,117                            
Total liabilities           466,372                            
Net foreign currency position           $ (323,811)                            
Foreign currency                                        
Assets                                        
Cash and cash equivalents                     495,612,000                  
Other accounts receivable, net                     39,997,000                  
Guarantee deposits                     479,566,000                  
Derivative financial instruments                     10,000                  
Total assets                     1,015,185,000                  
Liabilities                                        
Financial debt (Note 5)                     183,806,000                  
Lease liabilities                     2,334,153,000                  
Suppliers                     174,553,000                  
Other taxes and fees payable                     16,105,000                  
Derivative financial instruments                     484,000                  
Total liabilities                     2,709,101,000                  
Net foreign currency position                     $ (1,693,916,000)                  
v3.22.1
Financial instruments and risk management - Foreign currency sensitivity (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, entity's own equity instruments [line items]        
Net income (loss) for the period $ 103,022 $ 2,120,551 $ (4,293,791) $ 2,639,063
USD | Foreign currency | Fair value        
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, entity's own equity instruments [line items]        
Percentage of reasonably possible increase in exchange rate 5.00% 5.00% 5.00%  
Percentage of reasonably possible decrease in exchange rate (5.00%) (5.00%) (5.00%)  
Effect on profit before tax from reasonably possible increase in exchange rate   $ (1,439,653) $ (253,763)  
Effect on profit before tax from reasonably possible decrease in exchange rate   $ 1,439,653 $ 253,763  
Denominated in Mexican pesos | Foreign currency | Fair value        
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, entity's own equity instruments [line items]        
Percentage of reasonably possible increase in exchange rate 5.00% 5.00%    
Percentage of reasonably possible decrease in exchange rate (5.00%) (5.00%)    
Effect on profit before tax from reasonably possible increase in exchange rate   $ (69,942)    
Effect on profit before tax from reasonably possible decrease in exchange rate   $ 69,942    
v3.22.1
Financial instruments and risk management - Interest rate risk (Details)
12 Months Ended
Nov. 03, 2021
Dec. 31, 2021
MXN ($)
item
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Interest rate risk        
Derivative financial liabilities     $ 9,657,000  
Loss on cash flow hedges   $ 14,020,000 1,306,557,000 $ 67,629,000
Spread on interest rate basis   0.25%    
Interest rate Cap        
Interest rate risk        
Spread on interest rate basis   125.00%    
CEBUR (VOLARCB19) [Member]        
Interest rate risk        
Decrease in caplets due to increase in interest hedging instruments   $ (30,860) (280)  
Increase in caplets due to decrease in interest hedging instruments   $ 30,860 $ 280  
CEBUR (VOLARCB19) [Member] | Fair value | Denominated in Mexican pesos        
Interest rate risk        
Increase in rate   0.01% 0.01%  
Decrease in rate   (0.01%) (0.01%)  
CEBUR (VOLARCB21L) [Member]        
Interest rate risk        
Number of caplets 59      
Increase in rate   0.01%    
Decrease in rate   (0.01%)    
Decrease in caplets due to increase in interest hedging instruments   $ (165,440)    
Increase in caplets due to decrease in interest hedging instruments   $ 165,440    
CEBUR (VOLARCB21L) [Member] | Interest rate Cap        
Interest rate risk        
Notional amount (in USD)   3,000,000,000.0 1,500,000,000  
Derivative financial liabilities   $ 28,771,000 $ 326,000  
28-day TIIE.        
Interest rate risk        
Spread on interest rate basis   2.40%   3.00%
Number of caplets | item   59    
28-day TIIE. | Maximum        
Interest rate risk        
Spread on interest rate basis   10.00%    
v3.22.1
Financial instruments and risk management - Maturity analysis for financial liabilities (Details) - MXN ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments $ 59,823,677 $ 51,995,295
Within one year    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 10,329,929 8,127,093
Between one year and five years    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 49,493,748 43,868,202
Jet fuel Zero-Cost collars    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments   9,657
Jet fuel Zero-Cost collars | Within one year    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments   9,657
Aircraft, engines, land and buildings leases    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 49,650,239 44,130,542
Aircraft, engines, land and buildings leases | Within one year    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 5,842,492 6,484,092
Aircraft, engines, land and buildings leases | Between one year and five years    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 43,807,747 37,646,450
Aircraft and engine lease return obligation    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 3,887,789 2,504,484
Aircraft and engine lease return obligation | Within one year    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 451,788 86,801
Aircraft and engine lease return obligation | Between one year and five years    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 3,436,001 2,417,683
Revolving line of credit    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 3,535,649 3,650,612
Revolving line of credit | Within one year    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 3,535,649 1,096,543
Revolving line of credit | Between one year and five years    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments   2,554,069
Short-term working capital facilities    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments   200,000
Short-term working capital facilities | Within one year    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments   200,000
Asset backed trust notes ("CEBUR"), in Mexican pesos    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 2,750,000 1,500,000
Asset backed trust notes ("CEBUR"), in Mexican pesos | Within one year    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments 500,000 250,000
Asset backed trust notes ("CEBUR"), in Mexican pesos | Between one year and five years    
Liquidity risk    
Contractual principal payments on financial liabilities and derivative financial instruments $ 2,250,000 $ 1,250,000
v3.22.1
Financial instruments and risk management - Debt Sensitivity Analysis (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Dec. 31, 2021
USD ($)
Oct. 13, 2021
Dec. 31, 2020
USD ($)
Disclosure Of Foreign Exchange Exposure [Line Items]            
Income tax relating to components of other comprehensive income $ 2,805 $ (47,629) $ 71,762      
Basis points       0.25%    
Increase in basis point       100.00%   100.00%
Decrease in basis point       (100.00%)   (100.00%)
Banco Nacional de Comercio Exterior, S.N.C. ("Bancomext") [Member]            
Disclosure Of Foreign Exchange Exposure [Line Items]            
Increase in results       $ 138,476   $ 155,332
Decrease in results       (138,476)   (155,332)
Asset backed trust notes ("CEBUR"), in Mexican pesos            
Disclosure Of Foreign Exchange Exposure [Line Items]            
Basis points         200.00%  
Increase in results       133,173   131,054
Decrease in results       (133,173)   (131,054)
Banco Sabadell S.A., Institucin de Banca Multiple ("Sabadell") [Member]            
Disclosure Of Foreign Exchange Exposure [Line Items]            
Increase in results       16,064   18,086
Decrease in results       $ (16,064)   $ (18,086)
Minimum            
Disclosure Of Foreign Exchange Exposure [Line Items]            
Interest rate basis 4.25          
Maximum            
Disclosure Of Foreign Exchange Exposure [Line Items]            
Interest rate basis 5.50          
Interest rate Cap            
Disclosure Of Foreign Exchange Exposure [Line Items]            
Income tax relating to components of other comprehensive income $ 5,407          
Basis points       125.00%    
v3.22.1
Fair value measurements - Carrying amount and fair value (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Fair value measurements    
Carrying amount of derivative financial assets $ 28,771 $ 532
Fair value of derivative financial assets 28,771 532
Fair value of financial liabilities   (9,657)
Net carrying amount (6,256,878) (5,359,737)
Net fair value (6,205,470) (5,536,457)
Transfers of assets from level 1 to level 2 0  
Transfers of assets from level 2 to level 1 0  
Financial debt    
Fair value measurements    
Carrying amount of financial liabilities (6,285,649) (5,350,612)
Fair value of financial liabilities (6,234,241) (5,527,332)
Interest-bearing loans and borrowings    
Fair value measurements    
Fair value of financial liabilities (6,234,241) (5,527,332)
Non derivative financial instruments.    
Fair value measurements    
Carrying amount of financial liabilities   (9,657)
Fair value of financial liabilities   (9,657)
Jet fuel Asian call options contracts    
Fair value measurements    
Carrying amount of derivative financial assets   206
Fair value of derivative financial assets   206
Interest rate Cap    
Fair value measurements    
Carrying amount of derivative financial assets 28,771 326
Fair value of derivative financial assets 28,771 326
Level 2    
Fair value measurements    
Fair value of financial liabilities   (9,657)
Net fair value (6,205,470) (5,536,457)
Level 2 | Interest-bearing loans and borrowings    
Fair value measurements    
Fair value of financial liabilities (6,234,241) (5,527,332)
Level 2 | Jet fuel Asian call options contracts    
Fair value measurements    
Fair value of derivative financial assets   206
Level 2 | Interest rate Cap    
Fair value measurements    
Fair value of derivative financial assets $ 28,771 $ 326
v3.22.1
Fair value measurements - Loss gain from financial instruments (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
USD ($)
Dec. 31, 2020
MXN ($)
USD ($)
Dec. 31, 2019
MXN ($)
USD ($)
Apr. 26, 2022
$ / $
Dec. 31, 2021
₡ / $
Dec. 31, 2021
Q / $
Dec. 31, 2021
$ / $
Dec. 31, 2020
₡ / $
Dec. 31, 2020
Q / $
Dec. 31, 2020
$ / $
Dec. 31, 2019
₡ / $
Dec. 31, 2019
Q / $
Dec. 31, 2019
$ / $
gain (loss) on financial instruments                            
Loss from derivatives financial instruments recognized in consolidated statements of operations   $ (14,020) $ (1,306,557) $ (67,629)                    
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income $ 916,000 $ 18,854 $ (1,747,686) $ 263,495                    
Exchange rate 20.5835 20.5835 19.9487 18.8452 20.3183 645.9000 7.7285 20.5835 615.7800 7.8095 19.9487 573.4400 7.6988 18.8452
Fair value                            
gain (loss) on financial instruments                            
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income   $ 1,596,327 $ (1,747,686) $ 263,495                    
Foreign currency forward contract | Fair value                            
gain (loss) on financial instruments                            
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income       (14,241)                    
Jet fuel Asian call options contracts | Fair value                            
gain (loss) on financial instruments                            
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income   11,997 (11,993) 11,148                    
Jet fuel Zero cost collars | Fair value                            
gain (loss) on financial instruments                            
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income   9,657 (143,224) 256,515                    
Interest rate Cap | Fair value                            
gain (loss) on financial instruments                            
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income   (2,800) (900) (4,023)                    
Non derivative financial instruments. | Fair value                            
gain (loss) on financial instruments                            
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income   1,577,473 (1,591,569) 14,096                    
Fuel cost | Jet fuel Asian call options contracts                            
gain (loss) on financial instruments                            
Loss from derivatives financial instruments recognized in consolidated statements of operations   (12,577) (20,646) (61,069)                    
Fuel cost | Jet fuel Zero cost collars                            
gain (loss) on financial instruments                            
Loss from derivatives financial instruments recognized in consolidated statements of operations     (835,884) (9,477)                    
Finance cost | Jet fuel Asian call options contracts                            
gain (loss) on financial instruments                            
Loss from derivatives financial instruments recognized in consolidated statements of operations     (12,981)                      
Finance cost | Jet fuel Zero cost collars                            
gain (loss) on financial instruments                            
Loss from derivatives financial instruments recognized in consolidated statements of operations     (435,578)                      
Finance cost | Interest rate Cap                            
gain (loss) on financial instruments                            
Loss from derivatives financial instruments recognized in consolidated statements of operations   $ (1,443) $ (1,468) (1,282)                    
Aircraft and engine rent expenses | Foreign currency forward contract                            
gain (loss) on financial instruments                            
Loss from derivatives financial instruments recognized in consolidated statements of operations       $ 4,199                    
v3.22.1
Financial assets and liabilities - Financial assets (Details)
$ in Thousands, $ in Thousands
Dec. 31, 2021
MXN ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2020
MXN ($)
Financial assets      
Total financial assets $ 28,771   $ 532
Current     206
Non-current 28,771 $ 1,398 326
Jet fuel Asian call options contracts      
Financial assets      
Total financial assets     206
Interest rate Cap      
Financial assets      
Total financial assets $ 28,771   $ 326
v3.22.1
Financial assets and liabilities - Short-term and long-term debt (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Oct. 13, 2021
MXN ($)
Dec. 31, 2019
MXN ($)
Jun. 20, 2019
MXN ($)
Short-term and long-term debt              
Amortized transaction costs   $ (15,542)   $ (31,408)      
Accrued interest and other financial cost   19,563   22,439      
Financial debt without unamortized cost $ 6,308,088            
Total financial debt   5,354,633   6,276,680   $ 4,975,969  
Less: Short-term maturities   1,558,884 $ 196,898 4,052,859   2,086,017  
Long-term   3,795,749 $ 108,039 $ 2,223,821   $ 2,889,952  
Spread on interest rate basis     0.25% 0.25%      
28-day TIIE.              
Short-term and long-term debt              
Spread on interest rate basis     2.40% 2.40%   3.00%  
Within one year              
Short-term and long-term debt              
Total financial debt       $ 4,058,088      
Between one year and two years              
Short-term and long-term debt              
Total financial debt       583,333      
Between two and three years              
Short-term and long-term debt              
Total financial debt       750,000      
Between three and four years              
Short-term and long-term debt              
Total financial debt       916,667      
Revolving line of credit              
Short-term and long-term debt              
Financial debt excluding accrued interest   $ 3,650,612   3,535,649      
Total financial debt       $ 3,552,091      
Interest rate basis three-month LIBOR plus a spread of 260 basis points. three-month LIBOR plus a spread of 260 basis points.          
Spread on interest rate basis   2.60% 2.60% 2.60%      
Revolving line of credit | Within one year              
Short-term and long-term debt              
Total financial debt       $ 3,552,091      
Asset backed trust notes ("CEBUR"), in Mexican pesos              
Short-term and long-term debt              
Financial debt $ 1,250,000 $ 1,500,000          
Total financial debt       $ 2,755,997      
Spread on interest rate basis         200.00%    
Nominal amount of working capital facility (in USD)         $ 1,500,000   $ 1,500,000
Asset backed trust notes ("CEBUR"), in Mexican pesos | 28-day TIIE.              
Short-term and long-term debt              
Interest rate basis TIIE 28 days plus 175 basis points. TIIE 28 days plus 175 basis points.          
Spread on interest rate basis   1.75% 1.75% 1.75%      
Asset backed trust notes ("CEBUR"), in Mexican pesos | Within one year              
Short-term and long-term debt              
Total financial debt       $ 505,997      
Asset backed trust notes ("CEBUR"), in Mexican pesos | Between one year and two years              
Short-term and long-term debt              
Total financial debt       583,333      
Asset backed trust notes ("CEBUR"), in Mexican pesos | Between two and three years              
Short-term and long-term debt              
Total financial debt       750,000      
Asset backed trust notes ("CEBUR"), in Mexican pesos | Between three and four years              
Short-term and long-term debt              
Total financial debt       $ 916,667      
Second tranche Asset backed trust notes ("CEBUR"), in Mexican pesos              
Short-term and long-term debt              
Financial debt $ 1,500,000            
Second tranche Asset backed trust notes ("CEBUR"), in Mexican pesos | 28-day TIIE.              
Short-term and long-term debt              
Interest rate basis TIIE 28 days plus 200 basis points. TIIE 28 days plus 200 basis points.          
Spread on interest rate basis   2.00% 2.00% 2.00%      
Short-term working capital facility with Banco Sabadell S.A.              
Short-term and long-term debt              
Financial debt excluding accrued interest   $ 200,000          
Interest rate basis TIIE 28 days plus a spread of 300 basis points. TIIE 28 days plus a spread of 300 basis points.          
Spread on interest rate basis   3.00% 3.00% 3.00%      
Minimum              
Short-term and long-term debt              
Interest rate basis 4.25            
Maximum              
Short-term and long-term debt              
Interest rate basis 5.50            
Maximum | 28-day TIIE.              
Short-term and long-term debt              
Spread on interest rate basis     10.00% 10.00%      
v3.22.1
Financial assets and liabilities - Aircraft financing and Notes (Details)
12 Months Ended
Oct. 13, 2021
MXN ($)
item
Jun. 20, 2019
MXN ($)
item
Dec. 31, 2021
MXN ($)
aircraft
Dec. 31, 2020
MXN ($)
aircraft
Dec. 31, 2019
MXN ($)
aircraft
Aircraft financing          
Number of aircraft incorporated to fleet | aircraft     15 7 7
Maturity of notes     5 years    
Basis points     0.25%    
Financial liabilities     $ 6,276,680,000 $ 5,354,633,000 $ 4,975,969,000
Financial ratio long term debt adjusted from dividend payable     6.50%    
Borrowings, adjustment to interest rate basis     0.25%    
Finance pre-delivery payments of aircraft          
Aircraft financing          
Financial liabilities     $ 3,535,649    
Revolving line of credit          
Aircraft financing          
Basis points     2.60% 2.60%  
Financial liabilities     $ 3,552,091,000    
Borrowings, adjustment to interest rate basis     2.60% 2.60%  
Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Number of notes issued | item 15,000,000 15,000,000      
Notes issued $ 1,500,000,000 $ 1,500,000,000      
Authorized amount under the program $ 3,000,000,000.0 $ 3,000,000,000.0      
Maturity of notes 5 years 5 years      
Basis points 200.00%        
Financial liabilities     $ 2,755,997,000    
Borrowings, adjustment to interest rate basis 200.00%        
Short-term working capital facility with Banco Sabadell S.A.          
Aircraft financing          
Basis points     3.00% 3.00%  
Borrowings, adjustment to interest rate basis     3.00% 3.00%  
Sustainability Linked Bond Principles 2020 [Member] | 2022          
Aircraft financing          
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer     21.54%    
Sustainability Linked Bond Principles 2020 [Member] | 2023          
Aircraft financing          
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer     24.08%    
Sustainability Linked Bond Principles 2020 [Member] | 2024          
Aircraft financing          
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer     25.53%    
Sustainability Linked Bond Principles 2020 [Member] | 2030          
Aircraft financing          
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer     35.42%    
Within one year          
Aircraft financing          
Financial liabilities     $ 4,058,088,000    
Within one year | Revolving line of credit          
Aircraft financing          
Financial liabilities     3,552,091,000    
Within one year | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     505,997,000    
Between one year and two years          
Aircraft financing          
Financial liabilities     583,333,000    
Between one year and two years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     583,333,000    
Between two and three years          
Aircraft financing          
Financial liabilities     750,000,000    
Between two and three years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     750,000,000    
Between three and four years          
Aircraft financing          
Financial liabilities     916,667,000    
Between three and four years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     $ 916,667,000    
28-day TIIE.          
Aircraft financing          
Basis points     2.40%   3.00%
Debt service coverage ratio prior computation period of debt service     6 months    
Debt service coverage ratio extended prior computation period of debt service     6 months    
Consecutive days for event of retention     90 days    
Joint obligor as percentage of EBITDA     85.00%    
Borrowings, adjustment to interest rate basis     2.40%   3.00%
28-day TIIE. | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Basis points     1.75% 1.75%  
Borrowings, adjustment to interest rate basis     1.75% 1.75%  
28-day TIIE. | Minimum          
Aircraft financing          
Debt service coverage ratio     2.5    
28-day TIIE. | Maximum          
Aircraft financing          
Basis points     10.00%    
Borrowings, adjustment to interest rate basis     10.00%    
200 Basis Point | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Maturity of notes     5 years    
Basis points     2.00%    
Borrowings, adjustment to interest rate basis     2.00%    
200 Basis Point | Between one year and two years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     $ 83,333    
200 Basis Point | Between two and three years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     500,000    
200 Basis Point | Between three and four years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     500,000    
200 Basis Point | Between four and five years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     $ 416,667    
175 Basis Point | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Basis points     1.75%    
Borrowings, adjustment to interest rate basis     1.75%    
175 Basis Point | Between one year and two years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     $ 250,000    
175 Basis Point | Between two and three years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     500,000    
175 Basis Point | Between three and four years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     500,000    
175 Basis Point | Between four and five years | Asset backed trust notes ("CEBUR"), in Mexican pesos          
Aircraft financing          
Financial liabilities     $ 250,000    
v3.22.1
Financial assets and liabilities - Line of credit (Details) - MXN ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Financial assets and liabilities    
Total available credit lines $ 9,949,640 $ 9,256,978
Available credit lines related to letters of credit 2,982,110 2,405,640
Available credit lines related to financial debt 6,967,530 6,851,338
Undrawn credit of financial debt   1,500,726
Undrawn credit of letters of credit $ 476,689 $ 214,012
v3.22.1
Financial assets and liabilities - Changes in liabilities arising from financing activities (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Financial assets and liabilities      
Net cash flows, current   $ (1,223,402) $ (1,231,695)
Net cash flows, non-current   2,023,240 1,374,678
Net cash flows, total   799,838 142,983
Accrued Interest, Current   2,876 (10,498)
Accrued interest   2,876 (10,498)
Foreign exchange movement, current   76,942 (32,491)
Foreign exchange movement, non-current   35,171 231,612
Foreign exchange movement, total   112,113 199,121
Reclassification and other, current   3,637,559 747,551
Reclassification and other, non-current   (3,637,559) (747,551)
Other, Non current   7,220 47,058
Other, Total   7,220 47,058
Current interest-bearing loans and borrowings, end of the year $ 196,898 4,052,859 1,558,884
Non-current interest-bearing loans and borrowings, end of the year $ 108,039 2,223,821 3,795,749
Total liabilities from financing activities, end of the year   $ 6,276,680 $ 5,354,633
v3.22.1
Financial assets and liabilities - Other financial liabilities (Details)
$ in Thousands
Dec. 31, 2020
MXN ($)
Other financial liabilities  
Total financial liabilities $ 9,657
Current 9,657
Zero cost collar options  
Other financial liabilities  
Total financial liabilities $ 9,657
v3.22.1
Cash and cash equivalents (Details)
$ in Thousands, $ in Thousands
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
USD ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Dec. 31, 2018
MXN ($)
Cash and cash equivalents            
Cash in banks   $ 9,543,860   $ 6,907,295    
Short-term investments   5,558,131   3,068,618    
Restricted funds held in trust related to debt service reserves   147,415   91,040    
Cash on hand   5,470   36,432    
Total cash, cash equivalents and restricted cash $ 741,122 $ 15,254,876 $ 490,849 $ 10,103,385 $ 7,979,972 $ 5,862,942
v3.22.1
Related parties - Analysis of balances due from/to related parties (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Disclosure of transactions between related parties      
Due from related parties $ 4,662 $ 95,951 $ 72,629
Due to related parties   217,103 124,993
Frontier Airlines Inc      
Disclosure of transactions between related parties      
Due from related parties   95,951 72,629
Due to related parties   42 39
Term 30 days    
Grupo Aeroportuario del Centro Norte      
Disclosure of transactions between related parties      
Due to related parties   199,393 80,681
Term 30 days    
Chevez, Ruiz, Zamarripa y Ca., S.C      
Disclosure of transactions between related parties      
Due to related parties   9,373 4,823
Term 30 days    
Aeromantenimiento, S.A.      
Disclosure of transactions between related parties      
Due to related parties   $ 8,295 39,284
Term 30 days    
Mijares, Angoitia, Corts y Fuentes, S.C.      
Disclosure of transactions between related parties      
Due to related parties     $ 166
Term 30 days    
v3.22.1
Related parties - Transactions with related parties (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Disclosure of transactions between related parties      
Guarantees provided $ 0 $ 0  
guarantees received 0 0  
Provision for expected credit losses 0 0  
Frontier Airlines Inc      
Disclosure of transactions between related parties      
Code-share 71,210 148,964 $ 208,968
Aeromantenimiento, S.A.      
Disclosure of transactions between related parties      
Aircraft maintenance 160,632 239,118 201,624
Technical support 2,882 3,945 5,815
Grupo Aeroportuario del Centro Norte      
Disclosure of transactions between related parties      
Airport service 133,296 32,193  
Chevez, Ruiz, Zamarripa y Ca., S.C      
Disclosure of transactions between related parties      
Professional fees 4,798 4,823  
Mijares, Angoitia, Corts y Fuentes, S.C.      
Disclosure of transactions between related parties      
Professional fees 4,311 5,582 1,321
One Link, S.A. de C.V.      
Disclosure of transactions between related parties      
Call center fees   73,167 37,026
Servprot S.A. de C.V.      
Disclosure of transactions between related parties      
Security service $ 3,531 $ 3,464 $ 3,120
v3.22.1
Related parties - Other information (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Dec. 31, 2021
MXN ($)
Disclosure of transactions between related parties          
Balances due under the agreement     $ 124,993   $ 217,103
Due from related parties $ 4,662   72,629   95,951
Aggregate compensation of short and long-term benefits $ 235,970 $ 4,857,083 3,453,382 $ 3,600,762  
Expense (benefit) arising from cash-settled share-based payments transactions     105,303 40,724  
Expense arising from cash-settled share-based payments transactions   $ (62,262)      
Servprot S.A. de C.V.          
Disclosure of transactions between related parties          
Security services expenses     3,464 3,120  
Balances due under the agreement         3,531
Aeromantenimiento, S.A.          
Disclosure of transactions between related parties          
Agreement term 5 years 5 years      
Balances due under the agreement     39,284   8,295
Aircraft, engine maintenance and technical support   $ 163,514 243,063 207,439  
One Link, S.A. de C.V.          
Disclosure of transactions between related parties          
Expenses under the agreement     73,167 37,026  
Mijares, Angoitia, Corts y Fuentes          
Disclosure of transactions between related parties          
Balances due under the agreement     166    
Expenses under the agreement   4,311 5,582 1,321  
Frontier Airlines Inc          
Disclosure of transactions between related parties          
Balances due under the agreement     39   42
Due from related parties     72,629   95,951
Revenue under this agreement   71,210 148,964 208,968  
Directors and officers          
Disclosure of transactions between related parties          
Share-based payments transactions   89,464 75,040 49,659  
Expense (benefit) arising from cash-settled share-based payments transactions   (62,262) 105,303 40,724  
Provision for cash bonuses       80,634 155,388
Salaries and benefits for directors and officers   155,388 0 80,634  
Chairman and independent members of the board of directors          
Disclosure of transactions between related parties          
Aggregate compensation of short and long-term benefits   12,598 5,762 8,085  
Rest of the directors          
Disclosure of transactions between related parties          
Aggregate compensation of short and long-term benefits   3,620 3,692 4,367  
Senior managers          
Disclosure of transactions between related parties          
Aggregate compensation of short and long-term benefits   383,838 253,681 $ 237,846  
Grupo Aeroportuario del Centro Norte          
Disclosure of transactions between related parties          
Balances due under the agreement     80,681   199,393
Account payable     80,681   199,393
Amount expensed   133,296 32,193    
Chevez, Ruiz, Zamarripa y Ca., S.C          
Disclosure of transactions between related parties          
Balances due under the agreement     4,823   9,373
Account payable     4,823   $ 9,373
Amount expensed   $ 4,798 $ 4,823    
v3.22.1
Other accounts receivable, net (Details) - MXN ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Other accounts receivable, net        
Credit cards $ 760,016 $ 231,260    
Other points of sales 140,952 67,315    
Cargo clients 51,790 45,201    
Travel agencies and insurance commissions 33,864 16,099    
Other accounts receivable 33,688 87,204    
Employees 15,637 36,287    
Benefits from suppliers 10,616 105,947    
Marketing services receivable 706 4,020    
Airport services   15    
Other current accounts receivable, gross 1,047,269 593,348    
Allowance for expected credit losses (12,665) (32,708) $ (40,308) $ (11,304)
Other accounts receivable, net $ 1,034,604 $ 560,640    
v3.22.1
Other accounts receivable, net - Aging of accounts receivable (Details) - MXN ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Accounts receivable aging        
Impaired accounts receivable $ 12,665 $ 32,708 $ 40,308 $ 11,304
Not impaired accounts receivable 1,034,604 560,640    
Total accounts receivable 1,047,269 593,348    
0-30 Days        
Accounts receivable aging        
Impaired accounts receivable 10,347 4,090    
Not impaired accounts receivable 976,313 486,001    
Total accounts receivable 986,660 490,091    
31-60 Days        
Accounts receivable aging        
Not impaired accounts receivable 27,411 13,872    
Total accounts receivable 27,411 13,872    
61-90 Days        
Accounts receivable aging        
Not impaired accounts receivable 8,453 6,081    
Total accounts receivable 8,453 6,081    
91-120 Days        
Accounts receivable aging        
Impaired accounts receivable 2,318 28,618    
Not impaired accounts receivable 22,427 54,686    
Total accounts receivable $ 24,745 $ 83,304    
v3.22.1
Other accounts receivable, net - Movement in the allowance for doubtful accounts (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Other accounts receivable, net      
Balance as of beginning of the year $ (32,708) $ (40,308) $ (11,304)
Write-offs 36,161 21,264 11,389
Increase in allowance (16,118) (13,664) (40,393)
Balance as of end of the year $ (12,665) $ (32,708) $ (40,308)
v3.22.1
Inventories (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Inventories.          
Spare parts and accessories of flight equipment   $ 271,454     $ 296,345
Miscellaneous supplies   7,505      
Total   278,959   $ 14,397 $ 296,345
Consumption of inventories included in maintenance expense $ 312,462 $ 234,691 $ 284,687    
v3.22.1
Prepaid expenses and other current assets (Details)
$ in Thousands, $ in Thousands
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Prepaid expenses and other current assets      
Other prepaid expenses   $ 214,874 $ 81,803
Sales commission to travel agencies   190,052 151,342
Advances to suppliers   175,830 163,044
Flight credits   123,964 389,927
Prepaid insurance   85,418 64,309
Total $ 38,387 $ 790,138 $ 850,425
v3.22.1
Guarantee deposits (Details)
$ in Thousands, $ in Thousands
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Current assets:      
Credit letters deposits   $ 1,127,302 $ 829,918
Aircraft maintenance deposits paid to lessors (Note 1j)   434,866 279,390
Deposits for rental of flight equipment   34,723 23,584
Other guarantee deposits   28,995 9,064
Total $ 78,990 1,625,886 1,141,956
Non-current assets:      
Aircraft maintenance deposits paid to lessors   8,320,612 7,641,544
Deposits for rental of flight equipment   1,029,323 741,871
Other guarantee deposits   23,219 41,323
Total $ 455,372 9,373,154 8,424,738
Total guarantee deposits   $ 10,999,040 $ 9,566,694
v3.22.1
Rotable spare parts, furniture and equipment, net - Net carrying value (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   $ 7,281,157 $ 7,385,334 $ 454,602 $ 9,357,304
Capitalized borrowing costs $ 143,966 384,038 456,313    
Disposals of capitalized borrowing costs $ 84,273 401,862      
Leasehold improvements to flight equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   1,737,883 1,540,788   2,631,817
Pre-delivery payments          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   4,920,126 4,507,770   5,224,632
Finance pre-delivery payments of aircraft          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   465,913 733,250   862,728
Aircraft Spare engines          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   47,039     7,859
Construction and improvements in process          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   53,545 474,240   545,941
Constructions and improvements          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   27,016 40,950   25,640
Computer equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   7,819 13,071   4,120
Workshop tools          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   3,329 4,852   1,148
Electric power equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   7,675 9,012   5,954
Communications equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   5,765 5,777   4,596
Workshop machinery and equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   12,933 10,209   14,436
Motorized transport equipment platform          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   7,323 9,634   8,184
Service carts on board          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   3,104 2,121   2,342
Office furniture and equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   31,726 $ 36,660   25,766
Allowance for obsolescence          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   3,000      
Gross value          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   12,152,595     13,610,685
Gross value | Leasehold improvements to flight equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   5,092,049     5,328,605
Gross value | Pre-delivery payments          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   4,920,126     5,224,632
Gross value | Finance pre-delivery payments of aircraft          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   1,689,473     2,193,686
Gross value | Construction and improvements in process          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   53,545     545,941
Gross value | Constructions and improvements          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   175,407     153,485
Gross value | Computer equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   49,945     28,813
Gross value | Workshop tools          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   27,727     8,664
Gross value | Electric power equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   20,448     11,011
Gross value | Communications equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   14,803     12,049
Gross value | Workshop machinery and equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   20,574     22,679
Gross value | Motorized transport equipment platform          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   15,247     11,542
Gross value | Service carts on board          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   9,216     9,216
Gross value | Office furniture and equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   67,035     60,362
Gross value | Allowance for obsolescence          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   3,000      
Accumulated depreciation / amortization          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (4,871,438)     (4,253,381)
Accumulated depreciation / amortization | Leasehold improvements to flight equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (3,354,166)     (2,696,788)
Accumulated depreciation / amortization | Finance pre-delivery payments of aircraft          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (1,223,560)     (1,330,958)
Accumulated depreciation / amortization | Constructions and improvements          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (148,391)     (127,845)
Accumulated depreciation / amortization | Computer equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (42,126)     (24,693)
Accumulated depreciation / amortization | Workshop tools          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (24,398)     (7,516)
Accumulated depreciation / amortization | Electric power equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (12,773)     (5,057)
Accumulated depreciation / amortization | Communications equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (9,038)     (7,453)
Accumulated depreciation / amortization | Workshop machinery and equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (7,641)     (8,243)
Accumulated depreciation / amortization | Motorized transport equipment platform          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (7,924)     (3,358)
Accumulated depreciation / amortization | Service carts on board          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   (6,112)     (6,874)
Accumulated depreciation / amortization | Office furniture and equipment          
Rotable spare parts, furniture and equipment, net          
Rotable spare parts, furniture and equipment, net (Note 12)   $ (35,309)     $ (34,596)
v3.22.1
Rotable spare parts, furniture and equipment, net - Reconciliation of changes (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   $ 7,281,157 $ 7,385,334  
Additions   (3,964,885) (3,682,005)  
Disposals and transfers   (926,566) (2,971,631)  
Borrowing costs, net   59,692 (17,822)  
Other movements   148 1,098  
Depreciation   (1,022,012) (797,827) $ (587,849)
Balance at end of the year $ 454,602 9,357,304 7,281,157 7,385,334
Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   12,152,595    
Balance at end of the year   13,610,685 12,152,595  
Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (4,871,438)    
Balance at end of the year   (4,253,381) (4,871,438)  
Aircraft Spare engines        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   47,039    
Depreciation   (39,179) (5,946) (1,787)
Balance at end of the year   7,859 47,039  
Finance pre-delivery payments of aircraft        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   465,913 733,250  
Additions   (517,234) (668,376)  
Disposals and transfers   (2,781) (861,761)  
Depreciation   (117,638) (73,952)  
Balance at end of the year   862,728 465,913 733,250
Finance pre-delivery payments of aircraft | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   1,689,473    
Balance at end of the year   2,193,686 1,689,473  
Finance pre-delivery payments of aircraft | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (1,223,560)    
Balance at end of the year   (1,330,958) (1,223,560)  
Constructions and improvements        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   27,016 40,950  
Additions     (128)  
Disposals and transfers   (14)    
Other movements   14,899 2,317  
Depreciation   (16,261) (16,379)  
Balance at end of the year   25,640 27,016 40,950
Constructions and improvements | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   175,407    
Balance at end of the year   153,485 175,407  
Constructions and improvements | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (148,391)    
Balance at end of the year   (127,845) (148,391)  
Computer equipment        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   7,819 13,071  
Additions   (1,470) (1,648)  
Disposals and transfers   (61)    
Other movements   522 713  
Depreciation   (5,630) (7,613)  
Balance at end of the year   4,120 7,819 13,071
Computer equipment | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   49,945    
Balance at end of the year   28,813 49,945  
Computer equipment | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (42,126)    
Balance at end of the year   (24,693) (42,126)  
Office furniture and equipment        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   31,726 36,660  
Additions   (63) (733)  
Disposals and transfers   (3,462)    
Other movements   3,010 101  
Depreciation   (5,571) (5,768)  
Balance at end of the year   25,766 31,726 36,660
Office furniture and equipment | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   67,035    
Balance at end of the year   60,362 67,035  
Office furniture and equipment | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (35,309)    
Balance at end of the year   (34,596) (35,309)  
Electric power equipment        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   7,675 9,012  
Additions   (1,938)    
Disposals and transfers   (2,491)    
Other movements     36  
Depreciation   (1,168) (1,373)  
Balance at end of the year   5,954 7,675 9,012
Electric power equipment | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   20,448    
Balance at end of the year   11,011 20,448  
Electric power equipment | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (12,773)    
Balance at end of the year   (5,057) (12,773)  
Workshop tools        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   3,329 4,852  
Additions   (1,708) (851)  
Disposals and transfers   (277)    
Depreciation   (3,612) (2,374)  
Balance at end of the year   1,148 3,329 4,852
Workshop tools | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   27,727    
Balance at end of the year   8,664 27,727  
Workshop tools | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (24,398)    
Balance at end of the year   (7,516) (24,398)  
Motorized transport equipment platform        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   7,323 9,634  
Additions   (4,796)    
Disposals and transfers   (5,078)    
Other movements   3,579 222  
Depreciation   (2,436) (2,533)  
Balance at end of the year   8,184 7,323 9,634
Motorized transport equipment platform | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   15,247    
Balance at end of the year   11,542 15,247  
Motorized transport equipment platform | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (7,924)    
Balance at end of the year   (3,358) (7,924)  
Communications equipment        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   5,765 5,777  
Disposals and transfers   (587)    
Other movements   431 1,083  
Depreciation   (1,013) (1,095)  
Balance at end of the year   4,596 5,765 5,777
Communications equipment | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   14,803    
Balance at end of the year   12,049 14,803  
Communications equipment | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (9,038)    
Balance at end of the year   (7,453) (9,038)  
Workshop machinery and equipment        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   12,933 10,209  
Additions   (4,173)    
Disposals and transfers   (872)    
Other movements   130 4,273  
Depreciation   (1,928) (1,549)  
Balance at end of the year   14,436 12,933 10,209
Workshop machinery and equipment | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   20,574    
Balance at end of the year   22,679 20,574  
Workshop machinery and equipment | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (7,641)    
Balance at end of the year   (8,243) (7,641)  
Service carts on board        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   3,104 2,121  
Additions     (1,541)  
Depreciation   (762) (558)  
Balance at end of the year   2,342 3,104 2,121
Service carts on board | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   9,216    
Balance at end of the year   9,216 9,216  
Service carts on board | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (6,112)    
Balance at end of the year   (6,874) (6,112)  
Allowance for obsolescence [Member]        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   3,000 3,000  
Disposals and transfers   3,000    
Balance at end of the year     3,000 3,000
Allowance for obsolescence [Member] | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   3,000    
Balance at end of the year     3,000  
Pre-delivery payments        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   4,920,126 4,507,770  
Additions   (1,130,669) (2,185,902)  
Disposals and transfers   (885,855) (1,755,724)  
Borrowing costs, net   59,692 (17,822)  
Balance at end of the year   5,224,632 4,920,126 4,507,770
Pre-delivery payments | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   4,920,126    
Balance at end of the year   5,224,632 4,920,126  
Construction and improvements in process        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   53,545 474,240  
Additions   (547,220) (176,607)  
Disposals and transfers   (28,088) (354,146)  
Other movements   (26,736) (243,156)  
Balance at end of the year   545,941 53,545 474,240
Construction and improvements in process | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   53,545    
Balance at end of the year   545,941 53,545  
Leasehold improvements to flight equipment        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   1,737,883 1,540,788  
Additions   (1,755,614) (646,219)  
Other movements   4,313 235,509  
Depreciation   (865,993) (684,633)  
Balance at end of the year   2,631,817 1,737,883 $ 1,540,788
Leasehold improvements to flight equipment | Gross value        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   5,092,049    
Balance at end of the year   5,328,605 5,092,049  
Leasehold improvements to flight equipment | Accumulated depreciation / amortization        
Rotable spare parts, furniture and equipment, net        
Balance at beginning of the year   (3,354,166)    
Balance at end of the year   $ (2,696,788) $ (3,354,166)  
v3.22.1
Rotable spare parts, furniture and equipment, net - Additional Information (Details)
$ in Thousands, $ in Thousands
1 Months Ended 12 Months Ended
May 12, 2020
engine
Aug. 16, 2013
engine
Oct. 31, 2021
engine
Apr. 30, 2021
engine
Oct. 31, 2020
item
Jul. 31, 2020
item
Nov. 30, 2018
aircraft
item
Dec. 31, 2017
aircraft
Nov. 30, 2015
engine
Dec. 31, 2021
USD ($)
aircraft
Dec. 31, 2021
MXN ($)
aircraft
Dec. 31, 2020
USD ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Dec. 31, 2017
USD ($)
Dec. 31, 2017
MXN ($)
Dec. 31, 2011
aircraft
Dec. 31, 2021
MXN ($)
aircraft
Sep. 05, 2019
USD ($)
Sep. 05, 2019
MXN ($)
Rotable spare parts, furniture and equipment, net                                        
Depreciation expense | $                     $ 1,022,012   $ 797,827 $ 587,849            
Number of spare engines purchased | engine 11   1           3                      
Number of aircraft engines to be provided maintenance services | engine     13 2         16                      
Credit notes received                             $ 3,060 $ 58,530        
Accumulated amortization of credit notes | $                         4,878         $ 4,878    
Number of aircraft to be delivered | item         18 80 26                          
Amounts paid for aircraft and spare engines                   $ 183,390 3,774,799   3,376,576 3,483,368            
Total number of aircraft to be delivered                   132               132    
Gain (loss) on sale and leaseback | $                     $ 195,552   710,522 284,759            
Term of aircraft delivery agreement                   9 years 9 years                  
Carrying amount of remaining owned aircraft                   $ 454,602     7,281,157 7,385,334       $ 9,357,304    
Between one year and two years                                        
Rotable spare parts, furniture and equipment, net                                        
Total number of aircraft to be delivered                   13               13    
Between two and three years                                        
Rotable spare parts, furniture and equipment, net                                        
Total number of aircraft to be delivered                   5               5    
Between three and four years                                        
Rotable spare parts, furniture and equipment, net                                        
Total number of aircraft to be delivered                   17               17    
Between four and five years                                        
Rotable spare parts, furniture and equipment, net                                        
Total number of aircraft to be delivered                   16               16    
Between five and six years                                        
Rotable spare parts, furniture and equipment, net                                        
Total number of aircraft to be delivered                   27               27    
Between six and seven years                                        
Rotable spare parts, furniture and equipment, net                                        
Total number of aircraft to be delivered                   21               21    
Between seven and eight years                                        
Rotable spare parts, furniture and equipment, net                                        
Total number of aircraft to be delivered                   19               19    
Between eight and nine years                                        
Rotable spare parts, furniture and equipment, net                                        
Total number of aircraft to be delivered                   14               14    
Lufthansa Technik AG - December 2016 Agreement                                        
Rotable spare parts, furniture and equipment, net                                        
Credit notes received                             $ 1,500 $ 28,110        
Accumulated amortization of credit notes | $                         5,230 5,230       $ 5,230    
Term of total support agreement               66 months                        
A320 model                                        
Rotable spare parts, furniture and equipment, net                                        
Number of aircraft purchased               80   39 39           44      
A320CEO model                                        
Rotable spare parts, furniture and equipment, net                                        
Number of aircraft purchased                                 14      
Number of engines purchased | engine   14                                    
Number of spare engines purchased | engine   1                                    
A320NEO model                                        
Rotable spare parts, furniture and equipment, net                                        
Number of aircraft purchased               46                 30      
Number of engines purchased | engine 46 30                                    
Number of spare engines purchased | engine   6             2                      
Number of aircraft engines to be provided maintenance services | engine                 10                      
A321NEO model                                        
Rotable spare parts, furniture and equipment, net                                        
Number of aircraft purchased 34             34   39 39                  
Number of spare engines purchased | engine                 1                      
Number of aircraft engines to be provided maintenance services | engine                 6                      
A320NEO Into A321NEO                                        
Rotable spare parts, furniture and equipment, net                                        
Number of aircraft purchased             6     20 20                  
A319 model | Operating lease                                        
Rotable spare parts, furniture and equipment, net                                        
Total amount of previously leased aircraft                                     $ 19,600 $ 392,076
Pre-delivery payments                                        
Rotable spare parts, furniture and equipment, net                                        
Amounts paid for aircraft and spare engines                   $ 55,639,000 $ 1,130,669 $ 102,700 2,185,902              
Carrying amount of remaining owned aircraft | $                         4,920,126 4,507,770       5,224,632    
Aircraft Spare engines                                        
Rotable spare parts, furniture and equipment, net                                        
Depreciation expense | $                     39,179   5,946 $ 1,787            
Carrying amount of remaining owned aircraft | $                         $ 47,039         $ 7,859    
Aircraft Spare engines | Pratt and Whitney purchase agreement (FMP)                                        
Rotable spare parts, furniture and equipment, net                                        
Amounts paid for aircraft and spare engines                   $ 19,082 $ 394,254                  
v3.22.1
Intangible assets, net (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Composition and movement of intangible assets        
Beginning balance   $ 191,562    
Ending balance $ 12,632 260,015 $ 191,562  
Capitalization of implementation $ 12,632   191,562  
Software        
Composition and movement of intangible assets        
Beginning balance   191,562 167,397  
Additions   205,692 124,724  
Disposals   (25)    
Amortization   (137,212) (100,618)  
Exchange differences   (2) 59  
Ending balance   260,015 191,562 $ 167,397
Amortization expense   137,212 100,618 87,667
Capitalization of implementation     191,562 $ 167,397
Software | Gross value        
Composition and movement of intangible assets        
Beginning balance   704,257    
Ending balance   844,917 704,257  
Capitalization of implementation     704,257  
Software | Accumulated depreciation / amortization        
Composition and movement of intangible assets        
Beginning balance   (512,695)    
Ending balance   $ (584,902) (512,695)  
Capitalization of implementation     $ (512,695)  
Software | Minimum        
Composition and movement of intangible assets        
Estimated useful lives (in years) 1 year 1 year    
Software | Maximum        
Composition and movement of intangible assets        
Estimated useful lives (in years) 4 years 4 years    
SAP4HANA software        
Composition and movement of intangible assets        
Ending balance   $ 90,187    
Capitalization of implementation        
v3.22.1
Leases - Fleet and spare engines (Details)
1 Months Ended 12 Months Ended
May 12, 2020
engine
Aug. 16, 2013
engine
Oct. 31, 2021
engine
Feb. 28, 2021
engine
Nov. 30, 2015
engine
Dec. 31, 2021
engine
aircraft
Dec. 31, 2021
aircraft
engine
Dec. 31, 2021
aircraft
agreement
engine
Dec. 31, 2020
engine
aircraft
Dec. 31, 2019
agreement
aircraft
Dec. 31, 2011
aircraft
Leases                      
Number of aircraft leased           100 100 100 85    
Number of spare engines leased | engine           20 20 20 18    
Number of aircraft incorporated to fleet             15   7 7  
Number of aircraft with lease term extended     1     3   15   1  
Number of spare engines purchased | engine 11   1   3            
Airbus purchase agreement                      
Leases                      
Number of aircraft purchased             15   7    
Number of aircrafts purchased directly from lessor             10        
Number of aircraft incorporated to fleet             7        
Number of aircraft returned to respective lessors             3        
Number of aircraft with lease term extended             2        
Sale and Leaseback Transactions                      
Leases                      
Number of aircraft with lease term extended | engine       2              
Pratt and Whitney purchase agreement (FMP)                      
Leases                      
Number of NEO spare engines incorporated to fleet | engine           2          
Number of CEO spare engines incorporated to fleet | engine           2          
Number of aircraft spare engines to be leased | engine           4          
A319 Model 132                      
Leases                      
Number of aircraft leased           3 3 3 3    
A319 Model 133                      
Leases                      
Number of aircraft leased           2 2 2 2    
A320 Model 233                      
Leases                      
Number of aircraft leased           39 39 39 39    
A320 Model 232                      
Leases                      
Number of aircraft leased           1 1 1 1    
A320NEO Model 271N                      
Leases                      
Number of aircraft leased           39 39 39 24    
A321 Model 231                      
Leases                      
Number of aircraft leased           10 10 10 10    
A321NEO Model 271N                      
Leases                      
Number of aircraft leased           6 6 6 6    
A320CEO model                      
Leases                      
Number of aircraft purchased                     14
Number of spare engines purchased | engine   1                  
A320CEO model | Airbus purchase agreement                      
Leases                      
Number of aircraft incorporated to fleet             5        
Number of aircraft with lease term extended             13        
A319CEO Model | Airbus purchase agreement                      
Leases                      
Number of aircraft with lease term extended             2        
V2500 Model V2524-A5                      
Leases                      
Number of spare engines leased | engine           2 2 2 2    
V2500 Model V2527M-A5                      
Leases                      
Number of spare engines leased | engine           3 3 3 3    
V2500 Model V2527E-A5                      
Leases                      
Number of spare engines leased | engine           5 5 5 5    
V2500 Model V2527-A5                      
Leases                      
Number of spare engines leased | engine           4 4 4 2    
PW1100 Model PW1127G-JM                      
Leases                      
Number of spare engines leased | engine           5 5 5 5    
PW1100 Model PW1133G-JM engine                      
Leases                      
Number of spare engines leased | engine           1 1 1 1    
v3.22.1
Leases - Carrying amounts of right-of use assets (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Disclosure of quantitative information about right-of-use assets [line items]        
Balance at the beginning   $ 34,316,217 $ 34,128,766  
Additions   9,210,858 5,253,374  
Modifications   1,404,499    
Disposals   (5,536) (17,742)  
Foreign exchange effect   (5) 795  
Depreciation on right of use assets $ (265,389) (5,462,625) (5,048,976) $ (4,702,971)
Balance at the end $ 1,917,235 39,463,408 34,316,217 34,128,766
Finance pre-delivery payments of aircraft        
Disclosure of quantitative information about right-of-use assets [line items]        
Balance at the beginning   33,406,490 33,312,089  
Additions   8,869,694 4,876,071  
Modifications   1,221,718    
Disposals     (17,742)  
Depreciation on right of use assets   (5,124,774) (4,763,928)  
Balance at the end   38,373,128 33,406,490 33,312,089
Aircraft Spare engines        
Disclosure of quantitative information about right-of-use assets [line items]        
Balance at the beginning   829,200 677,198  
Additions   59,374 362,081  
Modifications   42,267    
Depreciation on right of use assets   (235,732) (210,079)  
Balance at the end   695,109 829,200 677,198
Land and building leases        
Disclosure of quantitative information about right-of-use assets [line items]        
Balance at the beginning   80,527 139,479  
Additions   281,790 15,222  
Modifications   140,514    
Disposals   (5,536)    
Foreign exchange effect   (5) 795  
Depreciation on right of use assets   (102,119) (74,969)  
Balance at the end   $ 395,171 $ 80,527 $ 139,479
v3.22.1
Leases - Carrying amounts of lease liabilities (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Leases          
As at 1 January $ 44,130,542 $ 40,517,045      
Additions 9,411,524 5,572,764      
Modifications 1,370,795        
Disposals (5,898) (231,566)      
Accretion of interest 2,582,391 2,218,982      
Foreign exchange effect 1,469,362 2,163,886      
Payments (9,308,477) (6,110,569) $ (6,499,802)    
As at 31 December $ 49,650,239 44,130,542 $ 40,517,045    
Current   6,484,092   $ 283,843 $ 5,842,492
Lease liabilities   $ 37,646,450   $ 2,128,294 $ 43,807,747
v3.22.1
Leases - Amounts recognized in profit and loss (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
MXN ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Leases        
Depreciation of right of use assets $ (5,462,625) $ (265,389) $ (5,048,976) $ (4,702,971)
Interest expense on lease liabilities (2,603,820)   (2,350,250) (2,128,162)
Aircraft and engine variable expenses (1,686,875) $ (81,953) (1,845,254) (961,657)
Total amount recognized in profit or loss (9,753,320)   (9,244,480) (7,792,790)
Cash outflow for leases 9,308,477   6,110,569 6,499,802
Supplemental Rent 1,131,107   $ 1,428,179 $ 680,964
Changes to lease payments that arose from concessions of lease modifications 190,811      
Increase in the lease liability from exercise of extension options 1,376,005      
Increase in the right-of-use assets from exercise of extension options $ 1,376,005      
v3.22.1
Accrued liabilities - Short-term (Details)
$ in Thousands, $ in Thousands
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Accrued liabilities      
Fuel and traffic accrued expenses   $ 1,819,353 $ 1,285,931
Salaries and benefits   432,596 337,467
Maintenance and aircraft parts accrued expenses   466,566 98,942
Sales, marketing and distribution accrued expenses   386,388 179,342
Accrued administrative expenses   196,856 122,729
Maintenance deposits   170,158 174,549
Deferred revenue from V Club membership   75,434 20,830
Others   45,987 86,374
Information and communication accrued expenses   40,899 35,359
Supplier services agreement   23,763 10,634
Benefits from suppliers   7,776 3,888
Advances from travel agencies   65 242
Total accrued liabilities $ 178,096 $ 3,665,841 $ 2,356,287
v3.22.1
Accrued liabilities - Long-term (Details)
$ in Thousands, $ in Thousands
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Accrued liabilities      
Supplier services agreement   $ 15,704 $ 45,270
Benefits from suppliers   9,071 16,847
Other   5,588 4,581
Total long-term accrued liabilities $ 1,475 $ 30,363 $ 66,698
v3.22.1
Other liabilities (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Analysis of accrued liabilities    
Balance at beginning of the year $ 2,768,901 $ 1,876,785
Increase for the year 1,684,800 2,397,211
Payments (304,797) (1,505,095)
Balance at end of the year 4,148,904 2,768,901
Aircraft and engine lease return obligation    
Analysis of accrued liabilities    
Balance at beginning of the year 2,504,484 1,852,688
Increase for the year 1,422,133 2,126,401
Payments (38,828) (1,474,605)
Balance at end of the year 3,887,789 2,504,484
Guarantee deposit    
Analysis of accrued liabilities    
Balance at beginning of the year 250,000  
Increase for the year   250,000
Payments (250,000)  
Balance at end of the year   250,000
Employee profit sharing    
Analysis of accrued liabilities    
Balance at beginning of the year 14,417 24,097
Increase for the year 262,667 20,810
Payments (15,969) (30,490)
Balance at end of the year $ 261,115 $ 14,417
v3.22.1
Other liabilities, short-term and long-term (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Accrued liabilities        
Current maturities   $ 101,218 $ 34,635 $ 712,903
Non-current   2,667,683 $ 166,930 $ 3,436,001
Cancellations, or write off related to liabilities $ 0 $ 0    
v3.22.1
Employee benefits - Analysis of net period cost (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Employee benefits      
Current service cost $ 8,611 $ 8,449 $ 8,214
Interest cost on benefit obligation 2,585 2,630 1,872
Net period cost $ 11,196 $ 11,079 $ 10,086
v3.22.1
Employee benefits - Changes in the defined benefit obligation and actuarial assumptions (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Defined benefit obligation and significant assumptions      
Defined benefit obligation at beginning of the year $ 50,627 $ 38,151  
Net period cost charged to profit or loss:      
Current service cost 8,611 8,449  
Interest cost on benefit obligation 2,585 2,630  
Remeasurement losses in other comprehensive income:      
Actuarial changes arising from changes in assumptions 9,279 2,651  
Payments made (1,452) (1,254)  
Others 12,023 0  
Defined benefit obligation at end of the year $ 81,673 $ 50,627  
Discount rate 7.84% 7.04% 7.18%
Expected rate of salary increases 5.50% 5.50% 5.50%
Annual increase in minimum salary   4.00% 4.00%
Employee profit-sharing (Note 15c) $ 432,596 $ 337,467  
General Zone      
Remeasurement losses in other comprehensive income:      
Annual increase in minimum salary 19.00%    
Border Zone      
Remeasurement losses in other comprehensive income:      
Annual increase in minimum salary 4.50%    
Employee profit sharing      
Remeasurement losses in other comprehensive income:      
Employee profit-sharing (Note 15c) $ 261,115 $ 14,417  
v3.22.1
Employee benefits - Sensitivity analysis (Details)
$ in Thousands
Dec. 31, 2021
MXN ($)
Discount rate  
Disclosure of sensitivity analysis for actuarial assumptions [line items]  
Increase in actuarial assumption 0.50%
Decrease in actuarial assumption 0.50%
Increase/(decrease) in defined benefit obligation, assuming increase in actuarial assumption $ 78,054
Increase/(decrease) in defined benefit obligation, assuming decrease in actuarial assumption $ 85,856
Salary increase rate  
Disclosure of sensitivity analysis for actuarial assumptions [line items]  
Increase in actuarial assumption 0.50%
Decrease in actuarial assumption 0.50%
Increase/(decrease) in defined benefit obligation, assuming increase in actuarial assumption $ 82,294
Increase/(decrease) in defined benefit obligation, assuming decrease in actuarial assumption $ 81,164
v3.22.1
Share-based payments - Share purchase plan (Details)
$ in Thousands
1 Months Ended 12 Months Ended
Nov. 11, 2014
MXN ($)
Nov. 30, 2021
MXN ($)
Nov. 30, 2020
MXN ($)
Nov. 30, 2019
MXN ($)
Nov. 30, 2014
MXN ($)
Dec. 31, 2021
EquityInstruments
shares
Dec. 31, 2020
EquityInstruments
shares
Dec. 31, 2019
EquityInstruments
shares
Share purchase plan                
Forfeited during the year           (551,732) (327,217)  
Share purchase plan                
Share purchase plan                
Special bonus granted | $         $ 10,831      
Special bonus net of withheld taxes | $ $ 7,059              
Cost of extensions to LTIP approved | $   $ 104,698 $ 92,132 $ 86,772        
Cost of extensions net of withheld taxes | $   $ 68,066 $ 59,899 $ 56,407        
Outstanding at beginning of the year           5,805,311 5,115,191 3,553,295
Purchased during the year | shares           1,849,417 3,159,763 2,694,600
Exercised/vested during the year           (2,612,575) (2,142,426) (959,614)
Forfeited during the year           (551,732) (327,217) (173,090)
Outstanding at end of the year           4,490,421 5,805,311 5,115,191
v3.22.1
Share-based payments - Vesting period of shares granted under share purchase plan (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2021
MXN ($)
EquityInstruments
Dec. 31, 2020
MXN ($)
EquityInstruments
Dec. 31, 2019
MXN ($)
EquityInstruments
Dec. 31, 2018
EquityInstruments
Share-based payments        
Compensation expense recorded in the consolidated statement of operations | $ $ 89,464 $ 75,040 $ 49,659  
Forfeited during the year (551,732) (327,217)    
Share purchase plan        
Share-based payments        
Shares outstanding 4,490,421 5,805,311 5,115,191 3,553,295
Compensation expense recorded in the consolidated statement of operations | $ $ 89,464 $ 75,040 $ 49,659  
Forfeited during the year (551,732) (327,217) (173,090)  
Share purchase plan | Vesting / Exercisable within one year        
Share-based payments        
Shares outstanding 2,408,277      
Share purchase plan | Vesting / Exercisable within two years        
Share-based payments        
Shares outstanding 1,485,802      
Share purchase plan | Vesting / Exercisable within three years        
Share-based payments        
Shares outstanding 596,342      
v3.22.1
Share-based payments - SARs (cash settled) (Details)
$ in Thousands
12 Months Ended
Nov. 06, 2014
MXN ($)
EquityInstruments
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Share-based payments        
Compensation expense recorded in the consolidated statement of operations   $ (62,262)    
Compensation (benefit) recorded in the consolidated statement of operations     $ 105,303 $ 40,724
SARs - cash settled        
Share-based payments        
Granted | EquityInstruments 4,315,264      
Vesting period 3 years      
Total amount granted $ 10,831      
Carrying amount of the liability       1,901
Compensation expense recorded in the consolidated statement of operations     (1,901)  
Compensation (benefit) recorded in the consolidated statement of operations   $ 0   $ 2,964
Cash payment related to key employees related to SARs plan     $ 2,395  
v3.22.1
Share-based payments - MIP I (Details)
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 27, 2012
MXN ($)
Dec. 24, 2012
$ / shares
Dec. 21, 2012
EquityInstruments
$ / shares
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Share-based payments            
Cost of MIP related to the vested shares       $ 27,202 $ 180,343 $ 90,383
MIP I            
Share-based payments            
Exercise price of shares | $ / shares   $ 5.31        
Amount borrowed by trust $ 133,723          
Maximum term of share options   10 years        
Total cost of MIP determined       $ 2,722    
Series A and B shares | MIP I            
Share-based payments            
Number of instruments granted in share-based payment arrangement | EquityInstruments     25,164,126      
Shares issued as a percentage of diluted capital stock     3.00%      
Exercise price of shares | $ / shares     $ 5.31      
v3.22.1
Share-based payments - MIP I, assumptions (Details) - MIP I
12 Months Ended
Dec. 24, 2012
MXN ($)
Y
$ / shares
Dec. 31, 2021
MXN ($)
EquityInstruments
Dec. 31, 2020
MXN ($)
EquityInstruments
Dec. 31, 2019
MXN ($)
Share-based payments        
Dividend yield (%) 0.00%      
Volatility (%) 37.00%      
Risk-free interest rate (%) 5.96%      
Expected life of share options (years) | Y 8.8      
Exercise price of shares | $ / shares $ 5.31      
Exercise multiple 1.1      
Fair value of the stock at grant date | $ $ 1.73      
Shares exercised | EquityInstruments   7,653,981    
Series A shares        
Share-based payments        
Shares exercised | EquityInstruments   7,653,981 2,780,000  
Amount paid to Management Trust corresponding to exercised shares | $   $ 40,668,000 $ 0 $ 14,773,000
v3.22.1
Share-based payments - MIP I, movement in share options (Details) - MIP I
$ / shares in Units, $ in Thousands
12 Months Ended
Dec. 31, 2021
MXN ($)
EquityInstruments
$ / shares
Dec. 31, 2021
USD ($)
EquityInstruments
Dec. 31, 2020
MXN ($)
EquityInstruments
$ / shares
Share-based payments      
Outstanding at beginning of the year (shares) | EquityInstruments 7,653,981 7,653,981 7,653,981
Granted during the year (shares) | EquityInstruments 0 0  
Forfeited during the year (shares) | EquityInstruments 0 0  
Exercised during the year (shares) | EquityInstruments (7,653,981) (7,653,981)  
Outstanding at end of the year (shares) | EquityInstruments     7,653,981
Outstanding at the beginning of the year (Exercise price) | $ / shares $ 5.31   $ 5.31
Granted during the year (Exercise price) | $ / shares 0    
Forfeited during the year (Exercise price)   $ 0  
Exercise during the year (Exercise price) | $ / shares $ 5.31    
Outstanding at end of the year (Exercise price) | $ / shares     $ 5.31
Outstanding at beginning of the year (Total) $ 40,668   $ 40,668
Granted during the year (Total) 0    
Forfeited during the year (Total) 0    
Exercised during the year (Total) $ (40,668)    
Outstanding at end of the year (Total)     $ 40,668
v3.22.1
Share-based payments - MIP II (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2021
MXN ($)
EquityInstruments
Dec. 31, 2020
MXN ($)
EquityInstruments
Dec. 31, 2019
MXN ($)
EquityInstruments
Share-based payments      
Compensation expense recorded in the consolidated statement of operations $ 89,464 $ 75,040 $ 49,659
Forfeited during the year | EquityInstruments 551,732 327,217  
MIP II      
Share-based payments      
Vesting period 5 years    
Extension of vesting period 5 years    
Carrying amount of the liability $ 115,508 $ 177,770  
Compensation expense recorded in the consolidated statement of operations $ (62,262)    
Compensation (benefit) recorded in the consolidated statement of operations   $ 107,204  
Exercised during the year (shares) | EquityInstruments     0
Granted | EquityInstruments 13,536,960    
v3.22.1
Share-based payments - Expense (benefit) recognized in retention plans (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Share-based payments      
Expense (benefit) arising from cash-settled share-based payments transactions   $ 105,303 $ 40,724
Expense arising from cash-settled share-based payments transactions $ (62,262)    
Expense arising from equity-settled share-based payments transactions 89,464 75,040 49,659
Total expense arising from share-based payments transactions $ 27,202 $ 180,343 $ 90,383
v3.22.1
Share-based payments - Board of Directors Incentive Plan (BoDIP) (Details) - BODIP
1 Months Ended 12 Months Ended
Apr. 30, 2018
Dec. 31, 2021
EquityInstruments
$ / shares
Dec. 31, 2020
EquityInstruments
$ / shares
Dec. 31, 2019
$ / shares
Disclosure of terms and conditions of share-based payment arrangement [line items]        
Vesting period 5 years 5 years    
Exercise price | $ / shares   $ 32.23 $ 9.74 $ 16.80
Shares available to be exercised | EquityInstruments   4,589,726 5,233,693  
v3.22.1
Equity - Authorized shares and secondary follow-on equity offering (Details)
$ / shares in Units, $ / shares in Units, $ in Thousands
12 Months Ended
Dec. 20, 2021
shares
Dec. 11, 2020
MXN ($)
shares
Dec. 11, 2020
USD ($)
$ / shares
shares
Dec. 31, 2021
EquityInstruments
$ / shares
shares
Dec. 31, 2020
MXN ($)
EquityInstruments
shares
Equity          
Par value | $ / shares       $ 0  
Number of authorized shares       1,165,976,677 1,165,976,677
Treasury shares       (9,904,197) (19,020,202)
Shares fully subscribed and paid       1,156,072,480 1,146,956,475
Forfeited during the year | EquityInstruments       551,732 327,217
Proceeds from issuance of shares     $ 164,419,000   $ 3,272,832
Increase in capital stock | $   $ 3,272,832     $ 3,272,832
Series A shares          
Equity          
Number of authorized shares       1,108,462,804 1,077,924,804
Number of shares per CPO   1 1    
Series B shares          
Equity          
Number of authorized shares       57,513,873 88,051,873
Conversion of equivalent number of shares 30,538,000       30,538,000
Fixed Class I          
Equity          
Number of authorized shares       24,180 24,180
Shares fully subscribed and paid       24,180 24,180
Fixed Class I | Series A shares          
Equity          
Number of authorized shares       10,478 10,478
Fixed Class I | Series B shares          
Equity          
Number of authorized shares       13,702 13,702
Variable Class II          
Equity          
Number of authorized shares       1,165,952,497 1,165,952,497
Treasury shares       (9,904,197) (19,020,202)
Shares fully subscribed and paid       1,156,048,300 1,146,932,295
Variable Class II | Series A shares          
Equity          
Number of authorized shares       1,108,452,326 1,077,914,326
Variable Class II | Series B shares          
Equity          
Number of authorized shares       57,500,171 88,038,171
American Depositary Shares          
Equity          
Weighted average share price | $ / shares     $ 11.25    
Number of CPOs per ADS   10 10    
Primary follow-on equity offering          
Equity          
Number of shares offered   134,000,000 134,000,000    
Over-allotment | American Depositary Shares          
Equity          
Number of shares issued   20,100,000 20,100,000    
v3.22.1
Equity - Earnings (loss) per share (Details)
$ / shares in Units, $ / shares in Units, shares in Thousands, $ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2021
MXN ($)
$ / shares
shares
Dec. 31, 2020
MXN ($)
$ / shares
shares
Dec. 31, 2019
MXN ($)
$ / shares
shares
Dec. 31, 2021
MXN ($)
Dec. 31, 2018
MXN ($)
Equity            
Net income (loss) for the period $ 103,022 $ 2,120,551 $ (4,293,791) $ 2,639,063    
Weighted average number of shares outstanding (in thousands):            
Basic 1,165,977 1,165,977 1,021,561 1,011,877    
Diluted 1,165,977 1,165,977 1,021,561 1,011,877    
EPS- LPS :            
Basic | (per share) $ 0.088 $ 1.819 $ (4.203) $ 2.608    
Diluted | (per share) $ 0.088 $ 1.819 $ (4.203) $ 2.608    
Legal reserve $ 14,146   $ 291,178 $ 291,178 $ 291,178 $ 291,178
Legal reserve as a percent of capital stock 8.50%   8.50% 9.80% 8.50%  
Withholding tax on dividends distributions (as a percent) 10.00% 10.00%        
Tax rate for dividends which exceeds the CUFIN and CUFINRE 42.86% 42.86%        
v3.22.1
Income tax - Income tax rates (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Income tax      
Corporate income tax rate 30.00% 30.00% 30.00%
Employee wages and benefits tax deductible (as a percent) 47.00%    
Withholding tax on dividends distributions (as a percent) 10.00%    
Consolidated basis tax income $ 1,224,156 $ 302,029 $ 938,304
Maximum      
Income tax      
Employee wages and benefits tax deductible (as a percent) 53.00%    
Guatemala      
Income tax      
Corporate income tax rate 25.00%    
Costa Rica      
Income tax      
Corporate income tax rate   30.00%  
Period in which tax losses can be carried forward 3 years    
El Salvador      
Income tax      
Corporate income tax rate     30.00%
Mexico      
Income tax      
Period in which tax losses can be carried forward 10 years    
v3.22.1
Income tax - Analysis of income tax expense (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Income tax        
Current year income tax expense   $ (347,803) $ (90,609) $ (281,491)
Deferred income tax (expense) benefit   (246,125) 1,496,793 (813,340)
Total income tax benefit (expense) $ (28,855) (593,928) 1,406,184 (1,094,831)
Deferred income tax expense, translation effect   (2,015) 2,035 (2,278)
Deferred income tax related to items recognized in OCI during the year        
Net (loss) gain cash flow hedges   (5,655) 46,835 (74,820)
Remeasurement gain of employee benefits   2,850 794 3,058
Deferred income tax recognized in OCI   $ (2,805) $ 47,629 $ (71,762)
v3.22.1
Income tax - Reconciliation of statutory corporate income tax rate to effective tax rate (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Reconciliation of accounting profit multiplied by applicable tax rates [abstract]        
Statutory income tax rate   $ 814,344 $ (1,709,992) $ 1,120,168
Amendment tax return effects and other tax adjustments   93 53,192 18,770
Inflation on furniture, intangible and equipment   (48,751) (17,442) (17,839)
Inflation of tax losses   (41,375) (13,512) (8,018)
Foreign countries difference with Mexican statutory rate   2,609 3,509 4,143
Annual inflation adjustment   (167,294) 51,768 (1,882)
Recorded deferred taxes on tax losses   (9,123) 74,597 10,025
Non-deductible expenses   43,425 258,080 7,004
Total income tax expense $ 28,855 $ 593,928 $ (1,406,184) $ 1,094,831
Statutory income tax rate 30.00% 30.00% 30.00% 30.00%
Amendment tax return effects and other tax adjustments (0.01%) (0.01%) 0.92% (0.51%)
Inflation on furniture, intangible and equipment (1.79%) (1.79%) 0.29% (0.48%)
Inflation of tax losses (1.52%) (1.52%) 0.23% (0.21%)
Foreign countries difference with Mexican statutory rate 0.10% 0.10% (0.06%) 0.11%
Annual inflation adjustment (6.16%) (6.16%) (0.91%) (0.05%)
Recorded deferred taxes on tax losses (0.34%) (0.34%) (1.29%) 0.27%
Non-deductible expenses 1.60% 1.60% (4.51%) 0.19%
Total effective tax rate 21.88% 21.88% 24.67% 29.32%
v3.22.1
Income tax - Analysis of deferred taxes (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Dec. 31, 2021
MXN ($)
Analysis of consolidated deferred taxes          
Net operating loss $ (391,882) $ (8,066,296) $ 3,253,596 $ (4,355,423)  
Deferred tax assets     15,859,473   $ 15,886,877
Deferred tax liabilities     12,930,689   13,209,340
Deferred tax liability, net     2,928,784 1,386,397 2,677,537
Reflected in consolidated statement of financial position          
Deferred tax assets 141,272   3,128,555   2,907,879
Deferred tax liabilities $ (11,191)   (199,771)   (230,342)
Deferred tax liability, net     2,928,784 1,386,397 2,677,537
Reconciliation of deferred tax liability, net          
Deferred tax (liability) asset, net - beginning of the year   2,928,784 1,386,397    
Deferred income tax (expense) benefit during the current year recorded on profits   (248,442) 1,494,758    
Deferred income tax (expense) benefit during the current year recorded in accumulated other comprehensive income (loss)   (2,805) 47,629 (71,762)  
Deferred tax (liability) asset, net - end of the year   2,677,537 2,928,784 1,386,397  
Tax effect of the discontinuation of the hedging reserve         473,000
Temporary differences associated with investments in subsidiaries     150,683   157,422
Deferred tax assets.          
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   30,209 1,651,362    
Lease liabilities          
Analysis of consolidated deferred taxes          
Deferred tax assets     13,239,254   13,969,589
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   730,335 1,084,140    
Unearned transportation revenue          
Analysis of consolidated deferred taxes          
Deferred tax assets     1,233,661   201,436
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   (1,032,225) 436,598    
Extension lease agreement          
Analysis of consolidated deferred taxes          
Deferred tax assets     773,443   1,073,547
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   300,104 314,100    
Intangible          
Analysis of consolidated deferred taxes          
Deferred tax assets     420,908   395,752
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   (25,156) (25,941)    
Allowance for doubtful accounts          
Analysis of consolidated deferred taxes          
Deferred tax assets     61,565   131,486
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   69,921 47,476    
Tax losses available for offsetting against future taxable income          
Analysis of consolidated deferred taxes          
Deferred tax assets     576,422 303,970 100,472
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   (475,950) 272,452    
Employee benefit          
Analysis of consolidated deferred taxes          
Deferred tax assets     15,191   10,432
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   (7,609) 2,934    
Financial instruments          
Analysis of consolidated deferred taxes          
Deferred tax assets     7,948   2,293
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits     (22)    
Employee profit sharing          
Analysis of consolidated deferred taxes          
Deferred tax assets     4,323   1,870
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   (2,453) (2,904)    
Non derivative financial instruments          
Analysis of consolidated deferred taxes          
Deferred tax assets     473,242    
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   473,242 (477,471)    
Deferred tax liabilities.          
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   278,651 156,604    
Right of use asset          
Analysis of consolidated deferred taxes          
Deferred tax liabilities     10,292,753   9,552,956
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   (739,797) 55,824    
Supplemental rent          
Analysis of consolidated deferred taxes          
Deferred tax liabilities     1,878,865   1,303,975
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   (574,890) 171,916    
Rotable spare parts, furniture and equipment, net.          
Analysis of consolidated deferred taxes          
Deferred tax liabilities     707,092   1,270,758
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   563,666 (177,384)    
Provisions          
Analysis of consolidated deferred taxes          
Deferred tax liabilities     91,253   539,911
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   448,658 442,598    
Inventories          
Analysis of consolidated deferred taxes          
Deferred tax liabilities     83,402   87,592
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   4,190 (6,885)    
Other prepayments          
Analysis of consolidated deferred taxes          
Deferred tax liabilities     9,786   22,907
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   13,121 (17,942)    
Prepaid expenses and other assets          
Analysis of consolidated deferred taxes          
Deferred tax liabilities     132,462   431,241
Reconciliation of deferred tax liability, net          
Deferred income tax (expense) benefit during the current year recorded on profits   563,703 (311,523)    
Guatemala          
Analysis of consolidated deferred taxes          
Net operating loss   664 1,835    
Guatemala | Tax losses available for offsetting against future taxable income          
Analysis of consolidated deferred taxes          
Net operating loss       1,085  
Costa Rica          
Analysis of consolidated deferred taxes          
Deferred tax assets     0 0 $ 0
Costa Rica | Tax losses available for offsetting against future taxable income          
Analysis of consolidated deferred taxes          
Net operating loss   122,427 55,751 50,246  
El Salvador          
Analysis of consolidated deferred taxes          
Net operating loss   $ 53,550 $ 16,619 $ 32,494  
v3.22.1
Income tax - Tax loss carry-forward (Details) - MXN ($)
$ in Thousands
12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Available tax loss carry-forward      
Historical Loss $ 2,205,957    
Restated tax loss 2,497,219    
Utilized 2,162,314    
Total remaining amount 334,905    
Net remaining amount $ 334,905    
Statutory income tax rate 30.00% 30.00% 30.00%
Deferred income tax $ 15,886,877 $ 15,859,473  
Tax balances      
Adjusted contributed capital account (CUCA) 4,946,422    
CUFIN 4,151,805    
Tax losses available for offsetting against future taxable income      
Available tax loss carry-forward      
Deferred income tax 100,472 $ 576,422 $ 303,970
Comercializadora Volaris, S.A. de C.V.      
Available tax loss carry-forward      
Historical Loss 54,101    
Restated tax loss 58,580    
Total remaining amount 58,580    
Concesionaria      
Available tax loss carry-forward      
Historical Loss 1,875,180    
Restated tax loss 2,160,330    
Utilized 2,160,330    
Viajes Vuela      
Available tax loss carry-forward      
Historical Loss 258,028    
Restated tax loss 258,028    
Total remaining amount 258,028    
Vuela, S.A.      
Available tax loss carry-forward      
Historical Loss 18,648    
Restated tax loss 20,281    
Utilized 1,984    
Total remaining amount $ 18,297    
Vuela, S.A. | Tax losses available for offsetting against future taxable income      
Available tax loss carry-forward      
Statutory income tax rate 30.00%    
2017, Expiration 2027      
Available tax loss carry-forward      
Historical Loss $ 1,067,836    
Restated tax loss 1,278,913    
Utilized 1,278,913    
2018, Expiration 2021      
Available tax loss carry-forward      
Historical Loss 1,142    
Restated tax loss 1,142    
Total remaining amount 1,142    
2019, Expiration 2022      
Available tax loss carry-forward      
Historical Loss 30,918    
Restated tax loss 30,918    
Total remaining amount 30,918    
2019, Expiration 2029      
Available tax loss carry-forward      
Historical Loss 4,922    
Restated tax loss 5,568    
Total remaining amount 5,568    
2020, Expiration 2030      
Available tax loss carry-forward      
Historical Loss 863,847    
Restated tax loss 943,026    
Utilized 883,401    
Total remaining amount 59,625    
2020, Expiration 2023      
Available tax loss carry-forward      
Historical Loss 103,541    
Restated tax loss 103,541    
Total remaining amount 103,541    
2021, Expiration 2031      
Available tax loss carry-forward      
Historical Loss 122,427    
Restated tax loss 122,427    
Total remaining amount 122,427    
2021, Expiration 2024      
Available tax loss carry-forward      
Historical Loss 11,324    
Restated tax loss 11,684    
Total remaining amount $ 11,684    
v3.22.1
Operating Revenues (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Revenue recognition        
Fare revenues $ 1,248,726 $ 25,703,144 $ 12,873,174 $ 23,129,991
Other passenger revenues 854,773 17,594,223 8,613,398 10,569,208
Passenger revenues 2,103,499 43,297,367 21,486,572 33,699,199
Other non-passenger revenue 75,696 1,558,092 882,360 897,586
Cargo 11,718 241,202 201,881 228,836
Total   45,096,661   34,825,621
Non-derivatives financial instruments (21,110) (434,522) (411,222) (72,949)
Operating revenues $ 2,169,803 44,662,139 22,159,591 34,752,672
Transactions from unearned transportation revenues        
January 1,   5,850,917 3,679,926  
Deferred   43,703,458 23,657,563  
Recognized in revenue during the year   (43,297,367) (21,486,572)  
December 31,   6,257,008 5,850,917 3,679,926
Total Revenues        
Revenue recognition        
Fare revenues     8,613,398  
Other passenger revenues     21,486,572  
Passenger revenues     12,873,174  
Other non-passenger revenue     882,360  
Cargo     201,881  
Total     22,570,813  
Non-derivatives financial instruments     (411,222)  
Operating revenues     22,159,591  
Domestic (Mexico)        
Revenue recognition        
Operating revenues   33,754,354 16,572,198 24,594,797
Domestic (Mexico) | At the flight time        
Revenue recognition        
Fare revenues   17,466,759 6,920,141 15,833,878
Other passenger revenues   14,376,043 15,375,788 7,531,725
Passenger revenues   31,842,802 8,455,647 23,365,603
Other non-passenger revenue   1,546,600 875,610 888,353
Cargo   231,653 196,349 221,375
Total   33,621,055 16,447,747 24,475,331
Domestic (Mexico) | At the sale        
Revenue recognition        
Fare revenues     124,450  
Other passenger revenues   135,992 124,450 119,466
Passenger revenues   135,992   119,466
Total   135,992 124,450 119,466
International | At the flight time        
Revenue recognition        
Fare revenues   8,236,385 1,536,206 7,296,113
Other passenger revenues   3,049,608 5,953,733 2,865,555
Passenger revenues   11,285,993 4,417,527 10,161,668
Other non-passenger revenue   11,492 6,750 9,233
Cargo   9,549 5,532 7,461
Total   11,307,034 5,966,015 10,178,362
International | At the sale        
Revenue recognition        
Fare revenues     32,601  
Other passenger revenues   32,580 32,601 52,462
Passenger revenues   32,580   52,462
Total   $ 32,580 $ 32,601 $ 52,462
v3.22.1
Other operating income and expenses (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Analysis of other operating income        
Gain on sale and leaseback transactions of aircraft and spare engines   $ 195,552 $ 710,522 $ 284,759
Loss on sale of rotable spare parts furniture and equipment   (2,571) (2,604) (8,954)
Other income   24,857 22,415 51,403
Other operating income $ 10,583 217,838 730,333 327,208
Analysis of other operating expenses        
Administrative and operational support expenses   752,434 632,041 581,181
Technology and communications   431,855 383,648 381,055
Passenger services   76,107 87,850 65,477
Insurance   74,499 53,507 74,661
Others   1,897 194 10,553
Other operating expenses $ 64,944 $ 1,336,792 $ 1,157,240 $ 1,112,927
v3.22.1
Finance income and cost (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Analysis of finance income        
Interest on cash and equivalents   $ 58,269 $ 93,122 $ 201,191
Interest on asset backed trust notes   5,714 6,342 6,525
Interest on recovery of guarantee deposits   7,595 2,047 83
Total finance income $ 3,477 71,578 101,511 207,799
Analysis of finance cost        
Leases financial cost   2,603,820 2,350,250 2,128,162
Financial instruments loss     448,559  
Interest on asset backed trust notes   115,578 116,240 80,314
Cost of letter credit notes   61,549 73,141 49,856
Interest on debts and borrowings   14,222 16,368 1,660
Bank fees and others   4,574 3,707 3,607
Other finance costs   32,246 10,219 6,230
Total finance costs $ 137,585 2,831,989 3,018,484 2,269,829
Capitalized borrowing costs        
Interest on debts and borrowings   158,188 400,406 457,973
Capitalized interest   (143,966) (384,038) (456,313)
Interest on debts and borrowing in the consolidated statements of operations   $ 14,222 $ 16,368 $ 1,660
v3.22.1
Components of other comprehensive income (loss) - Schedule of analysis of the other comprehensive (loss) income (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Balances at the beginning   $ (1,562,498) $ 116,240  
Comprehensive (loss) income of the year   1,583,027 (1,726,367)  
Deferred Tax effect   (2,805) 47,629 $ (71,762)
Net balances at the end $ 861 17,724 (1,562,498) 116,240
Remeasurements of employee benefits        
Balances at the beginning   (8,655) (6,798)  
Comprehensive (loss) income of the year   (9,279) (2,651)  
Deferred Tax effect   2,850 794  
Net balances at the end   (15,084) (8,655) (6,798)
Derivative and non-derivative financial instruments        
Balances at the beginning   (1,596,079) 104,772  
Comprehensive (loss) income of the year   1,596,327 (1,747,686)  
Deferred Tax effect   (5,655) 46,835  
Net balances at the end   (5,407) (1,596,079) 104,772
Exchange differences on the translation of foreign        
Balances at the beginning   42,236 18,266  
Comprehensive (loss) income of the year   (4,021) 23,970  
Net balances at the end   $ 38,215 $ 42,236 $ 18,266
v3.22.1
Components of other comprehensive (loss) income (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Derivative financial instruments:        
Net gain (loss) on cash flow hedges $ 916 $ 18,854 $ (1,747,686) $ 263,495
Reclassification amount $ 109,000 2,251,442    
Jet fuel Asian call options contracts        
Derivative financial instruments:        
Gains (losses) on cash flow hedges, before tax   11,997 (11,993) 11,148
Jet fuel Zero cost collars        
Derivative financial instruments:        
Gains (losses) on cash flow hedges, before tax   9,657 (143,224) 256,515
Foreign currency forward contract        
Derivative financial instruments:        
Gains (losses) on cash flow hedges, before tax       (14,241)
Interest rate Cap        
Derivative financial instruments:        
Gains (losses) on cash flow hedges, before tax   (2,800) (900) (4,023)
Non derivative financial instruments        
Derivative financial instruments:        
Gains (losses) on cash flow hedges, before tax   1,577,473 (1,591,569) 14,096
Derivative and non-derivative financial instruments.        
Derivative financial instruments:        
Net gain (loss) on cash flow hedges   $ 1,596,327 $ (1,747,686) $ 263,495
v3.22.1
Commitments and contingencies (Details)
$ in Thousands
Apr. 26, 2022
$ / $
Dec. 31, 2021
₡ / $
Dec. 31, 2021
Q / $
Dec. 31, 2021
USD ($)
Dec. 31, 2021
$ / $
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
₡ / $
Dec. 31, 2020
Q / $
Dec. 31, 2020
USD ($)
Dec. 31, 2020
$ / $
Dec. 31, 2019
₡ / $
Dec. 31, 2019
Q / $
Dec. 31, 2019
USD ($)
Dec. 31, 2019
$ / $
Commitments and contingencies                            
2022       $ 114,563,000   $ 2,358,108                
2023       314,660,000   6,476,797                
2024       903,776,000   18,602,869                
2025       981,657,000   20,205,930                
2026 and thereafter       4,362,996,000   89,805,726                
Total committed expenditures       $ 6,677,652,000   $ 137,449,430                
Exchange rate 20.3183 645.9000 7.7285 20.5835 20.5835   615.7800 7.8095 19.9487 19.9487 573.4400 7.6988 18.8452 18.8452
v3.22.1
Commitments and contingencies - Sale and lease back commitments (Details)
$ in Thousands
1 Months Ended 12 Months Ended
Dec. 28, 2017
aircraft
Nov. 30, 2021
aircraft
Dec. 31, 2017
aircraft
Dec. 31, 2021
₡ / $
aircraft
Dec. 31, 2020
₡ / $
aircraft
Dec. 31, 2011
aircraft
Apr. 26, 2022
$ / $
Dec. 31, 2021
Q / $
Dec. 31, 2021
USD ($)
Dec. 31, 2021
$ / $
Dec. 31, 2021
MXN ($)
Dec. 31, 2020
Q / $
Dec. 31, 2020
USD ($)
Dec. 31, 2020
$ / $
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
₡ / $
Dec. 31, 2019
Q / $
Dec. 31, 2019
USD ($)
Dec. 31, 2019
$ / $
Disclosure of maturity analysis of operating lease payments [line items]                                      
Estimated proceeds from aircraft sale                 $ 813,500,000   $ 16,744,677                
Non-cancellable sale and leaseback contracts of aircraft leases                 $ 950,923,000   19,573,324                
Exchange rate       645.9000 615.7800   20.3183 7.7285 20.5835 20.5835   7.8095 19.9487 19.9487   573.4400 7.6988 18.8452 18.8452
Possible contingencies | $                     163,000       $ 125,000        
Airbus purchase agreement                                      
Disclosure of maturity analysis of operating lease payments [line items]                                      
Number Of Aircraft Purchased       15 7                            
A320NEO model                                      
Disclosure of maturity analysis of operating lease payments [line items]                                      
Number Of Aircraft Purchased     46     30                          
A320NEO model | Airbus purchase agreement                                      
Disclosure of maturity analysis of operating lease payments [line items]                                      
Number Of Aircraft Purchased 80 39                                  
Within one year                                      
Disclosure of maturity analysis of operating lease payments [line items]                                      
Estimated proceeds from aircraft sale                 $ 705,500,000   14,521,659                
Non-cancellable sale and leaseback contracts of aircraft leases                 40,589,000   835,464                
Between one year and two years                                      
Disclosure of maturity analysis of operating lease payments [line items]                                      
Estimated proceeds from aircraft sale                 108,000,000   2,223,018                
Non-cancellable sale and leaseback contracts of aircraft leases                 75,098,000   1,545,780                
Between two and three years                                      
Disclosure of maturity analysis of operating lease payments [line items]                                      
Non-cancellable sale and leaseback contracts of aircraft leases                 79,244,000   1,631,119                
Between three and four years                                      
Disclosure of maturity analysis of operating lease payments [line items]                                      
Non-cancellable sale and leaseback contracts of aircraft leases                 79,244,000   1,631,119                
Later Than Four Years                                      
Disclosure of maturity analysis of operating lease payments [line items]                                      
Non-cancellable sale and leaseback contracts of aircraft leases                 $ 676,748,000   $ 13,929,842                
v3.22.1
Operating segments (Details)
$ in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2021
USD ($)
segment
Dec. 31, 2021
MXN ($)
segment
Dec. 31, 2020
MXN ($)
Dec. 31, 2019
MXN ($)
Operating segments        
Number of geographic segments | segment 2 2    
Total operating revenues $ 2,169,803 $ 44,662,139 $ 22,159,591 $ 34,752,672
Non-derivatives financial instruments $ (21,110) (434,522) (411,222) (72,949)
Domestic (Mexico)        
Operating segments        
Total operating revenues   33,754,354 16,572,198 24,594,797
United States of America and Central America        
Operating segments        
Total operating revenues   11,342,307 $ 5,998,615 $ 10,230,824
United States of America        
Operating segments        
Total operating revenues   $ 5,343,692