Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
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 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2019 |
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 | 2019 |
Document Fiscal Period Focus | FY |
Entity Shell Company | false |
Entity Interactive Data Current | Yes |
Ordinary Participation Certificates | |
IFRS Statement [Line Items] | |
Entity Common Stock, Shares Outstanding | 806,435,856 |
Series A shares | |
IFRS Statement [Line Items] | |
Entity Common Stock, Shares Outstanding | 923,824,804 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position $ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) |
Current assets: | ||||
Cash and cash equivalents ( Note 6) | $ 423,449 | $ 7,979,972 | $ 5,862,942 | $ 6,950,879 |
Accounts receivable: | ||||
Related parties (Note 7) | 1,244 | 23,442 | 8,266 | |
Other accounts receivable, net (Note 8) | 48,978 | 923,000 | 508,479 | 478,467 |
Recoverable value added tax and others | 49,802 | 938,532 | 612,146 | 400,464 |
Recoverable income tax | 23,102 | 435,360 | 337,799 | 570,361 |
Inventories (Note 9) | 16,020 | 301,908 | 297,271 | 294,850 |
Prepaid expenses and other current assets (Note 10) | 41,450 | 781,131 | 442,791 | 500,754 |
Financial instruments (Notes 3 and 5) | 7,088 | 133,567 | 62,440 | 497,403 |
Guarantee deposits (Note 11) | 31,856 | 600,327 | 790,635 | 1,352,893 |
Total current assets | 642,989 | 12,117,239 | 8,922,769 | 11,046,071 |
Non-current assets: | ||||
Rotable spare parts, furniture and equipment, net (Note 12) | 391,895 | 7,385,334 | 5,782,282 | 4,375,697 |
Right-of-use assets | 1,811,006 | 34,128,766 | 31,882,053 | 24,893,882 |
Intangible assets, net (Note 13) | 8,883 | 167,397 | 179,124 | 190,420 |
Financial instruments (Notes 3 and 5) | 143 | 2,695 | ||
Deferred income taxes (Note 19) | 81,853 | 1,542,536 | 3,392,240 | 3,222,228 |
Guarantee deposits (Note 11) | 405,643 | 7,644,421 | 6,337,496 | 6,098,252 |
Other assets | 8,785 | 165,546 | 154,757 | 126,423 |
Other long-term assets | 7,492 | 141,193 | 73,962 | |
Total non-current assets | 2,715,700 | 51,177,888 | 47,801,914 | 38,906,902 |
Total assets | 3,358,689 | 63,295,127 | 56,724,683 | 49,952,973 |
Short-term liabilities: | ||||
Unearned transportation revenue | 195,271 | 3,679,926 | 2,438,516 | 2,293,309 |
Suppliers | 84,748 | 1,597,099 | 1,085,499 | 1,077,438 |
Related parties (Note 7) | 3,107 | 58,554 | 17,775 | 40,931 |
Accrued liabilities (Note 15a) | 134,355 | 2,531,861 | 2,267,596 | 1,967,926 |
Lease liabilities | 250,488 | 4,720,505 | 4,976,454 | 4,213,417 |
Other taxes and fees payable (Note 1q) | 111,564 | 2,102,455 | 1,932,082 | 1,245,247 |
Income taxes payable | 7,461 | 140,609 | 4,065 | 111,292 |
Financial instruments (Notes 3 and 5) | 122,948 | |||
Financial debt (Note 5) | 110,692 | 2,086,017 | 1,212,259 | 2,403,562 |
Other liabilities | 21,608 | 407,190 | 25,835 | 202,250 |
Total short-term liabilities | 919,294 | 17,324,216 | 14,083,029 | 13,555,372 |
Long-term liabilities: | ||||
Financial debt (Note 5) | 153,352 | 2,889,952 | 2,310,939 | 1,079,152 |
Accrued liabilities (Note 15b) | 4,818 | 90,796 | 75,503 | 92,448 |
Lease liabilities (Note 14) | 1,899,504 | 35,796,540 | 34,588,692 | 28,310,287 |
Other liabilities | 77,982 | 1,469,595 | 1,820,194 | 1,454,790 |
Employee benefits (Note 16) | 2,027 | 38,206 | 18,153 | 19,289 |
Deferred income taxes (Note 19) | 8,285 | 156,139 | 1,123,020 | 1,616,282 |
Total long-term liabilities | 2,145,968 | 40,441,228 | 39,936,501 | 32,572,248 |
Total liabilities | 3,065,262 | 57,765,444 | 54,019,530 | 46,127,620 |
Equity: | ||||
Capital stock | 157,789 | 2,973,559 | 2,973,559 | 2,973,559 |
Treasury shares | (9,006) | (169,714) | (122,661) | (85,034) |
Contributions for future capital increases | 1 | 1 | 1 | |
Legal reserve | 15,451 | 291,178 | 291,178 | 291,178 |
Additional paid-in capital | 99,761 | 1,880,007 | 1,837,073 | 1,804,528 |
Retained earnings (losses) | 23,264 | 438,412 | (2,200,651) | (1,257,769) |
Accumulated other comprehensive income (loss) | 6,168 | 116,240 | (73,346) | 98,890 |
Total equity | 293,427 | 5,529,683 | 2,705,153 | 3,825,353 |
Total liabilities and equity | $ 3,358,689 | $ 63,295,127 | $ 56,724,683 | $ 49,952,973 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) | Apr. 27, 2020$ / $ | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2017$ / $ | Dec. 31, 2017Q / $ | Dec. 31, 2017₡ / $ |
Consolidated Statements of Financial Position | |||||||||||
Convenience translation to U.S. dollars | 24.6230 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 | 19.7354 | 7.3448 | 572.5600 |
Consolidated Statements of Oper
Consolidated Statements of Operations $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2019MXN ($)$ / shares | Dec. 31, 2018MXN ($)$ / shares | Dec. 31, 2017MXN ($)$ / shares | |
Operating revenues (Notes 1d and 24): | ||||
Fare revenues | $ 1,227,368 | $ 23,129,991 | $ 18,487,858 | $ 17,791,317 |
Other passenger revenues | 560,844 | 10,569,208 | 7,892,497 | 6,098,504 |
Passenger revenues | 1,788,212 | 33,699,199 | 26,380,355 | 23,889,821 |
Other non-passenger revenues (Note 1d) | 47,629 | 897,586 | 697,357 | 727,392 |
Cargo | 12,143 | 228,836 | 227,438 | 170,973 |
Non-derivatives financial instruments | (3,871) | (72,949) | ||
Operating revenues | 1,844,113 | 34,752,672 | 27,305,150 | 24,788,186 |
Other operating income (Note 20) | (17,363) | (327,208) | (621,973) | (96,765) |
Fuel expense, net | 616,925 | 11,626,069 | 10,134,982 | 7,255,636 |
Landing, take-off and navigation expenses | 271,076 | 5,108,489 | 4,573,319 | 4,002,744 |
Depreciation of right of use assets (Note 14) | 249,558 | 4,702,971 | 4,043,691 | 3,437,903 |
Salaries and benefits | 191,071 | 3,600,762 | 3,125,393 | 2,823,647 |
Maintenance expenses | 78,982 | 1,488,431 | 1,497,989 | 1,418,253 |
Sales, marketing and distribution expenses | 76,818 | 1,447,637 | 1,501,203 | 1,691,524 |
Aircraft and engine variable lease expenses | 51,030 | 961,657 | 956,010 | 1,429,595 |
Other operating expenses (Note 20) | 59,056 | 1,112,927 | 1,059,098 | 1,034,258 |
Depreciation and amortization (Notes 12 and 13) | 35,845 | 675,514 | 500,641 | 548,687 |
Operating income | 231,115 | 4,355,423 | 534,797 | 1,242,704 |
Finance income (Note 21) | 11,027 | 207,799 | 152,603 | 105,795 |
Finance cost (Note 21) | (120,446) | (2,269,829) | (1,876,312) | (1,515,281) |
Foreign exchange gain (loss), net | 76,439 | 1,440,501 | (103,790) | 683,039 |
Income (loss) before income tax | 198,135 | 3,733,894 | (1,292,702) | 516,257 |
Income tax (expense) benefit (Note 19) | (58,096) | (1,094,831) | 349,820 | (237,586) |
Net income (loss) | $ 140,039 | $ 2,639,063 | $ (942,882) | $ 278,671 |
Earnings (loss) per share basic: | (per share) | $ 0.138 | $ 2.608 | $ (0.932) | $ 0.275 |
Earnings (loss) per share diluted: | (per share) | $ 0.138 | $ 2.608 | $ (0.932) | $ 0.275 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) | Apr. 27, 2020$ / $ | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2017$ / $ | Dec. 31, 2017Q / $ | Dec. 31, 2017₡ / $ |
Consolidated Statements of Operations | |||||||||||
Convenience translation to U.S. dollars | 24.6230 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 | 19.7354 | 7.3448 | 572.5600 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Consolidated Statements of Comprehensive Income | ||||
Net income (loss) for the year | $ 140,039 | $ 2,639,063 | $ (942,882) | $ 278,671 |
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods: | ||||
Net gain (loss) on cash flow hedges (Note 22) | 13,982 | 263,495 | (283,691) | (42,148) |
Income tax effect (Note 19) | (3,970) | (74,820) | 85,107 | 12,017 |
Exchange differences on translation of foreign operations | 427 | 8,045 | 22,156 | (7,178) |
Other comprehensive (loss) income not to be reclassified to profit or loss in subsequent periods: | ||||
Remeasurement gain (loss) of employee benefits (Note 16) | (541) | (10,192) | 5,989 | (1,776) |
Income tax effect (Note 19) | 162 | 3,058 | (1,797) | 533 |
Other comprehensive income (loss) for the year, net of tax | 10,060 | 189,586 | (172,236) | (38,552) |
Total comprehensive income (loss) | $ 150,099 | $ 2,828,649 | $ (1,115,118) | $ 240,119 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) | Apr. 27, 2020$ / $ | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2017$ / $ | Dec. 31, 2017Q / $ | Dec. 31, 2017₡ / $ |
Consolidated Statements of Comprehensive Income | |||||||||||
Convenience translation to U.S. dollars | 24.6230 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 | 19.7354 | 7.3448 | 572.5600 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity $ in Thousands, $ in Thousands | Capital stockUSD ($) | Capital stockMXN ($) | Treasury sharesUSD ($) | Treasury sharesMXN ($) | Contribution for future capital increasesMXN ($) | Legal ReserveUSD ($) | Legal ReserveMXN ($) | Additional paid-in capitalUSD ($) | Additional paid-in capitalMXN ($) | Retained earnings (Accumulated losses)USD ($) | Retained earnings (Accumulated losses)MXN ($) | Other comprehensive income (loss)USD ($) | Other comprehensive income (loss)MXN ($) | USD ($) | MXN ($) |
Balance as of beginning of the year at Dec. 31, 2016 | $ 2,973,559 | $ (83,365) | $ 1 | $ 38,250 | $ 1,800,613 | $ (1,283,512) | $ 137,442 | $ 3,582,988 | |||||||
Legal reserve increase (Note 18) | 252,928 | (252,928) | |||||||||||||
Treasury shares | (10,108) | 10,108 | |||||||||||||
Exercised of stock options (Note 17) | 638 | 638 | |||||||||||||
Long-term incentive plan cost (Note 17) | 7,801 | (6,193) | 1,608 | ||||||||||||
Net income (loss) for the period | As previously reported | (594,599) | (594,599) | |||||||||||||
Net income (loss) for the period | 278,671 | ||||||||||||||
IFRS adoption | IFRS 15 adoption | (57,189) | (57,189) | |||||||||||||
IFRS adoption | IFRS 16 adoption (Note 1x) | 930,459 | 930,459 | |||||||||||||
Other comprehensive (loss) income items | (38,552) | (38,552) | |||||||||||||
Total comprehensive income (loss) | 278,671 | (38,552) | 240,119 | ||||||||||||
Balance as of end of the year at Dec. 31, 2017 | 2,973,559 | (85,034) | 1 | 291,178 | 1,804,528 | (1,257,769) | 98,890 | 3,825,353 | |||||||
Treasury shares | (57,320) | 41,590 | (15,730) | ||||||||||||
Exercised of stock options (Note 17) | 10,648 | 10,648 | |||||||||||||
Long-term incentive plan cost (Note 17) | 9,045 | (9,045) | |||||||||||||
Net income (loss) for the period | As previously reported | (682,500) | (682,500) | |||||||||||||
Net income (loss) for the period | (942,882) | ||||||||||||||
IFRS adoption | IFRS 16 adoption (Note 1x) | (260,382) | (260,382) | |||||||||||||
Other comprehensive (loss) income items | (172,236) | (172,236) | |||||||||||||
Total comprehensive income (loss) | (942,882) | (172,236) | (1,115,118) | ||||||||||||
Balance as of end 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) | ||||||||||||
Exercised of stock options (Note 17) | 14,773 | 14,773 | |||||||||||||
Long-term incentive plan cost (Note 17) | 13,549 | (13,549) | |||||||||||||
Net income (loss) for the period | 2,639,063 | $ 140,039 | 2,639,063 | ||||||||||||
Other comprehensive (loss) income items | 189,586 | 10,060 | 189,586 | ||||||||||||
Total comprehensive income (loss) | 2,639,063 | 189,586 | 150,099 | 2,828,649 | |||||||||||
Balance as of end of the year at Dec. 31, 2019 | $ 157,789 | $ 2,973,559 | $ (9,006) | $ (169,714) | $ 1 | $ 15,451 | $ 291,178 | $ 99,761 | $ 1,880,007 | $ 23,264 | $ 438,412 | $ 6,168 | $ 116,240 | $ 293,427 | $ 5,529,683 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) | Apr. 27, 2020$ / $ | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2017$ / $ | Dec. 31, 2017Q / $ | Dec. 31, 2017₡ / $ |
Consolidated Statements of Changes in Equity | |||||||||||
Convenience translation to U.S. dollars | 24.6230 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 | 19.7354 | 7.3448 | 572.5600 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Operating activities | ||||
Income (loss) before income tax | $ 198,135 | $ 3,733,894 | $ (1,292,702) | $ 516,257 |
Non-cash adjustment to reconcile income before tax to net cash flows from operating activities: | ||||
Depreciation and amortization (including right-of-use-assets) (Notes 12 and 13) | 285,403 | 5,378,485 | 4,544,332 | 3,986,590 |
Provision for doubtful accounts (Note 8) | 2,143 | 40,393 | 10,621 | 4,720 |
Finance income (Note 21) | (11,027) | (207,799) | (152,603) | (105,795) |
Finance cost (Note 21 and 1x) | 120,203 | 2,265,242 | 1,876,312 | 1,515,281 |
Net foreign exchange differences | (91,428) | (1,722,985) | 171,874 | (972,523) |
Financial instruments (Notes 4 and 22) | 3,589 | 67,629 | (455,009) | 50,007 |
Amortized Cost (CEBUR) | 175 | 3,306 | ||
Net gain on disposal of rotable spare parts, furniture and equipment and gain on sale of aircraft (Note 20) | (14,635) | (275,805) | (606,812) | (64,978) |
Employee benefits (Note 16) | 535 | 10,086 | 6,401 | 4,657 |
Aircraft and engine lease extension benefit and other benefits from service agreements | (564) | (10,634) | (12,693) | (12,356) |
Management incentive and long-term incentive plans (Note 17) | 1,712 | 32,257 | 12,919 | 8,783 |
Cash flows from operating activities before changes in working capital | 494,241 | 9,314,069 | 4,102,640 | 4,930,643 |
Changes in operating assets and liabilities: | ||||
Related parties | 1,359 | 25,603 | (31,422) | (24,091) |
Other accounts receivable | (19,506) | (367,603) | 1,711 | 139,774 |
Recoverable and prepaid taxes | (22,574) | (425,410) | 19,168 | (438,966) |
Inventories | (246) | (4,637) | (2,421) | (50,966) |
Prepaid expenses | (19,626) | (369,860) | (6,001) | 726,020 |
Other assets | (573) | (10,789) | (11,228) | 21,941 |
Guarantee deposits | (62,007) | (1,168,537) | 232,019 | 57,425 |
Suppliers | 27,497 | 518,189 | 14,022 | 196,082 |
Accrued liabilities | 18,703 | 352,475 | 540,471 | 515,436 |
Other taxes and fees payable | 6,352 | 119,700 | 558,174 | 353,014 |
Unearned transportation revenue | 65,874 | 1,241,410 | 145,207 | 65,258 |
Financial instruments | (1,005) | (18,943) | 807,644 | 126,053 |
Other liabilities | 10,139 | 191,099 | (38,875) | 11,198 |
Cash flows from operating activities before interest received and income tax paid | 498,628 | 9,396,766 | 6,331,109 | 6,628,821 |
Interest received | 11,027 | 207,799 | 152,602 | 105,795 |
Income tax paid | (5,037) | (94,922) | (207,004) | (715,849) |
Net cash flows provided by operating activities | 504,618 | 9,509,643 | 6,276,707 | 6,018,767 |
Investing activities | ||||
Acquisitions of rotable spare parts, furniture and equipment (Note 12) | (184,841) | (3,483,368) | (2,743,155) | (2,521,752) |
Acquisitions of intangible assets (Note 13) | (4,103) | (77,325) | (71,007) | (130,908) |
Pre-delivery payments reimbursements (Note 12) | 37,402 | 704,852 | 668,365 | 213,947 |
Proceeds from disposals of rotable spare parts, furniture and equipment | 51,817 | 976,500 | 756,402 | 178,273 |
Net cash flows used in investing activities | (99,725) | (1,879,341) | (1,389,395) | (2,260,440) |
Financing activities | ||||
Proceeds from exercised stock options | 784 | 14,773 | 10,648 | 638 |
Treasury shares purchase | (4,000) | (75,375) | (57,320) | (10,108) |
Interest paid | (11,515) | (217,018) | (175,170) | (105,388) |
Other finance interest paid | (3,228) | (60,824) | (28,567) | |
Payments of principal portion of lease liabilities | (344,905) | (6,499,802) | (5,710,907) | (5,032,898) |
Payments of financial debt | (62,707) | (1,181,726) | (1,193,589) | (924,867) |
Proceeds from financial debt | 147,578 | 2,781,132 | 1,208,846 | 2,438,025 |
Net cash flows (used in) provided by financing activities | (277,993) | (5,238,840) | (5,946,059) | (3,634,598) |
Increase (decrease) in cash and cash equivalents | 126,900 | 2,391,462 | (1,058,747) | 123,729 |
Net foreign exchange differences on cash balance | (14,562) | (274,432) | (29,190) | (244,101) |
Cash and cash equivalents at beginning of year | 311,111 | 5,862,942 | 6,950,879 | 7,071,251 |
Cash and cash equivalents at end of year | $ 423,449 | $ 7,979,972 | $ 5,862,942 | $ 6,950,879 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | Apr. 27, 2020$ / $ | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2017$ / $ | Dec. 31, 2017Q / $ | Dec. 31, 2017₡ / $ |
Consolidated Statements of Cash Flows | |||||||||||
Convenience translation to U.S. dollars | 24.6230 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 | 19.7354 | 7.3448 | 572.5600 |
Description of the business and
Description of the business and summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2019 | |
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 Mexican Corporate laws on October 27, 2005. Controladora is domiciled in Mexico City at Av. Antonio Dovali Jaime No. 70, 13 th Floor, Tower B, Colonia Zedec Santa Fe, Mexico City. 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 21, 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. The Company 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 (“IPO”) 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 Rican civil aviation authorities 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 1, 2016, Volaris Costa Rica started operations. The accompanying consolidated financial statements and notes were approved by the Company´s Board of Directors and by the Shareholders on April 22, 2020. These consolidated financial statements were also approved for issuance in the Company´s annual report on Form 20-F by the Company´s President and Chief Executive Officer, Enrique Beltranena, and Vice-President and Chief Financial Officer, Sonia Jerez Burdeus on April 27, 2020 and subsequent events were considered through that date (Note 25). a) Relevant events Issuance asset backed trust notes On June 20, 2019, the Company, through its subsidiary 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 TIIE 28 plus 175 basis points. Shares conversion On February 16, 2018, one of the Company´s shareholders concluded the conversion of 45,968,598 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. (Note 18). New code-share agreement On January 16, 2018, the Company and Frontier Airlines (herein after Frontier) entered into a code-share operations agreement, which started operations in September. 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. Tickets from Frontier can be purchased directly from the Volaris’ website. Purchase of 80 A320 New Engine Option ("NEO") 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, to support the Company's targeted growth markets in Mexico, United States and Central America. The related commitments for the acquisitions of such aircraft are disclosed in Note 23. b) Basis of preparation Statement of compliance These consolidated financial statements comprise the financial statements of the Company and its subsidiaries at December 31, 2019, 2018 and 2017 and for each of the three years in the period then ended, 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 the entity operates (“functional currency”). The presentation currency of the Company’s consolidated financial statements is the Mexican peso, which is used also for compliance with its legal and tax 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. The Company presents an additional statement of financial position at January 1, 2017, due to a retrospective application of accounting policies as a result of the adoption of IFRS 16 “Leases” see Note 1 p) and x). 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 and investments in marketable securities measured at fair value through profit and loss (“FVTPL”). 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. At December 31, 2019, 2018 and 2017, for accounting purposes the companies included in the consolidated financial statements are as follows: Principal % Equity interest Name Activities Country 2019 2018 2017 Concesionaria Air transportation services for passengers, cargo and mail throughout Mexico and abroad Mexico 100 % 100 % 100 % Vuela Aviación, S.A. Air transportation services for passengers, cargo and mail in Costa Rica and abroad Costa Rica 100 % 100 % 100 % Vuela, S.A. (“Vuela”) * Air transportation services for passengers, cargo and mail in Guatemala and abroad Guatemala 100 % 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. Merchandising of services Mexico 100 % 100 % 100 % Servicios Earhart, S.A.* Recruitment and payroll Guatemala 100 % 100 % 100 % Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”) Recruitment and payroll Mexico 100 % 100 % 100 % Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) Recruitment and payroll Mexico 100 % 100 % 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”) (1) Travel agency Mexico 100 % 100 % 100 % Deutsche Bank México, S.A., Trust 1710 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % Deutsche Bank México, S.A., Trust 1711 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % Irrevocable Administrative Trust number F/307750 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % 100 % Irrevocable Administrative Trust number F/745291 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % 100 % Irrevocable Administrative Trust number CIB/3081 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % — Irrevocable Administrative Trust number CIB/3249 “Administrative Trust” Asset backed securities trustor & administrator (Note 5) Mexico 100 % — — *The Companies have not started operations yet in Guatemala and El Salvador. **The Company has not started operations yet (1) With effect from July 16, 2018, the name of the Company was changed from Operaciones Volaris, S.A. de C.V. to Viajes Vuela, S.A. de C.V. 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. 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 exchange rates prevailing at the dates of the transactions. 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, as a modification of the tickets sold to V Club members. Tickets sold by other airlines where the Company provides the transportation are recognized as passenger revenue when the service is provided. 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 partners, the Company has determined that it is acting as an agent on behalf of the other airlines as they are responsible for their 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 airlines. 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. 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 does not have any obligations for returns, refunds and other similar obligations. All revenues from the Company related to future services, or services are rendered through a period of time less than 12 months. Breakdown of revenues: As of December 31, 2019, 2018 and 2017, the revenues from customers of contracts is described as follows: 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 At the flight time At the sale Total Revenue recognition as of December 31, 2018 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 12,336,095 Ps. 6,151,763 Ps. — Ps. — Ps. 18,487,858 Other Passenger Revenues 5,182,572 2,598,375 68,264 43,286 7,892,497 17,518,667 8,750,138 68,264 43,286 26,380,355 Non-Passenger Revenues Other Non-Passenger revenues 685,219 12,138 — — 697,357 Cargo 221,324 6,114 — — 227,438 Total Ps. 18,425,210 Ps. 8,768,390 Ps. 68,264 Ps. 43,286 Ps. 27,305,150 At the flight time At the sale Total Revenue recognition as of December 31, 2017 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 12,284,795 Ps. 5,506,522 Ps. — Ps. — Ps. 17,791,317 Other Passenger Revenues 4,087,664 1,992,696 11,283 6,861 6,098,504 16,372,459 7,499,218 11,283 6,861 23,889,821 Non-Passenger Revenues Other Non-Passenger revenues 723,297 4,095 — — 727,392 Cargo 165,907 5,066 — — 170,973 Total Ps. 17,261,663 Ps. 7,508,379 Ps. 11,283 Ps. 6,861 Ps. 24,788,186 Transactions from unearned transportation revenues. 2019 2018 2017 January 1, Ps. 2,438,516 Ps. 2,293,309 Ps. 2,228,051 Deferred 34,940,609 26,525,562 23,955,079 Recognized in revenue during the year (33,699,199) (26,380,355) (23,889,821) December 31, Ps. 3,679,926 Ps. 2,438,516 Ps. 2,293,309 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. e) Cash and cash equivalents 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 doesn’t have significant cash reserve requirements. 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 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. Derivative financial instruments are designated for hedging purposes under the cash flow hedge (“CFH”) accounting model and are measured at fair value. 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 c) 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 impaired in the Cash Generating Units (CGU). An impairment exists if one or more events has 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 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 records allowance for credit losses in accordance with the objective evidence of the incurred losses. Based on this evaluation, allowances are taken into account for the expected losses of these receivables. For the years ended December 31, 2019, 2018 and 2017, the Company recorded expected credit losses on accounts receivable of Ps.40,393, Ps.10,621 and Ps.4,720, respectively (Note 8). iii) Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, 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 EIR method. 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. During the years ended December 31, 2019, 2018 and 2017 the Company has not designated any financial liability as at FVTPL. 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 on the basis of the method of specific identification and expensed when 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, 2019, 2018 and 2017, the Company did not record any impairment loss in the value of its intangible assets. 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). Aircraft maintenance deposits paid to lessors Most of the Company’s lease agreements require the Company to pay maintenance deposits to aircraft lessors to be held as collateral in advance of the Company’s performance of major maintenance activities. These lease agreements provide that maintenance deposits are reimbursable to the Company upon completion of the maintenance event in an amount equal to the lesser of (i) the amount of the maintenance deposits held by the lessor associated with the specific maintenance event, or (ii) the qualifying costs related to the specific maintenance event. Substantially all these maintenance deposits are calculated based on a utilization measure of the leased aircrafts and engines, such as flight hours or cycles, and are used solely to collateralize the lessor for maintenance time run off the aircraft and engines until the completion of the maintenance of the aircraft and engines. Maintenance deposits expected to be recovered from lessors are reflected as guarantee deposits in the accompanying consolidated statement of financial position. These deposits are recorded as a monetary asset and are revaluated in order to record the foreign currency changes at each reported period. The Company makes certain assumptions at the inception of the lease and at each consolidated statement of financial position date to determine the recoverability of maintenance deposits. These assumptions are based on various factors such as the estimated time between the maintenance events, the date the aircraft is due to be returned to the lessor, and the number of flight hours the aircraft and engines is estimated to be utilized before it is returned to the lessor. Some other aircraft lease agreements do not require the obligation to pay maintenance deposits to lessors in advance in order to ensure major maintenance activities, so the Company does not record guarantee deposits regarding these aircraft. However, certain of these lease agreements include the obligation to make a maintenance adjustment payment to the lessors at the end of the lease period. These maintenance adjustments cover maintenance events that are not expected to be made before the termination of the lease; for such agreements the Company accrues a liability related to the amount of the costs to be incurred at the lease term, since no maintenance deposits had been made, Note 15c). The portion of prepaid maintenance deposits that is deemed unlikely to be recovered and accruals in lien of maintenance deposits, are recorded as a variable lease payment and is presented as supplemental rent in the consolidated statements of operations. For the years ended December 31, 2019, 2018 and 2017, the Company expensed as supplemental rent Ps. 295,720, Ps. 299,601 and Ps. 265,756, respectively. During the year ended December 31, 2019, 2018 and 2017, the Company added seven, ten and five new net leases aircraft to its fleet, respectively (Note 14). During the years ended December 31, 2019, 2018 and 2017, the Company extended the lease term of one, two and three aircraft agreements, respectively. Additionally, the Company extended the lease term of one spare engines in 2019, two spare engines in 2018 and two spare engines during 2017. These extensions made available to the Company maintenance deposits that were recognized in prior periods in the consolidated statements of operations as supplemental rent of Ps. 0, Ps.0 and Ps.65,716 during 2019, 2018 and 2017, respectively. The maintenance |
Significant accounting judgment
Significant accounting judgments, estimates and assumptions | 12 Months Ended |
Dec. 31, 2019 | |
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 1p (iv). i) LTIP, LTRP and MIP (equity settled) 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 earnings, 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. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest. The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model, including the expected life of the share option, volatility and dividend yield, and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in (Note 17). SARs plan (cash settled) The cost of the SARs plan is measured initially at fair value at the grant date, further details of which are given in (Note 17). This fair value is expensed over the period until the vesting date with recognition of a corresponding liability. The liability is remeasured to fair value at each reporting date up to, and including the settlement date, with changes in fair value recognized in salaries and benefits expense together with the grant date fair value. As with the equity settled awards described above, the valuation of cash settled award also requires using similar inputs, as appropriate. 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 19). During the years ended December 31, 2019, 2018 and 2017, the Company used Ps.214,460, Ps.154,353 and Ps.16,378, respectively, of the available tax loss carry-forwards (Note 19). 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. The value-in-use calculation is based on a discounted cash flow model, using the Company’s 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. v) Allowance for expected credit loss An allowance for expected credit loss on accounts receivables is established in accordance with the information mentioned in Note 1f) ii). vi) Leases - Estimating the incremental borrowing rate The Company cannot readily determine the interest rate implicit in the lease, 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). |
Financial instruments and risk
Financial instruments and risk management | 12 Months Ended |
Dec. 31, 2019 | |
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 risks 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, 2019, 2018 and 2017 represented 38%, 38% and 31%, 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, 2019, the Company entered into US Gulf Coast Jet fuel 54 Asian call options designated to hedge 13,492 thousand gallons. Such hedges represented a portion of the projected consumption for the 4Q 2019. Additionally, during the same period, the Company entered into US Gulf Coast Jet Fuel 54 Asian Zero-Cost collar options designated to hedge 70,136 thousand gallons. Such hedges represent a portion of the projected consumption for the 3Q19 and the year 2020. During the year ended December 31, 2018, the Company entered into US Gulf Coast Jet Fuel 54 Asian Call options and Zero-Cost Collars designated to hedge 45.6 million gallons. Such hedges represent a portion of the projected consumption for the next twelve months. Additionally, as of December 31, 2017, the Company entered into US Gulf Coast Jet Fuel 54 Asian call options designated to hedge 61.1 million gallons. Such hedges represented a portion of the projected consumption for the next nine months of operations. 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 a book 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 and Zero-Cost Collar options. As of December 31, 2018 and 2017, the fair value of the outstanding US Gulf Coast Jet Fuel Asian call options was Ps.48,199 and Ps.497,403, respectively. As of December 31, 2019 and 2018 for the Zero-Cost Collars it was Ps. 133,567 and a (loss) of Ps.(122,948), respectively and are presented as part of the financial assets and financial liabilities in the consolidated statement of financial position. (See Note 5). The Company did not hold any position in Zero-Cost Collars for the period ended 2017. During the year ended December 31, 2019, the intrinsic value of the Zero-Cost Collars recycled to the fuel cost was an expense of Ps. 9,477. As of December 31, 2018, the Company did not have intrinsic value recycled to the fuel cost as settlements started taking place on 2019. The amount of positive cost of hedging derived from the extrinsic value changes of the jet fuel hedged position as of December 31, 2019 recognized in other comprehensive income totals Ps.133,567 (the positive cost of hedging in December 2018 and 2017 totals Ps.134,096 and Ps.163,836, respectively), and will be recycled to the fuel cost during 2020, as these options expire on a monthly basis and the jet fuel is consumed. During the years ended December 31, 2019, 2018 and 2017, the net (positive) /negative cost of these options recycled to the fuel cost was Ps.61,067, Ps.(402,493) and Ps.26,980, respectively. The following table includes the notional amounts and strike prices of the derivative financial instruments outstanding as of the end of the year: Position as of December 31, 2019 Jet fuel Zero-Cost Collar collars option contracts maturities 1 Half 2020 2 Half 2020 2020 Total Jet fuel risk Zero-Cost collars Notional volume in gallons (thousands)* 34,480 22,164 56,644 Strike price agreed rate per gallon (U.S. dollars)** US$ / US$ / US$ / Approximate percentage of hedge (of expected consumption value) 25 % 15 % 20 % All-in Approximate percentage of hedge (of expected consumption value) 25 % 15 % 20 % * US Gulf Coast Jet 54 as underlying asset ** Weighted average Position as of December 31, 2018 Jet fuel Asian call and Zero-Cost collars option contracts maturities 1 Half 2019 2 Half 2019 2019 Total Jet fuel risk Asian Calls Notional volume in gallons (thousands)* 12,790 13,842 26,632 Strike price agreed rate per gallon (U.S.dollars) ** US$ 1.84 1.84 US$ 1.84 Approximate percentage of hedge (of expected consumption value) 10 % 10 % 10 % Jet fuel risk Zero-Cost collars Notional volume in gallons (thousands)* 18,963 — 18,963 Strike price agreed rate per gallon (U.S. dollars) ** US$ / US$ — US$ 1.91 / Approximate percentage of hedge (of expected consumption value) 15 % — % 15 % All-in Approximate percentage of hedge (of expected consumption value) 25 % 10 % 18 % * US Gulf Coast Jet 54 as underlying asset ** Weighted average Position as of December 31, 2017 Jet fuel Asian call option contracts maturities Jet fuel risk Asian Calls 1 Half 2018 2 Half 2018 2018 Total Notional volume in gallons (thousands)* 69,518 61,863 131,381 Strike price agreed rate per gallon (U.S. dollars) ** US$ 1.6861 US$ 1.8106 US$ 1.7447 Approximate percentage of hedge (of expected consumption value) 60 % 50 % 55 % * US Gulf Coast Jet 54 as underlying asset ** Weighted average The following table illustrates the sensitivity of US Gulf Coast Jet Fuel 54 Zero Cost Collars to a reasonably possible change in fuel prices, with all other variables held constant, on the caption of accumulated other comprehensive income. The calculations were made considering a parallel movement of +/-5% in the spot price of the US Gulf Coast Jet 54 as of December 31, 2019: Sensitivity of position as of December 31, 2019 effect on equity (U.S. dollars) US Gulf Coast Jet Fuel 54 spot level +5% +4.52M -5% -4.52M Please note this sensitivity was calculated with the net position delta of the portfolio, as change on the underlying price is small enough to be a good proxy b) Foreign currency risk Though the Mexican peso is the functional currency of the Company, a significant portion of its operating expenses are denominated in U.S. dollar; thus, Volaris relies on sustained U.S. dollar cash flows coming from operations in the United States of America and Central America to support part of its commitments in such currency, however there’s still a mismatch. 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. While most of the Company’s revenue is generated in Mexican pesos, although 29% of its revenues came from operations in the United States of America and Central America for the year ended at December 31, 2019 (32% at December 31, 2018 and 30% at December 31, 2017) and U.S. dollar denominated collections accounted for 43%, 38% and 40%, of the Company’s total collections in 2019, 2018 and 2017, respectively. 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 foreign exchange exposure as of December 31, 2019, 2018 and 2017 is as set forth below: Thousands of U.S. dollars 2019 2018 2017 Assets: Cash and cash equivalents US$ 373,099 US$ 279,829 US$ 344,038 Other accounts receivable, net 23,620 10,957 13,105 Guarantee deposits 437,499 362,149 377,485 Derivative financial instruments 7,088 3,172 25,204 Total assets US$ 841,306 US$ 656,107 US$ 759,832 Liabilities: Financial debt (Note 5) US$ 176,927 US$ 155,455 US$ 128,296 Lease liabilities 2,263,849 2,099,218 1,727,890 Suppliers 76,471 51,012 53,729 Other taxes and fees payable 22,486 14,823 10,304 Derivative financial instruments — 6,246 — Total liabilities 2,539,733 2,326,754 1,920,219 Net foreign currency position US$ (1,698,427) US$ (1,670,647) US$ (1,160,387) At April 27, 2020, date of issuance of these financial statements, the exchange rate was Ps.24.6230 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, 2019, the Company did not enter 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). During the year ended December 31, 2018 and 2017, the Company entered into foreign currency forward contracts in U.S. dollars to hedge approximately, 20% and 9% of its future 12 and 6 months of aircraft rental expenses. A portion of the Company's foreign currency forwards position matured throughout the fourth quarter of 2018 (November & December), all of the Company’s position in foreign currency forward contracts from 2017 matured throughout the second half of the year (August, September, November and December), therefore there was no outstanding balance as of December 31, 2017. As of December 31, 2018, the unrealized gains of Ps. 14,241, respectively relating to the foreign currency forward contracts is included in OCI. For the years ended December 31, 2019, 2018 and 2017, the net gains (loss) on the foreign currency forward contracts were Ps. 4,199, Ps. 52,516 and Ps.(11,290), respectively, which were recognized as part of rental expense in the consolidated statements of operations. i) Hedging relationships with non-derivative financial instruments Regarding the foreign currency risk effective since January 1 st , 2019, the Company implemented two hedging strategies for forecasted foreign exchange exposures using with non-derivatives financial instruments. In the first hedging strategy the Company has designated a hedge to mitigate the foreign exchange rate risk and foreign exchange variation fluctuation in US dollar denominated forecasted revenues using the financial liabilities corresponding to the leases liability denominated in USD over the term of the remaining leases term. The Company has at December 31, 2019 an amount equivalent to USD$2.1 billion of lease liability designated as hedging forecasted revenues over the remaining lease term. Additionally, the second strategy consists on a hedging relationship for foreign exchange rate with non- derivative financial instruments in order to mitigate the exchange rate risk and foreign exchange variation (MXN/USD) intrinsic in the US dollar denominated Jet Fuel purchases. For this strategy a portion of the Jet Fuel consumption over the next two years approximately has been designated as hedge item; as hedging instrument the company designated a portion of the guaranteed deposits and cash and cash equivalents denominated in USD. In this hedging relationship for foreign exchange rate with non-derivative financial instruments, the Company designated an amount equivalent to USD$410 million, which represent a portion of the financial assets denominated in USD. For both hedging relationships follow a Cash Flow Hedging Model, the accounting records corresponding to the recycling of the reserve for hedging of cash flows (called Other Comprehensive Income or OCI, part of the Stakeholders Equity) will be done as it is indicated on IFRS 9, this mean to reclassify the OCI through the accounts of Results in the same period or periods in which the expected hedging for cash flows affect the result of the period; when those sales are recognized as revenue- always adjusting them because of the hedging effects- for the program. 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”). 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 coupon payments. The floating rate coupons reference referring to TIIE 28 are limited under the cap to 10% on the reference rate for the life of the CEBUR and haves the same amortization schedule. Thus, the cash flows of the CEBUR are perfectly matched by the hedging instrument. 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 coupons for reference rate determination, coupon term, and fair value. At December 31, 2019, the Company’s outstanding hedging contracts in the form of interest rate caps with notional amount of Ps.1.5 billion had fair value of Ps.2,695 recorded in assets. During the years ended December 31, 2018 and 2017, the Company did not have any outstanding interest rate derivatives. For the years ended December 31, 2017, the reported loss on the interest rate swaps was Ps.13,827, which was recognized as part of rental expense in the consolidated statements of operations. All the Company’s position in the form of interest rate swaps matured on March 31 and April 30, 2017 consequently there is no outstanding balance as of December 31, 2018 and 2017. 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. The table below presents the Company’s contractual principal payments required on its financial liabilities and the derivative financial instruments fair value: December 31, 2019 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) Ps. 1,855,956 Ps. 1,452,553 Ps. 3,308,509 Short-term working capital facilities (Note 5) 200,000 — 200,000 Asset backed trust note (Note 5) — 1,500,000 1,500,000 Lease liabilities: Aircraft, engines, land and buildings leases 4,720,505 35,796,540 40,517,045 Aircraft and engine lease return obligation 383,093 1,469,595 1,852,688 Total Ps. 7,159,554 Ps. 40,218,688 Ps. 47,378,242 December 31, 2018 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) Ps. 734,635 Ps. 2,310,939 Ps. 3,045,574 Short-term working capital facilities (Note 5) 461,260 — 461,260 Derivative financial instruments: Jet fuel Asian Zero-Cost collars options contracts 122,948 — 122,948 Lease liabilities: Aircraft, engines, land and buildings leases 4,976,454 34,588,692 39,565,146 Aircraft and engine lease return obligation 10,851 1,820,194 1,831,045 Total Ps. 6,306,148 Ps. 38,719,825 Ps. 45,025,973 December 31, 2017 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) Ps. 1,449,236 Ps. 1,079,152 Ps. 2,528,388 Short-term working capital facilities (Note 5) 948,354 — 948,354 Lease liabilities: Aircraft, engines, land and buildings leases 4,213,417 28,310,287 32,523,704 Aircraft and engine lease return obligation 193,187 1,454,790 1,647,977 Total Ps. 6,804,194 Ps. 30,844,229 Ps. 37,648,423 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. At December 31, 2019, 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 2019 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, 2019, 2018 and 2017. The Company is not subject to any externally imposed capital requirement, other than the legal reserve (Note 18). |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair value measurements | |
Fair value measurements | 4. Fair value measurements The only financial assets and liabilities recognized at fair value on a recurring basis 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 2019 2018 2017 2019 2018 2017 Assets Derivative financial instruments Ps. 136,262 Ps. 62,440 Ps. 497,403 Ps. 136,262 Ps. 62,440 Ps. 497,403 Liabilities Financial debt (5,008,509) (3,506,834) (3,476,742) (5,194,316) (3,515,550) (3,481,741) Derivative financial instruments — (122,948) — — (122,948) — Total Ps. (4,872,247) Ps. (3,567,342) Ps. (2,979,339) Ps. (5,058,054) Ps. (3,576,058) Ps. (2,984,338) The following table summarizes the fair value measurements at December 31, 2019: 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 Zero-Cost collar options contracts* Ps. — Ps. 133,567 Ps. — Ps. 133,567 Interest rate Caps — 2,695 — 2,695 Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (5,194,316) — (5,194,316) Net Ps. — Ps. (5,058,054) Ps. — Ps. (5,058,054) * 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 fair value measurements at December 31, 2018: 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. 48,199 Ps. — Ps. 48,199 Foreign currency forward — 14,241 — 14,241 Liabilities Derivatives financial instruments: Jet fuel Asian Zero-Cost collars options contracts* — (122,948) — (122,948) Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (3,515,550) — (3,515,550) Net Ps. — Ps. (3,576,058) Ps. — Ps. (3,576,058) * 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 fair value measurements at December 31, 2017: 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. 497,403 Ps. — Ps. 497,403 Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (3,481,741) — (3,481,741) Net Ps. — Ps. (2,984,338) Ps. — Ps. (2,984,338) * 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 (loss) gain from derivatives financial instruments recognized in the consolidated statements of operations for the years ended December 31, 2019, 2018 and 2017: Instrument Financial statements line 2019 2018 2017 Jet fuel Asian call options contracts Fuel Ps. (61,069) Ps. 402,493 Ps. (26,980) Jet fuel Zero-Cost collars contracts Fuel (9,477) — — Foreign currency forward Aircraft and engine rent expenses 4,199 52,516 (11,290) Interest rate swap contracts Aircraft and engine rent expenses — — (13,827) Interest rate cap Finance cost (1,282) — — Total Ps. (67,629) Ps. 455,009 Ps. (52,097) 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, 2019, 2018 and 2017: Consolidated statements of other comprehensive gain (loss) income Financial Instrument statements line 2019 2018 2017 Jet fuel Asian call options contracts OCI Ps. 11,148 Ps. (174,984) Ps. (54,202) Jet fuel Zero cost collars OCI 256,515 (122,948) — Interest rate swap contracts OCI — — 14,144 Foreign currency contracts OCI (14,241) 14,241 (2,090) Interest rate cap OCI (4,023) — — Non derivative financial instruments OCI 14,096 — — Total Ps. 263,495 Ps. (283,691) Ps. (42,148) The exchange rates used to translate the above amounts to Mexican pesos at December 31, 2019, 2018 and 2017 were Ps.18.8452, Ps.19.6829 and Ps.19.7354, respectively, per U.S. dollar. |
Financial assets and liabilitie
Financial assets and liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Financial assets and liabilities | |
Financial assets and liabilities | 5. Financial assets and liabilities At December 31, 2019, 2018 and 2017, the Company’s financial assets are represented by cash and cash equivalents, trade and other accounts receivable, accounts receivable with carrying amounts that approximate their fair value. a) Financial assets 2019 2018 2017 Derivative financial instruments designated as cash flow hedges (effective portion recognized within OCI) Jet fuel Asian call options Ps. — Ps. 48,199 Ps. 497,403 Jet fuel Zero-Cost collars 133,567 — — Foreign currency forward contracts — 14,241 — Interest rate cap 2,695 — — Total financial assets Ps. 136,262 Ps. 62,440 Ps. 497,403 Presented on the consolidated statements of financial position as follows: Current Ps. 133,567 Ps. 62,440 Ps. 497,403 Non-current Ps. 2,695 Ps. — Ps. — b) Financial debt (i) At December 31, 2019, 2018 and 2017, the Company’s short-term and long-term debt consists of the following: 2019 2018 2017 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 May 31, 2022, bearing annual interest rate at the three-month LIBOR plus a spread of 260 basis points. Ps. 3,308,509 Ps. 3,045,574 Ps. 2,528,388 II. The Company issued in the Mexico market Asset backed trust notes (“CEBUR”), in Mexican pesos, maturing on June 20 th , 2024 bearing annual interest rate at TIIE 28 days plus 175 basis points. 1,459,871 — — III. In December 2016, the Company entered into a short-term working capital facility with Banco Nacional de México S.A. (“Citibanamex”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a 90 basis points. — 461,260 948,354 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 120 basis points. 200,000 — — V. Amortized transaction costs (22,472) — — VI. Accrued interest and other financial cost 30,061 16,364 5,972 4,975,969 3,523,198 3,482,714 Less: Short-term maturities 2,086,017 1,212,259 2,403,562 Long-term Ps. 2,889,952 Ps. 2,310,939 Ps. 1,079,152 TIIE: Mexican interbank rate (ii) The following table provides a summary of the Company’s scheduled principal payments of financial debt and accrued interest at December 31, 2019: 2020 2021 2022 2023 2024 Total Santander/Bancomext Ps. 1,881,676 Ps. 1,428,534 Ps. 24,019 Ps. — Ps. — Ps. 3,334,229 CEBUR 4,341 250,000 500,000 500,000 209,871 (1) 1,464,212 Banco Sabadell 200,000 — — — — 200,000 Total Ps. 2,086,017 Ps. 1,678,534 Ps. 524,019 Ps. 500,000 Ps. 209,871 Ps. 4,998,441 (1) This amount includes the repurchase of asset backed trust notes 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 are met. At December 31, 2019, 2018 and 2017, the Company was in compliance with the covenants under the above-mentioned loan agreement. 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 (Deutsche Bank Mexico, S.A. Trust 1710 and 1711). At December 31, 2019, the Company have available credit lines totaling Ps.9,005,008, of which Ps.6,649,358 were related to financial debt (Ps.1,640,849 were undrawn) and Ps.2,355,650 were related to letters of credit (Ps.86,066 were undrawn). At December 31, 2018, the Company have available credit lines totaling Ps.6,721,139, of which Ps.4,063,947 were related to financial debt and Ps.2,657,192 were related to letters of credit (Ps.1,048,241 were undrawn). At December 31, 2017, the Company had available credit lines totaling Ps.7,368,346, of which Ps.4,616,861 were related to financial debt and Ps.2,751,485 were related to letters of credit (Ps.1,739,775 were undrawn). On June 20, 2019, the Company, through its subsidiary Concesionaria issued 15,000,000 asset backed trust notes under the ticket VOLARCB 19 for the amount of Ps.1.5 billion Mexican pesos through the Irrevocable Trust number 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 reductions 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 starts amortizing at the end of the second year. The asset backed trust notes 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, there is a found retention event if the ratio is less than 2.5 and or equal to 1.75 times. The amortization of the debt of the asset backed trust notes begins in July of 2021. In addition, early amortization applies if: i) The Debt Coverage Ratio is less than 1.75 on any of the determination dates; ii) A retention event that is not rectified in a period of 90 consecutive days; iii) The debt service reserve account of the Series of any Series maintains an amount less than the balance required in the service account of the debt of the Series of that Series on two or more consecutive payment dates. (at the close of business on that payment dates); iv) The update of a new insolvency event in relation to the Concesionaria Vuela; v) Updating a new event of default. 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 120 basis points. The “Sabadell” working capital facility has the following covenant: i) Joint obligor (Concesionaria) must represent 85% of EBITDA of the holding. In 2019, we were 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 At December 31, 2019, 2018 and 2017, the changes in liabilities from financing activities from the Company are summarized in the following table: Current vs non- current January 1, Net cash Accrued Foreign exchange reclassification December 31, 2019 Flows Interest movement and other 2019 Current interest-bearing loans and borrowings Ps. 1,212,259 Ps. (633,609) Ps. 13,698 Ps. (41,173) Ps. 1,534,842 Ps. 2,086,017 Non-current interest -bearing loans and borrowings 2,310,939 2,273,143 — (122,466) (1,571,664) 2,889,952 Total liabilities from financing activities Ps. 3,523,198 Ps. 1,639,534 Ps. 13,698 Ps. (163,639) Ps. (36,822) Ps. 4,975,969 Current vs non- current January 1, Net cash Accrued Foreign exchange reclassification December 31, 2018 Flows Interest movement and other 2018 Current interest-bearing loans and borrowings Ps. 2,403,562 Ps. (793,363) Ps. 10,392 Ps. 71,380 Ps. (479,712) Ps. 1,212,259 Non-current interest -bearing loans and borrowings 1,079,152 808,620 — (56,945) 480,112 2,310,939 Total liabilities from financing activities Ps. 3,482,714 Ps. 15,257 Ps. 10,392 Ps. 14,435 Ps. 400 Ps. 3,523,198 Current vs non- current January 1, Net cash Accrued Foreign exchange reclassification December 31, 2017 Flows Interest movement and other 2017 Current interest-bearing loans and borrowings Ps. 1,051,237 Ps. 419,350 Ps. (130) Ps. 25,924 Ps. 907,181 Ps. 2,403,562 Non-current interest - bearing loans and borrowings 943,046 1,093,808 — (50,521) (907,181) 1,079,152 Total liabilities from financing activities Ps. 1,994,283 Ps. 1,513,158 Ps. (130) Ps. (24,597) Ps. — Ps. 3,482,714 c) Other financial liabilities 2019 2018 2017 Derivative financial instruments designated as CFH (effective portion recognized within OCI): Zero-Cost Collar options Ps. — Ps. 122,948 Ps. — Total financial liabilities Ps. — Ps. 122,948 Ps. — Presented on the consolidated statements of financial position as follows: Current Ps. — Ps. 122,948 Ps. — Non-current Ps. — Ps. — Ps. — |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2019 | |
Cash and cash equivalents | |
Cash and cash equivalents | 6. Cash and cash equivalents An analysis of this caption is as follows: 2019 2018 2017 Cash in banks Ps. 4,612,927 Ps. 1,061,150 Ps. 963,162 Short-term investments 3,231,125 4,796,554 5,982,314 Cash on hand 44,880 5,238 5,403 Restricted funds held in trust related to debt service reserves 91,040 — — Total cash and cash equivalents Ps. 7,979,972 Ps. 5,862,942 Ps. 6,950,879 As of December 31, 2019, the Company recorded a portion of advance ticket sales by an amount of Ps.91,040 as a restricted fund (Note 1 and 6). The restricted funds held in Trust are used to constitute the debt service reserves and cannot be used for purposes other than those established in the contract of the Trust. |
Related parties
Related parties | 12 Months Ended |
Dec. 31, 2019 | |
Related parties | |
Related parties | 7. Related parties a) An analysis of balances due from/to related parties at December 31, 2019, 2018 and 2017 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 2019 2018 2017 Terms Due from: Frontier Airlines Inc. (“Frontier”) Code-share USA Ps. 23,442 Ps. 8,266 Ps. — 30 days Ps. 23,442 Ps. 8,266 Ps. — Country Type of transaction of origin 2019 2018 2017 Terms Due to: One Link, S.A. de C.V. (“One Link”) Call center fees El Salvador Ps. 39,838 Ps. — Ps. 24,980 30 days Frontier Airlines Inc. (“Frontier”) Code-share USA 16,246 2,751 — 30 days Aeromantenimiento, S.A. (“Aeroman”) Aircraft and engine maintenance Mexico/El Salvador 1,474 15,024 15,951 30 days Mijares, Angoitia, Cortés y Fuentes, S.C. Professional fees Mexico 996 — — 30 days Ps. 58,554 Ps. 17,775 Ps. 40,931 b) During the years ended December 31, 2019, 2018 and 2017, the Company had the following transactions with related parties: Related party transactions Country of origin 2019 2018 2017 Revenues: Transactions with affiliates Frontier Airlines Inc Code-share USA Ps. 208,968 Ps. 8,358 Ps. — Expenses: Transactions with affiliates Aeromantenimiento, S.A. Aircraft and engine maintenance Mexico/El Salvador Ps. 201,624 Ps. 341,726 Ps. 249,266 Servprot, Human Capital Int., Onelink, MACF Call center fees and other professional fees Mexico/El Salvador 41,467 4,800 202,689 Aeromantenimiento, S.A. Technical support Mexico/El Salvador 5,815 4,796 8,088 Frontier started having transactions with the Company in September 2018. During the years ended December 31, 2017 the Company did not have any revenue transactions with related parties. As of December 31, 2019, 2018 and 2017, there have been no guarantees provided or received for any related party receivables or payables. For the years ended December 31, 2019, 2018 and 2017, no provision for expected credit losses had been recognized. 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 Rodolfo Montemayor, who served as an alternate member of our board of directors until April 19, 2018, are shareholders of such company. Servprot provides security services for Mr. Beltranena and his family, as well as for Mr. Montemayor. As of December 31, 2019, 2018 and 2017 Servprot did not have net balance under this agreement. During the years ended December 31, 2019, 2018 and 2017 the Company expensed Ps. 3,120, Ps. 2,804 and Ps. 1,838, respectively for this concept. d) Aeroman Aeroman was a related party until July 24, 2019, because Roberto José Kriete Ávila, former member of the Company’s board of directors is shareholder 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 years term. As of December 31, 2019, 2018 and 2017, the balances due under the agreement with Aeroman were Ps. 1,474, Ps. 15,024 and Ps. 15,951, respectively. The Company incurred expenses in aircraft, engine maintenance and technical support under this agreement of Ps. 207,439, Ps. 346,522 and Ps. 251,731 for the years ended December 31, 2019, 2018 and 2017, respectively. e) Human Capital International Human Capital International HCI, S.A. de C.V. (“Human Capital International”), was a related party until April 19, 2018, because Rodolfo Montemayor Garza, a former member of the Company’s board of directors, is founder and chairman of the board of directors of Human Capital International. Human Capital International provided the Company with services regarding the selection and hiring of executives. As of December 31, 2019, 2018 and 2017, Human Capital International did not have net balance under this agreement. For the years ended December 31, 2019, 2018 and 2017, the Company recognized an expense under this agreement of Ps. 0, Ps. 324 and Ps. 816, respectively. f) 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 Onelink, Holdings, S.A. (“Onelink Holdings”) and its subsidiary Onelink are once again related parties, because Mr. Rodrigo Antonio Escobar Nottebohm, an 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, 2019, 2018 and 2017, the account payable under this agreement was Ps.39,838, Ps.0 and Ps. 24,980, respectively. For the years ended December 31, 2019, 2018 and 2017, Company recognized an expense under this agreement of Ps.37,026, Ps. 0 and Ps.200,035, respectively. g) SearchForce SearchForce was a related party because William Dean Donovan, a member of the board, is a director of the Company. Pursuant to this agreement, SearchForce provided until 2017 consultation services, reports, findings, analysis or other deliverables to us regarding the software and the implementation of the internet marketing strategy developed to the Company at its request. As of December 31, 2019, 2018 and 2017, SearchFroce did not have net balance under this agreement. The Company recognized an expense under this agreement of Ps.0, Ps.0 and Ps.1,946 for the years ended December 31, 2019, 2018 and 2017, respectively. h) 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 the Company. As of December 31, 2019, MACF, the balance due under the agreement was Ps.996. As of December 31, 2018, and 2017, MACF did not have net balance under this agreement. For the year ended December 31, 2019, 2018 and 2017, the Company expensed Ps.1,321, Ps. 1,672 and Ps. 0, respectively, for this concept. i) 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 have significant investments in both Companies. As of December 31, 2019, and 2018, the account receivable under this agreement was Ps. 23,442 and Ps. 8,266, respectively. Additionally, as of December 31, 2019, and 2018, the account payable under this agreement was Ps.16,246 and Ps. 2,751, respectively. For the year ended December 31, 2019 and 2018 the Company recognized revenue under this agreement of Ps. 208,968 and Ps.8,358, respectively. j) Directors and officers During the year ended December 31, 2019, 2018 and 2017, the chairman and the independent members of the Company’s board of directors received an aggregate compensation of approximately Ps.8,085, Ps.7,178 and Ps.8,993, respectively, and the rest of the directors received a compensation of Ps.4,367, Ps.5,217 and Ps.7,834, respectively. During the years ended December 31, 2019, 2018 and 2017, all the Company’s senior managers received an aggregate compensation of short and long-term benefits of Ps.237,846, Ps.180,001 and Ps.134,370, respectively, these amounts were recognized in salaries and benefits in the consolidated statement of operations. For the years ended December 31, 2019, 2018 and 2017 the cost of the share-based payments transactions (MIP and LTIP) were Ps.49,659, Ps.19,980 and Ps.13,508, respectively. The cost (benefit) of the cash-settled payments transactions MIP II and SARs were Ps.40,724, Ps. (5,238) and Ps. (25,498), respectively (Note 17). The Company has a short-term benefit plan for certain personnel whereby cash bonuses are awarded for meeting certain Company’s performance target. During the years ended December 31, 2019, 2018 and 2017, the Company recorded a provision in the amount of Ps.80,634, Ps.50,000 and Ps.0 respectively. |
Other accounts receivable, net
Other accounts receivable, net | 12 Months Ended |
Dec. 31, 2019 | |
Other accounts receivable, net | |
Other accounts receivable, net | 8. Other accounts receivable, net An analysis of other accounts receivable at December 31, 2019, 2018 and 2017, is detailed below: 2019 2018 2017 Current: Credit cards Ps. 389,634 Ps. 96,646 Ps. 191,322 Other accounts receivable 189,904 101,487 117,582 Other points of sales 102,002 71,054 54,719 Travel agencies and insurance commissions 76,975 39,806 27,925 Affinity credit card 49,040 55,172 40,517 Cargo clients 46,600 41,408 34,655 Airport services 42,894 9,991 5,898 Employees 29,681 27,274 8,878 Benefits from suppliers 26,989 68,946 — Marketing services receivable 7,024 7,999 13,435 Settlement receivable 2,422 — — Insurance claims 143 — 1,345 963,308 519,783 496,276 Allowance for credit losses (40,308) (11,304) (17,809) Ps. 923,000 Ps. 508,479 Ps. 478,467 Accounts receivable have the following aging: 2019 2019 Total 2018 2018 Total 2017 2017 Total Days Impaired Not impaired 2019 Impaired Not impaired 2018 Impaired Not impaired 2017 0–30 Ps. 5,804 Ps. 722,651 Ps. 728,455 Ps. 8,725 Ps. 388,644 Ps. 397,369 Ps. 16,962 Ps. 415,847 Ps. 432,809 31–60 — 64,983 64,983 — 69,648 69,648 — 38,705 38,705 61–90 — 19,274 19,274 — 27,138 27,138 — 17,918 17,918 91–120 34,504 116,092 150,596 2,579 23,049 25,628 847 5,997 6,844 Ps. 40,308 Ps. 923,000 Ps. 963,308 Ps. 11,304 Ps. 508,479 Ps. 519,783 Ps. 17,809 Ps. 478,467 Ps. 496,276 The movement in the allowance for credit losses from January 1, 2017 to December 31, 2019 is as follows: Balance as of January 1, 2017 Ps. (19,317) Write-offs 6,228 Increase in allowance (4,720) Balance as of December 31, 2017 (17,809) Write-offs 17,126 Increase in allowance (10,621) Balance as of December 31, 2018 (11,304) Write-offs 11,389 Increase in allowance (40,393) Balance as of December 31, 2019 Ps. (40,308) |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventories | |
Inventories | 9. Inventories An analysis of inventories at December 31, 2019, 2018 and 2017 is as follows: 2019 2018 2017 Spare parts and accessories of flight equipment Ps. 294,390 Ps. 289,737 Ps. 285,185 Miscellaneous supplies 7,518 7,534 9,665 Ps. 301,908 Ps. 297,271 Ps. 294,850 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. During the years ended as of December 31, 2019, 2018 and 2017, the amount of consumption of inventories, recorded as an operating expense as part of maintenance expense was Ps.284,687, Ps.290,206 and Ps.242,265, respectively. |
Prepaid expenses and other curr
Prepaid expenses and other current assets | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019, 2018 and 2017 is as follows: 2019 2018 2017 Advances to suppliers Ps. 283,340 Ps. 198,174 Ps. 87,536 Advances to components suppliers 209,557 67,446 220,095 Other prepaid expenses 115,054 40,655 56,146 Prepaid insurance 88,941 76,896 68,712 Sales commission to travel agencies (Note 1d) 84,239 59,620 54,501 Advances for constructions of aircraft and engines — — 13,764 Ps. 781,131 Ps. 442,791 Ps. 500,754 |
Guarantee deposits
Guarantee deposits | 12 Months Ended |
Dec. 31, 2019 | |
Guarantee deposits | |
Guarantee deposits | 11. Guarantee deposits An analysis of this caption at December 31, 2019, 2018 and 2017 is as follows: 2019 2018 2017 Current asset: Aircraft maintenance deposits paid to lessors (Note 1j) Ps. 576,505 Ps. 729,899 Ps. 1,317,663 Deposits for rental of flight equipment — 1,220 17,178 Other guarantee deposits 23,822 59,516 18,052 600,327 790,635 1,352,893 Non-current asset: Aircraft maintenance deposits paid to lessors (Note 1j) 5,853,924 5,765,122 5,631,304 Deposits for rental of flight equipment 1,750,966 531,261 441,110 Other guarantee deposits 39,531 41,113 25,838 7,644,421 6,337,496 6,098,252 Ps. 8,244,748 Ps. 7,128,131 Ps. 7,451,145 |
Rotable spare parts, furniture
Rotable spare parts, furniture and equipment, net | 12 Months Ended |
Dec. 31, 2019 | |
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 and impairment Net carrying value At December At December At December At December At December At December At December At December At December 31, 2019 31, 2018 31, 2017 31, 2019 31, 2018 31, 2017 31, 2019 31, 2018 31, 2017 Leasehold improvements to flight equipment Ps. 4,220,672 Ps. 3,424,778 Ps. 2,575,495 Ps. (2,679,884) Ps. (2,210,189) Ps. (1,882,996) Ps. 1,540,788 Ps. 1,214,589 Ps. 692,499 Pre-delivery payments 4,507,770 3,672,090 2,783,303 — — — 4,507,770 3,672,090 2,783,303 Flight equipment 1,287,102 932,642 830,145 (553,852) (268,320) (199,223) 733,250 664,322 630,922 Construction and improvements in process 474,240 142,738 193,607 — — — 474,240 142,738 193,607 Constructions and improvements 172,460 132,446 131,503 (131,510) (117,211) (106,335) 40,950 15,235 25,168 Computer equipment 47,566 44,563 30,113 (34,495) (28,016) (20,790) 13,071 16,547 9,323 Workshop tools 26,875 23,454 20,500 (22,023) (20,085) (18,229) 4,852 3,369 2,271 Electric power equipment 20,412 15,438 15,439 (11,400) (10,316) (9,185) 9,012 5,122 6,254 Communications equipment 14,099 12,305 11,229 (8,322) (7,394) (6,502) 5,777 4,911 4,727 Workshop machinery and equipment 16,301 9,530 8,405 (6,092) (5,049) (4,345) 10,209 4,481 4,060 Motorized transport equipment platform 15,026 5,496 5,587 (5,392) (5,050) (4,701) 9,634 446 886 Service carts on board 7,675 5,403 5,403 (5,554) (5,277) (5,021) 2,121 126 382 Office furniture and equipment 70,709 66,546 44,749 (34,049) (28,240) (22,454) 36,660 38,306 22,295 Allowance for obsolescence (3,000) — — — — — (3,000) — — Total Ps. 10,877,907 Ps. 8,487,429 Ps. 6,655,478 Ps. (3,492,573) Ps. (2,705,147) Ps. (2,279,781) Ps. 7,385,334 Ps. 5,782,282 Ps. 4,375,697 * During the years ended December 31, 2019, 2018 and 2017, the Company capitalized borrowing costs of Ps.456,313, Ps.357,920 and Ps.193,389, respectively. The amount of this line is net of disposals of capitalized borrowing costs related to sale and leaseback transactions of Ps.328,571, Ps.242,678 and Ps.110,274, 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 book amount as of December 31, 2016 Ps. 577,498 Ps. 35,013 Ps. 7,200 Ps. 17,657 Ps. 6,928 Ps. 4,585 Ps. 1,357 Ps. 3,555 Ps. 3,618 Ps. 758 Ps. — Ps. 1,206,330 Ps. 255,374 Ps. 405,135 Ps. 2,525,008 Additions 115,558 — 1,845 6,805 — — — — 123 — — 1,707,805 206,932 545,164 2,584,232 Disposals and transfers (930) — — (15) — — — — — — — (213,947) (3,555) (101,224) (319,671) Borrowing costs, net* — — — — — — — — — — — 83,115 — — 83,115 Other movements — 10,371 4,087 1,649 620 — — 1,968 1,041 — — — (265,144) 244,712 (696) Depreciation (61,204) (20,216) (3,809) (3,801) (1,294) (2,314) (471) (796) (722) (376) — — — (401,288) (496,291) As of December 31, 2017 630,922 25,168 9,323 22,295 6,254 2,271 886 4,727 4,060 382 — 2,783,303 193,607 692,499 4,375,697 Cost 830,145 131,503 30,113 44,749 15,439 20,500 5,587 11,229 8,405 5,403 — 2,783,303 193,607 2,575,495 6,655,478 Accumulated depreciation (199,223) (106,335) (20,790) (22,454) (9,185) (18,229) (4,701) (6,502) (4,345) (5,021) — — — (1,882,996) (2,279,781) Net book amount as of December 31, 2017 630,922 25,168 9,323 22,295 6,254 2,271 886 4,727 4,060 382 — 2,783,303 193,607 692,499 4,375,697 Additions 366,371 689 5,316 652 — 2,673 — 1,050 1,040 — — 1,485,643 142,703 687,260 2,693,397 Disposals and transfers (261,866) — — — — — — — (2) — — (712,098) (89) — (974,055) Borrowing costs, net* — — — — — — — — — — — 115,242 — — 115,242 Other movements — 67 9,123 21,568 — 281 42 26 110 — — — (193,483) 162,023 (243) Depreciation (71,105) (10,689) (7,215) (6,209) (1,132) (1,856) (482) (892) (727) (256) — — — (327,193) (427,756) As of December 31, 2018 664,322 15,235 16,547 38,306 5,122 3,369 446 4,911 4,481 126 — 3,672,090 142,738 1,214,589 5,782,282 Cost 932,642 132,446 44,563 66,546 15,438 23,454 5,496 12,305 9,530 5,403 — 3,672,090 142,738 3,424,778 8,487,429 Accumulated depreciation (268,320) (117,211) (28,016) (28,240) (10,316) (20,085) (5,050) (7,394) (5,049) (5,277) — — — (2,210,189) (2,705,147) Net book amount as of December 31, 2018 664,322 15,235 16,547 38,306 5,122 3,369 446 4,911 4,481 126 — 3,672,090 142,738 1,214,589 5,782,282 Additions 692,186 5,596 1,730 1,461 2,487 3,137 — 355 4,278 2,273 (3,000) 1,412,790 525,556 661,954 3,310,803 Disposals and transfers (538,370) — (131) (10) — — — (2) (35) — — (704,852) (3,957) — (1,247,357) Borrowing costs, net* — — — — — — — — — — — 127,742 — — 127,742 Other movements — 34,840 1,999 2,757 2,487 284 9,529 1,446 2,529 — — — (190,097) 133,939 (287) Depreciation (84,888) (14,721) (7,074) (5,854) (1,084) (1,938) (341) (933) (1,044) (278) — — — (469,694) (587,849) As of December 31, 2019 733,250 40,950 13,071 36,660 9,012 4,852 9,634 5,777 10,209 2,121 (3,000) 4,507,770 474,240 1,540,788 7,385,334 Cost 1,287,102 172,460 47,566 70,709 20,412 26,875 15,026 14,099 16,301 7,675 (3,000) 4,507,770 474,240 4,220,672 10,877,907 Accumulated depreciation (553,852) (131,510) (34,495) (34,049) (11,400) (22,023) (5,392) (8,322) (6,092) (5,554) — — — (2,679,884) (3,492,573) Net book amount 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 a) Depreciation expense for the years ended December 31, 2019, 2018 and 2017, was Ps.587,849, Ps.427,756 and Ps.496,291, respectively. Depreciation charges for the year are recognized as a component of operating expenses in the consolidated statements of operations. b) 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 Volaris used its rights on the Airbus Purchase Agreement to convert six 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. The Company received credit notes from P&W in December 2017 of Ps.58,530 (US$3.06 million), which are being amortized on a straight-line basis, prospectively during the term of the agreement. As of December 31, 2018, and 2017, the Company amortized a corresponding benefit from these credit notes of Ps.4,878 and Ps.1,219, respectively, which is recognized as an offset to maintenance expenses in the consolidated statements of operations. During the years ended December 31, 2019, 2018 and 2017, the amounts paid for aircraft and spare engine pre-delivery payments were of Ps.1,412,790 (US$75.0 million), Ps.1,485,643 (US$77.1 million) and Ps.1,707,805 (US$90.0 million), respectively. The current purchase agreement with Airbus requires the Company to accept delivery of 103 Airbus A320 family aircraft during the following six years (from January 2020 to November 2026). The agreement provides for the addition of 103 Aircraft to its fleet as follows: eight in 2020, thirteen in 2021, thirteen in 2022, sixteen in 2023, thirteen in 2024, fifteen in 2025 and twenty-five in 2026. Commitments to acquisitions of property and equipment are disclosed in Note 23. During the years ended December 31, 2019, 2018 and 2017 the Company entered into aircraft and spare engines sale and leaseback transactions, resulting in a gain of Ps.284,759, Ps.609,168 and Ps.65,886, respectively, that was recorded under the caption other income in the consolidated statement of operations , only the amount of gains that relates to the rights transferred to the buyer-lessor. The rest of the gains are amortized under the lease term (Note 20). c) 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 (US$1.5 million), which are being amortized on a straight-line basis, prospectively during the term of the agreement. As of December 31, 2019,and 2018, the Company amortized a corresponding benefit from these credit notes of Ps.5,230 and Ps.7,191, respectively, recognized as an offset to maintenance expenses in the consolidated statements of operations. d) 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 (US$19,600). This transaction did not generate any gain or loses 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 the month of December, the Company sold the recently acquire aircraft engines in by a sale and lease back transaction. As of December 31, 2019, the carry amount of the remaining owned aircraft and the depreciation was Ps.54,771 and Ps.1,787, respectively. |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2019 | |
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 2019 2018 2017 2019 2018 2017 2019 2018 2017 Software 1 – 4 Ps. 579,360 Ps. 503,467 Ps. 441,803 Ps. (411,963) Ps. (324,343) Ps. (251,383) Ps. 167,397 Ps. 179,124 Ps. 190,420 Balance as of January 1, 2017 Ps. 114,041 Additions 130,908 Disposals (1,976) Amortization (52,396) Exchange differences (157) Balance as of December 31, 2017 190,420 Additions 71,007 Disposals (9,368) Amortization (72,885) Exchange differences (50) Balance as of December 31, 2018 179,124 Additions 77,325 Disposals — Amortization (87,667) Exchange differences (1,385) Balance as of December 31, 2019 Ps. 167,397 Software amortization expense for the years ended December 31, 2019, 2018 and 2017 was Ps.87,667, Ps.72,885 and Ps.52,396, respectively. These amounts were recognized in depreciation and amortization in the consolidated statements of operations. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | 14. Leases The most significant leases are as follows: a) Aircraft and engine represent the Company´s most significant lease agreements. At December 31, 2019, the Company leases 81 aircraft (77 and 71 as of December 31, 2018 and 2017, respectively) and 14 spare engines under operating leases (10 and eighth as of December 31, 2018 and 2017, respectively) 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*: At December At December At December Aircraft Type Model 31, 2019 31, 2018 31, 2017 A319 132 3 4 6 A319 133 4 4 6 A320 233 39 39 39 A320 232 2 4 4 A320NEO 271N 17 12 6 A321 231 10 10 10 A321NEO 271N 6 4 — 81 77 71 Engine spare At December At December At December Type Model 31, 2019 31, 2018 31, 2017 V2500 V2524-A5 2 — — V2500 V2527M-A5 3 3 3 V2500 V2527E-A5 3 3 3 V2500 V2527-A5 2 2 2 PW1100 PW1127G-JM 3 2 — PW1100 PW1133G-JM 1 — — 14 10 8 * Certain of the Company’s aircraft and engine lease agreements include an option to extend the lease term period. Terms and conditions are subject to market conditions at the time of renewal. During the year ended December 31, 2019, the Company added seven new leased aircraft to its fleet (three A320 NEO´s acquired through sale and leaseback transactions under our existing Airbus purchase agreement and four obtained directly from the lessor´s). Also, the Company extended the lease term of one spare engine (effective from 2019) and returned two aircraft to their respective lessors. All the aircraft incorporated through the lessor´s aircraft order book was not subject to sale and leaseback transactions. During the year ended December 31, 2019, the Company also leased two NEO spare engines (based on the terms of the Pratt and 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 as leases. Additionally, during 2019 the Company extended the lease term of one spare engine (effective from November 2019). During the year ended December 31, 2018, the Company added ten new leased aircraft to its fleet (acquired three A320 NEO’s through sale leaseback transactions under our existing Airbus purchase agreement and seven obtained directly from the lessors). Also, the Company extended the lease term of Aircraft (effective from 2019) and two spare engines (effective from February and April 2018), and returned four aircraft to their respective lessors. During the year ended December 31, 2018, the Company also added two NEO spare engines to its fleet based on the terms of the Pratt and Whitney purchase agreement (FMP). These two engines incorporated were subject to sale and leaseback transactions. During the year ended December 31, 2017, the Company added five aircraft to its fleet (acquired one A320 NEO’s through sale leaseback transactions under our existing Airbus purchase agreement and four obtained directly from the lessors). Also, the Company returned three aircraft to their respective lessors. All the aircraft incorporated through the lessor´s aircraft order book were not subject to sale and leaseback transactions. Additionally, during 2017 the Company extended the lease term of three aircraft (effective from 2018) and two spare engines (effective from July 2017 and September 2017, respectively). Such leases were not subject to sale and leaseback transactions. 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 at 1 January 2017 (adjusted) Ps. 23,047,879 Ps. 220,554 Ps. 231,648 Ps. 23,500,081 Additions 4,665,330 157,225 9,149 4,831,704 Depreciation on right of use assets (3,306,249) (77,750) (53,904) (3,437,903) As at 31 December 2017 (adjusted) 24,406,960 300,029 186,893 24,893,882 Additions 10,585,188 387,480 59,194 11,031,862 Depreciation on right of use assets (3,865,979) (107,813) (69,899) (4,043,691) As at 31 December 2018 (adjusted) 31,126,169 579,696 176,188 31,882,053 Additions 6,676,492 230,200 42,992 6,949,684 Depreciation on right of use assets (4,490,572) (132,698) (79,701) (4,702,971) As at 31 December 2019 Ps. 33,312,089 Ps. 677,198 Ps. 139,479 Ps. 34,128,766 Set out below are the carrying amounts of lease liabilities and the movements during the period: 2018 2017 2019 (Adjusted) (Adjusted) As at 1 January Ps. 39,565,146 Ps. 32,523,704 Ps. 32,711,793 Additions 7,186,613 11,038,578 4,897,420 Accretion of interest 2,037,540 1,683,330 1,381,680 Foreign exchange effect (1,772,452) 30,441 (1,434,291) Payments (6,499,802) (5,710,907) (5,032,898) As at 31 December 40,517,045 39,565,146 32,523,704 Current Ps. 4,720,505 Ps. 4,976,454 Ps. 4,213,417 Non-current The following are the amounts recognized in profit or loss: As of December As of December As of December 31, 2018 31, 2017 31, 2019 (Adjusted) (Adjusted) Depreciation of right-of-use assets Ps. (4,702,971) Ps. (4,043,691) Ps. (3,437,903) Interest expense on lease liabilities (2,128,162) (1,755,978) (1,428,924) Aircraft and engine variable expenses (961,657) (956,010) (1,429,595) Total amount recognized in profit or loss Ps. (7,792,790) Ps. (6,755,679) Ps. (6,296,422) The Company had total cash outflows for leases of Ps.6,499,802 in 2019 (Ps.5,710,907 in 2018 and Ps.5,032,898 in 2017). 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 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 supplemental rent 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, 2019, 2018 and 2017, the Company expensed as supplemental rent Ps.680,964, Ps.659,106 and Ps.851,410, respectively. |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Accrued liabilities | |
Accrued liabilities | 15. Accrued liabilities a) An analysis of accrued liabilities short - term at December 31, 2019, 2018 and 2017 is as follows: 2019 2018 2017 Fuel and traffic accrued expenses Ps. 1,507,659 Ps. 1,315,363 Ps. 1,106,913 Maintenance and aircraft parts accrued expenses 120,254 79,280 194,366 Sales, marketing and distribution accrued expenses 230,935 283,538 143,758 Maintenance deposits 132,085 141,371 132,519 Salaries and benefits 296,829 187,072 114,781 Accrued administrative expenses 81,124 67,306 90,459 Deferred revenue from V Club membership 35,465 59,557 76,261 Information and communication accrued expenses 67,808 45,008 44,638 Supplier services agreement 10,634 10,634 10,634 Benefits from suppliers — — 1,473 Advances from travel agencies 542 482 650 Others 48,526 77,985 51,474 Ps. 2,531,861 Ps. 2,267,596 Ps. 1,967,926 b) Accrued liabilities long-term at December 31, 2019, 2018 and 2017 is as follows: 2019 2018 2017 Supplier services agreement Ps. 55,905 Ps. 66,539 Ps. 77,174 Benefits from suppliers 19,439 — — Other 15,452 8,964 15,274 Ps. 90,796 Ps. 75,503 Ps. 92,448 c) An analysis of other liabilities is as follows: Balance as of Balance as of January 1, Increase for December 31, 2019 the year Payments 2019 Aircraft and engine lease return obligation Ps. 1,831,045 Ps. 725,506 Ps. 703,863 Ps. 1,852,688 Employee profit sharing (Note 16) 14,984 22,134 13,021 24,097 Ps. 1,846,029 Ps. 747,640 Ps. 716,884 Ps. 1,876,785 Short-term maturities Ps. 407,190 Long-term Ps. 1,469,595 Balance as of Balance as of January 1, Increase for December 31, 2018 the year Payments 2018 Aircraft and engine lease return obligation (Adjusted) Ps. 1,647,977 Ps. 1,015,391 Ps. 832,323 Ps. 1,831,045 Employee profit sharing (Note 16) 9,063 14,106 8,185 14,984 Ps. 1,657,040 Ps. 1,029,497 Ps. 840,508 Ps. 1,846,029 Short-term maturities Ps. 25,835 Long-term Ps. 1,820,194 Balance as of Balance as of January 1, Increase for December 31, 2017 the year Payments 2017 Aircraft and engine lease return obligation (Adjusted) Ps. 1,408,039 Ps. 1,099,597 Ps. 859,659 Ps. 1,647,977 Employee profit sharing (Note 16) 10,695 8,342 9,974 9,063 Ps. 1,418,734 Ps. 1,107,939 Ps. 869,633 Ps. 1,657,040 Short-term maturities Ps. 202,250 Long-term Ps. 1,454,790 During the years ended December 31, 2019, 2018 and 2017 no cancellations or write-offs related to these liabilities were recorded. |
Employee benefits
Employee benefits | 12 Months Ended |
Dec. 31, 2019 | |
Employee benefits | |
Employee benefits | 16. 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, 2019, 2018 and 2017, are as follows: 2019 2018 2017 Analysis of net period cost: Current service cost Ps. 8,214 Ps. 4,977 Ps. 3,657 Interest cost on benefit obligation 1,872 1,424 1,000 Net period cost Ps. 10,086 Ps. 6,401 Ps. 4,657 Changes in the defined benefit obligation are as follows: 2019 2018 2017 Defined benefit obligation at January 1, Ps. 18,153 Ps. 19,289 Ps. 13,438 Net period cost charged to profit or loss: Current service cost 8,214 4,977 3,657 Interest cost on benefit obligation 1,872 1,000 Remeasurement losses in other comprehensive income: Actuarial changes arising from changes in assumptions 10,192 (5,989) 1,776 Payments made (225) (1,548) (582) Defined benefit obligation at December 31, Ps. 38,206 Ps. 18,153 Ps. 19,289 The significant assumptions used in the computation of the seniority premium obligations are shown below: 2019 2018 2017 Financial: Discount rate 7.18 % 9.91 % 7.72 % Expected rate of salary increases 5.50 % 5.65 % 5.50 % Annual increase in minimum salary 4.00 % 4.15 % 4.00 % Biometric: Mortality (1) EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA EMSSA 09 EMSSA 09 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 at December 31, 2019, 2018 and 2017, respectively, are as follows: 2019 2018 2017 Employee profit-sharing (Note 15c) Ps. 24,097 Ps. 14,984 Ps. 9,063 The key management personnel of the Company include the members of the Board of Directors (Note 7). |
Share-based payments
Share-based payments | 12 Months Ended |
Dec. 31, 2019 | |
Share-based payments | |
Share-based payments | 17. 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 2019, 2018 and 2017, the extensions to the LTIP were approved by the Company’s shareholder’s and Company’s Board of Directors, respectively. The total cost of the extensions approved were Ps .86,772 (Ps.56,407 net of withheld taxes), Ps.63,961 (Ps.41,590 net of withheld taxes), Ps.15,765 (Ps.10,108 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, 2019, 2018 and 2017, 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, 2017 618,048 * Purchased during the year 547,310 Granted during the year — Exercised/vested during the year (345,270) Forfeited during the year — Outstanding as of December 31, 2017 820,088 * Purchased during the year 3,208,115 Granted during the year — Exercised/vested during the year (353,457) Forfeited during the year (121,451) Outstanding as of December 31, 2018 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 * * These shares are presented as treasury shares in the consolidated statement of financial position as of December 31, 2019, 2018 and 2017. The vesting period of the shares granted under the Company’s share purchase plans is as follows: Number of Series A shares Vesting period 2,211,269 November 2019 – 2020 2,005,716 November 2020 – 2021 898,206 November 2021 – 2022 5,115,191 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, 2019, 2018 and 2017, the compensation expense recorded in the consolidated statement of operations amounted to Ps.49,659, Ps.19,980 and Ps.13,508, respectively. All shares held in the Administrative Trust are considered outstanding for both basic and diluted (loss) earnings per share purposes, since the shares are entitled to dividend if and when declared by the Company. During 2019 and 2018, 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, 2019 and 2018, were (173,090) and (121,451), 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 3 years period. The total amount of the appreciation rights granted under this plan at the grant date was Ps.10,831 at such date. Under the LTIP extensions, the number of SARs granted to certain key executives of the Company were Ps.0, Ps.0 and 3,965,351, which amounts to Ps.0, Ps.0 and Ps.15,765, for the years ended December 31, 2019, 2018 and 2017, respectively. The SARs vest as long as the employee continues to be employed by the Company at the end of each anniversary, during a three years period. Fair value of the SARs is measured at each reporting date. The carrying amount of the liability relating to the SARs as of December 31, 2019, 2018 and 2017 were Ps.1,901,Ps.537 and Ps.723, 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, 2019, 2018 and 2017, the Company recorded a expense (benefit) of Ps.2,964,Ps.(186) and Ps.(8,999), respectively, in the consolidated statement of operations. The fair value of these SARs is 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 (vesting schedule in tables below). Number of SARs Exercisable date 725,193 November 2020 725,193 * * Includes forfeited SARs of 32,616, 484,656 and 145,769 for the years ended December 31, 2019, 2018 and 2017, respectively. During the years ended December 31, 2019, 2018 and 2017, the Company made a cash payment to key employees related to the SARs plan in the amount of Ps.2,395, Ps.0 and Ps.6,021, respectively. Such payments were determined based on the increase in the share price of the Company from the grant date to the exercisable date. 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, 2018 and 2017, the key employees exercised 2,780,000, 2,003,876 and 120,000 Series A shares. As a result, the key employees paid to the Management Trust Ps.14,773,Ps.10,654 and Ps.638 corresponding to the exercised shares for the years ended December 31, 2019, 2018 and 2017, respectively. Thereafter, the Company 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 year: Total in Number of share Exercise price thousands of options in Mexican pesos Mexican pesos Outstanding as of December 31, 2016 12,557,857 Ps. 5.31 Ps. 66,733 Granted during the year — — — Forfeited during the year — — — Exercised during the year (120,000) 5.31 (638) Outstanding as of December 31, 2017 12,437,857 Ps. 5.31 Ps. 66,095 Granted during the year — — — Forfeited during the year — — — Exercised during the year (2,003,876) 5.31 (10,654) Outstanding as of December 31, 2018 10,433,981 Ps. 5.31 Ps. 55,441 Granted during the year — — — Forfeited during the year — — — Exercised during the year (2,780,000) 5.31 (14,773) Outstanding as of December 31, 2019 7,653,981 Ps. 5.31 Ps. 40,668 At December 31, 2019, 2018 and 2017, 7,653,981, 10,433,981 and 12,437,857 share options pending to exercise were considered as treasury shares, respectively. ● 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, 2019, 2018 and 2017 was Ps.70,567, Ps.32,807 and Ps.37,858, 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, 2019, 2018 and 2017, the Company recorded a (benefit) expense of Ps.37,760,Ps. (5,052) and Ps. (16,499), respectively, in the consolidated statement of operations. No SARs were exercised during 2018. The vesting schedule is summarized in the table below: Number of SARs Vesting date 2,825,840 February 2020 3,391,020 February 2021 6,216,860 * * Includes forfeited SARs of 0,1,563,520 and 0, for the years ended December 31, 2019, 2018 and 2017, respectively. The expense (benefit) recognized for the Company’s retention plans during the year is shown in the following table: 2019 2018 2017 (Benefit) expense arising from cash-settled share-based payments transactions Ps. 40,724 Ps. (5,238) Ps. (25,498) Expense arising from equity-settled share-based payments transactions 49,659 19,980 13,508 Total expense (benefit) arising from share-based payments transactions Ps. 90,383 Ps. 14,742 Ps. (11,990) 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 four years period with an exercise price share at Ps.16.80, Ps. 16.12 and Ps.26.29 for the years ended 2019, 2018 and 2017, 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 Trust Agreement number CIB/3081 was created by Controladora Vuela, Compañia de Aviación S.A.B de C.V as trustee and CIBanco, S.A., Institucion de Banco Multiple as trustor. The number of shares hold as of December 31, 2019 available to be exercised is 2,072,344. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity | |
Equity | 18. Equity As of December 31, 2019, the total number of the Company's authorized shares was 1,011,876,677; 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) 10,478 923,814,326 923,824,804 Series B shares (1) 13,702 88,038,171 88,051,873 24,180 1,011,852,497 1,011,876,677 Treasury shares (Note 17) — (15,136,057) (15,136,057) * 24,180 996,716,440 996,740,620 *The number of forfeited shares as of December 31, 2019 were 294,541, which are include in treasury shares. As of December 31, 2018, the total number of the Company's authorized shares was 1,011,876,677; 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) 10,478 923,814,326 923,824,804 Series B shares (1) 13,702 88,038,171 88,051,873 24,180 1,011,852,497 1,011,876,677 Treasury shares (Note 17) — (15,212,365) (15,212,365) * 24,180 996,640,132 996,664,312 *The number of forfeited shares as of December 31, 2018 were 121,451, which are include in treasury shares. (1) On February 16, 2018, one of the Company´s shareholders converted 45,968,598 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. As of December 31, 2017, the total number of the Company's authorized shares was 1,011,876,677; 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 3,224 877,852,982 877,856,206 Series B shares 20,956 133,999,515 134,020,471 24,180 1,011,852,497 1,011,876,677 Treasury shares (Note 17) — (13,257,945) (13,257,945) 24,180 998,594,552 998,618,732 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 in the event that 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, 2019, 2018 and 2017, 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 income (loss) for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted EPS or LPS amounts are calculated by dividing the profit (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) per share for the years ended December 31, 2019, 2018 and 2017. At December 31, 2018 2017 2019 (Adjusted) (Adjusted) Net income (loss) for the period Ps. 2,639,063 Ps. (942,882) Ps. 278,671 Weighted average number of shares outstanding (in thousands): Basic 1,011,877 1,011,877 1,011,877 Diluted 1,011,877 1,011,877 1,011,877 EPS - LPS: Basic 2.608 (0.932) 0.275 Diluted 2.608 (0.932) 0.275 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, 2019 , 2018 and 2017, the Company’s legal reserve was Ps.291,178 or 9.8% our capital stock. At an ordinary general shareholders' meeting held on April 19, 2017 the shareholders approved to increase legal reserve in the amount of Ps.252,928. As of December 31, 2019, 2018 and 2017 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. 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 has to be authorized. |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2019 | |
Income tax | |
Income tax | 19. 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 rate for 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 2019, 2018 and 2017 in Guatemala, Costa Rica and El Salvador are 25%, 30%, and 30% respectively. b) For the years ended December 31, 2019, 2018 and 2017, the Company reported on a consolidated basis taxable income of Ps.938,304, Ps.777,513 and Ps.171,046, 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. c) An analysis of consolidated income tax expense for the years ended December 31, 2019, 2018 and 2017 is as follows: Consolidated statements of operations 2019 2018 2017 Current year income tax expense Ps. (281,491) Ps. (232,824) Ps. (51,313) Deferred income tax (expense) benefit (813,340) (1) 582,644 (2) (186,273) (3) Total income tax (expense) benefit Ps. (1,094,831) Ps. 349,820 Ps. (237,586) (1) Includes translation effect by Ps.(2,278) (2) Includes translation effect by Ps.2,680 (3) Includes translation effect by Ps.936 Consolidated statements of comprehensive income 2019 2018 2017 Deferred tax related to items recognized in OCI during the year Net (loss) gain on cash flow hedges Ps. (74,820) Ps. 85,107 Ps. 12,017 Remeasurement gain (loss) of employee benefits 3,058 (1,797) 533 Deferred tax charged to OCI Ps. (71,762) Ps. 83,310 Ps. 12,550 d) A reconciliation of the statutory corporate income tax rate to the Company’s effective tax rate for financial reporting purposes is as follows: 2019 2018 2017 Statutory income tax rate 30.00 % 30.00 % 30.00 % Non-deductible expenses 0.19 % (2.51) % 5.71 % Unrecorded deferred taxes on tax losses 0.27 % (3.96) % 21.31 % Foreign countries difference with Mexican statutory rate 0.11 % (0.02) % 0.48 % Inflation of tax losses (0.21) % 1.16 % (2.20) % Amendment tax return effects and other tax adjustments (0.51) % 0.05 % 3.78 % Inflation on furniture, intangible and equipment (0.48) % 2.08 % (7.19) % Annual inflation adjustment (0.05) % 0.26 % (5.87) % 29.32 % 27.06 % 46.02 % 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 year ended December 31, 2019 and 2018, the Company obtained a net operating (loss) income of Ps.(1,085) and Ps.8,549, 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, 2019, 2018 and 2017, the Company generated net operating losses for an amount of Ps.50,246, Ps.170,731 and Ps.300,613, 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, 2019, the Company obtained a net operating loss of Ps.32,494. e) An analysis of consolidated deferred taxes is as follows: 2019 2018 2017 Consolidated Consolidated Consolidated statement of Consolidated statement of Consolidated statement of Consolidated financial statement of financial statement of financial statement of position operations position operations position operations Adjusted Adjusted Deferred income tax assets: Lease liability Ps. 12,155,114 Ps. 313,137 Ps. 11,841,977 Ps. 2,108,422 Ps. 9,733,555 Ps. (59,235) Unearned transportation revenue 797,063 61,708 735,355 699,414 35,941 (29,814) Extension lease agreement 459,343 (137,639) 596,982 82,421 514,562 113,443 Intangible 446,849 (13,741) 460,590 (2,621) 463,211 (18,415) Provisions 351,345 60,655 290,690 (4,175) 294,865 (48,439) Tax losses available for offsetting against future taxable income 303,970 (5,350) 309,320 (33,759) 343,079 309,758 Allowance for doubtful accounts 14,089 9,187 4,902 (2,422) 7,324 433 Employee benefits 11,463 2,958 5,446 1,456 5,786 1,222 Employee profit sharing 7,227 2,734 4,493 1,777 2,716 (490) Non derivative financial instruments 4,229 4,229 — — — — Financial instruments (38,865) — 35,956 — (49,151) — 14,511,827 297,878 14,285,711 2,850,513 11,351,888 268,463 Deferred income tax liabilities: Right of use asset| 10,236,929 672,311 9,564,618 2,096,458 7,468,160 354,352 Supplemental rent 1,706,949 111,430 1,595,519 32,156 1,563,363 223,753 Rotable spare parts, furniture and equipment, net 884,476 239,452 645,024 168,107 476,917 108,890 Prepaid expenses and other assets 179,061 88,683 90,378 (25,686) 116,064 (239,586) Inventories 90,287 1,392 88,895 726 88,169 15,286 Other prepayments 27,728 (4,329) 32,057 (1,212) 33,269 (7,023) 13,125,430 1,108,939 12,016,491 2,270,549 9,745,942 455,672 Ps. 1,386,397 Ps. (811,061) Ps. 2,269,220 Ps. 579,964 Ps. 1,605,946 Ps. (187,209) Reflected in the consolidated statement of financial position as follows: 2019 2018 2017 Deferred tax assets Ps. 1,542,536 Ps. 3,392,240 Ps. 3,222,228 Deferred tax liabilities (156,139) (1,123,020) (1,616,282) Deferred tax assets, net Ps. 1,386,397 Ps. 2,269,220 Ps. 1,605,946 A reconciliation of deferred tax asset, net is as follows: 2019 2018 2017 Opening balance as of January 1, Ps. 2,269,220 Ps. 1,605,946 Ps. 1,780,605 Deferred income tax (expense) benefit during the current year recorded on profits (811,061) 579,964 (187,209) Deferred income tax (expense) benefit during the current year recorded in accumulated other comprehensive income (loss) (71,762) 83,310 12,550 Closing balance as of December 31, Ps. 1,386,397 Ps. 2,269,220 Ps. 1,605,946 At December 31, 2019, 2018 and 2017, the table shown above includes deferred income tax asset recognized by Concesionaria and Operaciones Volaris (2018), Comercializadora (2017) 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 at December 31, 2019, 2018 and 2017 a deferred tax asset for tax losses of Ps.303,970, Ps.309,320 and Ps.343,079 respectively. During 2017, the Company recognized a deferred tax asset for the carry-forward of available tax losses of Concesionaria, Comercializadora and Operaciones Volaris, 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 and Operaciones Volaris, respectively, is derived directly from Concesionaria’s operations. An analysis of the available tax losses carry-forward of the Company at December 31, 2019 is as follows: Year Historical Adjusted Total remaining Year of of loss loss tax loss Utilized amount expiration 2016 Ps. 26,658 Ps. 26,658 Ps. 26,658 Ps. — 2017 228,413 228,413 88,752 139,661 2017 1,068,498 1,176,068 218,110 957,958 2018 170,049 170,049 — 170,049 2018 3,192 3,299 3,299 — 2019 50,246 50,246 — 50,246 2019 4,922 5,028 — 5,028 Ps. 1,551,978 Ps. 1,659,761 Ps. 336,819 Ps. 1,322,942 A breakdown of available tax loss carry-forward of Controladora and its subsidiaries at December 31, 2019 is as follows: Historical Adjusted Total loss tax loss Utilized remaining amount Comercializadora Ps. 4,922 Ps. 5,028 Ps. — Ps. 5,028 Concesionaria 1,067,836 1,175,351 217,393 957,958 Operaciones Volaris 3,853 4,016 4,016 — Vuela Aviación 475,367 475,366 115,410 359,956 Ps. 1,551,978 Ps. 1,659,761 Ps. 336,819 Ps. 1,322,942 Unrecognized NOLs (309,710) Ps. 1,013,232 Tax rate 30 % Deferred income tax Ps. 303,970 f) At December 31, 2019 the Company had the following tax balances: 2019 Adjusted contributed capital account ( Cuenta de capital de aportación or “CUCA”) Ps. 4,028,022 CUFIN* 3,847,209 *The calculation comprises all the subsidiaries of the Company. |
Other operating income and expe
Other operating income and expenses | 12 Months Ended |
Dec. 31, 2019 | |
Other operating income and expenses | |
Other operating income and expenses | 20. Other operating income and expenses An analysis of other operating income is as follows: 2019 2018 2017 Gain on sale and leaseback Ps. 284,759 Ps. 609,168 Ps. 65,886 Loss on sale of rotable spare parts furniture and equipment (8,954) (2,356) (908) Administrative benefits — — 27,180 Other income 51,403 15,161 4,607 Ps. 327,208 Ps. 621,973 Ps. 96,765 An analysis of other operating expenses is as follows: 2019 2018 2017 Administrative and operational support expenses Ps. 581,181 Ps. 536,079 Ps. 539,101 Technology and communications 381,055 385,841 373,394 Passenger services 65,477 70,337 59,261 Insurance 74,661 60,892 54,569 Others 10,553 5,949 7,933 Ps. 1,112,927 Ps. 1,059,098 Ps. 1,034,258 |
Finance income and cost
Finance income and cost | 12 Months Ended |
Dec. 31, 2019 | |
Finance income and cost | |
Finance income and cost | 21. Finance income and cost An analysis of finance income is as follows: 2019 2018 2017 Interest on cash and equivalents Ps. 201,191 Ps. 152,437 Ps. 105,151 Interest on asset backed trust notes 6,525 — — Interest on recovery of guarantee deposits 83 166 644 Ps. 207,799 Ps. 152,603 Ps. 105,795 An analysis of finance cost is as follows: 2019 2018 2017 Leases financial cost Ps. 2,128,162 Ps. 1,755,978 Ps. 1,428,924 Interest on asset backed trust notes 80,314 — — Cost of letter credit notes 49,856 57,277 42,294 Bank fees and others 3,607 6,141 5,279 Interest on debts and borrowings* 1,660 56,916 37,565 Other finance costs 6,230 — 1,219 Ps. 2,269,829 Ps. 1,876,312 Ps. 1,515,281 * 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. 2019 2018 2017 Interest on debts and borrowings Ps. 457,973 Ps. 414,836 Ps. 230,954 Capitalized interest (Note 12) (456,313) (357,920) (193,389) Net interest on debts and borrowing in the consolidated statements of operations Ps. 1,660 Ps. 56,916 Ps. 37,565 |
Components of other comprehensi
Components of other comprehensive income (loss) | 12 Months Ended |
Dec. 31, 2019 | |
Components of other comprehensive income (loss) | |
Components of other comprehensive income (loss) | 22. Components of other comprehensive income (loss) An analysis of the other comprehensive income for the years ended December 31, 2019, 2018 and 2017 is as follows: 2019 2018 2017 Derivative financial instruments: Reclassification of call options and forwards during the year to profit or loss (Note 4) Ps. — Ps. (455,009) Ps. 52,097 Extrinsic value of changes on jet fuel Asian call options 11,148 227,509 (81,182) Extrinsic value of changes on jet fuel Zero cost collars 256,515 (122,948) — (Loss) gain of the matured foreign currency forward contracts (14,241) 66,757 (13,380) Gain of the not-yet matured interest rate swap contracts — — 317 Loss of the interest rate Cap (4,023) — — Non derivative financial instruments 14,096 — — Total Ps. 263,495 Ps. (283,691) Ps. (42,148) |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and contingencies | |
Commitments and contingencies | 23. 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 U.S. equivalent in dollars Mexican pesos (1) 2020 US$ 141,218 Ps. 2,661,281 2021 164,856 3,106,744 2022 606,842 11,436,059 2023 793,967 14,962,467 2024 and thereafter 2,688,321 50,661,947 US$ 4,395,204 Ps. 82,828,498 (1) Using the exchange rate as of December 31, 2019 of Ps.18.8452. All aircraft acquired by the Company through the Airbus purchase agreement through December 31, 2019 have been executed through sale and leaseback transactions. In addition, we have commitments to execute sale and leaseback over the next three years. The estimated proceeds from these commitments are as follows: Aircraft sale prices estimated in U.S. dollars in Mexican pesos 2020 US$ 396,470 Ps. 7,471,556 2021 691,940 13,039,748 2022 102,400 1,929,748 US$ 1,190,810 Ps. 22,441,052 The future lease payments for these non-cancellable sale and leaseback contracts are as follows: Aircraft leases in U.S. dollars in Mexican pesos 2020 US$ 20,847 Ps. 392,866 2021 57,190 1,077,757 2022 86,025 1,621,158 2023 88,259 1,663,259 2024 and thereafter 806,786 15,204,044 US$ 1,059,107 Ps. 19,959,084 Litigation The Company is a party to legal proceedings and claims that arise during the ordinary course of business. The Company believes the ultimate outcome of these matters will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. |
Operating segments
Operating segments | 12 Months Ended |
Dec. 31, 2019 | |
Operating segments | |
Operating segments | 24. Operating segments The Company is managed as a single business unit that provides air transportation services. The Company has two geographic segments identified below: 2019 2018 2017 Operating revenues: Domestic (Mexico) Ps. 24,594,797 Ps. 18,493,476 Ps. 17,272,946 International: United States of America and Central America* 10,230,824 8,811,674 7,515,240 Non-derivative financial instruments (72,949) — — Total operating revenues Ps. 34,752,672 Ps. 27,305,150 Ps. 24,788,186 *United States of America represents approximately 29%, 31% and 29% of total revenues from external customers in 2019, 2018 and 2017, respectively. 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. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent events | |
Subsequent events | 25. Subsequent events Subsequent to December 31, 2019 and through April 27, 2020: a) On February 21, 2020, the Mexican federal government through the Mexican Communications and Transportation Ministry granted to the Company, through its subsidiary Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. the renewal of the Concession to provide air transportation services for passengers, cargo and mail throughout Mexico and abroad, contained in the Title TAN-OR-VCV, for a period of twenty (20) years starting from May 9, 2020. b) Subsequent to the closing date of the financial statements as of December 31, 2019, there has been a significant variation in the exchange rate from Ps.18.8452 to Ps.24.6230 per dollar to April 27, 2020 which represent a depreciation of 30.7% of the Mexican Peso. c) The ongoing outbreak of COVID-19 was first reported on December 31, 2019 in Wuhan, Hubei Province, China. From Wuhan, the disease spread rapidly to other parts of China as well as other countries, including Mexico and the United States, growing into a global pandemic. Since the outbreak began, countries have responded by taking various measures including imposing quarantines and medical screenings, restricting travel, limiting public gatherings and suspending certain activities. The Company decreased capacity as measured by available seat miles (ASMs) for the month of April 2020 by approximately 80% of total operation versus the originally published schedule, due to the negative effects of COVID-19, declared a pandemic by the World Health Organization, and related governmental travel restrictions, which have significantly reduced the demand for global air transportation. On April 21, 2020, the General Health Council (GHG) announced that Mexico is in "Phase 3" of the spread of the COVID-19, the most serious stage, as transmission of the virus is intensifying. Mexico has extended governmental restrictions to contain the COVID-19 until May 30, 2020 and plans to begin easing up restrictions from June 1, 2020 onwards if the current measures are successful. As result, Volaris will carry out a capacity reduction for the month of May 2020 of approximately 90% versus the originally scheduled capacity. d) The Company has taken actions to preserve liquidity and sustain its operations during the contingent period, establishing supplier’s payment deferral agreements, reducing management’s and operational staff compensation under temporary and voluntary leaves of absence, deferring and cutting capital expenditures to the minimum and non-essential operational expenses and certain other measures, while the operations are significantly reduced as a result of the COVID-19 pandemic. |
Description of the business a_2
Description of the business and summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019, 2018 and 2017 and for each of the three years in the period then ended, 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 the entity operates (“functional currency”). The presentation currency of the Company’s consolidated financial statements is the Mexican peso, which is used also for compliance with its legal and tax 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. The Company presents an additional statement of financial position at January 1, 2017, due to a retrospective application of accounting policies as a result of the adoption of IFRS 16 “Leases” see Note 1 p) and x). 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 and investments in marketable securities measured at fair value through profit and loss (“FVTPL”). 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. At December 31, 2019, 2018 and 2017, for accounting purposes the companies included in the consolidated financial statements are as follows: Principal % Equity interest Name Activities Country 2019 2018 2017 Concesionaria Air transportation services for passengers, cargo and mail throughout Mexico and abroad Mexico 100 % 100 % 100 % Vuela Aviación, S.A. Air transportation services for passengers, cargo and mail in Costa Rica and abroad Costa Rica 100 % 100 % 100 % Vuela, S.A. (“Vuela”) * Air transportation services for passengers, cargo and mail in Guatemala and abroad Guatemala 100 % 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. Merchandising of services Mexico 100 % 100 % 100 % Servicios Earhart, S.A.* Recruitment and payroll Guatemala 100 % 100 % 100 % Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”) Recruitment and payroll Mexico 100 % 100 % 100 % Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) Recruitment and payroll Mexico 100 % 100 % 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”) (1) Travel agency Mexico 100 % 100 % 100 % Deutsche Bank México, S.A., Trust 1710 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % Deutsche Bank México, S.A., Trust 1711 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % Irrevocable Administrative Trust number F/307750 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % 100 % Irrevocable Administrative Trust number F/745291 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % 100 % Irrevocable Administrative Trust number CIB/3081 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % — Irrevocable Administrative Trust number CIB/3249 “Administrative Trust” Asset backed securities trustor & administrator (Note 5) Mexico 100 % — — *The Companies have not started operations yet in Guatemala and El Salvador. **The Company has not started operations yet (1) With effect from July 16, 2018, the name of the Company was changed from Operaciones Volaris, S.A. de C.V. to Viajes Vuela, S.A. de C.V. 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. 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 exchange rates prevailing at the dates of the transactions. 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, as a modification of the tickets sold to V Club members. Tickets sold by other airlines where the Company provides the transportation are recognized as passenger revenue when the service is provided. 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 partners, the Company has determined that it is acting as an agent on behalf of the other airlines as they are responsible for their 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 airlines. 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. 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 does not have any obligations for returns, refunds and other similar obligations. All revenues from the Company related to future services, or services are rendered through a period of time less than 12 months. Breakdown of revenues: As of December 31, 2019, 2018 and 2017, the revenues from customers of contracts is described as follows: 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 At the flight time At the sale Total Revenue recognition as of December 31, 2018 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 12,336,095 Ps. 6,151,763 Ps. — Ps. — Ps. 18,487,858 Other Passenger Revenues 5,182,572 2,598,375 68,264 43,286 7,892,497 17,518,667 8,750,138 68,264 43,286 26,380,355 Non-Passenger Revenues Other Non-Passenger revenues 685,219 12,138 — — 697,357 Cargo 221,324 6,114 — — 227,438 Total Ps. 18,425,210 Ps. 8,768,390 Ps. 68,264 Ps. 43,286 Ps. 27,305,150 At the flight time At the sale Total Revenue recognition as of December 31, 2017 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 12,284,795 Ps. 5,506,522 Ps. — Ps. — Ps. 17,791,317 Other Passenger Revenues 4,087,664 1,992,696 11,283 6,861 6,098,504 16,372,459 7,499,218 11,283 6,861 23,889,821 Non-Passenger Revenues Other Non-Passenger revenues 723,297 4,095 — — 727,392 Cargo 165,907 5,066 — — 170,973 Total Ps. 17,261,663 Ps. 7,508,379 Ps. 11,283 Ps. 6,861 Ps. 24,788,186 Transactions from unearned transportation revenues. 2019 2018 2017 January 1, Ps. 2,438,516 Ps. 2,293,309 Ps. 2,228,051 Deferred 34,940,609 26,525,562 23,955,079 Recognized in revenue during the year (33,699,199) (26,380,355) (23,889,821) December 31, Ps. 3,679,926 Ps. 2,438,516 Ps. 2,293,309 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. |
Cash and cash equivalents | e) Cash and cash equivalents 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 doesn’t have significant cash reserve requirements. |
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 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. Derivative financial instruments are designated for hedging purposes under the cash flow hedge (“CFH”) accounting model and are measured at fair value. 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 c) 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 impaired in the Cash Generating Units (CGU). An impairment exists if one or more events has 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 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 records allowance for credit losses in accordance with the objective evidence of the incurred losses. Based on this evaluation, allowances are taken into account for the expected losses of these receivables. For the years ended December 31, 2019, 2018 and 2017, the Company recorded expected credit losses on accounts receivable of Ps.40,393, Ps.10,621 and Ps.4,720, respectively (Note 8). iii) Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, 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 EIR method. 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. During the years ended December 31, 2019, 2018 and 2017 the Company has not designated any financial liability as at FVTPL. 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 on the basis of the method of specific identification and expensed when 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, 2019, 2018 and 2017, the Company did not record any impairment loss in the value of its intangible assets. |
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). Aircraft maintenance deposits paid to lessors Most of the Company’s lease agreements require the Company to pay maintenance deposits to aircraft lessors to be held as collateral in advance of the Company’s performance of major maintenance activities. These lease agreements provide that maintenance deposits are reimbursable to the Company upon completion of the maintenance event in an amount equal to the lesser of (i) the amount of the maintenance deposits held by the lessor associated with the specific maintenance event, or (ii) the qualifying costs related to the specific maintenance event. Substantially all these maintenance deposits are calculated based on a utilization measure of the leased aircrafts and engines, such as flight hours or cycles, and are used solely to collateralize the lessor for maintenance time run off the aircraft and engines until the completion of the maintenance of the aircraft and engines. Maintenance deposits expected to be recovered from lessors are reflected as guarantee deposits in the accompanying consolidated statement of financial position. These deposits are recorded as a monetary asset and are revaluated in order to record the foreign currency changes at each reported period. The Company makes certain assumptions at the inception of the lease and at each consolidated statement of financial position date to determine the recoverability of maintenance deposits. These assumptions are based on various factors such as the estimated time between the maintenance events, the date the aircraft is due to be returned to the lessor, and the number of flight hours the aircraft and engines is estimated to be utilized before it is returned to the lessor. Some other aircraft lease agreements do not require the obligation to pay maintenance deposits to lessors in advance in order to ensure major maintenance activities, so the Company does not record guarantee deposits regarding these aircraft. However, certain of these lease agreements include the obligation to make a maintenance adjustment payment to the lessors at the end of the lease period. These maintenance adjustments cover maintenance events that are not expected to be made before the termination of the lease; for such agreements the Company accrues a liability related to the amount of the costs to be incurred at the lease term, since no maintenance deposits had been made, Note 15c). The portion of prepaid maintenance deposits that is deemed unlikely to be recovered and accruals in lien of maintenance deposits, are recorded as a variable lease payment and is presented as supplemental rent in the consolidated statements of operations. For the years ended December 31, 2019, 2018 and 2017, the Company expensed as supplemental rent Ps. 295,720, Ps. 299,601 and Ps. 265,756, respectively. During the year ended December 31, 2019, 2018 and 2017, the Company added seven, ten and five new net leases aircraft to its fleet, respectively (Note 14). During the years ended December 31, 2019, 2018 and 2017, the Company extended the lease term of one, two and three aircraft agreements, respectively. Additionally, the Company extended the lease term of one spare engines in 2019, two spare engines in 2018 and two spare engines during 2017. These extensions made available to the Company maintenance deposits that were recognized in prior periods in the consolidated statements of operations as supplemental rent of Ps. 0, Ps.0 and Ps.65,716 during 2019, 2018 and 2017, respectively. The maintenance event for which the maintenance deposits were previously expensed was scheduled to occur after the original lease term and as such the supplemental rental payments were expensed. However, when the leases were amended the maintenance deposits amounts became probable of recovery due to the longer lease term and as such they are being recognized as an asset. The effect of these lease extensions was recognized as a lease incentive reducing the right of use asset (Note 14). |
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 typically are required approximately every 22 months. 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 approximately 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 usage. The United States Federal Aviation Administration (“FAA”) and the Mexican Federal Civil Aviation Agency (Agencia Federal de Aviación Civil) 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, 2019, 2018 and 2017, the Company capitalized major maintenance events as part of leasehold improvements to flight equipment for an amount of Ps.659,082, Ps.676,457 and Ps.529,331, respectively (Note 12).For the years ended December 31, 2019, 2018 and 2017, the amortization of major maintenance leasehold improvement costs was Ps.450,371, Ps.313,464 and Ps.382,745 respectively (Note 12). 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 12d). 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. During the years ended December 31, 2019, 2018 and 2017, the Company capitalized borrowing costs which amounted to Ps. 456,313 Ps. 357,920 and Ps.193,389, respectively (Note 21). The rate used to determine the amount of borrowing cost was 5.10%, 4.41% and 3.30%, for the years ended December 31, 2019, 2018 and 2017, respectively. 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 and salvage values of these assets and any changes are accounted for prospectively. The Company assesses, at each reporting date, whether there is an objective evidence that rotable spare parts, furniture and equipment and right of use asset are impaired in the Cash Generating Unit (CGU). The Company identified only one CGU, which is the fleet. 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. During 2019, the Company performed its annual impairment test. The recoverable amount of rotable spare parts, furniture and equipment assets 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 fair value less costs of disposal did not exceed the value in use. Consequently, for the years ended December 31, 2019, 2018 and 2017, there were no impairment charges recorded in respect of the Company’s value of rotable spare parts, furniture and equipment. |
Foreign currency transactions and exchange differences | m) Foreign currency transactions and exchange differences The Company’s consolidated financial statements are presented in Mexican peso, which is the reporting and functional 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 the entity operates (“the functional currency”). The financial statements of foreign subsidiaries prepared under IFRS and denominated in their respective local currencies, are translated into the 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 were translated at the exchange rate at the consolidated statement of financial position date. · All non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. · 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 translation are recognized in the consolidated statements of operations. For the year ended December 31, 2019, 2018 and 2017, 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 2019 as of 2019 for 2018 as of 2018 for 2017 as of 2017 Costa Rica Colon U.S. dollar ₵. 590.9574 ₵. 573.4400 ₵. 580.8534 ₵. 609.6100 ₵. 572.2000 ₵. 572.5600 Guatemala Quetzal U.S. dollar Q. 7.7066 Q. 7.6988 Q. 7.5337 Q. 7.7440 Q. 7.3509 Q. 7.3448 El Salvador U.S Dollar U.S. dollar $. $. $. — $. — $. — $. — The exchange rates used to translate the above amounts to Mexican pesos at December 31, 2019, 2018 and 2017, were Ps.18.8452, Ps.19.6829 and Ps.19.7354, respectively, per U.S. dollar. Foreign currency differences arising on translation into the presentation currency are recognized in OCI. Exchange differences on translation of foreign entities for the year ended December 31, 2019, 2018 and 2017, were Ps.8,045, Ps.22,156 and Ps. (7,178), 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, 2019, 2018 and 2017, 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, 2019. 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, 2019, 2018 and 2017 the Company expensed Ps.62,825, Ps.67,680 and Ps.48,384, 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. During the years ended December 31, 2019, 2018 and 2017 the Company recorded an expense for an amount of Ps.80,634, Ps.50,000, and Ps.0, respectively, under the caption salaries and benefits. 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. During 2019 and 2018, 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 17). During the years ended December 31, 2019, 2018 and 2017, the Company expensed Ps. 49,659, Ps.19,980 and Ps.13,508, 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 17).During the years ended December 31, 2019, 2018 and 2017, the Company recorded an expense (benefit) for Ps. 2,964, Ps.(186), Ps.(8,999), respectively, related to the SARs included in the LTIP. These amounts were recorded under the caption salaries and benefits. 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 requisite service period (Note 17). 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 17). During the years ended December 31, 2019, 2018 and 2017, the Company recorded an expense (benefit) for Ps.37,760, Ps.(5,052) and Ps.(16,499), 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 four years period with an exercise price share at Ps.16.12, 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 2019, 2018 and 2017, the employee profit sharing is Ps.22,134, Ps.14,106 and Ps.8,342, respectively, and is presented as an 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 regulation. |
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 of time 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 to make lease payments and right-of-use assets representing the right to use the underlying assets. i) Right-of-use assets The Company recognize 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 14 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, 2019, 2018 and 2017, 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. Since January 1, 2019 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. The rest of the gain is amortized over the lease term. Before to the IFRS 16 adoption, the profit or loss related to a sale transaction followed by an operating lease, is accounted for as follows: (i) Profit or loss was recognized immediately when it was clear that the transaction is established at fair value. (ii) If the sale price was at or below fair value, any profit or loss was recognized immediately. However, if the loss was compensated for by future lease payments at below market price, such loss was recognized as an asset in the consolidated statements of financial position and amortized to the consolidated statements of operations in proportion to the lease payments over the contractual lease term. (iii) If the sale price was above fair value, the excess of the price above the fair value was deferred and amortized to the consolidated statements of operations over the asset’s expected lease term, including probable renewals, with the amortization recorded as a reduction of rent expense. iv) 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 in most cases 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 rent 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, 2019, 2018 and 2017, the Company expensed as variable rent of Ps. 680,964, Ps.659,106 and Ps.851,410, respectively. |
Other taxes and fees payable | q) 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 | r) 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 provided using the liability method on 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 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. The charge for income taxes incurred is computed based on tax laws approved in Mexico, Costa Rica, Guatemala and El Salvador at the date of the consolidated statement of financial position. |
Derivative financial instruments and hedge accounting | s) 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. During the years ended December 31, 2019, 2018 and 2017, there was no ineffectiveness with respect to derivative financial instruments. The amounts recognized in OCI are transferred to earnings in the period in which the hedged transaction affects earnings. 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. 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 | t) 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 | u) 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, issue 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 are settled with treasury shares (Note 17). |
Operating segments | v) 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 and Central America) Note 24. |
Current versus non-current classification | w) 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 | x) 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, 2019. The Company has not early adopted any other standard interpretation or amendment that has been issued but is not yet effective.Although these new standards and amendments applied for the first time in 2019, except for IFRS 16, that have a material impact on the annual consolidated financial statements of the Company. The nature and the impact of these changes to each new standard and amendment are described below: IFRIC 22 — Foreign Currency Transactions and Advance Considerations IFRIC 22 clarifies that 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 an entity initially recognizes the non-monetary asset or non-monetary liability arising from the advance consideration. This interpretation does not have any impact on the Company’s consolidated financial statements. Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions The IASB issued amendments to IFRS 2 Share-based Payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and other criteria are met. The Company’s accounting policy for cash-settled share-based payments is consistent with the approach clarified in the amendments. In addition, the Company has no share-based payment transaction with net settlement features for withholding tax obligations and had not made any modifications to the terms and conditions of its share-based payment transaction. Therefore, these amendments do not have any impact on the consolidated financial statements. IFRIC 23 Uncertainty over Income Tax Treatment The Interpretation 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. 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 study, that it is probable that its tax treatments (including those for the subsidiaries) will be accepted by the taxation authorities. The Interpretation did not have an impact on the consolidated financial statements of the Company. Amendments to IFRS 9 Prepayment Features with Negative Compensation Under IFRS 9, a debt instrument can be measured at amortized cost or at fair value through other comprehensive income, provided that the contractual cash flows are ‘solely payments of principal and interest on the principal amount outstanding’ (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to IFRS 9 clarify that a financial asset passes the SPPI criterion regardless of an event or circumstance that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract. These amendments had no impact on the consolidated financial statements of the Company. Amendments to IAS 19 Plan Amendment, Curtailment or Settlement The amendments to IAS 19 address the accounting when a plan amendment, curtailment or settlement occurs during a reporting period. The amendments specify that when a plan amendment, curtailment or settlement occurs during the annual reporting period, an entity is required to determine the current service cost for the remainder of the period after the plan amendment, curtailment or settlement, using the actuarial assumptions used to remeasure the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event. An entity is also required to determine the net interest for the remainder of the period after the plan amendment, curtailment or settlement using the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event, and the discount rate used to remeasure that net defined benefit liability (asset). The amendments had no impact on the consolidated financial statements of the Company as it did not have any plan amendments, curtailments, or settlements during the period. IFRS 16 Leases IFRS 16 is effective for annual periods beginning on or after January 1, 2019 and supersedes IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to recognize most leases on the balance sheet. The Company adopted IFRS 16 using the full retrospective method of adoption, with the date of initial application of January 1, 2019. The Company elected to use the transition provision allowing it to opt not to reassess whether a contract is, or contains, a lease at January 1, 2019. Instead, the Company applied the standard only to contracts that were previously identified as leases according to IAS 17 and IFRIC 4 at the date of initial application. The Company also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option (short-term leases), and lease contracts for which the underlying asset is of low value (low-value assets). Impact of adoption on the consolidated statements of financial position The effect of adopting IFRS 16 is, as follows: Impact on the consolidated statement of financial position (increase/(decrease)): As of As of December 31, December 31, As of January 1, 2018 2017 2017 Assets Non-current assets Right-of-use-assets Ps. 31,882,053 Ps. 24,893,882 Ps. 23,500,081 Deferred income tax 2,725,037 2,636,821 3,042,344 Prepaid expenses (266,959) (266,959) (266,959) Liabilities Short-term liabilities: Lease liabilities 4,976,454 4,213,417 4,237,065 Other liabilities (91,889) (78,494) (68,548) Long-term liabilities: Lease liabilities 34,588,692 28,310,287 28,474,728 Other liabilities 1,492,260 1,238,088 997,979 Equity Retained losses Ps. (6,625,386) Ps. (6,419,554) Ps. (7,365,758) Impact on the consolidated statement of profit or loss (increase/(decrease)): For the year For the year ended December ended December 31, 2018 31, 2017 Depreciation expense Ps. 4,043,691 Ps. 3,437,903 Lease benefit (5,543,655) (4,807,378) Operating income (1,499,964) (1,369,475) Finance cost 1,755,978 1,428,924 Foreign exchange loss (gain), net 31,315 (1,476,893) Income tax (benefit) expense (88,216) 405,523 Net loss (income) for the period Ps. 199,113 Ps. (1,011,921) Impact on consolidated statement of cash flows (increase/(decrease)): For the year For the year ended December ended December 31, 2018 31, 2017 Lease payments (5,710,907) (5,032,898) Net cash flows from operating activities Ps. 5,710,907 Ps. 5,032,898 Payment of principal portion of lease liabilities 5,710,907 5,032,898 Net cash flows from financing activities Ps. (5,710,907) Ps. (5,032,898) Due to the adoption of IFRS 16, it is expected that the Company operating profit should improve, while its interest expense should increase. This is due to the change in the accounting for expenses of leases that were classified as operating leases under IAS 17. Upon adoption of IFRS 16, the Company applied a single recognition and measurement approach for all leases for which it is the lessee, except for short-term leases and leases of low-value assets. The Company recognized lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. In accordance with the full retrospective method of adoption, the Company applied IFRS 16 at the date of initial application as if it had already been effective at the commencement date of existing lease contracts. IAS 12 Income Taxes The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognizes the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where it originally recognized those past transactions or events. An entity applies the amendments for annual reporting periods beginning on or after January 1 st , 2019, with early application permitted. When the entity first applies those amendments, it applies them to the income tax consequences of dividends recognized on or after the beginning of the earliest comparative period. Since the Company’s current practice is in line with these amendments, they had no impact on the consolidated financial statements of the Company. IAS 23 Borrowing Costs The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to develop a qualifying asset when substantially all the activities necessary to prepare that asset for its intended use or sale are complete. The entity applies the amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which the entity first applies those amendments. An entity applies those amendments for annual reporting periods beginning on or after January 1 st , 2019, with early application permitted. Since the Company’s current practice is in line with these amendments, they had no impact on the consolidated financial statements of the Company. Standards issued but not yet effective Amendments to IAS 1 and IAS 8: Definition of Material in October 2018, the IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to align the definition of “material” across the standards and to clarify certain aspects of the definition. The new definition states that, “Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purposes financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments to the definition of material is not expected to have a significant impact on the Company’s consolidated financial statements. |
Convenience translation | y) Convenience translation U.S. dollar amounts at December 31, 2019 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.18.8452 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, 2019. 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 solely for information purposes and does not represent that the amounts are in accordance with IFRS 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. |
Description of the business a_3
Description of the business and summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 2019 2018 2017 Concesionaria Air transportation services for passengers, cargo and mail throughout Mexico and abroad Mexico 100 % 100 % 100 % Vuela Aviación, S.A. Air transportation services for passengers, cargo and mail in Costa Rica and abroad Costa Rica 100 % 100 % 100 % Vuela, S.A. (“Vuela”) * Air transportation services for passengers, cargo and mail in Guatemala and abroad Guatemala 100 % 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. Merchandising of services Mexico 100 % 100 % 100 % Servicios Earhart, S.A.* Recruitment and payroll Guatemala 100 % 100 % 100 % Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”) Recruitment and payroll Mexico 100 % 100 % 100 % Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) Recruitment and payroll Mexico 100 % 100 % 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”) (1) Travel agency Mexico 100 % 100 % 100 % Deutsche Bank México, S.A., Trust 1710 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % Deutsche Bank México, S.A., Trust 1711 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % Irrevocable Administrative Trust number F/307750 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % 100 % Irrevocable Administrative Trust number F/745291 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % 100 % Irrevocable Administrative Trust number CIB/3081 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % — Irrevocable Administrative Trust number CIB/3249 “Administrative Trust” Asset backed securities trustor & administrator (Note 5) Mexico 100 % — — *The Companies have not started operations yet in Guatemala and El Salvador. **The Company has not started operations yet (1) With effect from July 16, 2018, the name of the Company was changed from Operaciones Volaris, S.A. de C.V. to Viajes Vuela, S.A. de C.V. |
Schedule of breakdown of revenues | 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 At the flight time At the sale Total Revenue recognition as of December 31, 2018 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 12,336,095 Ps. 6,151,763 Ps. — Ps. — Ps. 18,487,858 Other Passenger Revenues 5,182,572 2,598,375 68,264 43,286 7,892,497 17,518,667 8,750,138 68,264 43,286 26,380,355 Non-Passenger Revenues Other Non-Passenger revenues 685,219 12,138 — — 697,357 Cargo 221,324 6,114 — — 227,438 Total Ps. 18,425,210 Ps. 8,768,390 Ps. 68,264 Ps. 43,286 Ps. 27,305,150 At the flight time At the sale Total Revenue recognition as of December 31, 2017 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 12,284,795 Ps. 5,506,522 Ps. — Ps. — Ps. 17,791,317 Other Passenger Revenues 4,087,664 1,992,696 11,283 6,861 6,098,504 16,372,459 7,499,218 11,283 6,861 23,889,821 Non-Passenger Revenues Other Non-Passenger revenues 723,297 4,095 — — 727,392 Cargo 165,907 5,066 — — 170,973 Total Ps. 17,261,663 Ps. 7,508,379 Ps. 11,283 Ps. 6,861 Ps. 24,788,186 |
Schedule of transactions from unearned transportation revenues | 2019 2018 2017 January 1, Ps. 2,438,516 Ps. 2,293,309 Ps. 2,228,051 Deferred 34,940,609 26,525,562 23,955,079 Recognized in revenue during the year (33,699,199) (26,380,355) (23,889,821) December 31, Ps. 3,679,926 Ps. 2,438,516 Ps. 2,293,309 |
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 2019 as of 2019 for 2018 as of 2018 for 2017 as of 2017 Costa Rica Colon U.S. dollar ₵. 590.9574 ₵. 573.4400 ₵. 580.8534 ₵. 609.6100 ₵. 572.2000 ₵. 572.5600 Guatemala Quetzal U.S. dollar Q. 7.7066 Q. 7.6988 Q. 7.5337 Q. 7.7440 Q. 7.3509 Q. 7.3448 El Salvador U.S Dollar U.S. dollar $. $. $. — $. — $. — $. — |
Summary of estimated useful lives of the assets | Aircraft and engines up to 18 years Spare engines up to 14 years Buildings leases one to ten years Maintenance component up to eight years |
Schedule of impact of adoption of IFRS 16 (Leases) on the consolidated financial statements | Impact on the consolidated statement of financial position (increase/(decrease)): As of As of December 31, December 31, As of January 1, 2018 2017 2017 Assets Non-current assets Right-of-use-assets Ps. 31,882,053 Ps. 24,893,882 Ps. 23,500,081 Deferred income tax 2,725,037 2,636,821 3,042,344 Prepaid expenses (266,959) (266,959) (266,959) Liabilities Short-term liabilities: Lease liabilities 4,976,454 4,213,417 4,237,065 Other liabilities (91,889) (78,494) (68,548) Long-term liabilities: Lease liabilities 34,588,692 28,310,287 28,474,728 Other liabilities 1,492,260 1,238,088 997,979 Equity Retained losses Ps. (6,625,386) Ps. (6,419,554) Ps. (7,365,758) Impact on the consolidated statement of profit or loss (increase/(decrease)): For the year For the year ended December ended December 31, 2018 31, 2017 Depreciation expense Ps. 4,043,691 Ps. 3,437,903 Lease benefit (5,543,655) (4,807,378) Operating income (1,499,964) (1,369,475) Finance cost 1,755,978 1,428,924 Foreign exchange loss (gain), net 31,315 (1,476,893) Income tax (benefit) expense (88,216) 405,523 Net loss (income) for the period Ps. 199,113 Ps. (1,011,921) Impact on consolidated statement of cash flows (increase/(decrease)): For the year For the year ended December ended December 31, 2018 31, 2017 Lease payments (5,710,907) (5,032,898) Net cash flows from operating activities Ps. 5,710,907 Ps. 5,032,898 Payment of principal portion of lease liabilities 5,710,907 5,032,898 Net cash flows from financing activities Ps. (5,710,907) Ps. (5,032,898) |
Financial instruments and ris_2
Financial instruments and risk management (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial instruments and risk management | |
Schedule of notional amounts and strike prices of derivative financial instruments | Position as of December 31, 2019 Jet fuel Zero-Cost Collar collars option contracts maturities 1 Half 2020 2 Half 2020 2020 Total Jet fuel risk Zero-Cost collars Notional volume in gallons (thousands)* 34,480 22,164 56,644 Strike price agreed rate per gallon (U.S. dollars)** US$ / US$ / US$ / Approximate percentage of hedge (of expected consumption value) 25 % 15 % 20 % All-in Approximate percentage of hedge (of expected consumption value) 25 % 15 % 20 % * US Gulf Coast Jet 54 as underlying asset ** Weighted average Position as of December 31, 2018 Jet fuel Asian call and Zero-Cost collars option contracts maturities 1 Half 2019 2 Half 2019 2019 Total Jet fuel risk Asian Calls Notional volume in gallons (thousands)* 12,790 13,842 26,632 Strike price agreed rate per gallon (U.S.dollars) ** US$ 1.84 1.84 US$ 1.84 Approximate percentage of hedge (of expected consumption value) 10 % 10 % 10 % Jet fuel risk Zero-Cost collars Notional volume in gallons (thousands)* 18,963 — 18,963 Strike price agreed rate per gallon (U.S. dollars) ** US$ / US$ — US$ 1.91 / Approximate percentage of hedge (of expected consumption value) 15 % — % 15 % All-in Approximate percentage of hedge (of expected consumption value) 25 % 10 % 18 % * US Gulf Coast Jet 54 as underlying asset ** Weighted average Position as of December 31, 2017 Jet fuel Asian call option contracts maturities Jet fuel risk Asian Calls 1 Half 2018 2 Half 2018 2018 Total Notional volume in gallons (thousands)* 69,518 61,863 131,381 Strike price agreed rate per gallon (U.S. dollars) ** US$ 1.6861 US$ 1.8106 US$ 1.7447 Approximate percentage of hedge (of expected consumption value) 60 % 50 % 55 % * US Gulf Coast Jet 54 as underlying asset ** Weighted average |
Schedule of sensitivity of US Gulf Coast Jet Fuel 54 Zero Cost Collars to a reasonably possible change in fuel prices, with all other variables held constant, on the caption of accumulated other comprehensive income | : Sensitivity of position as of December 31, 2019 effect on equity (U.S. dollars) US Gulf Coast Jet Fuel 54 spot level +5% +4.52M -5% -4.52M Please note this sensitivity was calculated with the net position delta of the portfolio, as change on the underlying price is small enough to be a good proxy |
Schedule of foreign exchange exposure | Thousands of U.S. dollars 2019 2018 2017 Assets: Cash and cash equivalents US$ 373,099 US$ 279,829 US$ 344,038 Other accounts receivable, net 23,620 10,957 13,105 Guarantee deposits 437,499 362,149 377,485 Derivative financial instruments 7,088 3,172 25,204 Total assets US$ 841,306 US$ 656,107 US$ 759,832 Liabilities: Financial debt (Note 5) US$ 176,927 US$ 155,455 US$ 128,296 Lease liabilities 2,263,849 2,099,218 1,727,890 Suppliers 76,471 51,012 53,729 Other taxes and fees payable 22,486 14,823 10,304 Derivative financial instruments — 6,246 — Total liabilities 2,539,733 2,326,754 1,920,219 Net foreign currency position US$ (1,698,427) US$ (1,670,647) US$ (1,160,387) |
Schedule of contractual principal payments required on financial liabilities and derivative instruments fair value | December 31, 2019 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) Ps. 1,855,956 Ps. 1,452,553 Ps. 3,308,509 Short-term working capital facilities (Note 5) 200,000 — 200,000 Asset backed trust note (Note 5) — 1,500,000 1,500,000 Lease liabilities: Aircraft, engines, land and buildings leases 4,720,505 35,796,540 40,517,045 Aircraft and engine lease return obligation 383,093 1,469,595 1,852,688 Total Ps. 7,159,554 Ps. 40,218,688 Ps. 47,378,242 December 31, 2018 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) Ps. 734,635 Ps. 2,310,939 Ps. 3,045,574 Short-term working capital facilities (Note 5) 461,260 — 461,260 Derivative financial instruments: Jet fuel Asian Zero-Cost collars options contracts 122,948 — 122,948 Lease liabilities: Aircraft, engines, land and buildings leases 4,976,454 34,588,692 39,565,146 Aircraft and engine lease return obligation 10,851 1,820,194 1,831,045 Total Ps. 6,306,148 Ps. 38,719,825 Ps. 45,025,973 December 31, 2017 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) Ps. 1,449,236 Ps. 1,079,152 Ps. 2,528,388 Short-term working capital facilities (Note 5) 948,354 — 948,354 Lease liabilities: Aircraft, engines, land and buildings leases 4,213,417 28,310,287 32,523,704 Aircraft and engine lease return obligation 193,187 1,454,790 1,647,977 Total Ps. 6,804,194 Ps. 30,844,229 Ps. 37,648,423 |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair value measurements | |
Schedule of carrying amounts and fair values of financial instruments | Carrying amount Fair value 2019 2018 2017 2019 2018 2017 Assets Derivative financial instruments Ps. 136,262 Ps. 62,440 Ps. 497,403 Ps. 136,262 Ps. 62,440 Ps. 497,403 Liabilities Financial debt (5,008,509) (3,506,834) (3,476,742) (5,194,316) (3,515,550) (3,481,741) Derivative financial instruments — (122,948) — — (122,948) — Total Ps. (4,872,247) Ps. (3,567,342) Ps. (2,979,339) Ps. (5,058,054) Ps. (3,576,058) Ps. (2,984,338) The following table summarizes the fair value measurements at December 31, 2019: 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 Zero-Cost collar options contracts* Ps. — Ps. 133,567 Ps. — Ps. 133,567 Interest rate Caps — 2,695 — 2,695 Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (5,194,316) — (5,194,316) Net Ps. — Ps. (5,058,054) Ps. — Ps. (5,058,054) * 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 fair value measurements at December 31, 2018: 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. 48,199 Ps. — Ps. 48,199 Foreign currency forward — 14,241 — 14,241 Liabilities Derivatives financial instruments: Jet fuel Asian Zero-Cost collars options contracts* — (122,948) — (122,948) Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (3,515,550) — (3,515,550) Net Ps. — Ps. (3,576,058) Ps. — Ps. (3,576,058) * 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 fair value measurements at December 31, 2017: 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. 497,403 Ps. — Ps. 497,403 Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (3,481,741) — (3,481,741) Net Ps. — Ps. (2,984,338) Ps. — Ps. (2,984,338) * 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 | Instrument Financial statements line 2019 2018 2017 Jet fuel Asian call options contracts Fuel Ps. (61,069) Ps. 402,493 Ps. (26,980) Jet fuel Zero-Cost collars contracts Fuel (9,477) — — Foreign currency forward Aircraft and engine rent expenses 4,199 52,516 (11,290) Interest rate swap contracts Aircraft and engine rent expenses — — (13,827) Interest rate cap Finance cost (1,282) — — Total Ps. (67,629) Ps. 455,009 Ps. (52,097) 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, 2019, 2018 and 2017: Consolidated statements of other comprehensive gain (loss) income Financial Instrument statements line 2019 2018 2017 Jet fuel Asian call options contracts OCI Ps. 11,148 Ps. (174,984) Ps. (54,202) Jet fuel Zero cost collars OCI 256,515 (122,948) — Interest rate swap contracts OCI — — 14,144 Foreign currency contracts OCI (14,241) 14,241 (2,090) Interest rate cap OCI (4,023) — — Non derivative financial instruments OCI 14,096 — — Total Ps. 263,495 Ps. (283,691) Ps. (42,148) |
Financial assets and liabilit_2
Financial assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Financial assets and liabilities | |
Schedule of financial assets | 2019 2018 2017 Derivative financial instruments designated as cash flow hedges (effective portion recognized within OCI) Jet fuel Asian call options Ps. — Ps. 48,199 Ps. 497,403 Jet fuel Zero-Cost collars 133,567 — — Foreign currency forward contracts — 14,241 — Interest rate cap 2,695 — — Total financial assets Ps. 136,262 Ps. 62,440 Ps. 497,403 Presented on the consolidated statements of financial position as follows: Current Ps. 133,567 Ps. 62,440 Ps. 497,403 Non-current Ps. 2,695 Ps. — Ps. — |
Schedule of short-term and long-term debt | 2019 2018 2017 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 May 31, 2022, bearing annual interest rate at the three-month LIBOR plus a spread of 260 basis points. Ps. 3,308,509 Ps. 3,045,574 Ps. 2,528,388 II. The Company issued in the Mexico market Asset backed trust notes (“CEBUR”), in Mexican pesos, maturing on June 20 th , 2024 bearing annual interest rate at TIIE 28 days plus 175 basis points. 1,459,871 — — III. In December 2016, the Company entered into a short-term working capital facility with Banco Nacional de México S.A. (“Citibanamex”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a 90 basis points. — 461,260 948,354 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 120 basis points. 200,000 — — V. Amortized transaction costs (22,472) — — VI. Accrued interest and other financial cost 30,061 16,364 5,972 4,975,969 3,523,198 3,482,714 Less: Short-term maturities 2,086,017 1,212,259 2,403,562 Long-term Ps. 2,889,952 Ps. 2,310,939 Ps. 1,079,152 TIIE: Mexican interbank rate |
Summary of scheduled principal payments of financial debt and accrued interest | 2020 2021 2022 2023 2024 Total Santander/Bancomext Ps. 1,881,676 Ps. 1,428,534 Ps. 24,019 Ps. — Ps. — Ps. 3,334,229 CEBUR 4,341 250,000 500,000 500,000 209,871 (1) 1,464,212 Banco Sabadell 200,000 — — — — 200,000 Total Ps. 2,086,017 Ps. 1,678,534 Ps. 524,019 Ps. 500,000 Ps. 209,871 Ps. 4,998,441 |
Schedule of changes in liabilities from financing activities | Current vs non- current January 1, Net cash Accrued Foreign exchange reclassification December 31, 2019 Flows Interest movement and other 2019 Current interest-bearing loans and borrowings Ps. 1,212,259 Ps. (633,609) Ps. 13,698 Ps. (41,173) Ps. 1,534,842 Ps. 2,086,017 Non-current interest -bearing loans and borrowings 2,310,939 2,273,143 — (122,466) (1,571,664) 2,889,952 Total liabilities from financing activities Ps. 3,523,198 Ps. 1,639,534 Ps. 13,698 Ps. (163,639) Ps. (36,822) Ps. 4,975,969 Current vs non- current January 1, Net cash Accrued Foreign exchange reclassification December 31, 2018 Flows Interest movement and other 2018 Current interest-bearing loans and borrowings Ps. 2,403,562 Ps. (793,363) Ps. 10,392 Ps. 71,380 Ps. (479,712) Ps. 1,212,259 Non-current interest -bearing loans and borrowings 1,079,152 808,620 — (56,945) 480,112 2,310,939 Total liabilities from financing activities Ps. 3,482,714 Ps. 15,257 Ps. 10,392 Ps. 14,435 Ps. 400 Ps. 3,523,198 Current vs non- current January 1, Net cash Accrued Foreign exchange reclassification December 31, 2017 Flows Interest movement and other 2017 Current interest-bearing loans and borrowings Ps. 1,051,237 Ps. 419,350 Ps. (130) Ps. 25,924 Ps. 907,181 Ps. 2,403,562 Non-current interest - bearing loans and borrowings 943,046 1,093,808 — (50,521) (907,181) 1,079,152 Total liabilities from financing activities Ps. 1,994,283 Ps. 1,513,158 Ps. (130) Ps. (24,597) Ps. — Ps. 3,482,714 |
Schedule of other financial liabilities | 2019 2018 2017 Derivative financial instruments designated as CFH (effective portion recognized within OCI): Zero-Cost Collar options Ps. — Ps. 122,948 Ps. — Total financial liabilities Ps. — Ps. 122,948 Ps. — Presented on the consolidated statements of financial position as follows: Current Ps. — Ps. 122,948 Ps. — Non-current Ps. — Ps. — Ps. — |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Cash and cash equivalents | |
Summary of cash and cash equivalents | 2019 2018 2017 Cash in banks Ps. 4,612,927 Ps. 1,061,150 Ps. 963,162 Short-term investments 3,231,125 4,796,554 5,982,314 Cash on hand 44,880 5,238 5,403 Restricted funds held in trust related to debt service reserves 91,040 — — Total cash and cash equivalents Ps. 7,979,972 Ps. 5,862,942 Ps. 6,950,879 |
Related parties (Tables)
Related parties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related parties | |
Schedule of balances due from/to related parties | Country Type of transaction of origin 2019 2018 2017 Terms Due from: Frontier Airlines Inc. (“Frontier”) Code-share USA Ps. 23,442 Ps. 8,266 Ps. — 30 days Ps. 23,442 Ps. 8,266 Ps. — Country Type of transaction of origin 2019 2018 2017 Terms Due to: One Link, S.A. de C.V. (“One Link”) Call center fees El Salvador Ps. 39,838 Ps. — Ps. 24,980 30 days Frontier Airlines Inc. (“Frontier”) Code-share USA 16,246 2,751 — 30 days Aeromantenimiento, S.A. (“Aeroman”) Aircraft and engine maintenance Mexico/El Salvador 1,474 15,024 15,951 30 days Mijares, Angoitia, Cortés y Fuentes, S.C. Professional fees Mexico 996 — — 30 days Ps. 58,554 Ps. 17,775 Ps. 40,931 |
Schedule of transactions with related parties | Related party transactions Country of origin 2019 2018 2017 Revenues: Transactions with affiliates Frontier Airlines Inc Code-share USA Ps. 208,968 Ps. 8,358 Ps. — Expenses: Transactions with affiliates Aeromantenimiento, S.A. Aircraft and engine maintenance Mexico/El Salvador Ps. 201,624 Ps. 341,726 Ps. 249,266 Servprot, Human Capital Int., Onelink, MACF Call center fees and other professional fees Mexico/El Salvador 41,467 4,800 202,689 Aeromantenimiento, S.A. Technical support Mexico/El Salvador 5,815 4,796 8,088 |
Other accounts receivable, net
Other accounts receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other accounts receivable, net | |
Schedule of other accounts receivables | 2019 2018 2017 Current: Credit cards Ps. 389,634 Ps. 96,646 Ps. 191,322 Other accounts receivable 189,904 101,487 117,582 Other points of sales 102,002 71,054 54,719 Travel agencies and insurance commissions 76,975 39,806 27,925 Affinity credit card 49,040 55,172 40,517 Cargo clients 46,600 41,408 34,655 Airport services 42,894 9,991 5,898 Employees 29,681 27,274 8,878 Benefits from suppliers 26,989 68,946 — Marketing services receivable 7,024 7,999 13,435 Settlement receivable 2,422 — — Insurance claims 143 — 1,345 963,308 519,783 496,276 Allowance for credit losses (40,308) (11,304) (17,809) Ps. 923,000 Ps. 508,479 Ps. 478,467 |
Schedule of aging of accounts receivable | 2019 2019 Total 2018 2018 Total 2017 2017 Total Days Impaired Not impaired 2019 Impaired Not impaired 2018 Impaired Not impaired 2017 0–30 Ps. 5,804 Ps. 722,651 Ps. 728,455 Ps. 8,725 Ps. 388,644 Ps. 397,369 Ps. 16,962 Ps. 415,847 Ps. 432,809 31–60 — 64,983 64,983 — 69,648 69,648 — 38,705 38,705 61–90 — 19,274 19,274 — 27,138 27,138 — 17,918 17,918 91–120 34,504 116,092 150,596 2,579 23,049 25,628 847 5,997 6,844 Ps. 40,308 Ps. 923,000 Ps. 963,308 Ps. 11,304 Ps. 508,479 Ps. 519,783 Ps. 17,809 Ps. 478,467 Ps. 496,276 |
Schedule of movement in the allowance for doubtful accounts | Balance as of January 1, 2017 Ps. (19,317) Write-offs 6,228 Increase in allowance (4,720) Balance as of December 31, 2017 (17,809) Write-offs 17,126 Increase in allowance (10,621) Balance as of December 31, 2018 (11,304) Write-offs 11,389 Increase in allowance (40,393) Balance as of December 31, 2019 Ps. (40,308) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventories | |
Schedule of inventories | 2019 2018 2017 Spare parts and accessories of flight equipment Ps. 294,390 Ps. 289,737 Ps. 285,185 Miscellaneous supplies 7,518 7,534 9,665 Ps. 301,908 Ps. 297,271 Ps. 294,850 |
Prepaid expenses and other cu_2
Prepaid expenses and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid expenses and other current assets | |
Schedule of prepaid expenses and other current assets | 2019 2018 2017 Advances to suppliers Ps. 283,340 Ps. 198,174 Ps. 87,536 Advances to components suppliers 209,557 67,446 220,095 Other prepaid expenses 115,054 40,655 56,146 Prepaid insurance 88,941 76,896 68,712 Sales commission to travel agencies (Note 1d) 84,239 59,620 54,501 Advances for constructions of aircraft and engines — — 13,764 Ps. 781,131 Ps. 442,791 Ps. 500,754 |
Guarantee deposits (Tables)
Guarantee deposits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Guarantee deposits | |
Schedule of guarantee deposits | 2019 2018 2017 Current asset: Aircraft maintenance deposits paid to lessors (Note 1j) Ps. 576,505 Ps. 729,899 Ps. 1,317,663 Deposits for rental of flight equipment — 1,220 17,178 Other guarantee deposits 23,822 59,516 18,052 600,327 790,635 1,352,893 Non-current asset: Aircraft maintenance deposits paid to lessors (Note 1j) 5,853,924 5,765,122 5,631,304 Deposits for rental of flight equipment 1,750,966 531,261 441,110 Other guarantee deposits 39,531 41,113 25,838 7,644,421 6,337,496 6,098,252 Ps. 8,244,748 Ps. 7,128,131 Ps. 7,451,145 |
Rotable spare parts, furnitur_2
Rotable spare parts, furniture and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Rotable spare parts, furniture and equipment, net | |
Summary of rotable spare parts, furniture and equipment, net | Gross value Accumulated depreciation and impairment Net carrying value At December At December At December At December At December At December At December At December At December 31, 2019 31, 2018 31, 2017 31, 2019 31, 2018 31, 2017 31, 2019 31, 2018 31, 2017 Leasehold improvements to flight equipment Ps. 4,220,672 Ps. 3,424,778 Ps. 2,575,495 Ps. (2,679,884) Ps. (2,210,189) Ps. (1,882,996) Ps. 1,540,788 Ps. 1,214,589 Ps. 692,499 Pre-delivery payments 4,507,770 3,672,090 2,783,303 — — — 4,507,770 3,672,090 2,783,303 Flight equipment 1,287,102 932,642 830,145 (553,852) (268,320) (199,223) 733,250 664,322 630,922 Construction and improvements in process 474,240 142,738 193,607 — — — 474,240 142,738 193,607 Constructions and improvements 172,460 132,446 131,503 (131,510) (117,211) (106,335) 40,950 15,235 25,168 Computer equipment 47,566 44,563 30,113 (34,495) (28,016) (20,790) 13,071 16,547 9,323 Workshop tools 26,875 23,454 20,500 (22,023) (20,085) (18,229) 4,852 3,369 2,271 Electric power equipment 20,412 15,438 15,439 (11,400) (10,316) (9,185) 9,012 5,122 6,254 Communications equipment 14,099 12,305 11,229 (8,322) (7,394) (6,502) 5,777 4,911 4,727 Workshop machinery and equipment 16,301 9,530 8,405 (6,092) (5,049) (4,345) 10,209 4,481 4,060 Motorized transport equipment platform 15,026 5,496 5,587 (5,392) (5,050) (4,701) 9,634 446 886 Service carts on board 7,675 5,403 5,403 (5,554) (5,277) (5,021) 2,121 126 382 Office furniture and equipment 70,709 66,546 44,749 (34,049) (28,240) (22,454) 36,660 38,306 22,295 Allowance for obsolescence (3,000) — — — — — (3,000) — — Total Ps. 10,877,907 Ps. 8,487,429 Ps. 6,655,478 Ps. (3,492,573) Ps. (2,705,147) Ps. (2,279,781) Ps. 7,385,334 Ps. 5,782,282 Ps. 4,375,697 * During the years ended December 31, 2019, 2018 and 2017, the Company capitalized borrowing costs of Ps.456,313, Ps.357,920 and Ps.193,389, respectively. The amount of this line is net of disposals of capitalized borrowing costs related to sale and leaseback transactions of Ps.328,571, Ps.242,678 and Ps.110,274, 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 book amount as of December 31, 2016 Ps. 577,498 Ps. 35,013 Ps. 7,200 Ps. 17,657 Ps. 6,928 Ps. 4,585 Ps. 1,357 Ps. 3,555 Ps. 3,618 Ps. 758 Ps. — Ps. 1,206,330 Ps. 255,374 Ps. 405,135 Ps. 2,525,008 Additions 115,558 — 1,845 6,805 — — — — 123 — — 1,707,805 206,932 545,164 2,584,232 Disposals and transfers (930) — — (15) — — — — — — — (213,947) (3,555) (101,224) (319,671) Borrowing costs, net* — — — — — — — — — — — 83,115 — — 83,115 Other movements — 10,371 4,087 1,649 620 — — 1,968 1,041 — — — (265,144) 244,712 (696) Depreciation (61,204) (20,216) (3,809) (3,801) (1,294) (2,314) (471) (796) (722) (376) — — — (401,288) (496,291) As of December 31, 2017 630,922 25,168 9,323 22,295 6,254 2,271 886 4,727 4,060 382 — 2,783,303 193,607 692,499 4,375,697 Cost 830,145 131,503 30,113 44,749 15,439 20,500 5,587 11,229 8,405 5,403 — 2,783,303 193,607 2,575,495 6,655,478 Accumulated depreciation (199,223) (106,335) (20,790) (22,454) (9,185) (18,229) (4,701) (6,502) (4,345) (5,021) — — — (1,882,996) (2,279,781) Net book amount as of December 31, 2017 630,922 25,168 9,323 22,295 6,254 2,271 886 4,727 4,060 382 — 2,783,303 193,607 692,499 4,375,697 Additions 366,371 689 5,316 652 — 2,673 — 1,050 1,040 — — 1,485,643 142,703 687,260 2,693,397 Disposals and transfers (261,866) — — — — — — — (2) — — (712,098) (89) — (974,055) Borrowing costs, net* — — — — — — — — — — — 115,242 — — 115,242 Other movements — 67 9,123 21,568 — 281 42 26 110 — — — (193,483) 162,023 (243) Depreciation (71,105) (10,689) (7,215) (6,209) (1,132) (1,856) (482) (892) (727) (256) — — — (327,193) (427,756) As of December 31, 2018 664,322 15,235 16,547 38,306 5,122 3,369 446 4,911 4,481 126 — 3,672,090 142,738 1,214,589 5,782,282 Cost 932,642 132,446 44,563 66,546 15,438 23,454 5,496 12,305 9,530 5,403 — 3,672,090 142,738 3,424,778 8,487,429 Accumulated depreciation (268,320) (117,211) (28,016) (28,240) (10,316) (20,085) (5,050) (7,394) (5,049) (5,277) — — — (2,210,189) (2,705,147) Net book amount as of December 31, 2018 664,322 15,235 16,547 38,306 5,122 3,369 446 4,911 4,481 126 — 3,672,090 142,738 1,214,589 5,782,282 Additions 692,186 5,596 1,730 1,461 2,487 3,137 — 355 4,278 2,273 (3,000) 1,412,790 525,556 661,954 3,310,803 Disposals and transfers (538,370) — (131) (10) — — — (2) (35) — — (704,852) (3,957) — (1,247,357) Borrowing costs, net* — — — — — — — — — — — 127,742 — — 127,742 Other movements — 34,840 1,999 2,757 2,487 284 9,529 1,446 2,529 — — — (190,097) 133,939 (287) Depreciation (84,888) (14,721) (7,074) (5,854) (1,084) (1,938) (341) (933) (1,044) (278) — — — (469,694) (587,849) As of December 31, 2019 733,250 40,950 13,071 36,660 9,012 4,852 9,634 5,777 10,209 2,121 (3,000) 4,507,770 474,240 1,540,788 7,385,334 Cost 1,287,102 172,460 47,566 70,709 20,412 26,875 15,026 14,099 16,301 7,675 (3,000) 4,507,770 474,240 4,220,672 10,877,907 Accumulated depreciation (553,852) (131,510) (34,495) (34,049) (11,400) (22,023) (5,392) (8,322) (6,092) (5,554) — — — (2,679,884) (3,492,573) Net book amount 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 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets, net | |
Schedule of intangible assets, net | Useful Gross value Accumulated amortization Net carrying amount life At December 31, years 2019 2018 2017 2019 2018 2017 2019 2018 2017 Software 1 – 4 Ps. 579,360 Ps. 503,467 Ps. 441,803 Ps. (411,963) Ps. (324,343) Ps. (251,383) Ps. 167,397 Ps. 179,124 Ps. 190,420 Balance as of January 1, 2017 Ps. 114,041 Additions 130,908 Disposals (1,976) Amortization (52,396) Exchange differences (157) Balance as of December 31, 2017 190,420 Additions 71,007 Disposals (9,368) Amortization (72,885) Exchange differences (50) Balance as of December 31, 2018 179,124 Additions 77,325 Disposals — Amortization (87,667) Exchange differences (1,385) Balance as of December 31, 2019 Ps. 167,397 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of composition of fleet and spare engines, operating leases | At December At December At December Aircraft Type Model 31, 2019 31, 2018 31, 2017 A319 132 3 4 6 A319 133 4 4 6 A320 233 39 39 39 A320 232 2 4 4 A320NEO 271N 17 12 6 A321 231 10 10 10 A321NEO 271N 6 4 — 81 77 71 Engine spare At December At December At December Type Model 31, 2019 31, 2018 31, 2017 V2500 V2524-A5 2 — — V2500 V2527M-A5 3 3 3 V2500 V2527E-A5 3 3 3 V2500 V2527-A5 2 2 2 PW1100 PW1127G-JM 3 2 — PW1100 PW1133G-JM 1 — — 14 10 8 * Certain of the Company’s aircraft and engine lease agreements include an option to extend the lease term period. Terms and conditions are subject to 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 at 1 January 2017 (adjusted) Ps. 23,047,879 Ps. 220,554 Ps. 231,648 Ps. 23,500,081 Additions 4,665,330 157,225 9,149 4,831,704 Depreciation on right of use assets (3,306,249) (77,750) (53,904) (3,437,903) As at 31 December 2017 (adjusted) 24,406,960 300,029 186,893 24,893,882 Additions 10,585,188 387,480 59,194 11,031,862 Depreciation on right of use assets (3,865,979) (107,813) (69,899) (4,043,691) As at 31 December 2018 (adjusted) 31,126,169 579,696 176,188 31,882,053 Additions 6,676,492 230,200 42,992 6,949,684 Depreciation on right of use assets (4,490,572) (132,698) (79,701) (4,702,971) As at 31 December 2019 Ps. 33,312,089 Ps. 677,198 Ps. 139,479 Ps. 34,128,766 |
Summary of carrying amounts of lease liabilities and the movements during the period | 2018 2017 2019 (Adjusted) (Adjusted) As at 1 January Ps. 39,565,146 Ps. 32,523,704 Ps. 32,711,793 Additions 7,186,613 11,038,578 4,897,420 Accretion of interest 2,037,540 1,683,330 1,381,680 Foreign exchange effect (1,772,452) 30,441 (1,434,291) Payments (6,499,802) (5,710,907) (5,032,898) As at 31 December 40,517,045 39,565,146 32,523,704 Current Ps. 4,720,505 Ps. 4,976,454 Ps. 4,213,417 Non-current |
Summary of amounts recognized in profit or loss | As of December As of December As of December 31, 2018 31, 2017 31, 2019 (Adjusted) (Adjusted) Depreciation of right-of-use assets Ps. (4,702,971) Ps. (4,043,691) Ps. (3,437,903) Interest expense on lease liabilities (2,128,162) (1,755,978) (1,428,924) Aircraft and engine variable expenses (961,657) (956,010) (1,429,595) Total amount recognized in profit or loss Ps. (7,792,790) Ps. (6,755,679) Ps. (6,296,422) |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued liabilities | |
Schedule of analysis of accrued liabilities short - term | 2019 2018 2017 Fuel and traffic accrued expenses Ps. 1,507,659 Ps. 1,315,363 Ps. 1,106,913 Maintenance and aircraft parts accrued expenses 120,254 79,280 194,366 Sales, marketing and distribution accrued expenses 230,935 283,538 143,758 Maintenance deposits 132,085 141,371 132,519 Salaries and benefits 296,829 187,072 114,781 Accrued administrative expenses 81,124 67,306 90,459 Deferred revenue from V Club membership 35,465 59,557 76,261 Information and communication accrued expenses 67,808 45,008 44,638 Supplier services agreement 10,634 10,634 10,634 Benefits from suppliers — — 1,473 Advances from travel agencies 542 482 650 Others 48,526 77,985 51,474 Ps. 2,531,861 Ps. 2,267,596 Ps. 1,967,926 |
Schedule of accrued liabilities long term | 2019 2018 2017 Supplier services agreement Ps. 55,905 Ps. 66,539 Ps. 77,174 Benefits from suppliers 19,439 — — Other 15,452 8,964 15,274 Ps. 90,796 Ps. 75,503 Ps. 92,448 |
Schedule of other liabilities | Balance as of Balance as of January 1, Increase for December 31, 2019 the year Payments 2019 Aircraft and engine lease return obligation Ps. 1,831,045 Ps. 725,506 Ps. 703,863 Ps. 1,852,688 Employee profit sharing (Note 16) 14,984 22,134 13,021 24,097 Ps. 1,846,029 Ps. 747,640 Ps. 716,884 Ps. 1,876,785 Short-term maturities Ps. 407,190 Long-term Ps. 1,469,595 Balance as of Balance as of January 1, Increase for December 31, 2018 the year Payments 2018 Aircraft and engine lease return obligation (Adjusted) Ps. 1,647,977 Ps. 1,015,391 Ps. 832,323 Ps. 1,831,045 Employee profit sharing (Note 16) 9,063 14,106 8,185 14,984 Ps. 1,657,040 Ps. 1,029,497 Ps. 840,508 Ps. 1,846,029 Short-term maturities Ps. 25,835 Long-term Ps. 1,820,194 Balance as of Balance as of January 1, Increase for December 31, 2017 the year Payments 2017 Aircraft and engine lease return obligation (Adjusted) Ps. 1,408,039 Ps. 1,099,597 Ps. 859,659 Ps. 1,647,977 Employee profit sharing (Note 16) 10,695 8,342 9,974 9,063 Ps. 1,418,734 Ps. 1,107,939 Ps. 869,633 Ps. 1,657,040 Short-term maturities Ps. 202,250 Long-term Ps. 1,454,790 |
Employee benefits (Tables)
Employee benefits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Employee benefits | |
Schedule of analysis of net period cost | 2019 2018 2017 Analysis of net period cost: Current service cost Ps. 8,214 Ps. 4,977 Ps. 3,657 Interest cost on benefit obligation 1,872 1,424 1,000 Net period cost Ps. 10,086 Ps. 6,401 Ps. 4,657 |
Schedule of changes in defined benefit obligation | 2019 2018 2017 Defined benefit obligation at January 1, Ps. 18,153 Ps. 19,289 Ps. 13,438 Net period cost charged to profit or loss: Current service cost 8,214 4,977 3,657 Interest cost on benefit obligation 1,872 1,000 Remeasurement losses in other comprehensive income: Actuarial changes arising from changes in assumptions 10,192 (5,989) 1,776 Payments made (225) (1,548) (582) Defined benefit obligation at December 31, Ps. 38,206 Ps. 18,153 Ps. 19,289 |
Summary of significant assumptions used in the computation of the seniority premium obligations | 2019 2018 2017 Financial: Discount rate 7.18 % 9.91 % 7.72 % Expected rate of salary increases 5.50 % 5.65 % 5.50 % Annual increase in minimum salary 4.00 % 4.15 % 4.00 % Biometric: Mortality (1) EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA EMSSA 09 EMSSA 09 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). |
Schedule of accruals for short-term employee benefits | 2019 2018 2017 Employee profit-sharing (Note 15c) Ps. 24,097 Ps. 14,984 Ps. 9,063 |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2017 618,048 * Purchased during the year 547,310 Granted during the year — Exercised/vested during the year (345,270) Forfeited during the year — Outstanding as of December 31, 2017 820,088 * Purchased during the year 3,208,115 Granted during the year — Exercised/vested during the year (353,457) Forfeited during the year (121,451) Outstanding as of December 31, 2018 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 * * These shares are presented as treasury shares in the consolidated statement of financial position as of December 31, 2019, 2018 and 2017. |
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, 2016 12,557,857 Ps. 5.31 Ps. 66,733 Granted during the year — — — Forfeited during the year — — — Exercised during the year (120,000) 5.31 (638) Outstanding as of December 31, 2017 12,437,857 Ps. 5.31 Ps. 66,095 Granted during the year — — — Forfeited during the year — — — Exercised during the year (2,003,876) 5.31 (10,654) Outstanding as of December 31, 2018 10,433,981 Ps. 5.31 Ps. 55,441 Granted during the year — — — Forfeited during the year — — — Exercised during the year (2,780,000) 5.31 (14,773) Outstanding as of December 31, 2019 7,653,981 Ps. 5.31 Ps. 40,668 |
Schedule of retention plan (benefit) expenses recognized | 2019 2018 2017 (Benefit) expense arising from cash-settled share-based payments transactions Ps. 40,724 Ps. (5,238) Ps. (25,498) Expense arising from equity-settled share-based payments transactions 49,659 19,980 13,508 Total expense (benefit) arising from share-based payments transactions Ps. 90,383 Ps. 14,742 Ps. (11,990) |
Share purchase plan | |
Share-based payments | |
Schedule of vesting period of shares granted | Number of Series A shares Vesting period 2,211,269 November 2019 – 2020 2,005,716 November 2020 – 2021 898,206 November 2021 – 2022 5,115,191 |
SARs - cash settled | |
Share-based payments | |
Schedule of vesting period of shares granted | Number of SARs Exercisable date 725,193 November 2020 725,193 * |
MIP II | |
Share-based payments | |
Schedule of vesting period of shares granted | Number of SARs Vesting date 2,825,840 February 2020 3,391,020 February 2021 6,216,860 * * Includes forfeited SARs of 0,1,563,520 and 0, for the years ended December 31, 2019, 2018 and 2017, respectively. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity | |
Schedule of authorized shares | Shares Fixed Variable Class I Class II Total shares Series A shares (1) 10,478 923,814,326 923,824,804 Series B shares (1) 13,702 88,038,171 88,051,873 24,180 1,011,852,497 1,011,876,677 Treasury shares (Note 17) — (15,136,057) (15,136,057) * 24,180 996,716,440 996,740,620 *The number of forfeited shares as of December 31, 2019 were 294,541, which are include in treasury shares. Shares Fixed Variable Class I Class II Total shares Series A shares (1) 10,478 923,814,326 923,824,804 Series B shares (1) 13,702 88,038,171 88,051,873 24,180 1,011,852,497 1,011,876,677 Treasury shares (Note 17) — (15,212,365) (15,212,365) * 24,180 996,640,132 996,664,312 *The number of forfeited shares as of December 31, 2018 were 121,451, which are include in treasury shares. (1) On February 16, 2018, one of the Company´s shareholders converted 45,968,598 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. Shares Fixed Variable Class I Class II Total shares Series A shares 3,224 877,852,982 877,856,206 Series B shares 20,956 133,999,515 134,020,471 24,180 1,011,852,497 1,011,876,677 Treasury shares (Note 17) — (13,257,945) (13,257,945) 24,180 998,594,552 998,618,732 |
Schedule of basic and diluted earnings (loss) per share | At December 31, 2018 2017 2019 (Adjusted) (Adjusted) Net income (loss) for the period Ps. 2,639,063 Ps. (942,882) Ps. 278,671 Weighted average number of shares outstanding (in thousands): Basic 1,011,877 1,011,877 1,011,877 Diluted 1,011,877 1,011,877 1,011,877 EPS - LPS: Basic 2.608 (0.932) 0.275 Diluted 2.608 (0.932) 0.275 |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income tax | |
Schedule of income tax in consolidated statements of operations | 2019 2018 2017 Current year income tax expense Ps. (281,491) Ps. (232,824) Ps. (51,313) Deferred income tax (expense) benefit (813,340) (1) 582,644 (2) (186,273) (3) Total income tax (expense) benefit Ps. (1,094,831) Ps. 349,820 Ps. (237,586) (1) Includes translation effect by Ps.(2,278) (2) Includes translation effect by Ps.2,680 (3) Includes translation effect by Ps.936 |
Schedule of income tax in consolidated statements of OCI | 2019 2018 2017 Deferred tax related to items recognized in OCI during the year Net (loss) gain on cash flow hedges Ps. (74,820) Ps. 85,107 Ps. 12,017 Remeasurement gain (loss) of employee benefits 3,058 (1,797) 533 Deferred tax charged to OCI Ps. (71,762) Ps. 83,310 Ps. 12,550 |
Schedule of reconciliation of corporate income tax rate to effective tax rate | 2019 2018 2017 Statutory income tax rate 30.00 % 30.00 % 30.00 % Non-deductible expenses 0.19 % (2.51) % 5.71 % Unrecorded deferred taxes on tax losses 0.27 % (3.96) % 21.31 % Foreign countries difference with Mexican statutory rate 0.11 % (0.02) % 0.48 % Inflation of tax losses (0.21) % 1.16 % (2.20) % Amendment tax return effects and other tax adjustments (0.51) % 0.05 % 3.78 % Inflation on furniture, intangible and equipment (0.48) % 2.08 % (7.19) % Annual inflation adjustment (0.05) % 0.26 % (5.87) % 29.32 % 27.06 % 46.02 % |
Schedule of consolidated deferred taxes | 2019 2018 2017 Consolidated Consolidated Consolidated statement of Consolidated statement of Consolidated statement of Consolidated financial statement of financial statement of financial statement of position operations position operations position operations Adjusted Adjusted Deferred income tax assets: Lease liability Ps. 12,155,114 Ps. 313,137 Ps. 11,841,977 Ps. 2,108,422 Ps. 9,733,555 Ps. (59,235) Unearned transportation revenue 797,063 61,708 735,355 699,414 35,941 (29,814) Extension lease agreement 459,343 (137,639) 596,982 82,421 514,562 113,443 Intangible 446,849 (13,741) 460,590 (2,621) 463,211 (18,415) Provisions 351,345 60,655 290,690 (4,175) 294,865 (48,439) Tax losses available for offsetting against future taxable income 303,970 (5,350) 309,320 (33,759) 343,079 309,758 Allowance for doubtful accounts 14,089 9,187 4,902 (2,422) 7,324 433 Employee benefits 11,463 2,958 5,446 1,456 5,786 1,222 Employee profit sharing 7,227 2,734 4,493 1,777 2,716 (490) Non derivative financial instruments 4,229 4,229 — — — — Financial instruments (38,865) — 35,956 — (49,151) — 14,511,827 297,878 14,285,711 2,850,513 11,351,888 268,463 Deferred income tax liabilities: Right of use asset| 10,236,929 672,311 9,564,618 2,096,458 7,468,160 354,352 Supplemental rent 1,706,949 111,430 1,595,519 32,156 1,563,363 223,753 Rotable spare parts, furniture and equipment, net 884,476 239,452 645,024 168,107 476,917 108,890 Prepaid expenses and other assets 179,061 88,683 90,378 (25,686) 116,064 (239,586) Inventories 90,287 1,392 88,895 726 88,169 15,286 Other prepayments 27,728 (4,329) 32,057 (1,212) 33,269 (7,023) 13,125,430 1,108,939 12,016,491 2,270,549 9,745,942 455,672 Ps. 1,386,397 Ps. (811,061) Ps. 2,269,220 Ps. 579,964 Ps. 1,605,946 Ps. (187,209) |
Schedule of components of deferred taxes in the consolidated statement of financial position | 2019 2018 2017 Deferred tax assets Ps. 1,542,536 Ps. 3,392,240 Ps. 3,222,228 Deferred tax liabilities (156,139) (1,123,020) (1,616,282) Deferred tax assets, net Ps. 1,386,397 Ps. 2,269,220 Ps. 1,605,946 |
Schedule of reconciliation of deferred tax liability, net | 2019 2018 2017 Opening balance as of January 1, Ps. 2,269,220 Ps. 1,605,946 Ps. 1,780,605 Deferred income tax (expense) benefit during the current year recorded on profits (811,061) 579,964 (187,209) Deferred income tax (expense) benefit during the current year recorded in accumulated other comprehensive income (loss) (71,762) 83,310 12,550 Closing balance as of December 31, Ps. 1,386,397 Ps. 2,269,220 Ps. 1,605,946 |
Schedule of available tax carry-forwards | An analysis of the available tax losses carry-forward of the Company at December 31, 2019 is as follows: Year Historical Adjusted Total remaining Year of of loss loss tax loss Utilized amount expiration 2016 Ps. 26,658 Ps. 26,658 Ps. 26,658 Ps. — 2017 228,413 228,413 88,752 139,661 2017 1,068,498 1,176,068 218,110 957,958 2018 170,049 170,049 — 170,049 2018 3,192 3,299 3,299 — 2019 50,246 50,246 — 50,246 2019 4,922 5,028 — 5,028 Ps. 1,551,978 Ps. 1,659,761 Ps. 336,819 Ps. 1,322,942 A breakdown of available tax loss carry-forward of Controladora and its subsidiaries at December 31, 2019 is as follows: Historical Adjusted Total loss tax loss Utilized remaining amount Comercializadora Ps. 4,922 Ps. 5,028 Ps. — Ps. 5,028 Concesionaria 1,067,836 1,175,351 217,393 957,958 Operaciones Volaris 3,853 4,016 4,016 — Vuela Aviación 475,367 475,366 115,410 359,956 Ps. 1,551,978 Ps. 1,659,761 Ps. 336,819 Ps. 1,322,942 Unrecognized NOLs (309,710) Ps. 1,013,232 Tax rate 30 % Deferred income tax Ps. 303,970 |
Schedule of tax balances | 2019 Adjusted contributed capital account ( Cuenta de capital de aportación or “CUCA”) Ps. 4,028,022 CUFIN* 3,847,209 *The calculation comprises all the subsidiaries of the Company. |
Other operating income and ex_2
Other operating income and expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other operating income and expenses | |
Schedule of other operating income | 2019 2018 2017 Gain on sale and leaseback Ps. 284,759 Ps. 609,168 Ps. 65,886 Loss on sale of rotable spare parts furniture and equipment (8,954) (2,356) (908) Administrative benefits — — 27,180 Other income 51,403 15,161 4,607 Ps. 327,208 Ps. 621,973 Ps. 96,765 |
Schedule of other operating expenses | 2019 2018 2017 Administrative and operational support expenses Ps. 581,181 Ps. 536,079 Ps. 539,101 Technology and communications 381,055 385,841 373,394 Passenger services 65,477 70,337 59,261 Insurance 74,661 60,892 54,569 Others 10,553 5,949 7,933 Ps. 1,112,927 Ps. 1,059,098 Ps. 1,034,258 |
Finance income and cost (Tables
Finance income and cost (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Finance income and cost | |
Schedule of finance income | 2019 2018 2017 Interest on cash and equivalents Ps. 201,191 Ps. 152,437 Ps. 105,151 Interest on asset backed trust notes 6,525 — — Interest on recovery of guarantee deposits 83 166 644 Ps. 207,799 Ps. 152,603 Ps. 105,795 |
Schedule of finance cost | 2019 2018 2017 Leases financial cost Ps. 2,128,162 Ps. 1,755,978 Ps. 1,428,924 Interest on asset backed trust notes 80,314 — — Cost of letter credit notes 49,856 57,277 42,294 Bank fees and others 3,607 6,141 5,279 Interest on debts and borrowings* 1,660 56,916 37,565 Other finance costs 6,230 — 1,219 Ps. 2,269,829 Ps. 1,876,312 Ps. 1,515,281 |
Schedule of capitalized interest | 2019 2018 2017 Interest on debts and borrowings Ps. 457,973 Ps. 414,836 Ps. 230,954 Capitalized interest (Note 12) (456,313) (357,920) (193,389) Net interest on debts and borrowing in the consolidated statements of operations Ps. 1,660 Ps. 56,916 Ps. 37,565 |
Components of other comprehen_2
Components of other comprehensive income (loss) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Components of other comprehensive income (loss) | |
Schedule of components of other comprehensive income (loss) | 2019 2018 2017 Derivative financial instruments: Reclassification of call options and forwards during the year to profit or loss (Note 4) Ps. — Ps. (455,009) Ps. 52,097 Extrinsic value of changes on jet fuel Asian call options 11,148 227,509 (81,182) Extrinsic value of changes on jet fuel Zero cost collars 256,515 (122,948) — (Loss) gain of the matured foreign currency forward contracts (14,241) 66,757 (13,380) Gain of the not-yet matured interest rate swap contracts — — 317 Loss of the interest rate Cap (4,023) — — Non derivative financial instruments 14,096 — — Total Ps. 263,495 Ps. (283,691) Ps. (42,148) |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and contingencies | |
Schedule of committed expenditures | Commitment Commitment expenditures expenditures in U.S. equivalent in dollars Mexican pesos (1) 2020 US$ 141,218 Ps. 2,661,281 2021 164,856 3,106,744 2022 606,842 11,436,059 2023 793,967 14,962,467 2024 and thereafter 2,688,321 50,661,947 US$ 4,395,204 Ps. 82,828,498 (1) Using the exchange rate as of December 31, 2019 of Ps.18.8452. |
Schedule of future minimum lease payments | Aircraft sale prices estimated in U.S. dollars in Mexican pesos 2020 US$ 396,470 Ps. 7,471,556 2021 691,940 13,039,748 2022 102,400 1,929,748 US$ 1,190,810 Ps. 22,441,052 |
Summary of future lease payments from sale and leaseback | Aircraft leases in U.S. dollars in Mexican pesos 2020 US$ 20,847 Ps. 392,866 2021 57,190 1,077,757 2022 86,025 1,621,158 2023 88,259 1,663,259 2024 and thereafter 806,786 15,204,044 US$ 1,059,107 Ps. 19,959,084 |
Operating segments (Tables)
Operating segments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Operating segments | |
Schedule of geographic segments | 2019 2018 2017 Operating revenues: Domestic (Mexico) Ps. 24,594,797 Ps. 18,493,476 Ps. 17,272,946 International: United States of America and Central America* 10,230,824 8,811,674 7,515,240 Non-derivative financial instruments (72,949) — — Total operating revenues Ps. 34,752,672 Ps. 27,305,150 Ps. 24,788,186 *United States of America represents approximately 29%, 31% and 29% of total revenues from external customers in 2019, 2018 and 2017, respectively. |
Description of the business a_4
Description of the business and summary of significant accounting policies - Relevant events (Details) $ in Billions | Feb. 21, 2020 | Jun. 20, 2019MXN ($)item | Feb. 16, 2018shares | Dec. 28, 2017aircraft | Nov. 10, 2016 | Feb. 17, 2010 | May 09, 2005 |
Description of the business and summary of significant accounting policies | |||||||
Notes issued | $ 1.5 | ||||||
Authorized amount under the program | $ 3 | ||||||
Maturity of notes | 5 years | ||||||
Term of authorization to provide air transportation services | 20 years | ||||||
Number of aircraft purchased | aircraft | 80 | ||||||
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 | ||||||
28-day TIIE | |||||||
Description of the business and summary of significant accounting policies | |||||||
Basis points | 1.75% | ||||||
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 | ||||||
Maturity of notes | 5 years | ||||||
Basis points | 1.75% | ||||||
Series B shares | |||||||
Description of the business and summary of significant accounting policies | |||||||
Conversion of equivalent number of shares | shares | 45,968,598 |
Description of the business a_5
Description of the business and summary of significant accounting policies - Subsidiaries (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Concesionaria | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Volaris Costa Rica | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Vuela, S.A. | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 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% | 100.00% |
Servicios Earhart, S.A. | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Servicios Corporativos | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Servicios Administrativos | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 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% | 100.00% |
Deutsche Bank Mexico Sa Trust 1710 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Deutsche Bank Mexico Sa Trust 1711 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Irrevocable Administrative Trust number F/307750 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Irrevocable Administrative Trust number F/745291 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Irrevocable Administrative Trust number CIB/3081 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% | |
Irrevocable Administrative Trust number CIB/3249 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100.00% |
Description of the business a_6
Description of the business and summary of significant accounting policies - Revenue recognition and financial instruments (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Revenue recognition | ||||
Fare revenues | $ 1,227,368 | $ 23,129,991 | $ 18,487,858 | $ 17,791,317 |
Other passenger revenues | 560,844 | 10,569,208 | 7,892,497 | 6,098,504 |
Passenger revenues | 1,788,212 | 33,699,199 | 26,380,355 | 23,889,821 |
Other non-passenger revenues (Note 1d) | 47,629 | 897,586 | 697,357 | 727,392 |
Cargo | 12,143 | 228,836 | 227,438 | 170,973 |
Total | 34,825,621 | |||
Non-derivatives financial instruments | (3,871) | (72,949) | ||
Operating revenues | $ 1,844,113 | 34,752,672 | 27,305,150 | 24,788,186 |
Transactions from unearned transportation revenues | ||||
January 1, | 2,438,516 | 2,293,309 | 2,228,051 | |
Deferred | 34,940,609 | 26,525,562 | 23,955,079 | |
Recognized in revenue during the year | (33,699,199) | (26,380,355) | (23,889,821) | |
December 31, | 3,679,926 | 2,438,516 | 2,293,309 | |
Non-ticket revenues | ||||
Expected credit losses on accounts receivable | 40,393 | 10,621 | 4,720 | |
Domestic (Mexico) | ||||
Revenue recognition | ||||
Operating revenues | 24,594,797 | 18,493,476 | 17,272,946 | |
Domestic (Mexico) | At the flight time | ||||
Revenue recognition | ||||
Fare revenues | 15,833,878 | 12,336,095 | 12,284,795 | |
Other passenger revenues | 7,531,725 | 5,182,572 | 4,087,664 | |
Passenger revenues | 23,365,603 | 17,518,667 | 16,372,459 | |
Other non-passenger revenues (Note 1d) | 888,353 | 685,219 | 723,297 | |
Cargo | 221,375 | 221,324 | 165,907 | |
Total | 24,475,331 | |||
Operating revenues | 18,425,210 | 17,261,663 | ||
Domestic (Mexico) | At the sale | ||||
Revenue recognition | ||||
Other passenger revenues | 119,466 | 68,264 | 11,283 | |
Passenger revenues | 119,466 | 68,264 | 11,283 | |
Total | 119,466 | |||
Operating revenues | 68,264 | 11,283 | ||
International | At the flight time | ||||
Revenue recognition | ||||
Fare revenues | 7,296,113 | 6,151,763 | 5,506,522 | |
Other passenger revenues | 2,865,555 | 2,598,375 | 1,992,696 | |
Passenger revenues | 10,161,668 | 8,750,138 | 7,499,218 | |
Other non-passenger revenues (Note 1d) | 9,233 | 12,138 | 4,095 | |
Cargo | 7,461 | 6,114 | 5,066 | |
Total | 10,178,362 | |||
Operating revenues | 8,768,390 | 7,508,379 | ||
International | At the sale | ||||
Revenue recognition | ||||
Other passenger revenues | 52,462 | 43,286 | 6,861 | |
Passenger revenues | 52,462 | 43,286 | 6,861 | |
Total | $ 52,462 | |||
Operating revenues | $ 43,286 | $ 6,861 | ||
Minimum | ||||
Revenue recognition | ||||
Term of trade receivables | 1 day | 1 day | ||
Maximum | ||||
Revenue recognition | ||||
Term of trade receivables | 2 days | 2 days |
Description of the business a_7
Description of the business and summary of significant accounting policies - Intangible assets (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Software | |
Intangible assets | |
Useful life of intangible assets | 5 years |
Description of the business a_8
Description of the business and summary of significant accounting policies - Aircraft, rotable spare parts, furniture and equipment, net (Details) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2019MXN ($)agreementengineaircraft | Dec. 31, 2018MXN ($)agreementengineaircraft | Dec. 31, 2017agreement | Dec. 31, 2017engine | Dec. 31, 2017aircraft | Dec. 31, 2017 | Dec. 31, 2017MXN ($) | |
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Maintenance deposits expensed as supplemental rent | $ 295,720 | $ 299,601 | $ 265,756 | ||||
Number of aircraft added to fleet | aircraft | 7 | 10 | 5 | ||||
Number of aircraft with lease term extended | 1 | 2 | 3 | 3 | |||
Number of engine agreements for which lease term extended | engine | 1 | 2 | 2 | ||||
Maintenance deposits expensed to contingent rent prior to lease extensions | $ 0 | $ 0 | 65,716 | ||||
Length of time before routine aircraft and engine maintenance is required | 22 months | ||||||
Depreciation | $ 587,849 | 427,756 | 496,291 | ||||
Capitalized borrowing costs | $ 456,313 | $ 357,920 | 193,389 | ||||
Rate used to determine amount of borrowing cost | 5.10% | 4.41% | 3.30% | ||||
Flight equipment | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Depreciation | $ 84,888 | $ 71,105 | 61,204 | ||||
Constructions and improvements | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Depreciation | 14,721 | 10,689 | 20,216 | ||||
Computer equipment | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Depreciation | $ 7,074 | 7,215 | 3,809 | ||||
Annual depreciation rate | 25.00% | ||||||
Workshop tools | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Depreciation | $ 1,938 | 1,856 | 2,314 | ||||
Annual depreciation rate | 33.30% | ||||||
Electric power equipment | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Depreciation | $ 1,084 | 1,132 | 1,294 | ||||
Annual depreciation rate | 10.00% | ||||||
Communications equipment | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Depreciation | $ 933 | 892 | 796 | ||||
Annual depreciation rate | 10.00% | ||||||
Workshop machinery and equipment | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Depreciation | $ 1,044 | 727 | 722 | ||||
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 | $ 278 | 256 | 376 | ||||
Annual depreciation rate | 20.00% | ||||||
Office furniture and equipment | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Depreciation | $ 5,854 | 6,209 | 3,801 | ||||
Annual depreciation rate | 10.00% | ||||||
Leasehold improvements to flight equipment | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Additions | $ 659,082 | 676,457 | 529,331 | ||||
Amortization of major maintenance leasehold improvement | 450,371 | 313,464 | 382,745 | ||||
Depreciation | 469,694 | 327,193 | 401,288 | ||||
Aircraft spare engines | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Depreciation | 1,787 | ||||||
Rotable spare parts, furniture and equipment assets | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Impairment charges on rotable spare parts, furniture and equipment | $ 0 | $ 0 | $ 0 | ||||
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 | Flight equipment | |||||||
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 | Flight equipment | |||||||
Aircraft, rotable spare parts, furniture and equipment, net | |||||||
Annual depreciation rate | 16.70% |
Description of the business a_9
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, 2019$ / $Q / $ | Dec. 31, 2019$ / $₡ / $ | Dec. 31, 2019USD ($)$ / $ | Dec. 31, 2019MXN ($)$ / $ | Dec. 31, 2018$ / $Q / $ | Dec. 31, 2018$ / $₡ / $ | Dec. 31, 2018MXN ($)$ / $ | Dec. 31, 2017$ / $Q / $ | Dec. 31, 2017$ / $₡ / $ | Dec. 31, 2017MXN ($)$ / $ | Apr. 27, 2020$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2017Q / $ | Dec. 31, 2017₡ / $ | |
Description of the business and summary of significant accounting policies | ||||||||||||||||||
Average exchange rate for year | 7.7066 | 590.9574 | 19.2618 | 7.5337 | 580.8534 | 7.3509 | 572.2000 | |||||||||||
Exchange rate as of end of the year | 18.8452 | 18.8452 | 18.8452 | 18.8452 | 19.6829 | 19.6829 | 19.6829 | 19.7354 | 19.7354 | 19.7354 | 24.6230 | 7.6988 | 573.4400 | 18.8452 | 7.7440 | 609.6100 | 7.3448 | 572.5600 |
Exchange differences on translation of foreign operations | $ 427,000 | $ 8,045 | $ 22,156 | $ (7,178) |
Description of the business _10
Description of the business and summary of significant accounting policies - Employee benefits (Details) $ / shares in Units, $ / shares in Units, $ in Thousands, $ in Thousands | Nov. 06, 2014 | Apr. 30, 2018$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2019MXN ($)$ / shares | Dec. 31, 2018$ / shares | Dec. 31, 2018MXN ($)$ / shares | Dec. 31, 2017$ / shares | Dec. 31, 2017MXN ($)$ / shares |
Share-based payments | ||||||||
Termination benefits provision | $ 0 | $ 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 | $ 191,071 | $ 3,600,762 | 3,125,393 | 2,823,647 | ||||
Quarterly incentive bonuses | ||||||||
Share-based payments | ||||||||
Salaries and benefits | 62,825 | 67,680 | 48,384 | |||||
Short-term benefit plan for certain key personnel | ||||||||
Share-based payments | ||||||||
Salaries and benefits | 80,634 | 50,000 | 0 | |||||
Restricted Stock Units | ||||||||
Share-based payments | ||||||||
Salaries and benefits | 49,659 | 19,980 | 13,508 | |||||
SARs - cash settled | ||||||||
Share-based payments | ||||||||
Salaries and benefits | $ 2,964 | |||||||
Salaries and benefits | $ (186) | $ (8,999) | ||||||
Vesting period | 3 years | 3 years | 3 years | 3 years | 3 years | |||
MIP I | ||||||||
Share-based payments | ||||||||
Exercise price | $ / shares | $ 5.31 | $ 5.31 | $ 5.31 | |||||
MIP II | ||||||||
Share-based payments | ||||||||
Salaries and benefits | $ 37,760 | |||||||
Salaries and benefits | $ (5,052) | $ (16,499) | ||||||
Vesting period | 5 years | 5 years | ||||||
BODIP | ||||||||
Share-based payments | ||||||||
Vesting period | 4 years | |||||||
Exercise price | $ / shares | $ 16.12 | $ 16.80 | $ 16.12 | $ 26.29 | ||||
Employee profit sharing | ||||||||
Share-based payments | ||||||||
Salaries and benefits | $ 22,134 | $ 14,106 | $ 8,342 |
Description of the business _11
Description of the business and summary of significant accounting policies - Leases (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Impairment charges recorded in respect of right-of-use asset | $ 0 | $ 0 | $ 0 |
Variable rent | $ 680,964 | $ 659,106 | $ 851,410 |
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 | 14 years | ||
Maintenance component | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Estimated useful lives of the assets | 8 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 |
Description of the business _12
Description of the business and summary of significant accounting policies - Operating segments (Details) - segment | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Description of the business and summary of significant accounting policies | |||
Number of operating segments | 1 | ||
Number of geographic segments | 2 | 2 | 2 |
Description of the business _13
Description of the business and summary of significant accounting policies - Impact of new International Financial Reporting Standards (Details) $ / shares in Units, $ / shares in Units, $ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2019MXN ($)$ / shares | Dec. 31, 2018MXN ($)$ / shares | Dec. 31, 2017MXN ($)$ / shares | Dec. 31, 2019MXN ($) | Dec. 31, 2016MXN ($) | |
Impact of adoption on the consolidated statements of financial position | ||||||
Unearned transportation revenue | $ 195,271 | $ 2,438,516 | $ 2,293,309 | $ 3,679,926 | ||
Retained earnings (losses) | 23,264 | (2,200,651) | (1,257,769) | 438,412 | ||
Impact of adoption on the consolidated statements of operations | ||||||
Fare revenues | 1,227,368 | $ 23,129,991 | 18,487,858 | 17,791,317 | ||
Other passenger revenues | 560,844 | 10,569,208 | 7,892,497 | 6,098,504 | ||
Passenger revenues | 1,788,212 | 33,699,199 | 26,380,355 | 23,889,821 | ||
Other non-passenger revenues (Note 1d) | 47,629 | 897,586 | 697,357 | 727,392 | ||
Cargo | 12,143 | 228,836 | 227,438 | 170,973 | ||
Operating revenues | 1,844,113 | 34,752,672 | 27,305,150 | 24,788,186 | ||
Operating income (loss) | 231,115 | 4,355,423 | 534,797 | 1,242,704 | ||
Net income (loss) | $ 140,039 | $ 2,639,063 | $ (942,882) | $ 278,671 | ||
Earnings (loss) per share basic: | (per share) | $ 0.138 | $ 2.608 | $ (0.932) | $ 0.275 | ||
Non-current assets: | ||||||
Right-of-use assets | $ 1,811,006 | $ 31,882,053 | $ 24,893,882 | 34,128,766 | $ 23,500,081 | |
Deferred income tax | 14,285,711 | 11,351,888 | 14,511,827 | |||
Short-term liabilities: | ||||||
Lease liabilities | 39,565,146 | 32,523,704 | 40,517,045 | 32,711,793 | ||
Lease liabilities | 250,488 | 4,976,454 | 4,213,417 | 4,720,505 | ||
Other liabilities | (21,608) | (25,835) | (202,250) | (407,190) | ||
Long-term liabilities: | ||||||
Lease liabilities | 1,899,504 | 34,588,692 | 28,310,287 | 35,796,540 | ||
Other liabilities | 77,982 | 1,820,194 | 1,454,790 | 1,469,595 | ||
Equity: | ||||||
Retained earnings (losses) | 23,264 | (2,200,651) | (1,257,769) | $ 438,412 | ||
Impact on the statement of operations | ||||||
Depreciation expense | 249,558 | $ 4,702,971 | 4,043,691 | 3,437,903 | ||
Operating income | 231,115 | 4,355,423 | 534,797 | 1,242,704 | ||
Finance cost | 120,446 | 2,269,829 | 1,876,312 | 1,515,281 | ||
Foreign exchange (gain) loss | (76,439) | (1,440,501) | 103,790 | (683,039) | ||
Income tax expense (benefit) | (58,096) | (1,094,831) | 349,820 | (237,586) | ||
Net (income) loss | (140,039) | (2,639,063) | 942,882 | (278,671) | ||
Impact on the statement of cash flows | ||||||
Lease payments | (6,499,802) | (5,710,907) | (5,032,898) | |||
Net cash flows from operating activities | 504,618 | 9,509,643 | 6,276,707 | 6,018,767 | ||
Payment of principal portion of lease liabilities | 344,905 | 6,499,802 | 5,710,907 | 5,032,898 | ||
Net cash flows from financing activities | $ (277,993) | $ (5,238,840) | (5,946,059) | (3,634,598) | ||
Impact of IFRS 16 adoption | ||||||
Impact of adoption on the consolidated statements of financial position | ||||||
Retained earnings (losses) | (6,625,386) | (6,419,554) | (7,365,758) | |||
Impact of adoption on the consolidated statements of operations | ||||||
Operating income (loss) | (1,499,964) | (1,369,475) | ||||
Net income (loss) | (199,113) | 1,011,921 | ||||
Non-current assets: | ||||||
Right-of-use assets | 31,882,053 | 24,893,882 | 23,500,081 | |||
Deferred income tax | 2,725,037 | 2,636,821 | 3,042,344 | |||
Prepaid expenses | (266,959) | (266,959) | (266,959) | |||
Short-term liabilities: | ||||||
Lease liabilities | 4,976,454 | 4,213,417 | 4,237,065 | |||
Other liabilities | (91,889) | (78,494) | (68,548) | |||
Long-term liabilities: | ||||||
Lease liabilities | 34,588,692 | 28,310,287 | 28,474,728 | |||
Other liabilities | 1,492,260 | 1,238,088 | 997,979 | |||
Equity: | ||||||
Retained earnings (losses) | (6,625,386) | (6,419,554) | $ (7,365,758) | |||
Impact on the statement of operations | ||||||
Depreciation expense | 4,043,691 | 3,437,903 | ||||
Lease benefit | (5,543,655) | (4,807,378) | ||||
Operating income | (1,499,964) | (1,369,475) | ||||
Finance cost | 1,755,978 | 1,428,924 | ||||
Foreign exchange (gain) loss | 31,315 | (1,476,893) | ||||
Income tax expense (benefit) | (88,216) | 405,523 | ||||
Net (income) loss | 199,113 | (1,011,921) | ||||
Impact on the statement of cash flows | ||||||
Lease payments | (5,710,907) | (5,032,898) | ||||
Net cash flows from operating activities | 5,710,907 | 5,032,898 | ||||
Payment of principal portion of lease liabilities | 5,710,907 | 5,032,898 | ||||
Net cash flows from financing activities | (5,710,907) | (5,032,898) | ||||
As previously reported | ||||||
Impact of adoption on the consolidated statements of operations | ||||||
Net income (loss) | (682,500) | (594,599) | ||||
Impact on the statement of operations | ||||||
Net (income) loss | $ 682,500 | $ 594,599 |
Significant accounting judgme_2
Significant accounting judgments, estimates and assumptions (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Significant accounting judgments, estimates and assumptions | |||
Tax loss carry-forwards used | $ 214,460 | $ 154,353 | $ 16,378 |
Financial instruments and ris_3
Financial instruments and risk management - Jet fuel price risk (Details) gal in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($)gal$ / gal | Dec. 31, 2018MXN ($)gal$ / gal | Dec. 31, 2017MXN ($)gal$ / gal | |
Jet fuel price risk | ||||
Fair value of derivative financial liabilities | $ | $ 122,948 | |||
Intrinsic value recycled to the fuel cost | $ | $ 9,477 | |||
Loss from derivatives financial instruments recognized in consolidated statements of operations | $ | $ (67,629) | $ 455,009 | $ (52,097) | |
Jet fuel | ||||
Jet fuel price risk | ||||
Percentage of operating expenses | 38.00% | 38.00% | 38.00% | 31.00% |
Jet fuel Asian call options | ||||
Jet fuel price risk | ||||
Notional volume (in gallons) | gal | 13,492 | |||
Fair value of derivative financial assets | $ | $ 48,199 | $ 497,403 | ||
Cost of hedging recognized in other comprehensive income | $ | $ 133,567 | 134,096 | 163,836 | |
Extrinsic value of options recycled to cost | $ | $ 61,067 | $ (402,493) | $ 26,980 | |
Jet fuel Asian call options | Within one year | ||||
Jet fuel price risk | ||||
Notional volume (in gallons) | gal | 26,632 | 131,381 | ||
Strike price agreed rate | 1.8400 | 1.7447 | ||
Approximate percentage of hedge (of expected consumption value) | 10.00% | 55.00% | ||
Jet fuel Asian call options | Within six months | ||||
Jet fuel price risk | ||||
Notional volume (in gallons) | gal | 12,790 | 69,518 | ||
Strike price agreed rate | 1.8400 | 1.6861 | ||
Approximate percentage of hedge (of expected consumption value) | 10.00% | 60.00% | ||
Jet fuel Asian call options | Between six months and one year | ||||
Jet fuel price risk | ||||
Notional volume (in gallons) | gal | 13,842 | 61,863 | ||
Strike price agreed rate | 1.8400 | 1.8106 | ||
Approximate percentage of hedge (of expected consumption value) | 10.00% | 50.00% | ||
Jet fuel Zero-Cost collars | ||||
Jet fuel price risk | ||||
Notional volume (in gallons) | gal | 70,136 | 45,600 | 61,100 | |
Fair value of derivative financial assets | $ | $ 133,567 | |||
Fair value of derivative financial liabilities | $ | $ 122,948 | |||
Upward/downward movement in the spot price of the US Gulf Coast Jet 54 | 5.00% | 5.00% | ||
Effect of upward movement in spot price on accumulated other comprehensive income | $ | $ 4,520 | |||
Effect of downward movement in spot price on accumulated other comprehensive income | $ | $ (4,520) | |||
Jet fuel Zero-Cost collars | Within one year | ||||
Jet fuel price risk | ||||
Notional volume (in gallons) | gal | 56,644 | 18,963 | ||
Approximate percentage of hedge (of expected consumption value) | 20.00% | 15.00% | ||
Jet fuel Zero-Cost collars | Within one year | Minimum | ||||
Jet fuel price risk | ||||
Strike price agreed rate | 1.82 | 1.91 | ||
Jet fuel Zero-Cost collars | Within one year | Maximum | ||||
Jet fuel price risk | ||||
Strike price agreed rate | 2.46 | |||
Jet fuel Zero-Cost collars | Within one year | Jet fuel | Minimum | ||||
Jet fuel price risk | ||||
Strike price agreed rate | 1.64 | |||
Jet fuel Zero-Cost collars | Within one year | Jet fuel | Maximum | ||||
Jet fuel price risk | ||||
Strike price agreed rate | 1.82 | |||
Jet fuel Zero-Cost collars | Within six months | ||||
Jet fuel price risk | ||||
Notional volume (in gallons) | gal | 34,480 | 18,963 | ||
Approximate percentage of hedge (of expected consumption value) | 25.00% | 15.00% | ||
Jet fuel Zero-Cost collars | Within six months | Minimum | ||||
Jet fuel price risk | ||||
Strike price agreed rate | 1.91 | |||
Jet fuel Zero-Cost collars | Within six months | Maximum | ||||
Jet fuel price risk | ||||
Strike price agreed rate | 2.46 | |||
Jet fuel Zero-Cost collars | Within six months | Jet fuel | Minimum | ||||
Jet fuel price risk | ||||
Strike price agreed rate | 1.63 | |||
Jet fuel Zero-Cost collars | Within six months | Jet fuel | Maximum | ||||
Jet fuel price risk | ||||
Strike price agreed rate | 1.82 | |||
Jet fuel Zero-Cost collars | Between six months and one year | ||||
Jet fuel price risk | ||||
Notional volume (in gallons) | gal | 22,164 | |||
Approximate percentage of hedge (of expected consumption value) | 15.00% | |||
Jet fuel Zero-Cost collars | Between six months and one year | Jet fuel | Minimum | ||||
Jet fuel price risk | ||||
Strike price agreed rate | 1.65 | |||
Jet fuel Zero-Cost collars | Between six months and one year | Jet fuel | Maximum | ||||
Jet fuel price risk | ||||
Strike price agreed rate | 1.81 | |||
All-in | Within one year | ||||
Jet fuel price risk | ||||
Approximate percentage of hedge (of expected consumption value) | 20.00% | 18.00% | ||
All-in | Within six months | ||||
Jet fuel price risk | ||||
Approximate percentage of hedge (of expected consumption value) | 25.00% | 25.00% | ||
All-in | Between six months and one year | ||||
Jet fuel price risk | ||||
Approximate percentage of hedge (of expected consumption value) | 15.00% | 10.00% |
Financial instruments and ris_4
Financial instruments and risk management - Foreign currency risk (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Foreign currency risk | |||
Percentage of total collections denominated in U.S. dollars | 43.00% | 38.00% | 40.00% |
United States of America and Central America | |||
Foreign currency risk | |||
Percentage of revenues | 29.00% | 32.00% | 30.00% |
Financial instruments and ris_5
Financial instruments and risk management - Foreign exchange on and off-balance sheet exposure (Details) $ in Thousands | 12 Months Ended | ||||||||||||||||
Dec. 31, 2019MXN ($)$ / $ | Dec. 31, 2018MXN ($)$ / $ | Dec. 31, 2017MXN ($)$ / $ | Apr. 27, 2020$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2018USD ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017Q / $ | Dec. 31, 2017₡ / $ | Dec. 31, 2017USD ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2016MXN ($) | |
Assets | |||||||||||||||||
Cash and cash equivalents | $ 423,449,000 | $ 7,979,972 | $ 311,111,000 | $ 5,862,942 | $ 6,950,879 | $ 7,071,251 | |||||||||||
Other accounts receivable, net | 48,978,000 | 923,000 | 508,479 | 478,467 | |||||||||||||
Total assets | 3,358,689,000 | 63,295,127 | 56,724,683 | 49,952,973 | |||||||||||||
Liabilities | |||||||||||||||||
Financial debt | 4,975,969 | 3,523,198 | 3,482,714 | 1,994,283 | |||||||||||||
Lease liabilities | 40,517,045 | 39,565,146 | 32,523,704 | $ 32,711,793 | |||||||||||||
Suppliers | 84,748,000 | 1,597,099 | 1,085,499 | 1,077,438 | |||||||||||||
Derivative financial instruments | 122,948 | ||||||||||||||||
Total liabilities | $ 3,065,262,000 | $ 57,765,444 | $ 54,019,530 | $ 46,127,620 | |||||||||||||
Exchange rate | 18.8452 | 19.6829 | 19.7354 | 24.6230 | 7.6988 | 573.4400 | 18.8452 | 7.7440 | 609.6100 | 7.3448 | 572.5600 | ||||||
Unrealized gains relating to the foreign currency forward contracts is included in OCI | $ 14,241 | ||||||||||||||||
Net gains on foreign currency forward contacts | $ 4,199 | $ 52,516 | |||||||||||||||
Net loss on foreign currency forward contract | $ 11,290 | ||||||||||||||||
Lease liability designated as hedging forecasted revenues over the remaining lease term | $ 2,100,000,000 | ||||||||||||||||
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 | ||||||||||||||||
Foreign exchange and off-balance sheet exposure | |||||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | 373,099,000 | 279,829,000 | $ 344,038,000 | ||||||||||||||
Other accounts receivable, net | 23,620,000 | 10,957,000 | 13,105,000 | ||||||||||||||
Guarantee deposits | 437,499,000 | 362,149,000 | 377,485,000 | ||||||||||||||
Derivative financial instruments | 7,088,000 | 3,172,000 | 25,204,000 | ||||||||||||||
Total assets | 841,306,000 | 656,107,000 | 759,832,000 | ||||||||||||||
Liabilities | |||||||||||||||||
Financial debt | 176,927,000 | 155,455,000 | 128,296,000 | ||||||||||||||
Lease liabilities | 2,263,849,000 | 2,099,218,000 | 1,727,890,000 | ||||||||||||||
Suppliers | 76,471,000 | 51,012,000 | 53,729,000 | ||||||||||||||
Other taxes and fees payable | 22,486,000 | 14,823,000 | 10,304,000 | ||||||||||||||
Derivative financial instruments | 6,246,000 | ||||||||||||||||
Total liabilities | 2,539,733,000 | 2,326,754,000 | 1,920,219,000 | ||||||||||||||
Net foreign currency position | $ (1,698,427,000) | $ (1,670,647,000) | $ (1,160,387,000) | ||||||||||||||
Aircraft rental expense | Foreign currency forward contract | |||||||||||||||||
Liabilities | |||||||||||||||||
Percentage of expense hedged | 20.00% | 9.00% |
Financial instruments and ris_6
Financial instruments and risk management - Interest rate risk (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019MXN ($)item | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Interest rate risk | |||
Derivative financial liabilities | $ 122,948 | ||
Loss on cash flow hedges | $ 67,629 | (455,009) | $ 52,097 |
Interest rate swap contracts | |||
Interest rate risk | |||
Derivative financial liabilities | $ 2,695 | $ 0 | 0 |
Loss on cash flow hedges | $ 13,827 | ||
28-day TIIE | |||
Interest rate risk | |||
Spread on interest rate basis | 1.20% | ||
Number of caplets | item | 59 | ||
28-day TIIE | Maximum | |||
Interest rate risk | |||
Spread on interest rate basis | 10.00% |
Financial instruments and ris_7
Financial instruments and risk management - Maturity analysis for financial liabilities (Details) - MXN ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | $ 47,378,242 | ||
Within one year | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 7,159,554 | ||
Between one year and five years | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 40,218,688 | ||
Jet fuel Zero-Cost collars | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | $ 122,948 | ||
Jet fuel Zero-Cost collars | Within one year | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 122,948 | ||
Lease liabilities | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 45,025,973 | $ 37,648,423 | |
Lease liabilities | Within one year | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 6,306,148 | 6,804,194 | |
Lease liabilities | Between one year and five years | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 38,719,825 | 30,844,229 | |
Aircraft, engines, land and buildings leases | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 40,517,045 | ||
Aircraft, engines, land and buildings leases | Within one year | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 4,720,505 | ||
Aircraft, engines, land and buildings leases | Between one year and five years | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 35,796,540 | ||
Aircraft, engines, land and buildings leases | Lease liabilities | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 39,565,146 | 32,523,704 | |
Aircraft, engines, land and buildings leases | Lease liabilities | Within one year | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 4,976,454 | 4,213,417 | |
Aircraft, engines, land and buildings leases | Lease liabilities | Between one year and five years | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 34,588,692 | 28,310,287 | |
Aircraft and engine lease return obligation | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 1,852,688 | ||
Aircraft and engine lease return obligation | Within one year | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 383,093 | ||
Aircraft and engine lease return obligation | Between one year and five years | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 1,469,595 | ||
Aircraft and engine lease return obligation | Lease liabilities | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 1,831,045 | 1,647,977 | |
Aircraft and engine lease return obligation | Lease liabilities | Within one year | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 10,851 | 193,187 | |
Aircraft and engine lease return obligation | Lease liabilities | Between one year and five years | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 1,820,194 | 1,454,790 | |
Revolving line of credit | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 3,308,509 | 3,045,574 | 2,528,388 |
Revolving line of credit | Within one year | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 1,855,956 | 734,635 | 1,449,236 |
Revolving line of credit | Between one year and five years | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 1,452,553 | 2,310,939 | 1,079,152 |
Short-term working capital facilities | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 200,000 | 461,260 | 948,354 |
Short-term working capital facilities | Within one year | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 200,000 | $ 461,260 | $ 948,354 |
Asset backed trust notes ("CEBUR"), in Mexican pesos | |||
Liquidity risk | |||
Contractual principal payments on financial liabilities and derivative financial instruments | 1,500,000 | ||
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 | $ 1,500,000 |
Fair value measurements - Carry
Fair value measurements - Carrying amount and fair value (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair value measurements | |||
Carrying amount of derivative financial assets | $ 136,262 | $ 62,440 | $ 497,403 |
Fair value of derivative financial assets | 136,262 | 62,440 | 497,403 |
Net carrying amount | (4,872,247) | (3,567,342) | (2,979,339) |
Net fair value | (5,058,054) | (3,576,058) | (2,984,338) |
Transfers of assets from level 1 to level 2 | 0 | 0 | 0 |
Transfers of assets from level 2 to level 1 | 0 | 0 | 0 |
Transfers of liabilities from level 1 to level 2 | 0 | 0 | 0 |
Transfers of liabilities from level 2 to level 1 | 0 | 0 | 0 |
Financial debt | |||
Fair value measurements | |||
Carrying amount of financial liabilities | (5,008,509) | (3,506,834) | (3,476,742) |
Fair value of financial liabilities | (5,194,316) | (3,515,550) | (3,481,741) |
Interest-bearing loans and borrowings | |||
Fair value measurements | |||
Fair value of financial liabilities | (5,194,316) | (3,515,550) | (3,481,741) |
Derivative financial instruments | |||
Fair value measurements | |||
Carrying amount of financial liabilities | (122,948) | ||
Fair value of financial liabilities | (122,948) | ||
Jet fuel Asian call options | |||
Fair value measurements | |||
Carrying amount of derivative financial assets | 48,199 | 497,403 | |
Fair value of derivative financial assets | 133,567 | 48,199 | 497,403 |
Fair value of financial liabilities | (122,948) | ||
Foreign currency forward contract | |||
Fair value measurements | |||
Carrying amount of derivative financial assets | 14,241 | ||
Fair value of derivative financial assets | 14,241 | ||
Loss of the interest rate Cap | |||
Fair value measurements | |||
Fair value of derivative financial assets | 2,695 | ||
Level 2 | |||
Fair value measurements | |||
Net fair value | (5,058,054) | (3,576,058) | (2,984,338) |
Level 2 | Interest-bearing loans and borrowings | |||
Fair value measurements | |||
Fair value of financial liabilities | (5,194,316) | (3,515,550) | (3,481,741) |
Level 2 | Jet fuel Asian call options | |||
Fair value measurements | |||
Fair value of derivative financial assets | 133,567 | 48,199 | $ 497,403 |
Fair value of financial liabilities | (122,948) | ||
Level 2 | Foreign currency forward contract | |||
Fair value measurements | |||
Fair value of derivative financial assets | $ 14,241 | ||
Level 2 | Loss of the interest rate Cap | |||
Fair value measurements | |||
Fair value of derivative financial assets | $ 2,695 |
Fair value measurements - Loss
Fair value measurements - Loss gain from financial instruments (Details) $ in Thousands | 12 Months Ended | |||||||||||
Dec. 31, 2019USD ($)$ / $ | Dec. 31, 2019MXN ($)$ / $ | Dec. 31, 2018MXN ($)$ / $ | Dec. 31, 2017MXN ($)$ / $ | Apr. 27, 2020$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2017Q / $ | Dec. 31, 2017₡ / $ | |
gain (loss) on financial instruments | ||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | $ (67,629) | $ 455,009 | $ (52,097) | |||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | $ 13,982,000 | $ 263,495 | $ (283,691) | $ (42,148) | ||||||||
Exchange rate | 18.8452 | 18.8452 | 19.6829 | 19.7354 | 24.6230 | 7.6988 | 573.4400 | 18.8452 | 7.7440 | 609.6100 | 7.3448 | 572.5600 |
Foreign currency forward contract | ||||||||||||
gain (loss) on financial instruments | ||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | $ 4,199 | $ 52,516 | $ (11,290) | |||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | (14,241) | 14,241 | (2,090) | |||||||||
Jet fuel Asian call options | ||||||||||||
gain (loss) on financial instruments | ||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (61,069) | 402,493 | (26,980) | |||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | 11,148 | (174,984) | (54,202) | |||||||||
Jet fuel Zero cost collars | ||||||||||||
gain (loss) on financial instruments | ||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (9,477) | |||||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | 256,515 | $ (122,948) | ||||||||||
Interest rate swap contracts | ||||||||||||
gain (loss) on financial instruments | ||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (13,827) | |||||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | $ 14,144 | |||||||||||
Loss of the interest rate Cap | ||||||||||||
gain (loss) on financial instruments | ||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (1,282) | |||||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | (4,023) | |||||||||||
Derivative financial instruments | ||||||||||||
gain (loss) on financial instruments | ||||||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | $ 14,096 |
Financial assets and liabilit_3
Financial assets and liabilities - Financial assets (Details) $ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) |
Financial assets | ||||
Total financial assets | $ 136,262 | $ 62,440 | $ 497,403 | |
Current | $ 7,088 | 133,567 | 62,440 | 497,403 |
Non-current | $ 143 | 2,695 | ||
Jet fuel Asian call options | ||||
Financial assets | ||||
Total financial assets | 48,199 | $ 497,403 | ||
Jet fuel Zero-Cost collars | ||||
Financial assets | ||||
Total financial assets | 133,567 | |||
Foreign currency forward contract | ||||
Financial assets | ||||
Total financial assets | $ 14,241 | |||
Interest rate cap | ||||
Financial assets | ||||
Total financial assets | $ 2,695 |
Financial assets and liabilit_4
Financial assets and liabilities - Short-term and long-term debt (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Jun. 20, 2019MXN ($) | Dec. 31, 2016MXN ($) | |
Short-term and long-term debt | |||||||
Amortized transaction costs | $ (22,472) | ||||||
Accrued interest and other financial cost | $ 16,364 | $ 5,972 | 30,061 | ||||
Financial debt without unamortized cost | $ 4,998,441 | ||||||
Total financial debt | 3,523,198 | 3,482,714 | 4,975,969 | $ 1,994,283 | |||
Less: Short-term maturities | 1,212,259 | 2,403,562 | $ 110,692 | 2,086,017 | 1,051,237 | ||
Long-term | 2,310,939 | 1,079,152 | $ 153,352 | $ 2,889,952 | $ 943,046 | ||
Nominal amount of working capital facility (in USD) | $ 1,500,000 | ||||||
28-day TIIE | |||||||
Short-term and long-term debt | |||||||
Spread on interest rate basis | 1.20% | 1.20% | |||||
Within one year | |||||||
Short-term and long-term debt | |||||||
Total financial debt | $ 2,086,017 | ||||||
Between one year and two years | |||||||
Short-term and long-term debt | |||||||
Total financial debt | 1,678,534 | ||||||
Between two and three years | |||||||
Short-term and long-term debt | |||||||
Total financial debt | 524,019 | ||||||
Between three and four years | |||||||
Short-term and long-term debt | |||||||
Total financial debt | 500,000 | ||||||
Between four and five years | |||||||
Short-term and long-term debt | |||||||
Total financial debt | 209,871 | ||||||
Revolving line of credit | |||||||
Short-term and long-term debt | |||||||
Financial debt excluding accrued interest | $ 3,045,574 | $ 2,528,388 | 3,308,509 | ||||
Total financial debt | $ 3,334,229 | ||||||
Interest rate basis | three-month LIBOR plus a spread of 260 basis points | 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% | 2.60% | |||
Revolving line of credit | Within one year | |||||||
Short-term and long-term debt | |||||||
Total financial debt | $ 1,881,676 | ||||||
Revolving line of credit | Between one year and two years | |||||||
Short-term and long-term debt | |||||||
Total financial debt | 1,428,534 | ||||||
Revolving line of credit | Between two and three years | |||||||
Short-term and long-term debt | |||||||
Total financial debt | 24,019 | ||||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | |||||||
Short-term and long-term debt | |||||||
Financial debt | $ 1,459,871 | ||||||
Total financial debt | $ 1,464,212 | ||||||
Interest rate basis | TIIE 28 days plus 175 basis points | ||||||
Spread on interest rate basis | 1.75% | ||||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | 28-day TIIE | |||||||
Short-term and long-term debt | |||||||
Spread on interest rate basis | 1.75% | 1.75% | |||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | Within one year | |||||||
Short-term and long-term debt | |||||||
Total financial debt | $ 4,341 | ||||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | Between one year and two years | |||||||
Short-term and long-term debt | |||||||
Total financial debt | 250,000 | ||||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | Between two and three years | |||||||
Short-term and long-term debt | |||||||
Total financial debt | 500,000 | ||||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | Between three and four years | |||||||
Short-term and long-term debt | |||||||
Total financial debt | 500,000 | ||||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | Between four and five years | |||||||
Short-term and long-term debt | |||||||
Total financial debt | 209,871 | ||||||
Short-term working capital facility with Citibanamex | |||||||
Short-term and long-term debt | |||||||
Total financial debt | $ 461,260 | $ 948,354 | |||||
Interest rate basis | TIIE 28 days plus a 90 basis points | TIIE 28 days plus a 90 basis points | |||||
Short-term working capital facility with Citibanamex | 28-day TIIE | |||||||
Short-term and long-term debt | |||||||
Spread on interest rate basis | 0.90% | 0.90% | |||||
Short-term working capital facility with Banco Sabadell S.A. | |||||||
Short-term and long-term debt | |||||||
Total financial debt | $ 200,000 | ||||||
Interest rate basis | TIIE 28 days plus a 120 basis points. | ||||||
Short-term working capital facility with Banco Sabadell S.A. | 28-day TIIE | |||||||
Short-term and long-term debt | |||||||
Spread on interest rate basis | 1.20% | 1.20% | |||||
Short-term working capital facility with Banco Sabadell S.A. | Within one year | |||||||
Short-term and long-term debt | |||||||
Total financial debt | $ 200,000 | ||||||
Maximum | 28-day TIIE | |||||||
Short-term and long-term debt | |||||||
Spread on interest rate basis | 10.00% | 10.00% |
Financial assets and liabilit_5
Financial assets and liabilities - Aircraft financing and Notes (Details) $ in Thousands | Jun. 20, 2019MXN ($)item | Dec. 31, 2019MXN ($)aircraft | Dec. 31, 2018MXN ($)aircraft | Dec. 31, 2017MXN ($)aircraft | Dec. 31, 2016MXN ($) |
Aircraft financing | |||||
Number of aircraft incorporated to fleet | aircraft | 7 | 10 | 5 | ||
Notes issued | $ 1,500,000 | ||||
Authorized amount under the program | $ 3,000,000 | ||||
Maturity of notes | 5 years | ||||
Financial liabilities | $ 4,975,969 | $ 3,523,198 | $ 3,482,714 | $ 1,994,283 | |
Revolving line of credit | |||||
Aircraft financing | |||||
Basis points | 2.60% | 2.60% | 2.60% | ||
Financial liabilities | $ 3,334,229 | ||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | |||||
Aircraft financing | |||||
Number of notes issued | item | 15,000,000 | ||||
Maturity of notes | 5 years | ||||
Basis points | 1.75% | ||||
Financial liabilities | 1,464,212 | ||||
Short-term working capital facility with Banco Sabadell S.A. | |||||
Aircraft financing | |||||
Financial liabilities | 200,000 | ||||
Within one year | |||||
Aircraft financing | |||||
Financial liabilities | 2,086,017 | ||||
Within one year | Revolving line of credit | |||||
Aircraft financing | |||||
Financial liabilities | 1,881,676 | ||||
Within one year | Asset backed trust notes ("CEBUR"), in Mexican pesos | |||||
Aircraft financing | |||||
Financial liabilities | 4,341 | ||||
Within one year | Short-term working capital facility with Banco Sabadell S.A. | |||||
Aircraft financing | |||||
Financial liabilities | 200,000 | ||||
Between one year and two years | |||||
Aircraft financing | |||||
Financial liabilities | 1,678,534 | ||||
Between one year and two years | Revolving line of credit | |||||
Aircraft financing | |||||
Financial liabilities | 1,428,534 | ||||
Between one year and two years | Asset backed trust notes ("CEBUR"), in Mexican pesos | |||||
Aircraft financing | |||||
Financial liabilities | 250,000 | ||||
Between two and three years | |||||
Aircraft financing | |||||
Financial liabilities | 524,019 | ||||
Between two and three years | Revolving line of credit | |||||
Aircraft financing | |||||
Financial liabilities | 24,019 | ||||
Between two and three years | Asset backed trust notes ("CEBUR"), in Mexican pesos | |||||
Aircraft financing | |||||
Financial liabilities | 500,000 | ||||
Between three and four years | |||||
Aircraft financing | |||||
Financial liabilities | 500,000 | ||||
Between three and four years | Asset backed trust notes ("CEBUR"), in Mexican pesos | |||||
Aircraft financing | |||||
Financial liabilities | 500,000 | ||||
Between four and five years | |||||
Aircraft financing | |||||
Financial liabilities | 209,871 | ||||
Between four and five years | Asset backed trust notes ("CEBUR"), in Mexican pesos | |||||
Aircraft financing | |||||
Financial liabilities | $ 209,871 | ||||
28-day TIIE | |||||
Aircraft financing | |||||
Basis points | 1.20% | ||||
Debt service coverage ratio prior computation period of debt service | 6 months | ||||
Consecutive days for event of retention | 90 days | ||||
Joint obligor as percentage of EBITDA | 85.00% | ||||
28-day TIIE | Asset backed trust notes ("CEBUR"), in Mexican pesos | |||||
Aircraft financing | |||||
Basis points | 1.75% | ||||
28-day TIIE | Short-term working capital facility with Banco Sabadell S.A. | |||||
Aircraft financing | |||||
Basis points | 1.20% | ||||
28-day TIIE | Minimum | |||||
Aircraft financing | |||||
Debt service coverage ratio | 1.75 | ||||
28-day TIIE | Maximum | |||||
Aircraft financing | |||||
Basis points | 10.00% | ||||
Debt service coverage ratio | 2.5 |
Financial assets and liabilit_6
Financial assets and liabilities - Line of credit (Details) - MXN ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financial assets and liabilities | |||
Total available credit lines | $ 9,005,008 | $ 6,721,139 | $ 7,368,346 |
Available credit lines related to letters of credit | 2,355,650 | 2,657,192 | 2,751,485 |
Available credit lines related to financial debt | 6,649,358 | 4,063,947 | 4,616,861 |
Undrawn credit of financial debt | 1,640,849 | ||
Undrawn credit of letters of credit | $ 86,066 | $ 1,048,241 | $ 1,739,775 |
Financial assets and liabilit_7
Financial assets and liabilities - Changes in liabilities arising from financing activities (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Financial assets and liabilities | ||||
Current interest-bearing loans and borrowings, beginning of the year | $ 1,212,259 | $ 2,403,562 | $ 1,051,237 | |
Non-current interest-bearing loans and borrowings, beginning of the year | 2,310,939 | 1,079,152 | 943,046 | |
Total liabilities from financing activities, beginning of the year | 3,523,198 | 3,482,714 | 1,994,283 | |
Net cash flows, current | (633,609) | (793,363) | 419,350 | |
Net cash flows, non-current | 2,273,143 | 808,620 | 1,093,808 | |
Net cash flows, total | 1,639,534 | 15,257 | 1,513,158 | |
Accrued Interest, Current | 13,698 | 10,392 | (130) | |
Accrued interest | 13,698 | 10,392 | (130) | |
Foreign exchange movement, current | (41,173) | 71,380 | 25,924 | |
Foreign exchange movement, non-current | (122,466) | (56,945) | (50,521) | |
Foreign exchange movement, total | (163,639) | 14,435 | (24,597) | |
Reclassification and other, current | 1,534,842 | (479,712) | 907,181 | |
Reclassification and other, non-current | (1,571,664) | 480,112 | (907,181) | |
Reclassification and other, total | (36,822) | 400 | ||
Current interest-bearing loans and borrowings, end of the year | $ 110,692 | 2,086,017 | 1,212,259 | 2,403,562 |
Non-current interest-bearing loans and borrowings, end of the year | $ 153,352 | 2,889,952 | 2,310,939 | 1,079,152 |
Total liabilities from financing activities, end of the year | $ 4,975,969 | $ 3,523,198 | $ 3,482,714 |
Financial assets and liabilit_8
Financial assets and liabilities - Other financial liabilities (Details) $ in Thousands | Dec. 31, 2018MXN ($) |
Other financial liabilities | |
Total financial liabilities | $ 122,948 |
Current | 122,948 |
Zero cost collar options | |
Other financial liabilities | |
Total financial liabilities | $ 122,948 |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) $ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2016MXN ($) |
Cash and cash equivalents | ||||||
Short-term investments | $ 3,231,125 | $ 4,796,554 | $ 5,982,314 | |||
Cash in banks | 4,612,927 | 1,061,150 | 963,162 | |||
Cash on hand | 44,880 | 5,238 | 5,403 | |||
Restricted funds held in trust related to debt service reserves | 91,040 | |||||
Total cash and cash equivalents | $ 423,449 | $ 7,979,972 | $ 311,111 | $ 5,862,942 | $ 6,950,879 | $ 7,071,251 |
Related parties - Analysis of b
Related parties - Analysis of balances due from/to related parties (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2019MXN ($) | |
Disclosure of transactions between related parties | ||||
Due from related parties | $ 1,244 | $ 8,266 | $ 23,442 | |
Due to related parties | 17,775 | $ 40,931 | 58,554 | |
Frontier | ||||
Disclosure of transactions between related parties | ||||
Due from related parties | 8,266 | 23,442 | ||
Due to related parties | $ 2,751 | 16,246 | ||
Term | 30 days | 30 days | 30 days | |
One Link, S.A. de C.V. | ||||
Disclosure of transactions between related parties | ||||
Due to related parties | $ 0 | $ 24,980 | 39,838 | |
Term | 30 days | 30 days | 30 days | |
Aeromantenimiento, S.A. | ||||
Disclosure of transactions between related parties | ||||
Due to related parties | $ 15,024 | $ 15,951 | 1,474 | |
Term | 30 days | 30 days | 30 days | |
Mijares, Angoitia, Corts y Fuentes, S.C. | ||||
Disclosure of transactions between related parties | ||||
Due to related parties | $ 996 | |||
Term | 30 days | 30 days | 30 days |
Related parties - Transactions
Related parties - Transactions with related parties (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of transactions between related parties | |||
Guarantees provided | $ 0 | $ 0 | $ 0 |
guarantees received | 0 | 0 | 0 |
Provision for expected credit losses | 0 | 0 | 0 |
Frontier | |||
Disclosure of transactions between related parties | |||
Code-share | 208,968 | 8,358 | |
Aeromantenimiento, S.A. | |||
Disclosure of transactions between related parties | |||
Aircraft and engine maintenance | 201,624 | 341,726 | 249,266 |
Technical support | 5,815 | 4,796 | 8,088 |
Servprot, Human Capital Int., Onelink, MACF | |||
Disclosure of transactions between related parties | |||
Call center fees and other fees | $ 41,467 | $ 4,800 | $ 202,689 |
Related parties - Other informa
Related parties - Other information (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2019MXN ($) | |
Disclosure of transactions between related parties | |||||
Balances due under the agreement | $ 17,775 | $ 40,931 | $ 58,554 | ||
Due from related parties | $ 1,244 | 8,266 | 23,442 | ||
Aggregate compensation of short and long-term benefits | $ 191,071 | $ 3,600,762 | 3,125,393 | 2,823,647 | |
(Benefit) arising from cash-settled share-based payments transactions | (5,238) | (25,498) | |||
Expense arising from cash-settled share-based payments transactions | 40,724 | ||||
Servprot S.A. de C.V. | |||||
Disclosure of transactions between related parties | |||||
Security services expenses | $ 3,120 | 2,804 | 1,838 | ||
Aeromantenimiento, S.A. | |||||
Disclosure of transactions between related parties | |||||
Agreement term | 5 years | 5 years | |||
Balances due under the agreement | 15,024 | 15,951 | 1,474 | ||
Aircraft, engine maintenance and technical support | $ 207,439 | 346,522 | 251,731 | ||
Human Capital International | |||||
Disclosure of transactions between related parties | |||||
Balances due under the agreement | 0 | 0 | 0 | ||
Professional services expenses | 0 | 324 | 816 | ||
One Link, S.A. de C.V. | |||||
Disclosure of transactions between related parties | |||||
Balances due under the agreement | 0 | 24,980 | 39,838 | ||
Expenses under the agreement | 37,026 | 0 | 200,035 | ||
SearchForce, Inc. | |||||
Disclosure of transactions between related parties | |||||
Expenses under the agreement | 0 | 0 | 1,946 | ||
Mijares, Angoitia, Corts y Fuentes | |||||
Disclosure of transactions between related parties | |||||
Balances due under the agreement | 996 | ||||
Expenses under the agreement | 1,321 | 1,672 | 0 | ||
Frontier | |||||
Disclosure of transactions between related parties | |||||
Balances due under the agreement | 2,751 | 16,246 | |||
Due from related parties | 8,266 | 23,442 | |||
Revenue under this agreement | 208,968 | 8,358 | |||
Directors and officers | |||||
Disclosure of transactions between related parties | |||||
Share-based payments transactions | 49,659 | 19,980 | 13,508 | ||
(Benefit) arising from cash-settled share-based payments transactions | (5,238) | (25,498) | |||
Expense arising from cash-settled share-based payments transactions | 40,724 | ||||
Provision for cash bonuses | 50,000 | 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 | 8,085 | 7,178 | 8,993 | ||
Rest of the directors | |||||
Disclosure of transactions between related parties | |||||
Aggregate compensation of short and long-term benefits | 4,367 | 5,217 | 7,834 | ||
Senior managers | |||||
Disclosure of transactions between related parties | |||||
Aggregate compensation of short and long-term benefits | $ 237,846 | $ 180,001 | $ 134,370 |
Other accounts receivable, ne_2
Other accounts receivable, net (Details) - MXN ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Other accounts receivable, net | ||||
Credit cards | $ 389,634 | $ 96,646 | $ 191,322 | |
Other accounts receivable | 189,904 | 101,487 | 117,582 | |
Other points of sales | 102,002 | 71,054 | 54,719 | |
Travel agencies and insurance commissions | 76,975 | 39,806 | 27,925 | |
Affinity credit card | 49,040 | 55,172 | 40,517 | |
Cargo clients | 46,600 | 41,408 | 34,655 | |
Airport services | 42,894 | 9,991 | 5,898 | |
Employees | 29,681 | 27,274 | 8,878 | |
Benefits from suppliers | 26,989 | 68,946 | ||
Marketing services receivable | 7,024 | 7,999 | 13,435 | |
Settlement receivable | 2,422 | |||
Insurance claims | 143 | 1,345 | ||
Other current accounts receivable, gross | 963,308 | 519,783 | 496,276 | |
Allowance for credit losses | (40,308) | (11,304) | (17,809) | $ (19,317) |
Other accounts receivable, net | $ 923,000 | $ 508,479 | $ 478,467 |
Other accounts receivable, ne_3
Other accounts receivable, net - Aging of accounts receivable (Details) - MXN ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts receivable aging | ||||
Impaired accounts receivable | $ 40,308 | $ 11,304 | $ 17,809 | $ 19,317 |
Not impaired accounts receivable | 923,000 | 508,479 | 478,467 | |
Total accounts receivable | 963,308 | 519,783 | 496,276 | |
0-30 Days | ||||
Accounts receivable aging | ||||
Impaired accounts receivable | 5,804 | 8,725 | 16,962 | |
Not impaired accounts receivable | 722,651 | 388,644 | 415,847 | |
Total accounts receivable | 728,455 | 397,369 | 432,809 | |
31-60 Days | ||||
Accounts receivable aging | ||||
Not impaired accounts receivable | 64,983 | 69,648 | 38,705 | |
Total accounts receivable | 64,983 | 69,648 | 38,705 | |
61-90 Days | ||||
Accounts receivable aging | ||||
Not impaired accounts receivable | 19,274 | 27,138 | 17,918 | |
Total accounts receivable | 19,274 | 27,138 | 17,918 | |
91-120 Days | ||||
Accounts receivable aging | ||||
Impaired accounts receivable | 34,504 | 2,579 | 847 | |
Not impaired accounts receivable | 116,092 | 23,049 | 5,997 | |
Total accounts receivable | $ 150,596 | $ 25,628 | $ 6,844 |
Other accounts receivable, ne_4
Other accounts receivable, net - Movement in the allowance for doubtful accounts (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other accounts receivable, net | |||
Balance as of beginning of the year | $ (11,304) | $ (17,809) | $ (19,317) |
Write-offs | 11,389 | 17,126 | 6,228 |
Increase in allowance | (40,393) | (10,621) | (4,720) |
Balance as of end of the year | $ (40,308) | $ (11,304) | $ (17,809) |
Inventories (Details)
Inventories (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | |
Inventories | |||||
Spare parts and accessories of flight equipment | $ 289,737 | $ 285,185 | $ 294,390 | ||
Miscellaneous supplies | 7,534 | 9,665 | 7,518 | ||
Total | 297,271 | 294,850 | $ 16,020 | $ 301,908 | |
Consumption of inventories included in maintenance expense | $ 284,687 | $ 290,206 | $ 242,265 |
Prepaid expenses and other cu_3
Prepaid expenses and other current assets (Details) $ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) |
Prepaid expenses and other current assets | ||||
Advances to suppliers | $ 283,340 | $ 198,174 | $ 87,536 | |
Advances to components suppliers | 209,557 | 67,446 | 220,095 | |
Other prepaid expenses | 115,054 | 40,655 | 56,146 | |
Prepaid insurance | 88,941 | 76,896 | 68,712 | |
Sales commission to travel agencies | 84,239 | 59,620 | 54,501 | |
Advances for constructions of aircraft and engines | 13,764 | |||
Total | $ 41,450 | $ 781,131 | $ 442,791 | $ 500,754 |
Guarantee deposits (Details)
Guarantee deposits (Details) $ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) |
Current assets: | ||||
Aircraft maintenance deposits paid to lessors | $ 576,505 | $ 729,899 | $ 1,317,663 | |
Deposits for rental of flight equipment | 1,220 | 17,178 | ||
Other guarantee deposits | 23,822 | 59,516 | 18,052 | |
Total | $ 31,856 | 600,327 | 790,635 | 1,352,893 |
Non-current assets: | ||||
Aircraft maintenance deposits paid to lessors | 5,853,924 | 5,765,122 | 5,631,304 | |
Deposits for rental of flight equipment | 1,750,966 | 531,261 | 441,110 | |
Other guarantee deposits | 39,531 | 41,113 | 25,838 | |
Total | $ 405,643 | 7,644,421 | 6,337,496 | 6,098,252 |
Total guarantee deposits | $ 8,244,748 | $ 7,128,131 | $ 7,451,145 |
Rotable spare parts, furnitur_3
Rotable spare parts, furniture and equipment, net - Net carrying value (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2016MXN ($) | |
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | $ 5,782,282 | $ 4,375,697 | $ 391,895 | $ 7,385,334 | $ 2,525,008 | |
Capitalized borrowing costs | $ 456,313 | 357,920 | 193,389 | |||
Disposals of capitalized borrowing costs | $ 328,571 | 242,678 | 110,274 | |||
Leasehold improvements to flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 1,214,589 | 692,499 | 1,540,788 | 405,135 | ||
Pre-delivery payments | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 3,672,090 | 2,783,303 | 4,507,770 | 1,206,330 | ||
Flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 664,322 | 630,922 | 733,250 | 577,498 | ||
Aircraft spare engines | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 54,771 | |||||
Construction and improvements in process | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 142,738 | 193,607 | 474,240 | 255,374 | ||
Constructions and improvements | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 15,235 | 25,168 | 40,950 | 35,013 | ||
Computer equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 16,547 | 9,323 | 13,071 | 7,200 | ||
Workshop tools | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 3,369 | 2,271 | 4,852 | 4,585 | ||
Electric power equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 5,122 | 6,254 | 9,012 | 6,928 | ||
Communications equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 4,911 | 4,727 | 5,777 | 3,555 | ||
Workshop machinery and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 4,481 | 4,060 | 10,209 | 3,618 | ||
Motorized transport equipment platform | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 446 | 886 | 9,634 | 1,357 | ||
Service carts on board | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 126 | 382 | 2,121 | 758 | ||
Office furniture and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 38,306 | 22,295 | 36,660 | $ 17,657 | ||
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) | 8,487,429 | 6,655,478 | 10,877,907 | |||
Gross value | Leasehold improvements to flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 3,424,778 | 2,575,495 | 4,220,672 | |||
Gross value | Pre-delivery payments | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 3,672,090 | 2,783,303 | 4,507,770 | |||
Gross value | Flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 932,642 | 830,145 | 1,287,102 | |||
Gross value | Construction and improvements in process | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 142,738 | 193,607 | 474,240 | |||
Gross value | Constructions and improvements | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 132,446 | 131,503 | 172,460 | |||
Gross value | Computer equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 44,563 | 30,113 | 47,566 | |||
Gross value | Workshop tools | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 23,454 | 20,500 | 26,875 | |||
Gross value | Electric power equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 15,438 | 15,439 | 20,412 | |||
Gross value | Communications equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 12,305 | 11,229 | 14,099 | |||
Gross value | Workshop machinery and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 9,530 | 8,405 | 16,301 | |||
Gross value | Motorized transport equipment platform | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 5,496 | 5,587 | 15,026 | |||
Gross value | Service carts on board | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 5,403 | 5,403 | 7,675 | |||
Gross value | Office furniture and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 66,546 | 44,749 | 70,709 | |||
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) | (2,705,147) | (2,279,781) | (3,492,573) | |||
Accumulated depreciation / amortization | Leasehold improvements to flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (2,210,189) | (1,882,996) | (2,679,884) | |||
Accumulated depreciation / amortization | Flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (268,320) | (199,223) | (553,852) | |||
Accumulated depreciation / amortization | Constructions and improvements | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (117,211) | (106,335) | (131,510) | |||
Accumulated depreciation / amortization | Computer equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (28,016) | (20,790) | (34,495) | |||
Accumulated depreciation / amortization | Workshop tools | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (20,085) | (18,229) | (22,023) | |||
Accumulated depreciation / amortization | Electric power equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (10,316) | (9,185) | (11,400) | |||
Accumulated depreciation / amortization | Communications equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (7,394) | (6,502) | (8,322) | |||
Accumulated depreciation / amortization | Workshop machinery and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (5,049) | (4,345) | (6,092) | |||
Accumulated depreciation / amortization | Motorized transport equipment platform | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (5,050) | (4,701) | (5,392) | |||
Accumulated depreciation / amortization | Service carts on board | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (5,277) | (5,021) | (5,554) | |||
Accumulated depreciation / amortization | Office furniture and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | $ (28,240) | $ (22,454) | $ (34,049) |
Rotable spare parts, furnitur_4
Rotable spare parts, furniture and equipment, net - Reconciliation of changes (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | $ 5,782,282 | $ 4,375,697 | $ 2,525,008 | |
Additions | 3,310,803 | 2,693,397 | 2,584,232 | |
Disposals and transfers | (1,247,357) | (974,055) | (319,671) | |
Borrowing costs, net | 127,742 | 115,242 | 83,115 | |
Other movements | (287) | (243) | (696) | |
Depreciation | (587,849) | (427,756) | (496,291) | |
Balance at end of the year | $ 391,895 | 7,385,334 | 5,782,282 | 4,375,697 |
Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 8,487,429 | 6,655,478 | ||
Balance at end of the year | 10,877,907 | 8,487,429 | 6,655,478 | |
Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (2,705,147) | (2,279,781) | ||
Balance at end of the year | (3,492,573) | (2,705,147) | (2,279,781) | |
Aircraft spare engines | ||||
Rotable spare parts, furniture and equipment, net | ||||
Depreciation | (1,787) | |||
Balance at end of the year | 54,771 | |||
Flight equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 664,322 | 630,922 | 577,498 | |
Additions | 692,186 | 366,371 | 115,558 | |
Disposals and transfers | (538,370) | (261,866) | (930) | |
Depreciation | (84,888) | (71,105) | (61,204) | |
Balance at end of the year | 733,250 | 664,322 | 630,922 | |
Flight equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 932,642 | 830,145 | ||
Balance at end of the year | 1,287,102 | 932,642 | 830,145 | |
Flight equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (268,320) | (199,223) | ||
Balance at end of the year | (553,852) | (268,320) | (199,223) | |
Constructions and improvements | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 15,235 | 25,168 | 35,013 | |
Additions | 5,596 | 689 | ||
Other movements | 34,840 | 67 | 10,371 | |
Depreciation | (14,721) | (10,689) | (20,216) | |
Balance at end of the year | 40,950 | 15,235 | 25,168 | |
Constructions and improvements | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 132,446 | 131,503 | ||
Balance at end of the year | 172,460 | 132,446 | 131,503 | |
Constructions and improvements | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (117,211) | (106,335) | ||
Balance at end of the year | (131,510) | (117,211) | (106,335) | |
Computer equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 16,547 | 9,323 | 7,200 | |
Additions | 1,730 | 5,316 | 1,845 | |
Disposals and transfers | (131) | |||
Other movements | 1,999 | 9,123 | 4,087 | |
Depreciation | (7,074) | (7,215) | (3,809) | |
Balance at end of the year | 13,071 | 16,547 | 9,323 | |
Computer equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 44,563 | 30,113 | ||
Balance at end of the year | 47,566 | 44,563 | 30,113 | |
Computer equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (28,016) | (20,790) | ||
Balance at end of the year | (34,495) | (28,016) | (20,790) | |
Office furniture and equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 38,306 | 22,295 | 17,657 | |
Additions | 1,461 | 652 | 6,805 | |
Disposals and transfers | (10) | (15) | ||
Other movements | 2,757 | 21,568 | 1,649 | |
Depreciation | (5,854) | (6,209) | (3,801) | |
Balance at end of the year | 36,660 | 38,306 | 22,295 | |
Office furniture and equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 66,546 | 44,749 | ||
Balance at end of the year | 70,709 | 66,546 | 44,749 | |
Office furniture and equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (28,240) | (22,454) | ||
Balance at end of the year | (34,049) | (28,240) | (22,454) | |
Electric power equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 5,122 | 6,254 | 6,928 | |
Additions | 2,487 | |||
Other movements | 2,487 | 620 | ||
Depreciation | (1,084) | (1,132) | (1,294) | |
Balance at end of the year | 9,012 | 5,122 | 6,254 | |
Electric power equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 15,438 | 15,439 | ||
Balance at end of the year | 20,412 | 15,438 | 15,439 | |
Electric power equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (10,316) | (9,185) | ||
Balance at end of the year | (11,400) | (10,316) | (9,185) | |
Workshop tools | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 3,369 | 2,271 | 4,585 | |
Additions | 3,137 | 2,673 | ||
Other movements | 284 | 281 | ||
Depreciation | (1,938) | (1,856) | (2,314) | |
Balance at end of the year | 4,852 | 3,369 | 2,271 | |
Workshop tools | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 23,454 | 20,500 | ||
Balance at end of the year | 26,875 | 23,454 | 20,500 | |
Workshop tools | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (20,085) | (18,229) | ||
Balance at end of the year | (22,023) | (20,085) | (18,229) | |
Motorized transport equipment platform | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 446 | 886 | 1,357 | |
Other movements | 9,529 | 42 | ||
Depreciation | (341) | (482) | (471) | |
Balance at end of the year | 9,634 | 446 | 886 | |
Motorized transport equipment platform | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 5,496 | 5,587 | ||
Balance at end of the year | 15,026 | 5,496 | 5,587 | |
Motorized transport equipment platform | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (5,050) | (4,701) | ||
Balance at end of the year | (5,392) | (5,050) | (4,701) | |
Communications equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 4,911 | 4,727 | 3,555 | |
Additions | 355 | 1,050 | ||
Disposals and transfers | (2) | |||
Other movements | 1,446 | 26 | 1,968 | |
Depreciation | (933) | (892) | (796) | |
Balance at end of the year | 5,777 | 4,911 | 4,727 | |
Communications equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 12,305 | 11,229 | ||
Balance at end of the year | 14,099 | 12,305 | 11,229 | |
Communications equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (7,394) | (6,502) | ||
Balance at end of the year | (8,322) | (7,394) | (6,502) | |
Workshop machinery and equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 4,481 | 4,060 | 3,618 | |
Additions | 4,278 | 1,040 | 123 | |
Disposals and transfers | (35) | (2) | ||
Other movements | 2,529 | 110 | 1,041 | |
Depreciation | (1,044) | (727) | (722) | |
Balance at end of the year | 10,209 | 4,481 | 4,060 | |
Workshop machinery and equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 9,530 | 8,405 | ||
Balance at end of the year | 16,301 | 9,530 | 8,405 | |
Workshop machinery and equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (5,049) | (4,345) | ||
Balance at end of the year | (6,092) | (5,049) | (4,345) | |
Service carts on board | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 126 | 382 | 758 | |
Additions | 2,273 | |||
Depreciation | (278) | (256) | (376) | |
Balance at end of the year | 2,121 | 126 | 382 | |
Service carts on board | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 5,403 | 5,403 | ||
Balance at end of the year | 7,675 | 5,403 | 5,403 | |
Service carts on board | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (5,277) | (5,021) | ||
Balance at end of the year | (5,554) | (5,277) | (5,021) | |
Allowance for obsolescence [Member] | ||||
Rotable spare parts, furniture and equipment, net | ||||
Additions | 3,000 | |||
Balance at end of the year | 3,000 | |||
Allowance for obsolescence [Member] | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at end of the year | 3,000 | |||
Pre-delivery payments | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 3,672,090 | 2,783,303 | 1,206,330 | |
Additions | 1,412,790 | 1,485,643 | 1,707,805 | |
Disposals and transfers | (704,852) | (712,098) | (213,947) | |
Borrowing costs, net | 127,742 | 115,242 | 83,115 | |
Balance at end of the year | 4,507,770 | 3,672,090 | 2,783,303 | |
Pre-delivery payments | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 3,672,090 | 2,783,303 | ||
Balance at end of the year | 4,507,770 | 3,672,090 | 2,783,303 | |
Construction and improvements in process | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 142,738 | 193,607 | 255,374 | |
Additions | 525,556 | 142,703 | 206,932 | |
Disposals and transfers | (3,957) | (89) | (3,555) | |
Other movements | (190,097) | (193,483) | (265,144) | |
Balance at end of the year | 474,240 | 142,738 | 193,607 | |
Construction and improvements in process | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 142,738 | 193,607 | ||
Balance at end of the year | 474,240 | 142,738 | 193,607 | |
Leasehold improvements to flight equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 1,214,589 | 692,499 | 405,135 | |
Additions | 661,954 | 687,260 | 545,164 | |
Disposals and transfers | (101,224) | |||
Other movements | 133,939 | 162,023 | 244,712 | |
Depreciation | (469,694) | (327,193) | (401,288) | |
Balance at end of the year | 1,540,788 | 1,214,589 | 692,499 | |
Leasehold improvements to flight equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 3,424,778 | 2,575,495 | ||
Balance at end of the year | 4,220,672 | 3,424,778 | 2,575,495 | |
Leasehold improvements to flight equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (2,210,189) | (1,882,996) | ||
Balance at end of the year | $ (2,679,884) | $ (2,210,189) | $ (1,882,996) |
Rotable spare parts, furnitur_5
Rotable spare parts, furniture and equipment, net - Additional Information (Details) $ in Thousands, $ in Thousands | Dec. 28, 2017aircraft | Aug. 16, 2013engine | Nov. 30, 2018itemaircraft | Dec. 31, 2016USD ($) | Dec. 31, 2016MXN ($) | Nov. 30, 2015engine | Dec. 31, 2019USD ($)aircraft | Dec. 31, 2019MXN ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017USD ($)aircraft | Dec. 31, 2017MXN ($)aircraft | Dec. 31, 2011aircraft | Dec. 31, 2019MXN ($)aircraft |
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Depreciation expense | $ | $ 587,849 | $ 427,756 | $ 496,291 | |||||||||||
Number of aircraft purchased | 80 | |||||||||||||
Number of spare engines purchased | engine | 3 | |||||||||||||
Number of aircraft engines to be provided maintenance services | engine | 16 | |||||||||||||
Credit notes received | $ 3,060 | 58,530 | ||||||||||||
Accumulated amortization of credit notes | $ | 1,219 | $ 4,878 | ||||||||||||
Number of aircraft to be delivered | item | 26 | |||||||||||||
Amounts paid for aircraft and spare engines | $ 184,841 | 3,483,368 | 2,743,155 | 2,521,752 | ||||||||||
Total number of aircraft to be delivered | 103 | 103 | ||||||||||||
Gain (loss) on sale and leaseback | $ | $ 284,759 | 609,168 | 65,886 | |||||||||||
Term of aircraft delivery agreement | 6 years | 6 years | ||||||||||||
Carrying amount of remaining owned aircraft | $ 2,525,008 | $ 391,895 | 5,782,282 | $ 4,375,697 | $ 7,385,334 | |||||||||
Between two and three years | ||||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Total number of aircraft to be delivered | 8 | 8 | ||||||||||||
Between three and four years | ||||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Total number of aircraft to be delivered | 13 | 13 | ||||||||||||
Between four and five years | ||||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Total number of aircraft to be delivered | 13 | 13 | ||||||||||||
Between five and six years | ||||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Total number of aircraft to be delivered | 16 | 16 | ||||||||||||
Between six and seven years | ||||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Total number of aircraft to be delivered | 13 | 13 | ||||||||||||
Between seven and eight years | ||||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Total number of aircraft to be delivered | 15 | 15 | ||||||||||||
Between eight and nine years | ||||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Total number of aircraft to be delivered | 25 | 25 | ||||||||||||
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 | $ | 7,191 | $ 5,230 | ||||||||||||
Term of total support agreement | 66 months | 66 months | ||||||||||||
A320 model | ||||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Number of aircraft purchased | 80 | 80 | 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 | 46 | 30 | |||||||||||
Number of engines purchased | engine | 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 | ||||||||||||
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 | |||||||||||||
Pre-delivery payments | ||||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Amounts paid for aircraft and spare engines | $ 75,000 | $ 1,412,790 | $ 77,100 | 1,485,643 | $ 90,000 | $ 1,707,805 | ||||||||
Carrying amount of remaining owned aircraft | $ | $ 1,206,330 | $ 3,672,090 | $ 2,783,303 | 4,507,770 | ||||||||||
Aircraft spare engines | ||||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||||
Depreciation expense | $ | $ 1,787 | |||||||||||||
Carrying amount of remaining owned aircraft | $ | $ 54,771 |
Intangible assets, net (Details
Intangible assets, net (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Composition and movement of intangible assets | ||||
Beginning balance | $ 179,124 | $ 190,420 | $ 114,041 | |
Additions | 77,325 | 71,007 | 130,908 | |
Disposals | (9,368) | (1,976) | ||
Amortization | (87,667) | (72,885) | (52,396) | |
Exchange differences | (1,385) | (50) | (157) | |
Ending balance | $ 8,883 | 167,397 | 179,124 | 190,420 |
Software | ||||
Composition and movement of intangible assets | ||||
Beginning balance | 179,124 | 190,420 | ||
Ending balance | 167,397 | 179,124 | 190,420 | |
Amortization expense | 87,667 | 72,885 | 52,396 | |
Software | Gross value | ||||
Composition and movement of intangible assets | ||||
Beginning balance | 503,467 | 441,803 | ||
Ending balance | 579,360 | 503,467 | 441,803 | |
Software | Accumulated depreciation / amortization | ||||
Composition and movement of intangible assets | ||||
Beginning balance | (324,343) | (251,383) | ||
Ending balance | $ (411,963) | $ (324,343) | $ (251,383) | |
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 |
Leases (Details)
Leases (Details) | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2015engine | Dec. 31, 2019agreementengineaircraft | Dec. 31, 2018agreementengineaircraft | Dec. 31, 2017agreementengineaircraft | Dec. 31, 2017engineaircraft | Dec. 31, 2017engineaircraft | |
Leases | ||||||
Number of aircraft leased | 81 | 77 | 71 | 71 | 71 | |
Number of spare engines leased | engine | 14 | 10 | 8 | 8 | 8 | |
Number of aircraft incorporated to fleet | 7 | 10 | 5 | |||
Number of aircraft returned to respective lessors | 2 | 4 | ||||
Number of aircraft with lease term extended | 1 | 2 | 3 | 3 | ||
Number of aircraft spare engines with lease term extended | 1 | 2 | 2 | |||
Number of spare engines purchased | engine | 3 | |||||
Airbus purchase agreement | ||||||
Leases | ||||||
Number of aircraft incorporated to fleet | 3 | 3 | 1 | |||
Lessor's aircraft order book | ||||||
Leases | ||||||
Number of aircraft incorporated to fleet | 4 | 7 | 4 | |||
Pratt and Whitney purchase agreement (FMP) | ||||||
Leases | ||||||
Number of NEO spare engines incorporated to fleet | engine | 2 | 2 | ||||
Number of CEO spare engines incorporated to fleet | engine | 2 | |||||
A319 Model 132 | ||||||
Leases | ||||||
Number of aircraft leased | 3 | 4 | 6 | 6 | 6 | |
A319 Model 133 | ||||||
Leases | ||||||
Number of aircraft leased | 4 | 4 | 6 | 6 | 6 | |
A320 Model 233 | ||||||
Leases | ||||||
Number of aircraft leased | 39 | 39 | 39 | 39 | 39 | |
A320 Model 232 | ||||||
Leases | ||||||
Number of aircraft leased | 2 | 4 | 4 | 4 | 4 | |
A320NEO Model 271N | ||||||
Leases | ||||||
Number of aircraft leased | 17 | 12 | 6 | 6 | 6 | |
A321 Model 231 | ||||||
Leases | ||||||
Number of aircraft leased | 10 | 10 | 10 | 10 | 10 | |
A321NEO Model 271N | ||||||
Leases | ||||||
Number of aircraft leased | 6 | 4 | ||||
V2500 Model V2524-A5 | ||||||
Leases | ||||||
Number of spare engines leased | engine | 2 | |||||
V2500 Model V2527M-A5 | ||||||
Leases | ||||||
Number of spare engines leased | engine | 3 | 3 | 3 | 3 | 3 | |
V2500 Model V2527E-A5 | ||||||
Leases | ||||||
Number of spare engines leased | engine | 3 | 3 | 3 | 3 | 3 | |
V2500 Model V2527-A5 | ||||||
Leases | ||||||
Number of spare engines leased | engine | 2 | 2 | 2 | 2 | 2 | |
PW1100 Model PW1127G-JM | ||||||
Leases | ||||||
Number of spare engines leased | engine | 3 | 2 | ||||
PW1100 Model PW1133G-JM engine | ||||||
Leases | ||||||
Number of spare engines leased | engine | 1 |
Leases - Carrying amounts of ri
Leases - Carrying amounts of right-of use assets (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Balance at the beginning | $ 31,882,053 | $ 24,893,882 | $ 23,500,081 | |
Additions | 6,949,684 | 11,031,862 | 4,831,704 | |
Depreciation on right of use assets | $ (249,558) | (4,702,971) | (4,043,691) | (3,437,903) |
Balance at the end | $ 1,811,006 | 34,128,766 | 31,882,053 | 24,893,882 |
Flight equipment | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Balance at the beginning | 31,126,169 | 24,406,960 | 23,047,879 | |
Additions | 6,676,492 | 10,585,188 | 4,665,330 | |
Depreciation on right of use assets | (4,490,572) | (3,865,979) | (3,306,249) | |
Balance at the end | 33,312,089 | 31,126,169 | 24,406,960 | |
Aircraft spare engines | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Balance at the beginning | 579,696 | 300,029 | 220,554 | |
Additions | 230,200 | 387,480 | 157,225 | |
Depreciation on right of use assets | (132,698) | (107,813) | (77,750) | |
Balance at the end | 677,198 | 579,696 | 300,029 | |
Land and buildings | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Balance at the beginning | 176,188 | 186,893 | 231,648 | |
Additions | 42,992 | 59,194 | 9,149 | |
Depreciation on right of use assets | (79,701) | (69,899) | (53,904) | |
Balance at the end | $ 139,479 | $ 176,188 | $ 186,893 |
Leases - Carrying amounts of le
Leases - Carrying amounts of lease liabilities (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | |
Leases | |||||
As at 1 January | $ 39,565,146 | $ 32,523,704 | $ 32,711,793 | ||
Additions | 7,186,613 | 11,038,578 | 4,897,420 | ||
Accretion of interest | 2,037,540 | 1,683,330 | 1,381,680 | ||
Foreign exchange effect | (1,772,452) | 30,441 | (1,434,291) | ||
Payments | (6,499,802) | (5,710,907) | (5,032,898) | ||
As at 31 December | $ 40,517,045 | 39,565,146 | 32,523,704 | ||
Current | 4,976,454 | 4,213,417 | $ 250,488 | $ 4,720,505 | |
Lease liabilities | $ 34,588,692 | $ 28,310,287 | $ 1,899,504 | $ 35,796,540 |
Leases - Amounts recognized in
Leases - Amounts recognized in profit and loss (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Leases | ||||
Depreciation on right of use assets | $ (249,558) | $ (4,702,971) | $ (4,043,691) | $ (3,437,903) |
Interest expense on lease liabilities | (2,128,162) | (1,755,978) | (1,428,924) | |
Aircraft and engine variable expenses | $ (51,030) | (961,657) | (956,010) | (1,429,595) |
Total amount recognized in profit or loss | (7,792,790) | (6,755,679) | (6,296,422) | |
Cash outflow for leases | 6,499,802 | 5,710,907 | 5,032,898 | |
Supplemental Rent | $ 680,964 | $ 659,106 | $ 851,410 |
Accrued liabilities - Short-ter
Accrued liabilities - Short-term (Details) $ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) |
Accrued liabilities | ||||
Fuel and traffic accrued expenses | $ 1,507,659 | $ 1,315,363 | $ 1,106,913 | |
Maintenance and aircraft parts accrued expenses | 120,254 | 79,280 | 194,366 | |
Sales, marketing and distribution accrued expenses | 230,935 | 283,538 | 143,758 | |
Maintenance deposits | 132,085 | 141,371 | 132,519 | |
Salaries and benefits | 296,829 | 187,072 | 114,781 | |
Accrued administrative expenses | 81,124 | 67,306 | 90,459 | |
Deferred revenue from V Club membership | 35,465 | 59,557 | 76,261 | |
Information and communication accrued expenses | 67,808 | 45,008 | 44,638 | |
Supplier services agreement | 10,634 | 10,634 | 10,634 | |
Benefits from suppliers | 1,473 | |||
Advances from travel agencies | 542 | 482 | 650 | |
Others | 48,526 | 77,985 | 51,474 | |
Total accrued liabilities | $ 134,355 | $ 2,531,861 | $ 2,267,596 | $ 1,967,926 |
Accrued liabilities - Long-term
Accrued liabilities - Long-term (Details) $ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) |
Accrued liabilities | ||||
Supplier services agreement | $ 55,905 | $ 66,539 | $ 77,174 | |
Benefits from suppliers | 19,439 | |||
Other | 15,452 | 8,964 | 15,274 | |
Total long-term accrued liabilities | $ 4,818 | $ 90,796 | $ 75,503 | $ 92,448 |
Accrued liabilities - Other lia
Accrued liabilities - Other liabilities (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Analysis of accrued liabilities | |||
Balance at beginning of the year | $ 1,846,029 | $ 1,657,040 | $ 1,418,734 |
Increase for the year | 747,640 | 1,029,497 | 1,107,939 |
Payments | 716,884 | 840,508 | 869,633 |
Balance at end of the year | 1,876,785 | 1,846,029 | 1,657,040 |
Aircraft and engine lease return obligation | |||
Analysis of accrued liabilities | |||
Balance at beginning of the year | 1,831,045 | 1,647,977 | 1,408,039 |
Increase for the year | 725,506 | 1,015,391 | 1,099,597 |
Payments | 703,863 | 832,323 | 859,659 |
Balance at end of the year | 1,852,688 | 1,831,045 | 1,647,977 |
Employee profit sharing | |||
Analysis of accrued liabilities | |||
Balance at beginning of the year | 14,984 | 9,063 | 10,695 |
Increase for the year | 22,134 | 14,106 | 8,342 |
Payments | 13,021 | 8,185 | 9,974 |
Balance at end of the year | $ 24,097 | $ 14,984 | $ 9,063 |
Accrued liabilities - Other l_2
Accrued liabilities - Other liabilities, short-term and long-term (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | |
Accrued liabilities | |||||
Short-term maturities | $ 25,835 | $ 202,250 | $ 21,608 | $ 407,190 | |
Long-term | 1,820,194 | 1,454,790 | $ 77,982 | $ 1,469,595 | |
Cancellations, or write off related to liabilities | $ 0 | $ 0 | $ 0 |
Employee benefits - Analysis of
Employee benefits - Analysis of net period cost (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee benefits | |||
Current service cost | $ 8,214 | $ 4,977 | $ 3,657 |
Interest cost on benefit obligation | 1,872 | 1,424 | 1,000 |
Net period cost | $ 10,086 | $ 6,401 | $ 4,657 |
Employee benefits - Changes in
Employee benefits - Changes in the defined benefit obligation and actuarial assumptions (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined benefit obligation and significant assumptions | |||
Defined benefit obligation at beginning of the year | $ 18,153 | $ 19,289 | $ 13,438 |
Net period cost charged to profit or loss: | |||
Current service cost | 8,214 | 4,977 | 3,657 |
Interest cost on benefit obligation | 1,872 | 1,424 | 1,000 |
Remeasurement losses in other comprehensive income: | |||
Actuarial changes arising from changes in assumptions | 10,192 | (5,989) | 1,776 |
Payments made | (225) | (1,548) | (582) |
Defined benefit obligation at end of the year | $ 38,206 | $ 18,153 | $ 19,289 |
Discount rate | 7.18% | 9.91% | 7.72% |
Expected rate of salary increases | 5.50% | 5.65% | 5.50% |
Annual increase in minimum salary | 4.00% | 4.15% | 4.00% |
Employee profit-sharing (Note 15c) | $ 296,829 | $ 187,072 | $ 114,781 |
Employee profit sharing | |||
Remeasurement losses in other comprehensive income: | |||
Employee profit-sharing (Note 15c) | $ 24,097 | $ 14,984 | $ 9,063 |
Share-based payments - Share pu
Share-based payments - Share purchase plan (Details) $ in Thousands | Nov. 11, 2014MXN ($) | Nov. 30, 2019MXN ($) | Nov. 30, 2018MXN ($) | Nov. 30, 2017MXN ($) | Nov. 30, 2014MXN ($) | Dec. 31, 2019EquityInstrumentsshares | Dec. 31, 2018EquityInstrumentsshares | Dec. 31, 2017EquityInstrumentsshares |
Share purchase plan | ||||||||
Forfeited during the year | (294,541) | (121,451) | ||||||
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 | $ | $ 86,772 | $ 63,961 | $ 15,765 | |||||
Cost of extensions net of withheld taxes | $ | $ 56,407 | $ 41,590 | $ 10,108 | |||||
Outstanding at beginning of the year | 3,553,295 | 820,088 | 618,048 | |||||
Purchased during the year | shares | 2,694,600 | 3,208,115 | 547,310 | |||||
Exercised/vested during the year | (959,614) | (353,457) | (345,270) | |||||
Forfeited during the year | (173,090) | (121,451) | ||||||
Outstanding at end of the year | 5,115,191 | 3,553,295 | 820,088 |
Share-based payments - Vesting
Share-based payments - Vesting period of shares granted under share purchase plan (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019MXN ($)EquityInstruments | Dec. 31, 2018MXN ($)EquityInstruments | Dec. 31, 2017MXN ($)EquityInstruments | Dec. 31, 2016EquityInstruments | |
Share-based payments | ||||
Compensation expense recorded in the consolidated statement of operations | $ | $ 49,659 | $ 19,980 | $ 13,508 | |
Forfeited during the year | (294,541) | (121,451) | ||
Share purchase plan | ||||
Share-based payments | ||||
Shares outstanding | 5,115,191 | 3,553,295 | 820,088 | 618,048 |
Compensation expense recorded in the consolidated statement of operations | $ | $ 49,659 | $ 19,980 | $ 13,508 | |
Forfeited during the year | (173,090) | (121,451) | ||
Share purchase plan | Vesting / Exercisable within one year | ||||
Share-based payments | ||||
Shares outstanding | 2,211,269 | |||
Share purchase plan | Vesting / Exercisable within two years | ||||
Share-based payments | ||||
Shares outstanding | 2,005,716 | |||
Share purchase plan | Vesting / Exercisable within three years | ||||
Share-based payments | ||||
Shares outstanding | 898,206 |
Share-based payments - SARs (ca
Share-based payments - SARs (cash settled) (Details) $ in Thousands | Nov. 06, 2014MXN ($)EquityInstruments | Dec. 31, 2019MXN ($)EquityInstruments | Dec. 31, 2018MXN ($)EquityInstruments | Dec. 31, 2017MXN ($)EquityInstruments |
Share-based payments | ||||
Compensation expense recorded in the consolidated statement of operations | $ 40,724 | |||
Compensation (benefit) recorded in the consolidated statement of operations | $ (5,238) | $ (25,498) | ||
SARs - cash settled | ||||
Share-based payments | ||||
Granted | EquityInstruments | 4,315,264 | 0 | 0 | 3,965,351 |
Vesting period | 3 years | 3 years | 3 years | 3 years |
Total amount granted | $ 10,831 | $ 0 | $ 0 | $ 15,765 |
Carrying amount of the liability | 1,901 | 537 | 723 | |
Compensation expense recorded in the consolidated statement of operations | $ 2,964 | |||
Compensation (benefit) recorded in the consolidated statement of operations | $ (186) | $ (8,999) |
Share-based payments - Vestin_2
Share-based payments - Vesting schedule of SARs (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019MXN ($)EquityInstruments | Dec. 31, 2018MXN ($)EquityInstruments | Dec. 31, 2017MXN ($)EquityInstruments | |
Share-based payments | |||
Forfeited during the year | 294,541 | 121,451 | |
SARs - cash settled | |||
Share-based payments | |||
Shares outstanding | 725,193 | ||
Forfeited during the year | 32,616 | 484,656 | 145,769 |
Cash payment related to key employees related to SARs plan | $ | $ 2,395 | $ 0 | $ 6,021 |
Vesting / Exercisable within one year | SARs - cash settled | |||
Share-based payments | |||
Shares outstanding | 725,193 |
Share-based payments - MIP I (D
Share-based payments - MIP I (Details) $ / shares in Units, $ in Thousands | Dec. 27, 2012MXN ($) | Dec. 24, 2012$ / shares | Dec. 21, 2012EquityInstruments$ / shares | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) |
Share-based payments | |||||
Cost of MIP related to the vested shares | $ 90,383 | $ 14,742 | |||
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 |
Share-based payments - MIP I, a
Share-based payments - MIP I, assumptions (Details) - MIP I | Dec. 24, 2012MXN ($)Y$ / shares | Dec. 31, 2019MXN ($)EquityInstruments | Dec. 31, 2018MXN ($)EquityInstruments | Dec. 31, 2017MXN ($)EquityInstruments |
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 | 2,780,000 | 2,003,876 | 120,000 | |
Series A shares | ||||
Share-based payments | ||||
Shares exercised | EquityInstruments | 2,780,000 | 2,003,876 | 120,000 | |
Amount paid to Management Trust corresponding to exercised shares | $ | $ 14,773,000 | $ 10,654,000 | $ 638,000 |
Share-based payments - MIP I, m
Share-based payments - MIP I, movement in share options (Details) - MIP I $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019$ / shares | Dec. 31, 2019MXN ($)EquityInstruments | Dec. 31, 2018$ / shares | Dec. 31, 2018MXN ($)EquityInstruments | Dec. 31, 2017$ / shares | Dec. 31, 2017MXN ($)EquityInstruments | |
Share-based payments | ||||||
Outstanding at beginning of the year (shares) | EquityInstruments | 10,433,981 | 12,437,857 | 12,557,857 | |||
Exercised during the year (shares) | EquityInstruments | (2,780,000) | (2,003,876) | (120,000) | |||
Outstanding at end of the year (shares) | EquityInstruments | 7,653,981 | 10,433,981 | 12,437,857 | |||
Outstanding at the beginning of the year (Exercise price) | $ / shares | $ 5.31 | $ 5.31 | $ 5.31 | |||
Exercise during the year (Exercise price) | $ / shares | 5.31 | 5.31 | 5.31 | |||
Outstanding at end of the year (Exercise price) | $ / shares | $ 5.31 | $ 5.31 | $ 5.31 | |||
Outstanding at beginning of the year (Total) | $ | $ 55,441 | $ 66,095 | $ 66,733 | |||
Exercised during the year (Total) | $ | (14,773) | (10,654) | (638) | |||
Outstanding at end of the year (Total) | $ | $ 40,668 | $ 55,441 | $ 66,095 |
Share-based payments - MIP II (
Share-based payments - MIP II (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019MXN ($)EquityInstruments | Dec. 31, 2018MXN ($)EquityInstruments | Dec. 31, 2017MXN ($)EquityInstruments | |
Share-based payments | |||
Compensation expense recorded in the consolidated statement of operations | $ | $ 49,659 | $ 19,980 | $ 13,508 |
Forfeited during the year | 294,541 | 121,451 | |
MIP II | |||
Share-based payments | |||
Vesting period | 5 years | ||
Extension of vesting period | 5 years | ||
Carrying amount of the liability | $ | $ 70,567 | $ 32,807 | 37,858 |
Compensation expense recorded in the consolidated statement of operations | $ | $ 37,760 | ||
Compensation (benefit) recorded in the consolidated statement of operations | $ | $ (5,052) | $ (16,499) | |
Exercised during the year (shares) | 0 | ||
Granted | 6,216,860 | ||
Forfeited during the year | 0 | 1,563,520 | 0 |
MIP II | Vesting / Exercisable within one year | |||
Share-based payments | |||
Granted | 2,825,840 | ||
MIP II | Vesting / Exercisable within two years | |||
Share-based payments | |||
Granted | 3,391,020 |
Share-based payments - Expense
Share-based payments - Expense (benefit) recognized in retention plans (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based payments | |||
(Benefit) arising from cash-settled share-based payments transactions | $ (5,238) | $ (25,498) | |
Expense arising from cash-settled share-based payments transactions | $ 40,724 | ||
Expense arising from equity-settled share-based payments transactions | 49,659 | 19,980 | 13,508 |
Total expense arising from share-based payments transactions | $ 90,383 | $ 14,742 | |
Total (benefit) arising from share-based payments transactions | $ (11,990) |
Share-based payments - Board of
Share-based payments - Board of Directors Incentive Plan (BoDIP) (Details) - BODIP | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2018$ / shares | Dec. 31, 2019EquityInstruments$ / shares | Dec. 31, 2018$ / shares | Dec. 31, 2017$ / shares | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||
Vesting period | 4 years | |||
Exercise price | $ / shares | $ 16.12 | $ 16.80 | $ 16.12 | $ 26.29 |
Shares available to be exercised | EquityInstruments | 2,072,344 |
Equity - Authorized shares and
Equity - Authorized shares and secondary follow-on equity offering (Details) | Feb. 16, 2018shares | Dec. 31, 2019EquityInstruments$ / sharesshares | Dec. 31, 2018EquityInstruments$ / sharesshares | Dec. 31, 2017$ / sharesshares |
Equity | ||||
Par value | $ / shares | $ 0 | $ 0 | $ 0 | |
Number of authorized shares | 1,011,876,677 | 1,011,876,677 | 1,011,876,677 | |
Treasury shares | (15,136,057) | (15,212,365) | (13,257,945) | |
Shares fully subscribed and paid | 996,740,620 | 996,664,312 | 998,618,732 | |
Forfeited during the year | EquityInstruments | 294,541 | 121,451 | ||
Series A shares | ||||
Equity | ||||
Number of authorized shares | 923,824,804 | 923,824,804 | 877,856,206 | |
Series B shares | ||||
Equity | ||||
Number of authorized shares | 88,051,873 | 88,051,873 | 134,020,471 | |
Conversion of equivalent number of shares | 45,968,598 | |||
Fixed Class I | ||||
Equity | ||||
Number of authorized shares | 24,180 | 24,180 | 24,180 | |
Shares fully subscribed and paid | 24,180 | 24,180 | 24,180 | |
Fixed Class I | Series A shares | ||||
Equity | ||||
Number of authorized shares | 10,478 | 10,478 | 3,224 | |
Fixed Class I | Series B shares | ||||
Equity | ||||
Number of authorized shares | 13,702 | 13,702 | 20,956 | |
Variable Class II | ||||
Equity | ||||
Number of authorized shares | 1,011,852,497 | 1,011,852,497 | 1,011,852,497 | |
Treasury shares | (15,136,057) | (15,212,365) | (13,257,945) | |
Shares fully subscribed and paid | 996,716,440 | 996,640,132 | 998,594,552 | |
Variable Class II | Series A shares | ||||
Equity | ||||
Number of authorized shares | 923,814,326 | 923,814,326 | 877,852,982 | |
Variable Class II | Series B shares | ||||
Equity | ||||
Number of authorized shares | 88,038,171 | 88,038,171 | 133,999,515 |
Equity - Earnings (loss) per sh
Equity - Earnings (loss) per share (Details) $ / shares in Units, $ / shares in Units, shares in Thousands, $ in Thousands, $ in Thousands | Apr. 19, 2017MXN ($) | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019MXN ($)$ / sharesshares | Dec. 31, 2018MXN ($)$ / sharesshares | Dec. 31, 2017MXN ($)$ / sharesshares | Dec. 31, 2019MXN ($) |
Equity | ||||||
Net income (loss) for the year | $ 140,039 | $ 2,639,063 | $ (942,882) | $ 278,671 | ||
Weighted average number of shares outstanding (in thousands): | ||||||
Basic | 1,011,877 | 1,011,877 | 1,011,877 | 1,011,877 | ||
Diluted | 1,011,877 | 1,011,877 | 1,011,877 | 1,011,877 | ||
EPS- LPS : | ||||||
Basic | (per share) | $ 0.138 | $ 2.608 | $ (0.932) | $ 0.275 | ||
Diluted | (per share) | $ 0.138 | $ 2.608 | $ (0.932) | $ 0.275 | ||
Legal reserve | $ 15,451 | $ 291,178 | $ 291,178 | $ 291,178 | ||
Legal reserve as a percent of capital stock | 9.80% | 9.80% | 9.80% | 9.80% | ||
Amount allocated to legal reserve | $ | $ 252,928 | |||||
Withholding tax on dividends distributions (as a percent) | 10.00% | 10.00% |
Income tax - Income tax rates (
Income tax - Income tax rates (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
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 | $ 938,304 | $ 777,513 | $ 171,046 |
Maximum | |||
Income tax | |||
Employee wages and benefits tax deductible (as a percent) | 53.00% | ||
Guatemala | |||
Income tax | |||
Corporate income tax rate | 25.00% | 25.00% | 25.00% |
Costa Rica | |||
Income tax | |||
Corporate income tax rate | 30.00% | 30.00% | 30.00% |
Period in which tax losses can be carried forward | 3 years | ||
El Salvador | |||
Income tax | |||
Corporate income tax rate | 30.00% | 30.00% | 30.00% |
Mexico | |||
Income tax | |||
Period in which tax losses can be carried forward | 10 years |
Income tax - Analysis of income
Income tax - Analysis of income tax expense (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Income tax | ||||
Current year income tax expense | $ (281,491) | $ (232,824) | $ (51,313) | |
Deferred income tax (expense) benefit | (813,340) | 582,644 | (186,273) | |
Total income tax (expense) benefit | $ (58,096) | (1,094,831) | 349,820 | (237,586) |
Deferred income tax expense, translation effect | (2,278) | 2,680 | 936 | |
Deferred tax related to items recognized in OCI during the year | ||||
Net (loss) gain on cash flow hedges | (74,820) | 85,107 | 12,017 | |
Remeasurement gain (loss) of employee benefits | 3,058 | (1,797) | 533 | |
Deferred tax charged to OCI | $ (71,762) | $ 83,310 | $ 12,550 |
Income tax - Reconciliation of
Income tax - Reconciliation of statutory corporate income tax rate to effective tax rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income tax | |||
Statutory income tax rate | 30.00% | 30.00% | 30.00% |
Non-deductible expenses | 0.19% | (2.51%) | 5.71% |
Unrecorded deferred taxes on tax losses | 0.27% | (3.96%) | 21.31% |
Foreign countries difference with Mexican statutory rate | 0.11% | (0.02%) | 0.48% |
Inflation of tax losses | (0.21%) | 1.16% | (2.20%) |
Amendment tax return effects and other tax adjustments | (0.51%) | 0.05% | 3.78% |
Inflation on furniture, intangible and equipment | (0.48%) | 2.08% | (7.19%) |
Annual inflation adjustment | (0.05%) | 0.26% | (5.87%) |
Total effective tax rate | 29.32% | 27.06% | 46.02% |
Income tax - Analysis of deferr
Income tax - Analysis of deferred taxes (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Analysis of consolidated deferred taxes | |||||||
Net operating loss | $ (231,115) | $ (4,355,423) | $ (534,797) | $ (1,242,704) | |||
Deferred income tax assets | $ 14,511,827 | $ 14,285,711 | $ 11,351,888 | ||||
Deferred income taxes | 13,125,430 | 12,016,491 | 9,745,942 | ||||
Deferred tax liability, net | 1,386,397 | 2,269,220 | 1,605,946 | 1,386,397 | 2,269,220 | 1,605,946 | |
Reflected in consolidated statement of financial position | |||||||
Deferred tax assets | 81,853 | 1,542,536 | 3,392,240 | 3,222,228 | |||
Deferred tax liabilities | $ (8,285) | (156,139) | (1,123,020) | (1,616,282) | |||
Deferred tax liability, net | 1,386,397 | 2,269,220 | 1,605,946 | 1,386,397 | 2,269,220 | 1,605,946 | |
Reconciliation of deferred tax liability, net | |||||||
Deferred tax (liability) asset, net - beginning of the year | 2,269,220 | 1,605,946 | 1,780,605 | ||||
Deferred income tax (expense) benefit during the current year recorded on profits | (811,061) | 579,964 | (187,209) | ||||
Deferred income tax (expense) benefit during the current year recorded in accumulated other comprehensive income (loss) | (71,762) | 83,310 | 12,550 | ||||
Deferred tax (liability) asset, net - end of the year | 1,386,397 | 2,269,220 | 1,605,946 | ||||
Deferred tax assets | |||||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 297,878 | 2,850,513 | 268,463 | ||||
Lease liabilities | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 12,155,114 | 11,841,977 | 9,733,555 | ||||
Deferred income taxes | (59,235) | ||||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 313,137 | 2,108,422 | |||||
Unearned transportation revenue | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 797,063 | 735,355 | 35,941 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 61,708 | 699,414 | (29,814) | ||||
Extension lease agreement | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 459,343 | 596,982 | 514,562 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (137,639) | 82,421 | 113,443 | ||||
Intangible | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 446,849 | 460,590 | 463,211 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (13,741) | (2,621) | (18,415) | ||||
Provisions | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 351,345 | 290,690 | 294,865 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 60,655 | (4,175) | (48,439) | ||||
Tax losses available for offsetting against future taxable income | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 303,970 | 309,320 | 343,079 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (5,350) | (33,759) | 309,758 | ||||
Allowance for doubtful accounts | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 14,089 | 4,902 | 7,324 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 9,187 | (2,422) | 433 | ||||
Employee benefits | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 11,463 | 5,446 | 5,786 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 2,958 | 1,456 | 1,222 | ||||
Employee profit sharing | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 7,227 | 4,493 | 2,716 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 2,734 | 1,777 | (490) | ||||
Non derivative financial instruments | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 4,229 | ||||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 4,229 | ||||||
Financial instruments | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 38,865 | 35,956 | |||||
Deferred income taxes | 49,151 | ||||||
Deferred tax liabilities | |||||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 1,108,939 | 2,270,549 | 455,672 | ||||
Right of use asset | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 10,236,929 | 9,564,618 | 7,468,160 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 672,311 | 2,096,458 | 354,352 | ||||
Supplemental rent | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 1,706,949 | 1,595,519 | 1,563,363 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 111,430 | 32,156 | 223,753 | ||||
Rotable spare parts, furniture and equipment, net | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 884,476 | 645,024 | 476,917 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 239,452 | 168,107 | 108,890 | ||||
Prepaid expenses and other assets | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 179,061 | 90,378 | 116,064 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 88,683 | (25,686) | (239,586) | ||||
Inventories | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 90,287 | 88,895 | 88,169 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 1,392 | 726 | 15,286 | ||||
Other prepayments | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 27,728 | 32,057 | 33,269 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (4,329) | (1,212) | (7,023) | ||||
Guatemala | |||||||
Analysis of consolidated deferred taxes | |||||||
Net operating loss | (1,085) | ||||||
Guatemala | Tax losses available for offsetting against future taxable income | |||||||
Analysis of consolidated deferred taxes | |||||||
Net operating loss | 8,549 | ||||||
Costa Rica | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | $ 0 | $ 0 | $ 0 | ||||
Costa Rica | Tax losses available for offsetting against future taxable income | |||||||
Analysis of consolidated deferred taxes | |||||||
Net operating loss | 50,246 | $ 170,731 | $ 300,613 | ||||
El Salvador | |||||||
Analysis of consolidated deferred taxes | |||||||
Net operating loss | $ 32,494 |
Income tax - Tax loss carry-for
Income tax - Tax loss carry-forward (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Available tax loss carry-forward | |||
Historical Loss | $ 1,551,978 | ||
Restated tax loss | 1,659,761 | ||
Utilized | 336,819 | ||
Total remaining amount | 1,322,942 | ||
Unrecognized NOLs | (309,710) | ||
Net remaining amount | $ 1,013,232 | ||
Statutory income tax rate | 30.00% | 30.00% | 30.00% |
Deferred income tax | $ 14,511,827 | $ 14,285,711 | $ 11,351,888 |
Tax balances | |||
Adjusted contributed capital account (CUCA) | 4,028,022 | ||
CUFIN | 3,847,209 | ||
Tax losses available for offsetting against future taxable income | |||
Available tax loss carry-forward | |||
Deferred income tax | 303,970 | $ 309,320 | $ 343,079 |
Comercializadora Volaris, S.A. de C.V. | |||
Available tax loss carry-forward | |||
Historical Loss | 4,922 | ||
Restated tax loss | 5,028 | ||
Total remaining amount | 5,028 | ||
Concesionaria | |||
Available tax loss carry-forward | |||
Historical Loss | 1,067,836 | ||
Restated tax loss | 1,175,351 | ||
Utilized | 217,393 | ||
Total remaining amount | 957,958 | ||
Operaciones Volaris | |||
Available tax loss carry-forward | |||
Historical Loss | 3,853 | ||
Restated tax loss | 4,016 | ||
Utilized | 4,016 | ||
Vuela, S.A. | |||
Available tax loss carry-forward | |||
Historical Loss | 475,367 | ||
Restated tax loss | 475,366 | ||
Utilized | 115,410 | ||
Total remaining amount | 359,956 | ||
2016, Expiration 2019 | |||
Available tax loss carry-forward | |||
Historical Loss | 26,658 | ||
Restated tax loss | 26,658 | ||
Utilized | 26,658 | ||
2017, Expiration 2020 | |||
Available tax loss carry-forward | |||
Historical Loss | 228,413 | ||
Restated tax loss | 228,413 | ||
Utilized | 88,752 | ||
Total remaining amount | 139,661 | ||
2017, Expiration 2027 | |||
Available tax loss carry-forward | |||
Historical Loss | 1,068,498 | ||
Restated tax loss | 1,176,068 | ||
Utilized | 218,110 | ||
Total remaining amount | 957,958 | ||
2018, Expiration 2021 | |||
Available tax loss carry-forward | |||
Historical Loss | 170,049 | ||
Restated tax loss | 170,049 | ||
Total remaining amount | 170,049 | ||
2018, Expiration 2028 | |||
Available tax loss carry-forward | |||
Historical Loss | 3,192 | ||
Restated tax loss | 3,299 | ||
Utilized | 3,299 | ||
2019, Expiration 2024 | |||
Available tax loss carry-forward | |||
Historical Loss | 50,246 | ||
Restated tax loss | 50,246 | ||
Total remaining amount | 50,246 | ||
2019, Expiration 2029 | |||
Available tax loss carry-forward | |||
Historical Loss | 4,922 | ||
Restated tax loss | 5,028 | ||
Total remaining amount | $ 5,028 |
Other operating income and ex_3
Other operating income and expenses (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Analysis of other operating income | ||||
Gain on sale and leaseback transactions of aircraft and spare engines | $ 284,759 | $ 609,168 | $ 65,886 | |
Loss on sale of rotable spare parts furniture and equipment | (8,954) | (2,356) | (908) | |
Administrative benefits | 27,180 | |||
Other income | 51,403 | 15,161 | 4,607 | |
Other operating income | $ 17,363 | 327,208 | 621,973 | 96,765 |
Analysis of other operating expenses | ||||
Administrative and operational support expenses | 581,181 | 536,079 | 539,101 | |
Technology and communications | 381,055 | 385,841 | 373,394 | |
Passenger services | 65,477 | 70,337 | 59,261 | |
Insurance | 74,661 | 60,892 | 54,569 | |
Others | 10,553 | 5,949 | 7,933 | |
Other operating expenses | $ 59,056 | $ 1,112,927 | $ 1,059,098 | $ 1,034,258 |
Finance income and cost (Detail
Finance income and cost (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Analysis of finance income | ||||
Interest on cash and equivalents | $ 201,191 | $ 152,437 | $ 105,151 | |
Interest on asset backed trust notes | 6,525 | |||
Interest on recovery of guarantee deposits | 83 | 166 | 644 | |
Total finance income | $ 11,027 | 207,799 | 152,603 | 105,795 |
Analysis of finance cost | ||||
Leases financial cost | 2,128,162 | 1,755,978 | 1,428,924 | |
Interest on asset backed trust notes | 80,314 | |||
Cost of letter credit notes | 49,856 | 57,277 | 42,294 | |
Interest on debts and borrowings | 1,660 | 56,916 | 37,565 | |
Bank fees and others | 3,607 | 6,141 | 5,279 | |
Other finance costs | 6,230 | 1,219 | ||
Total finance costs | $ 120,446 | 2,269,829 | 1,876,312 | 1,515,281 |
Capitalized borrowing costs | ||||
Interest on debts and borrowings | 457,973 | 414,836 | 230,954 | |
Capitalized interest | (456,313) | (357,920) | (193,389) | |
Interest on debts and borrowing in the consolidated statements of operations | $ 1,660 | $ 56,916 | $ 37,565 |
Components of other comprehen_3
Components of other comprehensive income (loss) (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Derivative financial instruments: | ||||
Reclassification of call options and forwards during the year to profit or loss (Note 4) | $ (455,009) | $ 52,097 | ||
Net gain (loss) on cash flow hedges | $ 13,982 | $ 263,495 | (283,691) | (42,148) |
Jet fuel Asian call options | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | 11,148 | 227,509 | (81,182) | |
Net gain (loss) on cash flow hedges | 11,148 | (174,984) | (54,202) | |
Jet fuel Zero cost collars | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | 256,515 | (122,948) | ||
Net gain (loss) on cash flow hedges | 256,515 | (122,948) | ||
Foreign currency forward contract | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | (14,241) | $ 66,757 | (13,380) | |
Interest rate swap contracts | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | 317 | |||
Net gain (loss) on cash flow hedges | $ 14,144 | |||
Loss of the interest rate Cap | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | (4,023) | |||
Net gain (loss) on cash flow hedges | (4,023) | |||
Non derivative financial instruments | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | $ 14,096 |
Commitments and contingencies_2
Commitments and contingencies (Details) $ in Thousands | Apr. 27, 2020$ / $ | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2017$ / $ | Dec. 31, 2017Q / $ | Dec. 31, 2017₡ / $ |
Commitments and contingencies | ||||||||||||
2020 | $ 141,218,000 | $ 2,661,281 | ||||||||||
2021 | 164,856,000 | 3,106,744 | ||||||||||
2022 | 606,842,000 | 11,436,059 | ||||||||||
2023 | 793,967,000 | 14,962,467 | ||||||||||
2024 and thereafter | 2,688,321,000 | 50,661,947 | ||||||||||
Total committed expenditures | $ 4,395,204,000 | $ 82,828,498 | ||||||||||
Exchange rate | 24.6230 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 | 19.7354 | 7.3448 | 572.5600 |
Commitments and contingencies -
Commitments and contingencies - Sale and lease back commitments (Details) - Dec. 31, 2019 $ in Thousands, $ in Thousands | USD ($) | MXN ($) |
Disclosure of maturity analysis of operating lease payments [line items] | ||
Estimated proceeds from aircraft sale | $ 1,190,810 | $ 22,441,052 |
Non-cancellable sale and leaseback contracts of aircraft leases | 1,059,107 | 19,959,084 |
Within one year | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Estimated proceeds from aircraft sale | 396,470 | 7,471,556 |
Non-cancellable sale and leaseback contracts of aircraft leases | 20,847 | 392,866 |
Between one year and two years | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Estimated proceeds from aircraft sale | 691,940 | 13,039,748 |
Non-cancellable sale and leaseback contracts of aircraft leases | 57,190 | 1,077,757 |
Between two and three years | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Estimated proceeds from aircraft sale | 102,400 | 1,929,748 |
Non-cancellable sale and leaseback contracts of aircraft leases | 86,025 | 1,621,158 |
Between three and four years | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Non-cancellable sale and leaseback contracts of aircraft leases | 88,259 | 1,663,259 |
Later Than Four Years | ||
Disclosure of maturity analysis of operating lease payments [line items] | ||
Non-cancellable sale and leaseback contracts of aircraft leases | $ 806,786 | $ 15,204,044 |
Operating segments (Details)
Operating segments (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)segment | Dec. 31, 2019MXN ($)segment | Dec. 31, 2018MXN ($)segment | Dec. 31, 2017MXN ($)segment | |
Operating segments | ||||
Number of geographic segments | segment | 2 | 2 | 2 | 2 |
Total operating revenues | $ 1,844,113 | $ 34,752,672 | $ 27,305,150 | $ 24,788,186 |
Non-derivatives financial instruments | $ (3,871) | (72,949) | ||
Domestic (Mexico) | ||||
Operating segments | ||||
Total operating revenues | 24,594,797 | 18,493,476 | 17,272,946 | |
United States of America and Central America | ||||
Operating segments | ||||
Total operating revenues | $ 10,230,824 | $ 8,811,674 | $ 7,515,240 | |
United States of America | ||||
Operating segments | ||||
Percentage of total revenues from external customers | 29.00% | 29.00% | 31.00% | 29.00% |
Subsequent events (Details) - E
Subsequent events (Details) - Exclude | Feb. 21, 2020 | May 31, 2020 | Apr. 30, 2020 | Apr. 27, 2020$ / $ | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2017$ / $ | Dec. 31, 2017Q / $ | Dec. 31, 2017₡ / $ |
Disclosure of non-adjusting events after reporting period [line items] | ||||||||||||||
Closing foreign exchange rate | 24.6230 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 | 19.7354 | 7.3448 | 572.5600 | |||
Renewal term of Concession to provide air transportation services | ||||||||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||||||||
Renewal term to provide air transportation services | 20 years | |||||||||||||
Change in exchange rate | ||||||||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||||||||
Closing foreign exchange rate | 24.6230 | 18.8452 | ||||||||||||
Depreciation of Mexican Peso | 30.70% | |||||||||||||
Outbreak of COVID-19 | ||||||||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||||||||
Percentage of decrease in capacity | 90.00% | 80.00% |