Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
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, 2020 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Entity Shell Company | false |
Entity Interactive Data Current | Yes |
ICFR Auditor Attestation Flag | false |
American Depositary Shares | |
IFRS Statement [Line Items] | |
Title of 12(b) Security | American Depositary Shares (ADSs) |
Trading Symbol | VLRS |
Security Exchange Name | NYSE |
Ordinary Participation Certificates | |
IFRS Statement [Line Items] | |
Title of 12(b) Security | Ordinary Participation Certificates (Certificados de Participación Ordinarios or CPOs) |
Trading Symbol | VLRS |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 806,435,856 |
Series A shares | |
IFRS Statement [Line Items] | |
Title of 12(b) Security | Series A shares of common stock, no par value |
Trading Symbol | VOLARA |
Security Exchange Name | MIAX |
Entity Common Stock, Shares Outstanding | 923,824,804 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position $ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) |
Current assets: | |||
Cash and cash equivalents ( Note 6) | $ 506,468 | $ 10,103,385 | $ 7,979,972 |
Accounts receivable: | |||
Related parties (Note 7) | 3,641 | 72,629 | 23,442 |
Other accounts receivable, net (Note 8) | 28,104 | 560,640 | 923,000 |
Recoverable value added tax and others | 46,242 | 922,458 | 938,532 |
Recoverable income tax | 23,643 | 471,652 | 435,360 |
Inventories (Note 9) | 13,984 | 278,959 | 301,908 |
Prepaid expenses and other current assets (Note 10) | 42,631 | 850,425 | 781,131 |
Financial instruments (Notes 3 and 5) | 10 | 206 | 133,567 |
Guarantee deposits (Note 11) | 57,245 | 1,141,956 | 600,327 |
Total current assets | 721,968 | 14,402,310 | 12,117,239 |
Non-current assets: | |||
Rotable spare parts, furniture and equipment, net (Note 12) | 364,994 | 7,281,157 | 7,385,334 |
Right-of-use assets (Note 14) | 1,720,223 | 34,316,217 | 34,128,766 |
Intangible assets, net (Note 13) | 9,603 | 191,562 | 167,397 |
Financial instruments (Notes 3 and 5) | 16 | 326 | 2,695 |
Deferred income taxes (Note 19) | 156,830 | 3,128,555 | 1,542,536 |
Guarantee deposits (Note 11) | 422,320 | 8,424,738 | 7,644,421 |
Other assets | 5,975 | 119,202 | 165,546 |
Other long-term assets | 16,294 | 325,046 | 141,193 |
Total non-current assets | 2,696,255 | 53,786,803 | 51,177,888 |
Total assets | 3,418,223 | 68,189,113 | 63,295,127 |
Current liabilities: | |||
Unearned transportation revenue (Note 1d) | 293,298 | 5,850,917 | 3,679,926 |
Suppliers | 112,275 | 2,239,736 | 1,597,099 |
Related parties (Note 7) | 6,266 | 124,993 | 58,554 |
Accrued liabilities (Note 15a) | 118,118 | 2,356,287 | 2,531,861 |
Lease liabilities (Note 14) | 325,038 | 6,484,092 | 4,720,505 |
Other taxes and fees payable (Note 1q) | 112,096 | 2,236,161 | 2,102,455 |
Income taxes payable | 201 | 4,005 | 140,609 |
Financial instruments (Notes 3 and 5) | 484 | 9,657 | |
Financial debt (Note 5) | 78,144 | 1,558,884 | 2,086,017 |
Other liabilities (Note 15c) | 5,074 | 101,218 | 407,190 |
Total current liabilities | 1,050,994 | 20,965,950 | 17,324,216 |
Non-current liabilities: | |||
Financial debt (Note 5) | 190,276 | 3,795,749 | 2,889,952 |
Accrued liabilities (Note 15b) | 3,343 | 66,698 | 90,796 |
Lease liabilities (Note 14) | 1,887,163 | 37,646,450 | 35,796,540 |
Other liabilities (Note 15c) | 133,727 | 2,667,683 | 1,469,595 |
Employee benefits (Note 16) | 2,538 | 50,627 | 38,206 |
Deferred income taxes (Note 19) | 10,014 | 199,771 | 156,139 |
Total non-current liabilities | 2,227,061 | 44,426,978 | 40,441,228 |
Total liabilities | 3,278,055 | 65,392,928 | 57,765,444 |
Equity (Note 18): | |||
Capital stock | 171,761 | 3,426,406 | 2,973,559 |
Treasury shares | (11,216) | (223,744) | (169,714) |
Contributions for future capital increases | 1 | 1 | |
Legal reserve | 14,596 | 291,178 | 291,178 |
Additional paid-in capital | 236,618 | 4,720,221 | 1,880,007 |
Retained (losses) earnings | (193,265) | (3,855,379) | 438,412 |
Accumulated other comprehensive (loss) income | (78,326) | (1,562,498) | 116,240 |
Total equity | 140,168 | 2,796,185 | 5,529,683 |
Total liabilities and equity | $ 3,418,223 | $ 68,189,113 | $ 63,295,127 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) | Apr. 29, 2021$ / $ | Dec. 31, 2020$ / $ | Dec. 31, 2020Q / $ | Dec. 31, 2020₡ / $ | Dec. 31, 2020USD ($) | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ |
Consolidated Statements of Financial Position | ||||||||||||
Convenience translation to U.S. dollars | 19.9785 | 19.9487 | 7.8095 | 615.7800 | 19.9487 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 |
Consolidated Statements of Oper
Consolidated Statements of Operations $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($)$ / shares | Dec. 31, 2020MXN ($)$ / shares | Dec. 31, 2019MXN ($)$ / shares | Dec. 31, 2018MXN ($)$ / shares | |
Operating revenues (Notes 1d and 24): | ||||
Fare revenues | $ 645,314 | $ 12,873,174 | $ 23,129,991 | $ 18,487,858 |
Other passenger revenues | 431,777 | 8,613,398 | 10,569,208 | 7,892,497 |
Passenger revenues | 1,077,091 | 21,486,572 | 33,699,199 | 26,380,355 |
Other non-passenger revenues (Note 1d) | 44,231 | 882,360 | 897,586 | 697,357 |
Cargo | 10,120 | 201,881 | 228,836 | 227,438 |
Non-derivatives financial instruments | (20,614) | (411,222) | (72,949) | |
Operating revenues | 1,110,828 | 22,159,591 | 34,752,672 | 27,305,150 |
Other operating income (Note 20) | (36,611) | (730,333) | (327,208) | (621,973) |
Fuel expense, net | 332,895 | 6,640,820 | 11,626,069 | 10,134,982 |
Landing, take-off and navigation expenses | 205,069 | 4,090,864 | 5,108,489 | 4,573,319 |
Depreciation of right of use assets (Note 14) | 253,098 | 5,048,976 | 4,702,971 | 4,043,691 |
Salaries and benefits | 173,113 | 3,453,382 | 3,600,762 | 3,125,393 |
Maintenance expenses | 58,536 | 1,167,720 | 1,488,431 | 1,497,989 |
Sales, marketing and distribution expenses | 92,278 | 1,840,819 | 1,447,637 | 1,501,203 |
Aircraft and engine variable lease expenses | 92,500 | 1,845,254 | 961,657 | 956,010 |
Other operating expenses (Note 20) | 58,011 | 1,157,240 | 1,112,927 | 1,059,098 |
Depreciation and amortization (Notes 12 and 13) | 45,038 | 898,445 | 675,514 | 500,641 |
Operating (loss) income | (163,099) | (3,253,596) | 4,355,423 | 534,797 |
Finance income (Note 21) | 5,089 | 101,511 | 207,799 | 152,603 |
Finance cost (Note 21) | (151,313) | (3,018,484) | (2,269,829) | (1,876,312) |
Foreign exchange gain (loss), net | 23,591 | 470,594 | 1,440,501 | (103,790) |
(Loss) income before income tax | (285,732) | (5,699,975) | 3,733,894 | (1,292,702) |
Income tax benefit (expense) (Note 19) | 70,490 | 1,406,184 | (1,094,831) | 349,820 |
Net (loss) income | $ (215,242) | $ (4,293,791) | $ 2,639,063 | $ (942,882) |
(Loss) earnings per share basic: | (per share) | $ (0.211) | $ (4.203) | $ 2.608 | $ (0.932) |
(Loss) earnings per share diluted: | (per share) | $ (0.211) | $ (4.203) | $ 2.608 | $ (0.932) |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) | Apr. 29, 2021$ / $ | Dec. 31, 2020$ / $ | Dec. 31, 2020Q / $ | Dec. 31, 2020₡ / $ | Dec. 31, 2020USD ($) | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ |
Consolidated Statements of Operations | ||||||||||||
Convenience translation to U.S. dollars | 19.9785 | 19.9487 | 7.8095 | 615.7800 | 19.9487 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Consolidated Statements of Comprehensive Income | ||||
Net (loss) income for the year | $ (215,242) | $ (4,293,791) | $ 2,639,063 | $ (942,882) |
Other comprehensive (loss) income to be reclassified to profit or loss in subsequent periods: | ||||
Net (loss) gain on cash flow hedges (Note 22) | (87,609) | (1,747,686) | 263,495 | (283,691) |
Income tax effect (Note 19) | 2,348 | 46,835 | (74,820) | 85,107 |
Exchange differences on translation of foreign operations | 1,202 | 23,970 | 8,045 | 22,156 |
Other comprehensive (loss) income not to be reclassified to profit or loss in subsequent periods: | ||||
Remeasurement (loss) gain of employee benefits (Note 16) | (133) | (2,651) | (10,192) | 5,989 |
Income tax effect (Note 19) | 40 | 794 | 3,058 | (1,797) |
Other comprehensive (loss) income for the year, net of tax | (84,152) | (1,678,738) | 189,586 | (172,236) |
Total comprehensive (loss) income for the year, net of tax | $ (299,394) | $ (5,972,529) | $ 2,828,649 | $ (1,115,118) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) | Apr. 29, 2021$ / $ | Dec. 31, 2020$ / $ | Dec. 31, 2020Q / $ | Dec. 31, 2020₡ / $ | Dec. 31, 2020USD ($) | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ |
Consolidated Statements of Comprehensive Income | ||||||||||||
Convenience translation to U.S. dollars | 19.9785 | 19.9487 | 7.8095 | 615.7800 | 19.9487 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 |
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 ($) | Retained (losses) earningsUSD ($) | Retained (losses) earningsMXN ($) | Other comprehensive (loss) incomeUSD ($) | Other comprehensive (loss) incomeMXN ($) | USD ($) | MXN ($) |
Balance as of beginning 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) | ||||||||||||
Exercise of stock options (Note 17) | 10,648 | 10,648 | |||||||||||||
Long-term incentive plan cost (Note 17) | 9,045 | (9,045) | |||||||||||||
Net (loss) income for the period | As previously reported | (682,500) | (682,500) | |||||||||||||
Net (loss) income for the period | (942,882) | ||||||||||||||
IFRS 16 adoption | IFRS 16 adoption | (260,382) | (260,382) | |||||||||||||
Other comprehensive (loss) income items | (172,236) | (172,236) | |||||||||||||
Total comprehensive (loss) income for the year, net of tax | (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) | ||||||||||||
Exercise of stock options (Note 17) | 14,773 | 14,773 | |||||||||||||
Long-term incentive plan cost (Note 17) | 13,549 | (13,549) | |||||||||||||
Net (loss) income for the period | 2,639,063 | 2,639,063 | |||||||||||||
Other comprehensive (loss) income items | 189,586 | 189,586 | |||||||||||||
Total comprehensive (loss) income for the year, net of tax | 2,639,063 | 189,586 | 2,828,649 | ||||||||||||
Balance as of end of the year at Dec. 31, 2019 | 2,973,559 | (169,714) | 1 | 291,178 | 1,880,007 | 438,412 | 116,240 | 5,529,683 | |||||||
Capital stock increase (Note 18) | 452,847 | 2,819,985 | 3,272,832 | ||||||||||||
Treasury shares | (94,564) | 60,763 | (33,801) | ||||||||||||
Long-term incentive plan cost (Note 17) | 40,534 | (40,534) | |||||||||||||
Net (loss) income for the period | (4,293,791) | $ (215,242) | (4,293,791) | ||||||||||||
Other comprehensive (loss) income items | (1,678,738) | (84,152) | (1,678,738) | ||||||||||||
Total comprehensive (loss) income for the year, net of tax | (4,293,791) | (1,678,738) | (299,394) | (5,972,529) | |||||||||||
Balance as of end of the year at Dec. 31, 2020 | $ 171,761 | $ 3,426,406 | $ (11,216) | $ (223,744) | $ 1 | $ 14,596 | $ 291,178 | $ 236,618 | $ 4,720,221 | $ (193,265) | $ (3,855,379) | $ (78,326) | $ (1,562,498) | $ 140,168 | $ 2,796,185 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) | Apr. 29, 2021$ / $ | Dec. 31, 2020$ / $ | Dec. 31, 2020Q / $ | Dec. 31, 2020₡ / $ | Dec. 31, 2020USD ($) | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ |
Consolidated Statements of Changes in Equity | ||||||||||||
Convenience translation to U.S. dollars | 19.9785 | 19.9487 | 7.8095 | 615.7800 | 19.9487 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Operating activities | ||||
(Loss) income before income tax | $ (285,732,000) | $ (5,699,975) | $ 3,733,894 | $ (1,292,702) |
Non-cash adjustment to reconcile (loss) income before income tax to net cash flows from operating activities: | ||||
Depreciation and amortization (including right-of-use-assets) (Notes 12,13 and 14) | 298,136,000 | 5,947,421 | 5,378,485 | 4,544,332 |
Allowance for credit losses | 685,000 | 13,664 | 40,393 | 10,621 |
Finance income (Note 21) | (5,089,000) | (101,511) | (207,799) | (152,603) |
Finance cost (Note 21 ) | 128,406,000 | 2,561,526 | 2,265,242 | 1,876,312 |
Net foreign exchange differences | (28,753,000) | (573,591) | (1,722,985) | 171,874 |
Financial instruments (Notes 3 and 4) | 65,496,000 | 1,306,557 | 67,629 | (455,009) |
Amortized Cost (CEBUR) | 347,000 | 6,930 | 3,306 | |
Net gain on disposal of rotable spare parts, furniture and equipment and gain on sale of aircraft (Note 20) | (35,487,000) | (707,918) | (275,805) | (606,812) |
Employee benefits (Note 16) | 555,000 | 11,079 | 10,086 | 6,401 |
Aircraft and engine lease extension benefit and other benefits from service agreements | (533,000) | (10,633) | (10,634) | (12,693) |
Management incentive and long-term incentive plans | 2,445,000 | 48,772 | 32,257 | 12,919 |
Cash flows from operating activities before changes in working capital | 140,476,000 | 2,802,321 | 9,314,069 | 4,102,640 |
Changes in operating assets and liabilities: | ||||
Related parties | 864,000 | 17,252 | 25,603 | (31,422) |
Other accounts receivable | 39,754,000 | 793,045 | (367,603) | 1,711 |
Recoverable and prepaid taxes | (1,103,000) | (22,010) | (425,410) | 19,168 |
Inventories | 1,150,000 | 22,949 | (4,637) | (2,421) |
Prepaid expenses | 3,670,000 | 73,220 | (369,860) | (6,001) |
Other assets | 2,843,000 | 56,717 | (10,789) | (11,228) |
Guarantee deposits | (70,036,000) | (1,397,131) | (1,168,537) | 232,019 |
Suppliers | 44,726,000 | 892,232 | 518,189 | 14,022 |
Accrued liabilities | (28,131,000) | (561,229) | 352,475 | 540,471 |
Other taxes and fees payable | 8,260,000 | 164,777 | 119,700 | 558,174 |
Unearned transportation revenue | 108,829,000 | 2,170,991 | 1,241,410 | 145,207 |
Financial instruments | (63,759,000) | (1,271,904) | (18,943) | 807,644 |
Other liabilities | 38,661,000 | 771,229 | 191,099 | (38,875) |
Cash flows from operating activities before interest received and income tax paid | 226,204,000 | 4,512,459 | 9,396,766 | 6,331,109 |
Interest received | 5,089,000 | 101,511 | 207,799 | 152,602 |
Income tax paid | (12,759,000) | (254,525) | (94,922) | (207,004) |
Net cash flows provided by operating activities | 218,534,000 | 4,359,445 | 9,509,643 | 6,276,707 |
Investing activities | ||||
Acquisitions of rotable spare parts, furniture and equipment (Note 12) | (169,263,000) | (3,376,576) | (3,483,368) | (2,743,155) |
Acquisitions of intangible assets (Note 13) | (6,252,000) | (124,724) | (77,325) | (71,007) |
Pre-delivery payments reimbursements (Note 12) | 85,737,000 | 1,710,338 | 704,852 | 668,365 |
Proceeds from disposals of rotable spare parts, furniture and equipment | 86,382,000 | 1,723,205 | 976,500 | 756,402 |
Net cash flows used in investing activities | (3,396,000) | (67,757) | (1,879,341) | (1,389,395) |
Financing activities | ||||
Net proceeds from public offering (Note 18) | 164,062,000 | 3,272,832 | ||
Proceeds from exercised stock options (Note 17) | 14,773 | 10,648 | ||
Treasury shares purchase | (4,740,000) | (94,564) | (75,375) | (57,320) |
Interest paid | (14,007,000) | (279,423) | (217,018) | (175,170) |
Other finance interest paid | (612,000) | (12,214) | (60,824) | (28,567) |
Payments of principal portion of lease liabilities (Note 14) | (306,314,000) | (6,110,569) | (6,499,802) | (5,710,907) |
Payments of financial debt | (107,285,000) | (2,140,194) | (1,181,726) | (1,193,589) |
Proceeds from financial debt | 116,464,000 | 2,323,292 | 2,781,132 | 1,208,846 |
Net cash flows used in financing activities | (152,432,000) | (3,040,840) | (5,238,840) | (5,946,059) |
Increase (decrease) in cash and cash equivalents | 62,706,000 | 1,250,848 | 2,391,462 | (1,058,747) |
Net foreign exchange differences on cash balance | 43,737,000 | 872,565 | (274,432) | (29,190) |
Cash and cash equivalents at beginning of year | 400,025,000 | 7,979,972 | 5,862,942 | 6,950,879 |
Cash and cash equivalents at end of year | $ 506,468,000 | $ 10,103,385 | $ 7,979,972 | $ 5,862,942 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | Apr. 29, 2021$ / $ | Dec. 31, 2020$ / $ | Dec. 31, 2020Q / $ | Dec. 31, 2020₡ / $ | Dec. 31, 2020USD ($) | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ |
Consolidated Statements of Cash Flows | ||||||||||||
Convenience translation to U.S. dollars | 19.9785 | 19.9487 | 7.8095 | 615.7800 | 19.9487 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 |
Description of the business and
Description of the business and summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2020 | |
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 24, 2020, Concesionaria’s concession was extended for a 20-year term starting on May 9, 2020. Concesionaria made its first commercial flight as a low-cost airline on March 13, 2006. 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 the Shareholders on April 26, 2021. 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 the Senior Vice president and Chief Financial Officer, Jaime E. Pous Fernández, on April 29, 2021. The Company´s Board of Directors and Shareholders have the authority to approve or modify the Company´s consolidated financial statements. Subsequent events have been considered through April 30, 2021 (Note 25). a) Relevant events Upsized Offering of ADSs On December 11, 2020, Controladora Vuela Compañía de Aviación, S.A.B. de C.V announced the closing of an upsized primary follow-on equity offering in which the Company offered 134,000,000 of its Ordinary Participation Certificates (Certificados de Participación Ordinarios), or CPOs, in the form of American Depositary Shares, or ADSs, at a price to the public of USD11.25 per ADS in the United States and other countries outside of Mexico, pursuant to the Company’s shelf registration statement filed with the Securities and Exchange Commission (the “SEC”). In connection with the offering, the underwriters exercised their option to purchase up to 20,100,000 additional CPOs in the form of ADSs. Each ADS represents 10 CPOs and each CPO represents a financial interest in one Series A share of common stock of the Company (Note 18). Covid-19 commentary 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. The first case of COVID-19 in Mexico was confirmed on February 28, 2020. In the following weeks, the Mexican government took various measures in order to prepare the country for a mass contagion, including declaring a national health emergency, asking the public to stay home, closing schools and imposing restrictions on non-essential activities in the public, private and social sectors. As a result of the national health emergency and health security measures imposed by the Mexican government in the spring of 2020, the Company´s capacity as measured by available seat miles (“ASMs”) was reduced. In April and May of 2020, the Company´s capacity as measured by ASMs was reduced by up to 80% and 90%, respectively, and remained reduced from June to November of 2020. Additionally, the Company suspended service on certain routes. Costa Rica, Guatemala and El Salvador imposed operational and migratory restrictions that made it impossible to operate international passenger flights to those countries. A gradual opening of the economy and easing of lockdown measures in Mexico and the other countries in which the Company operates led to a recovery in the ASMs and route operation during the second half of the year, with the Company´s capacity returning to over 100% of 2019 levels for the month of December. The Company has taken actions to preserve liquidity and sustain its operations during the period, establishing vendor and supplier’s payment deferral, reducing management’s compensations and other salaries and deferring capital expenditures and certain other measures. Liquidity and cash The Company implemented a strict liquidity preservation program, which resulted in approximately U.S. $200 million of savings as of December 31, 2020 through items such as cost reductions and deferral agreements with suppliers. In addition, the Company negotiated cost reductions with more than 360 suppliers and cut non-essential expenses. The Company also implemented online training and leave of absence programs in order to reduce costs. As of December 31, 2020, our cash and cash equivalents were Ps.10,103,385. Fleet plan The new contractual fleet plan with Airbus allows to the Company to maintain a “cautiously” sized fleet, that will remain at approximately 85 aircraft, net of new deliveries and redeliveries, until 2023. Customers and employees Additionally, the Company launched a new biosecurity and cleaning protocol and are communicating proactively with all staff, especially with crews and airport staff, regarding health and COVID-19 developments. Commercial and network growth opportunities. The Company is closely monitoring capacity reductions from competitors for possible opportunities, testing new ancillary products and running targeted promotions to test potential stimulation of air travel. The Company remained focused on price sensitive visiting friends and relatives, leisure and small and medium sized enterprises segments, which continued to show the strongest demand for air travel in Mexico as the market recovers from COVID-19. As of December 31, 2020, Volaris was positioned as the domestic market leader in 2020. In addition, the Company considered the impact of Covid‑19 in preparing their financial statements. Since the Company business and the airline industry have experienced material adverse impacts due to the COVID-19 pandemic, the Company cannot offer any assurance that these impacts will not intensify to the extent that COVID-19 persists throughout Mexico. Further, additional government COVID-19 response measures remain unknown and depend on future developments with respect to COVID-19, including the scope and duration of the pandemic, which are highly fluid, uncertain and cannot be predicted. It is not yet possible to determine when the adverse effects of COVID-19 will abate and the extent to which they will further decrease demand for air travel, which could continue to materially and negatively affect our business, results of operations and financial condition. 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 (Note 5b). 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. b) Basis of preparation Statement of compliance These consolidated financial statements comprise the financial statements of the Company and its subsidiaries at December 31, 2020 and 2019 and for each of the three years ended December 31, 2020, 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. 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, 2020 and 2019, for accounting purposes the companies included in the consolidated financial statements are as follows: Principal % Equity interest Name Activities Country 2020 2019 Concesionaria Air transportation services for passengers, cargo and mail throughout Mexico and abroad Mexico 100 % 100 % Vuela Aviación, S.A. Air transportation services for passengers, cargo and mail in Costa Rica and abroad Costa Rica 100 % 100 % Vuela, S.A. (“Vuela”) * Air transportation services for passengers, cargo and mail in Guatemala and abroad Guatemala 100 % 100 % Vuela El Salvador, S.A. de C.V.* Air transportation services for passengers, cargo and mail in El Salvador and abroad El Salvador 100 % 100 % Comercializadora Volaris, S.A. de C.V. Merchandising of services Mexico 100 % 100 % Servicios Earhart, S.A.* Recruitment and payroll Guatemala 100 % 100 % Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”) Recruitment and payroll Mexico 100 % 100 % Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) Recruitment and payroll Mexico 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”) Travel agency Mexico 100 % 100 % Deutsche Bank México, S.A., Trust 1710 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % Deutsche Bank México, S.A., Trust 1711 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % Irrevocable Administrative Trust number F/307750 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % Irrevocable Administrative Trust number F/745291 “Administrative Trust” Share administration trust (Note 17) Mexico 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 % 100 % *The Companies have not started operations yet in Guatemala and El Salvador. **The Company has not started operations yet 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. 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 2018. Through this alliance, the Company´s customers gain access to additional cities in the U.S. beyond the current available destinations as the Company’s customers are able to buy a ticket throughout any of Frontier’s actual destinations; and Frontier customers gain first-time access to new destinations in Mexico through Volaris presence in Mexican airports. Tickets from Frontier can be purchased directly from the Volaris’ website. Other considerations analyzed as part of revenue from contracts with customers All revenues offered by the Company including sales of tickets for future flights, other passenger related services and non-passenger revenue must be paid through a full cash settlement. The payment of the transaction price is equal to the cash settlement from the client at the sales time (using different payment options like credit or debit cards, paying through a third party or directly at the counter in cash). There is little or no judgment to determine the point in time of the revenue recognition, and the amount of it. Even if mainly all the sales of services are initially recognized as contract liabilities, there is no financing component in these transactions. The cost to obtain a contract is represented by the commissions paid to the travel agencies and the bank commissions charged by the financial institutions for processing electronic transactions (Note 10). The Company does not incur any additional costs to obtain and fulfill a contract that is eligible for capitalization. Trade receivables are mainly with financial institutions due to transactions with credit and debit cards, and therefore they are non-interest bearing and are mainly on terms of 24 to 48 hours. The Company has the right of collection at the beginning of the contracts and there are no discounts, payment incentives, bonuses, or other variable considerations subsequent to the purchase that could modify the amount of the transaction price. The Company´s tickets are non-refundable. However, if the Company cancels a flight for causes attributable to the airline, including as a result of the COVID-19 pandemic, then the passenger is entitled to either move their flight at no cost, receive a refund or a voucher. No revenue is recognized until either the voucher is redeemed, and the associate flight occurs, or the voucher expires. When vouchers issued exceed the amount of the original amount paid by the passenger the excess is recorded as reduction of the operating revenues. All of the Company´s revenues related to future services are rendered through an approximate period of 12 months. As of December 31, 2020, the Company recorded an amount of Ps.1,720,939 related to vouchers to be redeemed by passengers, which were presented as part of the unearned transportation revenues. Breakdown of revenues: As of December 31, 2020, 2019 and 2018, the revenues from customers of contracts is described as follows: At the flight time At the sale Total Revenue recognition as of December 31, 2020 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 8,455,647 Ps. 4,417,527 Ps. — Ps. — Ps. 12,873,174 Other Passenger Revenues 6,920,141 1,536,206 124,450 32,601 8,613,398 15,375,788 5,953,733 124,450 32,601 21,486,572 Non-Passenger Revenues Other Non-Passenger revenues 875,610 6,750 — — 882,360 Cargo 196,349 5,532 — — 201,881 Total Ps. 16,447,747 Ps. 5,966,015 Ps. 124,450 Ps. 32,601 Ps. 22,570,813 Non-derivative financial instruments (411,222) Ps. 22,159,591 At the flight time At the sale Total Revenue recognition as of December 31, 2019 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 15,833,878 Ps. 7,296,113 Ps. — Ps. — Ps. 23,129,991 Other Passenger Revenues 7,531,725 2,865,555 119,466 52,462 10,569,208 23,365,603 10,161,668 119,466 52,462 33,699,199 Non-Passenger Revenues Other Non-Passenger revenues 888,353 9,233 — — 897,586 Cargo 221,375 7,461 — — 228,836 Total Ps. 24,475,331 Ps. 10,178,362 Ps. 119,466 Ps. 52,462 Ps. 34,825,621 Non-derivative financial instruments (72,949) Ps. 34,752,672 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 Transactions from unearned transportation revenues. 2020 2019 January 1, Ps. 3,679,926 Ps. 2,438,516 Deferred 23,657,563 34,940,609 Recognized in revenue during the year (21,486,572) (33,699,199) December 31, Ps. 5,850,917 Ps. 3,679,926 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 the categories in IFRS 9, which are based on both: the characteristics of the contractual cash flows of these assets and the business model objective for holding them. Financial assets include those carried at FVTPL, whose objective to hold them is for trading purposes (short-term investments), or at amortized cost, for accounts receivables held to collect the contractual cash flows, which are characterized by solely payments of principal and interest (“SPPI”). Derivative financial instruments are also considered financial assets when these represent contractual rights to receive cash or another financial asset. All the Company’s financial assets are initially recognized at fair value, including derivative financial instruments. Subsequent measurement The subsequent measurement of financial assets depends on their initial classification, as is described below: 1. Financial assets at FVTPL which include financial assets held for trading. 2. Financial assets at amortized cost, whose characteristics meet the SPPI criterion and were originated to be held to collect principal and interest in accordance with the Company’s business model. 3. Financial assets at fair value through OCI with recycling of cumulative gains and losses. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when: a) The rights to receive cash flows from the asset have expired; b) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. ii) Impairment of financial assets The Company assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. 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 applies a simplified approach in calculating expected credit losses (ECLs). Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. Based on this evaluation, allowances are taken into account for the expected losses of these receivables. For the years ended December 31, 2020 y 2019 the Company recorded expected credit losses on accounts receivable of Ps.13,664 and Ps.40,393, 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, 2020 and 2019 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 softwa |
Significant accounting judgment
Significant accounting judgments, estimates and assumptions | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, 2019 and 2018, the Company used Ps.0, Ps.214,460 and Ps.154,353, respectively, of the available tax loss carry-forwards. iii) Fair value measurement of financial instruments Where the fair value of financial assets and financial liabilities recorded in the consolidated statements of financial position cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flows model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and expected volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments (Note 4). iv) Impairment of long-lived assets The Company assesses whether there are indicators of impairment for long-lived assets and right of use assets, annually and at other times when such indicators exist in the related CGU. Impairment exists when the carrying amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less cost to sell and its value-in-use. In making these determinations, the Company uses certain assumptions, including, but not limited to estimated, undiscounted future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company’s operations, excluding additions and extensions. The Company's assumptions about future conditions important to its assessment of potential impairment of its long-lived assets, including the impact of the COVID-19 pandemic to its business, are subject to uncertainty, and the Company will continue to monitor these conditions in future periods as new information becomes available, and will updated its analyses accordingly. The Company has assessed whether any impairment of its long-lived assets existed and has determined that no charges were deemed necessary under applicable accounting standards as of December 31, 2020. 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 its leases, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating). |
Financial instruments and risk
Financial instruments and risk management | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, 2019 and 2018 represented 28%, 38% and 38%, 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, 2020 and 2019, the Company entered into US Gulf Coast Jet fuel 54 Asian call options designated to hedge 23,967 and 13,492 thousand gallons respectively. Such hedges represented a portion of the projected consumption for the 2Q 2020, 3Q 2020 & 1Q 2021 and for the 4Q 2019, respectively. Additionally, during the same period, the Company entered into US Gulf Coast Jet Fuel 54 Asian Zero-Cost collar options designated to hedge 81,646 thousand gallons and 70,136 thousand gallons, respectively. Such hedges represent a portion of the projected consumption for the 2Q 2020, 2H 2020 & 2Q 2021 and the year 2020, respectively. Furthermore, the Company restructured part of its hedging portfolio by unwinding put legs on two Zero-Cost Collars instruments with maturity dates of June & July to reduce crude market exposure, in line with capacity adjustments due to COVID-19 outbreak. For the year ended December 31, 2020, the Company recognized an unwind of the Zero cost collar of Ps.42,644 which was recognized as part of finance cost. In accordance with IFRS 9 the Company separates the intrinsic value from the extrinsic value of an option contract; as such, the change in the intrinsic value can be designated as hedge accounting. Because extrinsic value (time and volatility values) of the Asian call options is related to a “transaction related hedged item”, it is required to be segregated and accounted for as a cost of hedging in OCI and accrued as a separate component of stockholders’ equity until the related hedged item matures and therefore impacts profit and loss. The underlying (US Gulf Coast Jet Fuel 54) of the options held by the Company is a consumption asset (energy commodity), which is not in the Company’s inventory. Instead, it is directly consumed by the Company’s fleet at different airport terminals. Therefore, although a non-financial asset is involved, its initial recognition does not generate 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 options and Zero-Cost Collars. The Company has a hedging policy in place to stablish guidelines to hedge fuel consumption; nevertheless, with COVID-19 outbreak, capacity was considerably reduced, thereby, ineffectiveness arose in the hedging relationship. As of December 31, 2020 and 2019, the fair value of the outstanding US Gulf Coast Jet Fuel Asian call options was Ps.206 and Ps.0, respectively. As of December 31, 2020 and 2019 the Zero-Cost Collars outstanding balance was of Ps.(9,657) and Ps.133,567, respectively and are presented as part of the financial assets and financial liabilities in the consolidated statement of financial position. (See Note 4). During the year ended December 31, 2020, the intrinsic value of the Asian call options recycled to the fuel cost was an expense of Ps.33,627 (Ps.20,646 which was recognized in the fuel cost and an expense of Ps.12,981 in finance cost). During the year ended December 31, 2019, the intrinsic value of the Asian call options recycled to the fuel cost was an expense of Ps.61,069. During the year ended December 31, 2018, the intrinsic value of the Asian call options recycled to the fuel cost was a benefit of Ps.402,493. During the year ended December 31, 2020, the intrinsic value of the Zero-Cost Collars recycled to the fuel cost was an expense of Ps.1,271,462. (Ps.835,884 which was recognized in the fuel cost and an expense of Ps.435,578 in finance cost) and for the year ended December 2019 and 2018 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 cost of hedging derived from the extrinsic value changes of the jet fuel hedged position as of December 31, 2020 recognized in other comprehensive income totals Ps.21,650. The (benefit) cost of hedging in December 2019 and 2018 totals Ps.(133,567) and Ps.134,096, and will be recycled to the fuel cost during 2021, as these options expire on a monthly basis and the jet fuel is consumed. 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, 2020 Jet fuel Asian call and Zero-Cost collars option contracts maturities 1 Half 2021 2 Half 2021 2021 Total Jet fuel risk Asian Calls Notional volume in gallons (thousands)* 7,280 — 7,280 Strike price agreed rate per gallon (U.S.dollars) ** US$ 1.90 — US$ 1.90 Approximate percentage of hedge (of expected consumption value) 6 % — % 3 % Jet fuel risk Zero-Cost collars Notional volume in gallons (thousands)* 7,556 — 7,556 Strike price agreed rate per gallon (U.S. dollars) ** US$ 1.23 / 1.93 US$ — US$ 1.23 / 1.93 Approximate percentage of hedge (of expected consumption value) 6 % — % 3 % All-in Approximate percentage of hedge (of expected consumption value) 12 % — % 6 % * US Gulf Coast Jet 54 as underlying asset ** Weighted average 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 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, 2020: Sensitivity of position as of December 31, 2020 effect on equity (U.S. dollars) US Gulf Coast Jet Fuel 54 spot level +5% +0.16M -5% -0.16M 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, 27% of its revenues came from operations in the United States of America and Central America for the year ended at December 31, 2020, (29% at December 31, 2019 and 32% at December 31, 2018) and U.S. dollar denominated collections accounted for 44%, 43% and 38%, of the Company’s total collections in 2020, 2019 and 2018, 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 on and off-balance sheet exposure as of December 31, 2020 and 2019 is as set forth below: Thousands of U.S. dollars 2020 2019 Assets: Cash and cash equivalents US$ 495,612 US$ 373,099 Other accounts receivable, net 39,997 23,620 Guarantee deposits 479,566 437,499 Derivative financial instruments 10 7,088 Total assets US$ 1,015,185 US$ 841,306 Liabilities: Financial debt (Note 5) US$ 183,806 US$ 176,927 Lease liabilities 2,334,153 2,263,849 Suppliers 174,553 76,471 Other taxes and fees payable 16,105 22,486 Derivative financial instruments 484 — Total liabilities 2,709,101 2,539,733 Net foreign currency position US$ (1,693,916) US$ (1,698,427) At April 29, 2021, date of issuance of these financial statements, the exchange rate was Ps.19.9785 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, 2020, the Company did not enter foreign exchange rate derivatives financial instruments. 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, the Company entered into foreign currency forward contracts in U.S. dollars to hedge approximately, 20% 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). 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 and 2018, the net gains (loss) on the foreign currency forward contracts were Ps. 4,199 and Ps.52,516, respectively, which were recognized as part of rental expense in the consolidated statements of operations. Foreign currency sensitivity The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities excluding the assets and liabilities associated with non-derivative financial instruments. The Company’s exposure to foreign currency changes for all other currencies is not material. Change in Effect on profit USD rate before tax 2020 +5 % Ps. (253,763) -5 % 253,763 2019 +5 % Ps. (155,593) -5 % 155,593 The movement in the pre-tax effect is a result of a change in the fair value of assets and liabilities denominated in US dollars, where the functional currency of the entity is a currency other than US dollars. i) Hedging relationships designating non-derivative financial instruments as hedging instruments for Foreign Exchange (FX) risk Regarding the foreign currency risk effective since January 1 st , 2019, the Company implemented two hedging strategies associated to forecasted FX exposures, by using non-derivatives financial assets and liabilities denominated in a non-functional currency (the USD in this case) as hedging instruments. In the first FX hedging strategy, the Company designated a hedge to mitigate the variability in FX fluctuation denominated in USD associated to forecasted revenues by using a portion of USD denominated financial liabilities associated to a portfolio of leasing liabilities up until the terms of the remaining leasing arrangements. The lease liability amount designated as a hedging item during 2019 was USD$2.1 billion. The outstanding USD balance designated under this hedging strategy as of December 31, 2020 and 2019 amount to US$1.5 billion and USD$1.7 billion respectively, represented by recognized leasing liabilities, which have been designated as hedging instruments tagged to USD denominated forecasted revenues over the remaining lease term. The second FX strategy consists on designating a hedging relationship by using a portion of USD denominated non-derivative financial assets as hedging instruments, to mitigate the FX variability (MXN/USD) contractually included as a component in the purchase of a portion of future Jet Fuel consumption. For this strategy designated in 2019, a portion of the Jet Fuel consumption over the two following years has been designated as hedged item; while the hedging instrument is represented by USD denominated recognized assets, including guaranteed deposits and cash and cash equivalents equivalent to USD$410 million, which represent a portion of the financial assets denominated in USD. The outstanding USD balance designated under this hedging strategy as of December 31, 2020 and 2019 amount to US$60.5 million and USD$166.7 million respectively, which does represent a portion of the recognized financial assets. Since the hedged items on for both hedging strategies are targeted at mitigating the cash flow variability of highly expected forecasted transactions, these are represented by multiple hedging relationships which do follow the Cash Flow Hedge Accounting Model. The effective portion of the hedging instrument’s changes in fair value, are taken to the hedge reserve within the OCI, presented as a separate caption within the Company’s Stakeholders Equity, which is in accordance with IFRS 9 criteria. The amounts recorded in OCI are recycled to profit and loss on a time basis as corresponding USD denominated Income and/or Jet Fuel consumptions do also impact the Company’s operating margin and are presented as adjustments to both operating income and expense, with respect to each FX hedging strategy in a timely matter, as USD denominated income and jet fuel consumption are recognized within operating earnings, hence reflecting a portion of both operating income and expenses amounts, net of both FX Hedging activities. During the year ended December 31, 2020, the Company determined that a portion of its non-derivative financial instruments designated as hedge accounting were no longer effective, since the jet fuel consumption was lower than anticipated as a result of the adverse effect of COVID-19. The impact of this adjustment in 2020 was a benefit of Ps.111 million in the Company´s net loss for the period. This amount was reclassified from other comprehensive income to comprehensive financial result. Further, Ps.94 million were also reclassified from other comprehensive income to operating expenses during 2020 as a result of the completion of a forecasted transaction designated in a hedge relationship. 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 to TIIE 28 are limited under the cap to 10% on the reference rate for the life of the CEBUR and have 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, 2020 and 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 values of Ps.326 and Ps.2,695, respectively, recorded in assets. During the years ended December 31, 2018, the Company did not have any outstanding interest rate derivatives. 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, 2020 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) Ps. 1,096,543 Ps. 2,554,069 Ps. 3,650,612 Short-term working capital facilities (Note 5) 200,000 — 200,000 Asset backed trust note (Note 5) 250,000 1,250,000 1,500,000 Derivative financial instruments: Jet fuel Asian Zero-Cost collars options contracts 9,657 — 9,657 Lease liabilities: Aircraft, engines, land and buildings leases 6,484,092 37,646,450 44,130,542 Aircraft and engine lease return obligation 86,801 2,417,683 2,504,484 Total Ps. 8,127,093 Ps. 43,868,202 Ps. 51,995,295 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 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, 2020, 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. g) 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 2020 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, 2020 and 2019. 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, 2020 | |
Fair value measurements | |
Fair value measurements | 4. Fair value measurements The only financial assets and liabilities measured at fair value after initial recognition are the derivative financial instruments. Fair value is the price that would be received from sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: (i) In the principal market for the asset or liability, or (ii) In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to the Company. The fair value of an asset or a liability is assessed using the course of thought which market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The assessment of a non-financial asset’s fair value considers the market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: · Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities. · Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. · Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. Set out below, is a comparison by class of the carrying amounts and fair values of the Company’s financial instruments, other than those for which carrying amounts are reasonable approximations of fair values: Carrying amount Fair value 2020 2019 2020 2019 Assets Derivative financial instruments Ps. 532 Ps. 136,262 Ps. 532 Ps. 136,262 Liabilities Financial debt (5,350,612) (5,008,509) (5,527,332) (5,194,316) Derivative financial instruments (9,657) — (9,657) — Total Ps. (5,359,737) Ps. (4,872,247) Ps. (5,536,457) Ps. (5,058,054) The following table summarizes the fair value measurements at December 31, 2020: Fair value measurement Quoted prices Significant Significant in active observable unobservable markets inputs inputs Level 1 Level 2 Level 3 Total Assets Derivatives financial instruments: Jet fuel Asian call options contracts* Ps. — Ps. 206 Ps. — Ps. 206 Interest rate Caps — 326 — 326 Liabilities Derivatives financial instruments:Jet fuel Asian Zero-Cost collars options contracts* — (9,657) — (9,657) Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (5,527,332) — (5,527,332) Net Ps. — Ps. (5,536,457) Ps. — Ps. (5,536,457) * Jet fuel forwards levels and LIBOR curve. ** LIBOR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt. There were no transfers between level 1 and level 2 during the period. The following table summarizes the 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 (loss) gain from derivatives financial instruments recognized in the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018: Instrument Financial statements line 2020 2019 2018 Jet fuel Asian call options contracts Fuel Ps. (20,646) Ps. (61,069) Ps. 402,493 Jet fuel Zero-Cost collars contracts Fuel (835,884) (9,477) — Jet fuel Asian call options contracts Finance cost (12,981) — — Jet fuel Zero-Cost collars contracts Finance cost (435,578) — — Foreign currency forward Aircraft and engine rent expenses — 4,199 52,516 Interest rate cap Finance cost (1,468) (1,282) — Total Ps. (1,306,557) Ps. (67,629) Ps. 455,009 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, 2020, 2019 and 2018: Consolidated statements of other comprehensive (loss) income Financial Instrument statements line 2020 2019 2018 Jet fuel Asian call options contracts OCI Ps. (11,993) Ps. 11,148 Ps. (174,984) Jet fuel Zero cost collars OCI (143,224) 256,515 (122,948) Foreign currency contracts OCI — (14,241) 14,241 Interest rate cap OCI (900) (4,023) — Non derivative financial instruments OCI (1,591,569) 14,096 — Total Ps. (1,747,686) Ps. 263,495 Ps. (283,691) The exchange rates used to translate the above amounts to Mexican pesos at December 31, 2020, 2019 and 2018 were Ps.19.9487, Ps.18.8452 and Ps.19.6829, respectively, per U.S. dollar. |
Financial assets and liabilitie
Financial assets and liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Financial assets and liabilities | |
Financial assets and liabilities | 5. Financial assets and liabilities At December 31, 2020 and 2019, 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 2020 2019 Derivative financial instruments designated as cash flow hedges (effective portion recognized within OCI) Jet fuel Asian call options Ps. 206 Ps. — Jet fuel Zero-Cost collars — 133,567 Interest rate cap 326 2,695 Total financial assets Ps. 532 Ps. 136,262 Presented on the consolidated statements of financial position as follows: Current Ps. 206 Ps. 133,567 Non-current Ps. 326 Ps. 2,695 b) Financial debt (i) At December 31, 2020 and 2019, the Company’s short-term and long-term debt consists of the following: 2020 2019 I. Revolving line of credit with Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander (“Santander”) and Banco Nacional de Comercio Exterior, S.N.C. (“Bancomext”), in U.S. dollars, to finance pre-delivery payments, maturing on October 31, 2022, bearing annual interest rate at the three-month LIBOR plus a spread of 260 basis points. Ps. 3,650,612 Ps. 3,308,509 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. 1,500,000 1,459,871 III. In December 2019, the Company entered into a short-term working capital facility with Banco Sabadell S.A., Institución de Banca Multiple (“Sabadell”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a 300 basis points. 200,000 200,000 IV. Amortized transaction costs (15,542) (22,472) V. Accrued interest and other financial cost 19,563 30,061 5,354,633 4,975,969 Less: Short-term maturities 1,558,884 2,086,017 Long-term Ps. 3,795,749 Ps. 2,889,952 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, 2020: 2021 2022 2023 2024 Total Santander/Bancomext Ps. 1,112,629 Ps. 2,554,069 Ps. — Ps. — Ps. 3,666,698 CEBUR 252,605 500,000 500,000 250,000 1,502,605 Banco Sabadell 200,872 — — — 200,872 Total Ps. 1,566,106 Ps. 3,054,069 Ps. 500,000 Ps. 250,000 Ps. 5,370,175 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, 2020, the Company was not in compliance with the financial ratio, therefore, the Company requested a waiver to the banks. The company received a waiver dated October 23, 2020, for the covenant regarding the financial ratio for the PDP financing facility that included the third and fourth quarter of 2020 and the first and second quarter of 2021. The waiver was provided by both banks, Santander and Bancomext. At December 31, 2019, 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 (CI Banco, S.A. (previously Deutsche Bank México, S.A. Trust 1710 and 1711)). At December 31, 2020, the Company has available credit lines totaling Ps.9,256,978 of which Ps.6,851,338 were related to financial debt (Ps.1,500,726 were undrawn) and Ps.2,405,640 were related to letters of credit (Ps.214,012 were undrawn). At December 31, 2019, the Company has 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). 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 start 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, not retention of funds exists if the ratio exceeds 2.5 times. Amortization on the asset backed trust notes begins in July of 2021. In addition, early amortization applies if: i) An event of retention is not cover in a period of 90 consecutive days. ii) The debt service reserve account of any series maintains on deposit an amount less than the required balance of the debt service reserve account for a period that includes two or more consecutive payment methods. iii) Insolvency event of Concesionaria. In December 2019, the Company entered into a short-term working capital facility with Banco Sabadell S.A., Institución de Banca Multiple (“Sabadell”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a 300 basis points. The “Sabadell” working capital facility has the following covenant: i) Joint obligor (Concesionaria) must represent 85% of EBITDA of the holding During the years ended on December 31, 2020 and 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, 2020 and 2019, the changes in liabilities from financing activities from the Company are summarized in the following table: Foreign Current vs non- January 1, Net cash Accrued exchange current December 31, 2020 Flows Interest movement reclassification Other 2020 Current interest-bearing loans and borrowings Ps. 2,086,017 Ps. (1,231,695) Ps. (10,498) Ps. (32,491) Ps. 747,551 Ps. - Ps. 1,558,884 Non-current interest -bearing loans and borrowings 2,889,952 1,374,678 — 231,612 (747,551) 47,058 3,795,749 Total liabilities from financing activities Ps. 4,975,969 Ps. 142,983 Ps. (10,498) Ps. 199,121 Ps. - Ps. 47,058 Ps. 5,354,633 Current vs non- January 1, Net cash Accrued Foreign exchange current December 31, 2019 Flows Interest movement reclassification 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. - Ps. 2,086,017 Non-current interest -bearing loans and borrowings 2,310,939 2,273,143 — (122,466) (1,534,842) (36,822) 2,889,952 Total liabilities from financing activities Ps. 3,523,198 Ps. 1,639,534 Ps. 13,698 Ps. (163,639) Ps. - Ps. (36,822) Ps. 4,975,969 c) Other financial liabilities 2020 2019 Derivative financial instruments designated as CFH (effective portion recognized within OCI): Zero-Cost Collar options Ps. 9,657 Ps. — Total financial liabilities Ps. 9,657 Ps. — Presented on the consolidated statements of financial position as follows: Current Ps. 9,657 Ps. — Non-current Ps. — Ps. — |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2020 | |
Cash and cash equivalents | |
Cash and cash equivalents | 6. Cash and cash equivalents An analysis of this caption is as follows: 2020 2019 Cash in banks Ps. 6,907,295 Ps. 4,612,927 Short-term investments 3,068,618 3,231,125 Cash on hand 36,432 44,880 Restricted funds held in trust related to debt service reserves 91,040 91,040 Total cash and cash equivalents Ps. 10,103,385 Ps. 7,979,972 As of December 31, 2020 and 2019, the Company recorded a portion of advance ticket sales by an amount of Ps.91,040 and Ps.91,040, respectively, as a restricted fund (Note 1e). 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, 2020 | |
Related parties | |
Related parties | 7. Related parties a) An analysis of balances due from/to related parties at December 31, 2020 and 2019 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 2020 2019 Terms Due from: Frontier Airlines Inc. (“Frontier”) Code-share USA Ps. 72,629 Ps. 23,442 30 days Ps. 72,629 Ps. 23,442 Due to: Grupo Aeroportuario del Centro Norte (“OMA”) Airport Services Mexico Ps. 80,681 Ps. — 30 days Aeromantenimiento, S.A. (“Aeroman”) Aircraft and engine Mexico/El Salvador 39,284 1,474 30 days Chevez, Ruiz, Zamarripa y Cía., S.C. Professional fees Mexico 4,823 — 30 days Mijares, Angoitia, Cortés y Fuentes, S.C. Professional fees Mexico 166 996 30 days Frontier Airlines Inc. (“Frontier”) Code-share USA 39 16,246 30 days One Link, S.A. de C.V. (“One Link”) Call center fees El Salvador — 39,838 30 days Ps. 124,993 Ps. 58,554 b) During the years ended December 31, 2020, 2019 and 2018, the Company had the following transactions with related parties: Related party transactions Country of origin 2020 2019 2018 Revenues: Transactions with affiliates Frontier Airlines Inc Code-share USA Ps. 148,964 Ps. 208,968 Ps. 8,358 Expenses: Transactions with affiliates Aeromantenimiento, S.A. Aircraft and engine maintenance Mexico/El Salvador Ps. 239,118 Ps. 201,624 Ps. 341,726 Technical support Mexico/El Salvador 3,945 5,815 4,796 Onelink, S.A. de C.V. Call center fees Mexico/El Salvador 73,167 37,026 — Grupo Aeroportuario del Centro Norte Airport services Mexico 32,193 — — Mijares, Angoitia, Cortés y Fuentes, S.C. Professional fees Mexico 5,582 1,321 1,672 Chevez, Ruiz, Zamarripa y Cía, S.C. Professional fees Mexico 4,823 — — Servprot, S.A. de C.V. México 3,464 3,120 2,804 Human Capital International HCI, S.A. México — — 324 Frontier started having transactions with the Company in September 2018. As of December 31, 2020 and 2019, there have been no guarantees provided or received for any related party receivables or payables. For the years ended December 31, 2020 and 2019, 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, 2020 and 2019 Servprot did not have net balance under this agreement. During the years ended December 31, 2020, 2019 and 2018 the Company expensed Ps.3,464, Ps.3,120 and Ps.2,804, respectively for this concept. d) Aeroman Aeroman is a related party, because Marco Baldocchi a member of the board of the Company’s board of directors is an alternate director of Aeroman. The Company entered into an aircraft repair and maintenance service agreement with Aeroman on January 1, 2017. This agreement provides that the Company must use Aeroman, exclusively for aircraft repair and maintenance services, subject to availability. Under this agreement, Aeroman provides inspection, maintenance, repair and overhaul services for aircraft. The Company makes payments under this agreement depending on the services performed. This agreement is for a 5-year term. As of December 31, 2020 and 2019, the balances due under the agreement with Aeroman were Ps.39,284 and Ps.1,474, respectively. The Company incurred expenses in aircraft, engine maintenance and technical support under this agreement of Ps.243,063, Ps.207,439 and Ps.346,522 for the years ended December 31, 2020, 2019 and 2018, 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, 2018, Human Capital International did not have net balance under this agreement. For the year ended December 31, 2018, the Company recognized an expense under this agreement of Ps.324. 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 and until June 30, 2020 Onelink, Holdings, S.A. (“Onelink Holdings”) and its subsidiary Onelink were related parties, because Mr. Rodrigo Antonio Escobar Nottebohm, a former alternate board member of Onelink Holdings, became an alternate Director of the Company. Pursuant to this agreement, Onelink received calls from the customers to book flights and provides customers with information about fares, schedules and availability. As of December 31, 2020 and 2019, the account payable under this agreement was Ps.0 and Ps.39,838, respectively. For the years ended December 31, 2020, 2019 and 2018, Company recognized an expense under this agreement of Ps.73,167, Ps.37,026 and Ps.0, respectively. g) 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, 2020 and 2019, MACF, the balance due under the agreement was Ps.166 and Ps. 996, respectively. For the years ended December 31, 2020, 2019 and 2018, the Company expensed Ps.5,582, Ps.1,321 and Ps.1,672, respectively, for this concept. h) 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, 2020 and 2019, the account receivable under this agreement was Ps.72,629 and Ps.23,442, respectively. Additionally, as of December 31, 2020 and 2019, the account payable under this agreement was Ps.39 and Ps.16,246, respectively. For the year ended December 31, 2020, 2019 and 2018 the Company recognized revenue under this agreement of Ps.148,964, Ps.208,968 and Ps.8,358, respectively. i) Grupo Aeroportuario del Centro Norte (OMA) In April 22, 2020, Grupo Aeroportuario del Centro Norte (OMA) became a related party because Mrs. Guadalupe Phillips Margain is an independent member of the board of directors the Company and OMA. Mr. Ricardo Maldonado Yañez is also an independent member of the board of directors the Company and OMA. As of December 31, 2020, the account payable under this agreement was Ps.80,681. For the year ended December 31, 2020, the Company expensed Ps.32,193 for this concept. j) Chevez, Ruiz, Zamarripa y Cia, S.C. (Chevez) Chevez, Ruiz, Zamarripa y Cia, S.C. (Chevez) is a related party because Mr. José Luis Fernández Fernández is an independent member of the Board of Directors, as well as the chairman of the Audit and Corporate Governance Committee of the Company and non-managing partner of Chevez. Chevez provides tax advisory services to us. As of December 31, 2020, the balances due to Chevez under the tax advisory services provided to the Company were Ps.4,823. For the year ended December 31, 2020, the Company expensed Ps.4,823 for this concept. k) Directors and officers During the year ended December 31, 2020, 2019 and 2018, the chairman and the independent members of the Company’s board of directors received an aggregate compensation of approximately Ps.5,762, Ps.8,085 and Ps.7,178, respectively, and the rest of the directors received a compensation of Ps.3,692, Ps.4,367 and Ps.5,217, respectively. During the years ended December 31, 2020, 2019 and 2018, all the Company’s senior managers received an aggregate compensation of short and long-term benefits of Ps.253,681, Ps.237,846 and Ps.180,001, respectively, these amounts were recognized in salaries and benefits in the consolidated statement of operations. For the years ended December 31, 2020, 2019 and 2018 the cost of the share-based payments transactions (MIP and LTIP) were Ps.75,040, Ps.49,659 and Ps.19,980, respectively. The cost (benefit) of the cash-settled payments transactions MIP II and SARs were Ps.105,303, Ps. 40,724 and Ps.(5,238), 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, 2020, 2019 and 2018, the Company recorded a provision in the amount of Ps.0, Ps.80,634 and Ps.50,000, respectively. |
Other accounts receivable, net
Other accounts receivable, net | 12 Months Ended |
Dec. 31, 2020 | |
Other accounts receivable, net | |
Other accounts receivable, net | 8. Other accounts receivable, net An analysis of other accounts receivable at December 31, 2020 and 2019, is detailed below: 2020 2019 Current: Credit cards Ps. 231,260 Ps. 389,634 Benefits from suppliers 105,947 26,989 Other accounts receivable 87,204 189,904 Other points of sales 67,315 102,002 Cargo clients 45,201 46,600 Employees 36,287 29,681 Travel agencies and insurance commissions 16,099 76,975 Marketing services receivable 4,020 7,024 Airport services 15 42,894 Affinity credit card — 49,040 Settlement receivable — 2,422 Insurance claims — 143 593,348 963,308 Allowance for credit losses (32,708) (40,308) Ps. 560,640 Ps. 923,000 Accounts receivable have the following aging: 2020 2020 Total 2019 2019 Total Days Impaired Not impaired 2020 Impaired Not impaired 2019 0–30 Ps. 4,090 Ps. 486,001 Ps. 490,091 Ps. 5,804 Ps. 722,651 Ps. 728,455 31–60 — 13,872 13,872 — 64,983 64,983 61–90 — 6,081 6,081 — 19,274 19,274 91–120 28,618 54,686 83,304 34,504 116,092 150,596 Ps. 32,708 Ps. 560,640 Ps. 593,348 Ps. 40,308 Ps. 923,000 Ps. 963,308 The movement in the allowance for credit losses from January 1, 2018 to December 31, 2020 is as follows: Balance as of January 1st, 2018 Ps. (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 (40,308) Write-offs 21,264 Increase in allowance (13,664) Balance as of December 31, 2020 Ps. (32,708) |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventories | |
Inventories | 9. Inventories An analysis of inventories on December 31, 2020 and 2019 is as follows: 2020 2019 Spare parts and accessories of flight equipment Ps. 271,454 Ps. 294,390 Miscellaneous supplies 7,505 7,518 Ps. 278,959 Ps. 301,908 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, 2020, 2019 and 2018, the amount of consumption of inventories, recorded as an operating expense as part of maintenance expense was Ps.234,691, Ps.284,687 and Ps.290,206, respectively. |
Prepaid expenses and other curr
Prepaid expenses and other current assets | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 and 2019 is as follows: 2020 2019 Flight credits Ps. 389,927 Ps. — Advances to suppliers 163,044 283,340 Sales commission to travel agencies (Note 1d) 151,342 84,239 Other prepaid expenses 81,803 115,054 Prepaid insurance 64,309 88,941 Advances to components suppliers — 209,557 Ps. 850,425 Ps. 781,131 |
Guarantee deposits
Guarantee deposits | 12 Months Ended |
Dec. 31, 2020 | |
Guarantee deposits | |
Guarantee deposits | 11. Guarantee deposits An analysis of this caption on December 31, 2020 and 2019 is as follows: 2020 2019 Current asset: Credit letters deposits Ps. 829,918 Ps. — Aircraft maintenance deposits paid to lessors (Note 1j) 279,390 576,505 Deposits for rental of flight equipment 23,584 — Other guarantee deposits 9,064 23,822 1,141,956 600,327 Non-current asset: Aircraft maintenance deposits paid to lessors (Note 1j) 7,641,544 7,047,360 Deposits for rental of flight equipment 741,871 557,530 Other guarantee deposits 41,323 39,531 8,424,738 7,644,421 Ps. 9,566,694 Ps. 8,244,748 |
Rotable spare parts, furniture
Rotable spare parts, furniture and equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Rotable spare parts, furniture and equipment, net | |
Rotable spare parts, furniture and equipment, net | 12. Rotable spare parts, furniture and equipment, net Gross value Accumulated depreciation Net carrying value At December At December At December At December At December At December 31, 2020 31, 2019 31, 2020 31, 2019 31, 2020 31, 2019 Leasehold improvements to flight equipment Ps. 5,092,049 Ps. 4,220,672 Ps. (3,354,166) Ps. (2,679,884) Ps. 1,737,883 Ps. 1,540,788 Pre-delivery payments* 4,920,126 4,507,770 — — 4,920,126 4,507,770 Flight equipment 1,689,473 1,287,102 (1,223,560) (553,852) 465,913 733,250 Construction and improvements in process 53,545 474,240 — — 53,545 474,240 Constructions and improvements 175,407 172,460 (148,391) (131,510) 27,016 40,950 Computer equipment 49,945 47,566 (42,126) (34,495) 7,819 13,071 Workshop tools 27,727 26,875 (24,398) (22,023) 3,329 4,852 Electric power equipment 20,448 20,412 (12,773) (11,400) 7,675 9,012 Communications equipment 14,803 14,099 (9,038) (8,322) 5,765 5,777 Workshop machinery and equipment 20,574 16,301 (7,641) (6,092) 12,933 10,209 Motorized transport equipment platform 15,247 15,026 (7,924) (5,392) 7,323 9,634 Service carts on board 9,216 7,675 (6,112) (5,554) 3,104 2,121 Office furniture and equipment 67,035 70,709 (35,309) (34,049) 31,726 36,660 Allowance for obsolescence (3,000) (3,000) — — (3,000) (3,000) Total Ps. 12,152,595 Ps. 10,877,907 Ps. (4,871,438) Ps. (3,492,573) Ps. 7,281,157 Ps. 7,385,334 * During the years ended December 31, 2020, 2019 and 2018, the Company capitalized borrowing costs of Ps.384,038, Ps.456,313 and Ps.357,920, respectively. The amount of this line is net of disposals of capitalized borrowing costs related to sale and leaseback transactions of Ps.401,862, Ps.328,571 and Ps.242,678, 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, 2018 Ps. Ps. 15,235 Ps. 16,547 Ps. 38,306 Ps. 5,122 Ps. 3,369 Ps. 446 Ps. 4,911 Ps. 4,481 Ps. 126 Ps. — Ps. 3,672,090 Ps. 142,738 Ps. 1,214,589 Ps. 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 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 Additions 668,376 128 1,648 733 — 851 — — — 1,541 — 2,185,902 176,607 646,219 3,682,005 Disposals and transfers (861,761) — — — — — — — — — — (1,755,724) (354,146) — (2,971,631) Borrowing costs, net* — — — — — — — — — — — (17,822) — — (17,822) Other movements — 2,317 713 101 36 — 222 1,083 4,273 — — — (243,156) 235,509 1,098 Depreciation (73,952) (16,379) (7,613) (5,768) (1,373) (2,374) (2,533) (1,095) (1,549) (558) — — — (684,633) (797,827) As of December 31, 2020 465,913 27,016 7,819 31,726 7,675 3,329 7,323 5,765 12,933 3,104 (3,000) 4,920,126 53,545 1,737,883 7,281,157 Cost 1,689,473 175,407 49,945 67,035 20,448 27,727 15,247 14,803 20,574 9,216 (3,000) 4,920,126 53,545 5,092,049 12,152,595 Accumulated depreciation (1,223,560) (148,391) (42,126) (35,309) (12,773) (24,398) (7,924) (9,038) (7,641) (6,112) — — — (3,354,166) (4,871,438) Net book amount as of December 31, 2020 Ps. 465,913 Ps. 27,016 Ps. 7,819 Ps. 31,726 Ps. 7,675 Ps. 3,329 Ps. 7,323 Ps. 5,765 Ps. 12,933 Ps. 3,104 Ps. (3,000) Ps. 4,920,126 Ps. 53,545 Ps. 1,737,883 Ps. 7,281,157 a) Depreciation expense for the years ended December 31, 2020, 2019 and 2018, was Ps.797,827, Ps.587,849 and Ps.427,756, 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. In July 2020, we amended the agreement with Airbus to reschedule the 80 aircraft deliveries between 2023 and 2028. In October 2020, we amended the agreement with Airbus to reschedule the remaining 18 fleet deliveries between 2020 and 2022. 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, 2020, and 2019, the Company amortized a corresponding benefit from these credit notes of Ps.4,878 and Ps.4,878, respectively, which is recognized as an offset to maintenance expenses in the consolidated statements of operations. During the years ended December 31, 2020 and 2019, the amounts paid for aircraft and spare engine pre-delivery payments were of Ps.2,185,902 (US$102.7 million) and Ps.1,412,790 (US$75.0 million), respectively. The current purchase agreement with Airbus requires the Company to accept delivery of 96 Airbus A320 family aircraft during the following eight years (from January 2021 to October 2028). The agreement provides for the addition of 96 Aircraft to its fleet as follows: four in 2021, twelve in 2022, three in 2023, thirteen in 2024, fifteen in 2025, twenty-five in 2026, eleven in 2027 and thirteen in 2028. Commitments to acquisitions of property and equipment are disclosed in Note 23. During the years ended December 31, 2020, 2019 and 2018 the Company entered into aircraft and spare engines sale and leaseback transactions, resulting in a gain of Ps.710,522, Ps.284,759 and Ps.609,168, respectively, that was recorded under the caption other operating 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). d) During December 2017, the Company entered into an updated total support agreement with Lufthansa for 66 months, with an effective date on July 1, 2018. This agreement includes similar terms and conditions as the original agreement. As part of this agreement, the Company received credit notes of Ps.28,110 (US$1.5 million), which are being amortized on a straight-line basis, prospectively during the term of the agreement. As of December 31, 2020, 2019 and 2018, the Company amortized a corresponding benefit from these credit notes of Ps.5,230 , Ps.5,230 and Ps.7,191, respectively, recognized as an offset to maintenance expenses in the consolidated statements of operations. e) On September 5, 2019, the Company acquired one previously leased A319 aircraft from the lessor, which was accounted for a cost for a total amount of Ps.392,076 (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 2019, the Company sold the recently acquired aircraft engines in a sale and lease back transaction. As of December 31, 2020, the carry amount of the remaining owned aircraft and the depreciation was Ps.52,984 and Ps.5,946, respectively. 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, 2020 | |
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 2020 2019 2020 2019 2020 2019 Software 1 – 4 Ps. 704,257 Ps. 579,360 Ps. (512,695) Ps. (411,963) Ps. 191,562 Ps. 167,397 Balance as of January 1st, 2019 Ps. 179,124 Additions 77,325 Disposals — Amortization (87,667) Exchange differences (1,385) Balance as of December 31, 2019 167,397 Additions 124,724 Disposals — Amortization (100,618) Exchange differences 59 Balance as of December 31, 2020 Ps. 191,562 Software amortization expense for the years ended December 31, 2020, 2019 and 2018 was Ps.100,618, Ps.87,667 and Ps.72,885, respectively. These amounts were recognized in depreciation and amortization in the consolidated statements of operations. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, the Company leases 85 aircraft (81 as of December 31, 2019) and 18 spare engines under lease agreements (14 as of December 31, 2019) that have maximum terms through 2033. These leases are generally guaranteed by either deposit in cash or letters of credits. Composition of the fleet and spare engines, leases*: Aircraft At December At December Type Model 31, 2020 31, 2019 A319 132 3 3 A319 133 2 4 A320 233 39 39 A320 232 1 2 A320NEO 271N 24 17 A321 231 10 10 A321NEO 271N 6 6 85 81 Engine spare At December At December Type Model 31, 2020 31, 2019 V2500 V2524-A5 2 2 V2500 V2527M-A5 3 3 V2500 V2527E-A5 5 3 V2500 V2527-A5 2 2 PW1100 PW1127G-JM 5 3 PW1100 PW1133G-JM 1 1 18 14 * 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, 2020, the Company added seven new leased aircraft to its fleet (seven A320 NEO´s acquired through sale and leaseback transactions under our existing Airbus purchase agreement). Also, the Company returned three aircraft to their respective lessors. During the year ended December 31, 2020, the Company also leased two NEO spare engines (based on the terms of the Pratt & Whitney purchase agreement FMP) and two CEO spare engines to its fleet. These four engines incorporated were subject to sale and leaseback transactions and their respective lease agreements were accounted as leases. 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 & 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 & Whitney purchase agreement (FMP). These two engines incorporated were 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 January 1st, 2019 Ps. 31,126,169 Ps. 579,696 Ps. 176,188 Ps. 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 December 31, 2019 33,312,089 677,198 139,479 34,128,766 Additions 4,876,071 362,081 15,222 5,253,374 Disposals (17,742) — — (17,742) Foreign exchange effect — — 795 795 Depreciation on right of use assets (4,763,928) (210,079) (74,969) (5,048,976) As at December 31, 2020 Ps. 33,406,490 Ps. 829,200 Ps. 80,527 Ps. 34,316,217 Set out below are the carrying amounts of lease liabilities and the movements during the period: 2020 2019 As at January 1 st Ps. 40,517,045 Ps. 39,565,146 Additions 5,572,764 7,186,613 Disposals (231,566) — Accretion of interest 2,218,982 2,037,540 Foreign exchange effect 2,163,886 (1,772,452) Payments (6,110,569) (6,499,802) As at 31 December Ps. 44,130,542 Ps. 40,517,045 Current Ps. 6,484,092 Ps. 4,720,505 Non-current Ps. 37,646,450 Ps. The Company applied practical expedients to leases from applying IFRS 16 guidance on lease modification accounting for rent concessions for those lease modifications arising as a direct result of COVID-19. The net impact on the consolidated statements of operations for 2020 was Ps.190,811, which reflects the changes to lease payments that arose from such concessions. The following are the amounts recognized in profit or loss: As of December As of December As of December 31, 2020 31, 2019 31, 2018 Depreciation of right-of-use assets Ps. (5,048,976) Ps. (4,702,971) Ps. (4,043,691) Interest expense on lease liabilities and aircraft and engine lease return obligation (Note 21) (2,350,250) (2,128,162) (1,755,978) Aircraft and engine variable expenses (1,845,254) (961,657) (956,010) Total amount recognized in profit or loss Ps. (9,244,480) Ps. (7,792,790) Ps. (6,755,679) The Company had total cash outflows for leases of Ps.6,110,569 in 2020 (Ps.6,499,802 in 2019 and Ps.5,710,907 in 2018). i) Return obligations The aircraft lease agreements of the Company also require that the aircraft and engines be returned to lessors under specific conditions of maintenance. The costs of return, which no case are related to scheduled major maintenance, are estimated and recognized ratably as a provision from the time it becomes likely such costs will be incurred and can be estimated reliably. These return costs are recognized on a straight-line basis as a component of variable lease expenses and the provision is included as part of other liabilities, through the remaining lease term. The Company estimates the provision related to airframe, engine overhaul and limited life parts using certain assumptions including the projected usage of the aircraft and the expected costs of maintenance tasks to be performed. For the years ended December 31, 2020, 2019 and 2018, the Company expensed as supplemental rent Ps.1,428,179, Ps.680,964 and Ps.659,106, respectively. 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. |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Accrued liabilities | |
Accrued liabilities | 15. Accrued liabilities a) An analysis of current accrued liabilities at December 31, 2020 and 2019 is as follows: 2020 2019 Fuel and traffic accrued expenses Ps. 1,285,931 Ps. 1,507,659 Salaries and benefits 337,467 296,829 Sales, marketing and distribution accrued expenses 179,342 230,935 Maintenance deposits 174,549 132,085 Accrued administrative expenses 122,729 81,124 Maintenance and aircraft parts accrued expenses 98,942 120,254 Others 86,374 48,526 Information and communication accrued expenses 35,359 67,808 Deferred revenue from V Club membership 20,830 35,465 Supplier services agreement 10,634 10,634 Benefits from suppliers 3,888 — Advances from travel agencies 242 542 Ps. 2,356,287 Ps. 2,531,861 b) Non-current accrued liabilities at December 31, 2020 and 2019 is as follows: 2020 2019 Supplier services agreement Ps. 45,270 Ps. 55,905 Benefits from suppliers 16,847 19,439 Other 4,581 15,452 Ps. 66,698 Ps. 90,796 c) An analysis of other liabilities is as follows: Balance as of Balance as of January 1, Increase for December 31, 2020 the year Payments 2020 Aircraft and engine lease return obligation Ps. 1,852,688 Ps. 2,126,401 Ps. (1,474,605) Ps. 2,504,484 Guarantee deposit — 250,000 — 250,000 Employee profit sharing (Note 16) 24,097 20,810 (30,490) 14,417 Ps. 1,876,785 Ps. 2,397,211 Ps. (1,505,095) Ps. 2,768,901 Current maturities Ps. 101,218 Non-current Ps. 2,667,683 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 Current maturities Ps. 407,190 Non-current Ps. 1,469,595 During the years ended December 31, 2020 and 2019 no cancellations or write-offs related to these liabilities were recorded. On September 12, 2012, the Company entered into a cobrand credit card agreement with Banco Invex, S.A., Institución de Banca Múltiple, Invex, Grupo Financiero Invex “Invex”. On June 26, 2020, the Company signed a new amendment with Invex. Through this agreement, Invex pays certain commissions to Volaris related to the cobrand credit card and Invex’s clients receive vouchers to be redeemed in different Volaris services under certain conditions. A portion of the voucher cost is paid by Volaris and the remaining amount by Invex. During the year ended December 31, 2020, Invex prepaid certain commissions to Volaris, which were recorded as part of other liabilities. |
Employee benefits
Employee benefits | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, 2019 and 2018, are as follows: 2020 2019 2018 Analysis of net period cost: Current service cost Ps. 8,449 Ps. 8,214 Ps. 4,977 Interest cost on benefit obligation 2,630 1,872 1,424 Net period cost Ps. 11,079 Ps. 10,086 Ps. 6,401 Changes in the defined benefit obligation are as follows: 2020 2019 Defined benefit obligation at January 1, Ps. 38,151 Ps. 18,153 Net period cost charged to profit or loss: Current service cost 8,449 8,214 Interest cost on benefit obligation 2,630 1,872 Remeasurement losses in other comprehensive income: Actuarial changes arising from changes in assumptions 2,651 10,192 Payments made (1,254) (225) Defined benefit obligation at December 31, Ps. 50,627 Ps. 38,206 The significant assumptions used in the computation of the seniority premium obligations are shown below: 2020 2019 2018 Financial: Discount rate 7.04 % 7.18 % 9.91 % Expected rate of salary increases 5.50 % 5.50 % 5.65 % Annual increase in minimum salary 4.00 % 4.00 % 4.15 % Biometric: Mortality (1) EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA EMSSA 09 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, 2020 and 2019, respectively, are as follows: 2020 2019 Employee profit-sharing (Note 15c) Ps. 14,417 Ps. 24,097 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, 2020 | |
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 2020, 2019 and 2018, 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.92,132 (Ps.59,899 net of withheld taxes), Ps.86,772 (Ps.56,407 net of withheld taxes) and Ps.63,961 (Ps.41,590 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, 2020, 2019 and 2018, 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, 2018 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 Purchased during the year 3,159,763 Granted during the year — Exercised/vested during the year (2,142,426) Forfeited during the year (327,217) Outstanding as of December 31, 2020 5,805,311 * * These shares are presented as treasury shares in the consolidated statement of financial position as of December 31, 2020, 2019 and 2018. The vesting period of the shares granted under the Company’s share purchase plans is as follows: Number of Series A shares Vesting period 2,979,412 November 2020 – 2021 1,819,440 November 2021 – 2022 1,006,459 November 2022 – 2023 5,805,311 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, 2020, 2019 and 2018, the compensation expense recorded in the consolidated statement of operations amounted to Ps.75,040, Ps.49,659 and Ps.19,980, 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 2020, 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, 2020, 2019 and 2018, were (327,217), (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. Fair value of the SARs was measured at each reporting date. The carrying amount of the liability relating to the SARs as of December 31, 2019 and 2018 were Ps.1,901 and Ps.537, respectively. The retention plan granted in previous periods expired in November 2020. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits over the service period. During the years ended December 31, 2020, 2019 and 2018, the Company recorded a expense (benefit) of Ps.(1,901), Ps.2,964 and Ps.(186), respectively, in the consolidated statement of operations. The fair value of these SARs was estimated at the grant date and at each reporting date using the Black-Scholes option pricing model, taking into account the terms and conditions on which the SARs were granted. During the years ended December 31, 2019, the Company made a cash payment to key employees related to the SARs plan in the amount of Ps.2,395. Such 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, the key employees exercised 2,780,000 Series A shares. As a result, the key employees paid to the Management Trust Ps.14,773 corresponding to the exercised shares for the year ended December 31, 2019. During 2020, there were no exercised shares under the MIP. 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, 2018 Ps. 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 5.31 40,668 Granted during the year — — — Forfeited during the year — — — Exercised during the year — — — Outstanding as of December 31, 2020 Ps. 7,653,981 Ps. 5.31 Ps. 40,668 At December 31, 2020 and 2019, 7,653,981 and 7,653,981 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, 2020 and 2019 was Ps.177,770 and Ps.70,567, 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, 2020 and 2019, the Company recorded a (benefit) expense of Ps.107,204 and Ps. 37,760, respectively, in the consolidated statement of operations. No SARs were exercised during 2020. The vesting schedule is summarized in the table below: Number of SARs Vesting date 3,391,020 February 2021 3,391,020 * * Includes forfeited SARs of 0,0 and 1,563,520, for the years ended December 31, 2020, 2019 and 2018, respectively. The expense (benefit) recognized for the Company’s retention plans during the year is shown in the following table: 2020 2019 2018 Expense (benefit) arising from cash-settled share-based payments transactions Ps. 105,303 Ps. 40,724 Ps. (5,238) Expense arising from equity-settled share-based payments transactions 75,040 49,659 19,980 Total expense arising from share-based payments transactions Ps. 180,343 Ps. 90,383 Ps. 14,742 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.9.74, Ps.16.80 and Ps.16.12 for the years ended 2020, 2019 and 2018, 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, 2020 and 2019 available to be exercised is 5,233,693 and 2,072,344, respectively. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity | |
Equity | 18. Equity As of December 31, 2020, the total number of the Company’s authorized shares was 1,165,976,677; represented by common registered shares, issued and with no par value, fully subscribed and paid, comprised as follows: Shares Fixed Variable Class I Class II Total shares Series A shares (1) 10,478 1,077,914,326 1,077,924,804 Series B shares (1) 13,702 88,038,171 88,051,873 24,180 1,165,952,497 1,165,976,677 Treasury shares (Note 17) — (19,020,202) (19,020,202) (1) 24,180 1,146,932,295 1,146,956,475 (1) The number of forfeited shares as of December 31, 2020 were 327,217, which are include in treasury shares. On December 11, 2020, Controladora Vuela Compañía de Aviación, S.A.B. de C.V announced the closing of an upsized primary follow-on equity offering in which the Company offered 134,000,000 of its Ordinary Participation Certificates (Certificados de Participación Ordinarios), or CPOs, in the form of American Depositary Shares, or ADSs, at a price to the public of USD11.25 per ADS in the United States and other countries outside of Mexico, pursuant to the Company’s shelf registration statement filed with the Securities and Exchange Commission (the “SEC”). In connection with the offering, the underwriters exercised their option to purchase up to 20,100,000 additional CPOs in the form of ADSs. Each ADS represents 10 CPOs and each CPO represents a financial interest in one Series A share of common stock of the Company. The Company currently intends to use the net proceeds of approximately USD164,419,000 (after the deduction of the underwriters´ commission and expenses payable by the Company) from the offering for general corporate purposes. The increase in capital stock amounts of Ps.3,272,832. 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) (1) 24,180 996,716,440 996,740,620 (1) The number of forfeited shares as of December 31, 2019 were 294,541, which are include in treasury shares. 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, 2020 and 2019, the Company did not declare any dividends. a) Earnings (loss) per share Basic earnings (loss) per share (“EPS or LPS”) amounts are calculated by dividing the net 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) income per share for the years ended December 31, 2020, 2019 and 2018. At December 31, 2018 2020 2019 (Adjusted) Net (loss) income for the period Ps. (4,293,791) Ps. 2,639,063 Ps. (942,882) Weighted average number of shares outstanding (in thousands): Basic 1,021,561 1,011,877 1,011,877 Diluted 1,021,561 1,011,877 1,011,877 EPS - LPS: Basic (4.203) 2.608 (0.932) Diluted (4.203) 2.608 (0.932) 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, 2020, 2019 and 2018, the Company’s legal reserve was Ps.291,178 or 8.5%, 9.8% and 9.8% respectively of our capital stock. For the years ended December 31, 2020, 2019 and 2018, we did not allocate any amount to our legal reserve fund. 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, 2020, 2019 and 2018 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, 2020 | |
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 2020 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 2020, 2019 and 2018 in Guatemala, Costa Rica and El Salvador are 25%, 30% and 30% respectively. b) For the years ended December 31, 2020, 2019 and 2018, the Company reported on a consolidated basis taxable income of Ps.302,029, Ps.938,304 and Ps.777,513, 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, 2020, 2019 and 2018 is as follows: Consolidated statements of operations 2020 2019 2018 Current year income tax expense Ps. (90,609) Ps. (281,491) Ps. (232,824) Deferred income tax benefit (expense) 1,496,793 (1) (813,340) (2) 582,644 (3) Total income tax benefit (expense) Ps. 1,406,184 Ps. (1,094,831) Ps. 349,820 (1) Includes translation effect by Ps.2,035 (2) Includes translation effect by Ps.(2,278) (3) Includes translation effect by Ps.2,680 Consolidated statements of comprehensive income 2020 2019 2018 Deferred income tax related to items recognized in OCI during the year Net gain (loss) cash flow hedges Ps. 46,835 Ps. (74,820) Ps. 85,107 Remeasurement (loss) gain of employee benefits 794 3,058 (1,797) Deferred income tax charged to OCI Ps. 47,629 Ps. (71,762) Ps. 83,310 d) A reconciliation of the statutory corporate income tax rate to the Company’s effective tax rate for financial reporting purposes is as follows: 2020 2019 2018 Statutory income tax rate 30.00 % 30.00 % 30.00 % Amendment tax return effects and other tax adjustments 0.92 % (0.51) % 0.05 % Inflation on furniture, intangible and equipment 0.29 % (0.48) % 2.08 % Inflation of tax losses 0.23 % (0.21) % 1.16 % Foreign countries difference with Mexican statutory rate (0.06) % 0.11 % (0.02) % Annual inflation adjustment (0.91) % (0.05) % 0.26 % Unrecorded deferred taxes on tax losses (1.29) % 0.27 % (3.96) % Non-deductible expenses (4.51) % 0.19 % (2.51) % 24.67 % 29.32 % 27.06 % 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, 2020, 2019 and 2018, the Company obtained a net operating (loss) income of Ps.(1,835), Ps.(1,085) and Ps.8,549, respectively. According to Costa Rica Corporate Income tax law, the tax is based on the net income earned from traffic whose origin or final destination is Costa Rica, and net operating losses can offset taxable income in a term of three years. For the years ended December 31, 2020, 2019 and 2018, the Company generated net operating losses for an amount of Ps.55,751, Ps.50,246 and Ps.170,731, respectively, for which no deferred tax asset has been recognized. According to El Salvador Corporate Income tax law, the tax is based on the net income earned from traffic whose origin or final destination is Costa Rica, and net operating losses cannot offset taxable income in prior or future years. For the year ended December 31, 2020 and 2019, the Company obtained a net operating loss of Ps.16,619 and Ps.32,494. e) An analysis of consolidated deferred taxes is as follows: 2020 2019 Consolidated Consolidated Consolidated Consolidated statement of statement of statement of statement of financial position operations financial position operations Deferred income tax assets: Lease liability Ps. 13,239,254 Ps. 1,084,140 Ps. 12,155,114 Ps. 313,137 Unearned transportation revenue 1,233,661 436,598 797,063 61,708 Extension lease agreement 773,443 314,100 459,343 (137,639) Tax losses available for offsetting against future taxable income 576,422 272,452 303,970 (5,350) Intangible 420,908 (25,941) 446,849 (13,741) Allowance for doubtful accounts 61,565 47,476 14,089 9,187 Employee benefits 15,191 2,934 11,463 2,958 Financial instruments 7,948 (22) (38,865) — Employee profit sharing 4,323 (2,904) 7,227 2,734 Provisions (91,253) (442,598) 351,345 60,655 Non derivative financial instruments (473,242) (477,471) 4,229 4,229 15,768,220 1,208,764 14,511,827 297,878 Deferred income tax liabilities: Right of use asset 10,292,753 55,824 10,236,929 672,311 Supplemental rent 1,878,865 171,916 1,706,949 111,430 Rotable spare parts, furniture and equipment, net 707,092 (177,384) 884,476 239,452 Inventories 83,402 (6,885) 90,287 1,392 Other prepayments 9,786 (17,942) 27,728 (4,329) Prepaid expenses and other assets (132,462) (311,523) 179,061 88,683 12,839,436 (285,994) 13,125,430 1,108,939 Ps. 2,928,784 Ps. 1,494,758 Ps. 1,386,397 Ps. (811,061) Reflected in the consolidated statement of financial position as follows: 2020 2019 Deferred tax assets Ps. 3,128,555 Ps. 1,542,536 Deferred tax liabilities (199,771) (156,139) Deferred tax assets, net Ps. 2,928,784 Ps. 1,386,397 A reconciliation of deferred tax asset, net is as follows: 2020 2019 Opening balance as of January 1, Ps. 1,386,397 Ps. 2,269,220 Deferred income tax (expense) benefit during the current year recorded on profits 1,494,758 (811,061) Deferred income tax (expense) benefit during the current year recorded in accumulated other comprehensive income (loss) 47,629 (71,762) Closing balance as of December 31, Ps. 2,928,784 Ps. 1,386,397 At December 31, 2020, 2019 and 2018, the table shown above includes deferred income tax asset recognized by Concesionaria (2020 and 2017), Comercializadora (2019 and 2020) and Vuela Aviación (2020) for tax losses carry-forwards to the extent that the realization of the related tax benefit through future taxable profits is probable. The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. According to IAS 12, Income Taxes , a deferred tax asset should be recognized for the carry-forward of available tax losses to the extent that it is probable that future taxable income will be available against which the available tax losses can be utilized. In these regards, the Company has recognized at December 31, 2020, 2019 and 2018 a deferred tax asset for tax losses of Ps.576,422, Ps.303,970 and Ps.309,320 respectively. During 2020, the Company recognized a deferred tax asset for the carry-forward of available tax losses of Concesionaria and Comercializadora, based on the positive evidence of the Company to generate taxable profit related to the same taxation authority against which the available tax losses can be utilized before they expire. Positive evidence includes Concesionaria’s actions to increase its aircraft fleet in the following years, increase in flight frequencies, and routes, inside and outside of Mexico; the profit of Comercializadora, is derived directly from Concesionaria’s operations. The temporary differences associated with investments in the Company’s subsidiaries, for which a deferred tax liability has not been recognized in the periods presented, aggregate to Ps.150,683 (2019:Ps.276,393). The Company has determined that the undistributed profits of its subsidiaries will not be distributed in the foreseeable future. The Company has an agreement with its associate that the profits of the associate will not be distributed until it obtains the consent of the Company. The Company does not anticipate giving such consent at the reporting date. Furthermore, the Group’s joint venture will not distribute its profits until it obtains the consent of all venture partners. An analysis of the available tax losses carry-forward of the Company at December 31, 2020 is as follows: Year Historical Adjusted Total remaining Year of of loss loss tax loss Utilized amount expiration 2017 Ps. 1,067,836 Ps. 1,206,232 Ps. 217,393 Ps. 988,839 2018 92,604 92,604 78,849 13,755 2019 4,922 5,186 — 5,186 2020 863,847 878,533 — 878,533 2020 55,751 55,751 — 55,751 Ps. 2,084,960 Ps. 2,238,306 Ps. 296,242 Ps. 1,942,064 A breakdown of available tax loss carry-forward of Controladora and its subsidiaries at December 31, 2020 is as follows: Historical Adjusted Total loss tax loss Utilized remaining amount Comercializadora Ps. 42,777 Ps. 43,685 Ps. — Ps. 43,685 Concesionaria 1,875,180 2,027,302 217,393 1,809,909 Operaciones Volaris 18,648 18,965 — 18,965 Vuela Aviación 148,355 148,354 78,849 69,505 Ps. 2,084,960 Ps. 2,238,306 Ps. 296,242 Ps. 1,942,064 Unrecognized NOLs 20,657 Ps. 1,921,407 Tax rate 30 % Deferred income tax Ps. 576,422 f) At December 31, 2020 the Company had the following tax balances: 2020 Adjusted contributed capital account ( Cuenta de capital de aportación or “CUCA”) Ps. 4,607,752 CUFIN* 3,241,275 * The calculation comprises all the subsidiaries of the Company . |
Other operating income and expe
Other operating income and expenses | 12 Months Ended |
Dec. 31, 2020 | |
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: 2020 2019 2018 Gain on sale and leaseback (Note 12) Ps. 710,522 Ps. 284,759 Ps. 609,168 Loss on sale of rotable spare parts furniture and equipment (2,604) (8,954) (2,356) Other income 22,415 51,403 15,161 Ps. 730,333 Ps. 327,208 Ps. 621,973 An analysis of other operating expenses is as follows: 2020 2019 2018 Administrative and operational support expenses Ps. 632,041 Ps. 581,181 Ps. 536,079 Technology and communications 383,648 381,055 385,841 Passenger services 87,850 65,477 70,337 Insurance 53,507 74,661 60,892 Others 194 10,553 5,949 Ps. 1,157,240 Ps. 1,112,927 Ps. 1,059,098 |
Finance income and cost
Finance income and cost | 12 Months Ended |
Dec. 31, 2020 | |
Finance income and cost | |
Finance income and cost | 21. Finance income and cost An analysis of finance income is as follows: 2020 2019 2018 Interest on cash and equivalents Ps. 93,122 Ps. 201,191 Ps. 152,437 Interest on asset backed trust notes 6,342 6,525 — Interest on recovery of guarantee deposits 2,047 83 166 Ps. 101,511 Ps. 207,799 Ps. 152,603 An analysis of finance cost is as follows: 2020 2019 2018 Interest expense on lease liabilities and aircraft and engine lease return obligation Ps. 2,350,250 Ps. 2,128,162 Ps. 1,755,978 Financial instruments loss 448,559 — — Interest on asset backed trust notes 116,240 80,314 — Cost of letter credit notes 73,141 49,856 57,277 Bank fees and others 3,707 3,607 6,141 Interest on debts and borrowings* 16,368 1,660 56,916 Other finance costs 10,219 6,230 — Ps. 3,018,484 Ps. 2,269,829 Ps. 1,876,312 * 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. 2020 2019 2018 Interest on debts and borrowings Ps. 400,406 Ps. 457,973 Ps. 414,836 Capitalized interest (Note 12) (384,038) (456,313) (357,920) Net interest on debts and borrowing in the consolidated statements of operations Ps. 16,368 Ps. 1,660 Ps. 56,916 |
Components of other comprehensi
Components of other comprehensive (loss) income | 12 Months Ended |
Dec. 31, 2020 | |
Components of other comprehensive (loss) income | |
Components of other comprehensive (loss) income | 22. Components of other comprehensive (loss) income An analysis of the other comprehensive (loss) income for the years ended December 31, 2020, 2019 and 2018 is as follows: 2020 2019 2018 Derivative financial instruments: Reclassification of call options and forwards during the year to profit or loss Ps. — Ps. — Ps. (455,009) Extrinsic value of changes on jet fuel Asian call options (11,993) 11,148 227,509 Extrinsic value of changes on jet fuel Zero cost collars (143,224) 256,515 (122,948) (Loss) gain of the matured foreign currency forward contracts — (14,241) 66,757 Loss of the interest rate Cap (900) (4,023) — Non derivative financial instruments (1,591,569) 14,096 — Total Ps. (1,747,686) Ps. 263,495 Ps. (283,691) |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2020 | |
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) 2021 US$ 40,213 Ps. 802,197 2022 138,919 2,771,253 2023 265,836 5,303,083 2024 705,331 14,070,437 2025 and thereafter 3,221,596 64,266,652 US$ 4,371,895 Ps. 87,213,622 (1) Using the exchange rate as of December 31, 2020 of Ps.19.9487. All aircraft acquired by the Company through the Airbus purchase agreement through December 31, 2020 have been executed through sale and leaseback transactions. In addition, we have commitments to execute sale and leaseback over the next two years. The estimated proceeds from these commitments are as follows: Aircraft sale prices estimated in U.S. dollars in Mexican pesos (1) 2021 US$ 209,500 Ps. 4,179,253 2022 547,328 10,918,482 US$ 756,828 Ps. 15,097,735 (1) Using the exchange rate as of December 31, 2020 of Ps.19.9487. The future lease payments for these non-cancellable sale and leaseback contracts are as follows: Aircraft leases in U.S. dollars in Mexican pesos (1) 2021 US$ 9,720 Ps. 193,901 2022 47,972 956,979 2023 63,222 1,261,197 2024 63,222 1,261,197 2025 and thereafter 574,529 11,461,107 US$ 758,665 Ps. 15,134,381 (1) Using the exchange rate as of December 31, 2020 of Ps.19.9487. 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, 2020 | |
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: 2020 2019 2018 Operating revenues: Domestic (Mexico) Ps. 16,572,198 Ps. 24,594,797 Ps. 18,493,476 International: United States of America and Central America* 5,998,615 10,230,824 8,811,674 Non-derivative financial instruments (411,222) (72,949) — Total operating revenues Ps. 22,159,591 Ps. 34,752,672 Ps. 27,305,150 *United States of America represents approximately 27%, 29% and 31% of total revenues from external customers in 2020, 2019 and 2018, 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, 2020 | |
Subsequent events | |
Subsequent events | 25. Subsequent events Subsequent to December 31, 2020 and through April 29, 2021: During the first quarter of 2021, the Company demonstrated flexibility focusing on capacity management in the face of a volatile demand environment. The Company finished the quarter operating 88.3% of the Available Seat Miles flown in the first quarter of the prior year. On April 16th, 2021, the Company received the Famous Brand Declaration from the Mexican Institute of Industrial Property ("IMPI") for the "Volaris" brand, which is the first trademark within the Mexican aviation industry declared as a Famous Brand by IMPI. |
Description of the business a_2
Description of the business and summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 and 2019 and for each of the three years ended December 31, 2020, 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. 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, 2020 and 2019, for accounting purposes the companies included in the consolidated financial statements are as follows: Principal % Equity interest Name Activities Country 2020 2019 Concesionaria Air transportation services for passengers, cargo and mail throughout Mexico and abroad Mexico 100 % 100 % Vuela Aviación, S.A. Air transportation services for passengers, cargo and mail in Costa Rica and abroad Costa Rica 100 % 100 % Vuela, S.A. (“Vuela”) * Air transportation services for passengers, cargo and mail in Guatemala and abroad Guatemala 100 % 100 % Vuela El Salvador, S.A. de C.V.* Air transportation services for passengers, cargo and mail in El Salvador and abroad El Salvador 100 % 100 % Comercializadora Volaris, S.A. de C.V. Merchandising of services Mexico 100 % 100 % Servicios Earhart, S.A.* Recruitment and payroll Guatemala 100 % 100 % Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”) Recruitment and payroll Mexico 100 % 100 % Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) Recruitment and payroll Mexico 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”) Travel agency Mexico 100 % 100 % Deutsche Bank México, S.A., Trust 1710 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % Deutsche Bank México, S.A., Trust 1711 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % Irrevocable Administrative Trust number F/307750 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % Irrevocable Administrative Trust number F/745291 “Administrative Trust” Share administration trust (Note 17) Mexico 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 % 100 % *The Companies have not started operations yet in Guatemala and El Salvador. **The Company has not started operations yet 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. 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 2018. Through this alliance, the Company´s customers gain access to additional cities in the U.S. beyond the current available destinations as the Company’s customers are able to buy a ticket throughout any of Frontier’s actual destinations; and Frontier customers gain first-time access to new destinations in Mexico through Volaris presence in Mexican airports. Tickets from Frontier can be purchased directly from the Volaris’ website. Other considerations analyzed as part of revenue from contracts with customers All revenues offered by the Company including sales of tickets for future flights, other passenger related services and non-passenger revenue must be paid through a full cash settlement. The payment of the transaction price is equal to the cash settlement from the client at the sales time (using different payment options like credit or debit cards, paying through a third party or directly at the counter in cash). There is little or no judgment to determine the point in time of the revenue recognition, and the amount of it. Even if mainly all the sales of services are initially recognized as contract liabilities, there is no financing component in these transactions. The cost to obtain a contract is represented by the commissions paid to the travel agencies and the bank commissions charged by the financial institutions for processing electronic transactions (Note 10). The Company does not incur any additional costs to obtain and fulfill a contract that is eligible for capitalization. Trade receivables are mainly with financial institutions due to transactions with credit and debit cards, and therefore they are non-interest bearing and are mainly on terms of 24 to 48 hours. The Company has the right of collection at the beginning of the contracts and there are no discounts, payment incentives, bonuses, or other variable considerations subsequent to the purchase that could modify the amount of the transaction price. The Company´s tickets are non-refundable. However, if the Company cancels a flight for causes attributable to the airline, including as a result of the COVID-19 pandemic, then the passenger is entitled to either move their flight at no cost, receive a refund or a voucher. No revenue is recognized until either the voucher is redeemed, and the associate flight occurs, or the voucher expires. When vouchers issued exceed the amount of the original amount paid by the passenger the excess is recorded as reduction of the operating revenues. All of the Company´s revenues related to future services are rendered through an approximate period of 12 months. As of December 31, 2020, the Company recorded an amount of Ps.1,720,939 related to vouchers to be redeemed by passengers, which were presented as part of the unearned transportation revenues. Breakdown of revenues: As of December 31, 2020, 2019 and 2018, the revenues from customers of contracts is described as follows: At the flight time At the sale Total Revenue recognition as of December 31, 2020 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 8,455,647 Ps. 4,417,527 Ps. — Ps. — Ps. 12,873,174 Other Passenger Revenues 6,920,141 1,536,206 124,450 32,601 8,613,398 15,375,788 5,953,733 124,450 32,601 21,486,572 Non-Passenger Revenues Other Non-Passenger revenues 875,610 6,750 — — 882,360 Cargo 196,349 5,532 — — 201,881 Total Ps. 16,447,747 Ps. 5,966,015 Ps. 124,450 Ps. 32,601 Ps. 22,570,813 Non-derivative financial instruments (411,222) Ps. 22,159,591 At the flight time At the sale Total Revenue recognition as of December 31, 2019 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 15,833,878 Ps. 7,296,113 Ps. — Ps. — Ps. 23,129,991 Other Passenger Revenues 7,531,725 2,865,555 119,466 52,462 10,569,208 23,365,603 10,161,668 119,466 52,462 33,699,199 Non-Passenger Revenues Other Non-Passenger revenues 888,353 9,233 — — 897,586 Cargo 221,375 7,461 — — 228,836 Total Ps. 24,475,331 Ps. 10,178,362 Ps. 119,466 Ps. 52,462 Ps. 34,825,621 Non-derivative financial instruments (72,949) Ps. 34,752,672 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 Transactions from unearned transportation revenues. 2020 2019 January 1, Ps. 3,679,926 Ps. 2,438,516 Deferred 23,657,563 34,940,609 Recognized in revenue during the year (21,486,572) (33,699,199) December 31, Ps. 5,850,917 Ps. 3,679,926 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 the categories in IFRS 9, which are based on both: the characteristics of the contractual cash flows of these assets and the business model objective for holding them. Financial assets include those carried at FVTPL, whose objective to hold them is for trading purposes (short-term investments), or at amortized cost, for accounts receivables held to collect the contractual cash flows, which are characterized by solely payments of principal and interest (“SPPI”). Derivative financial instruments are also considered financial assets when these represent contractual rights to receive cash or another financial asset. All the Company’s financial assets are initially recognized at fair value, including derivative financial instruments. Subsequent measurement The subsequent measurement of financial assets depends on their initial classification, as is described below: 1. Financial assets at FVTPL which include financial assets held for trading. 2. Financial assets at amortized cost, whose characteristics meet the SPPI criterion and were originated to be held to collect principal and interest in accordance with the Company’s business model. 3. Financial assets at fair value through OCI with recycling of cumulative gains and losses. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when: a) The rights to receive cash flows from the asset have expired; b) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. ii) Impairment of financial assets The Company assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. 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 applies a simplified approach in calculating expected credit losses (ECLs). Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. Based on this evaluation, allowances are taken into account for the expected losses of these receivables. For the years ended December 31, 2020 y 2019 the Company recorded expected credit losses on accounts receivable of Ps.13,664 and Ps.40,393, 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, 2020 and 2019 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, 2020 and 2019, 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, 2020, 2019 and 2018, the Company expensed as supplemental rent Ps.421,030, Ps.295,720 and Ps.299,601, respectively. During the year ended December 31, 2020, 2019 and 2018, the Company added seven, seven and ten new net leases aircraft to its fleet, respectively (Note 14). During the year ended December 31, 2020, the Company did not extend the lease term of aircraft and engines agreements. During the years ended December 31, 2019 and 2018, the Company extended the lease term of one and two aircraft agreements, respectively. Additionally, the Company extended the lease term of one spare engine in 2019 and two spare engines in 2018. 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, 2020 and 2019, the Company capitalized major maintenance events as part of leasehold improvements to flight equipment for an amount of Ps.646,219 and Ps.659,082, respectively. For the years ended December 31, 2020 and 2019, the amortization of major maintenance leasehold improvement costs was Ps.652,091 and Ps.450,371, respectively. The amortization of deferred maintenance costs is recorded as part of depreciation and amortization in the consolidated statements of operations. (iii) The Company has a power-by-the hour agreement for component services, which guarantees the availability of aircraft parts for the Company’s fleet when they are required. It also provides aircraft parts that are included in the redelivery conditions of the contract (hard time) without constituting an additional cost at the time of redelivery. The monthly maintenance cost associated with this agreement is recognized as incurred in the consolidated statements of operations. The Company has an engine flight hour agreement (component repair agreement), that guarantees a cost per overhaul, provides miscellaneous engines coverage, caps the cost of foreign objects damage events, ensures there is protection from annual escalations, and grants an annual credit for scrapped components. The cost associated with the miscellaneous engines’ coverage is recorded monthly as incurred in the consolidated statements of operations. |
Rotable spare parts, furniture and equipment, net | l) Rotable spare parts, furniture and equipment, net Rotable spare parts, furniture and equipment, are recorded at cost and are depreciated to estimated residual values over their estimated useful lives using the straight-line method. Aircraft spare engines have significant components with different useful lives; therefore, they are accounted for as separate items (major components) of spare engine parts (Note 12e). 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, 2020, 2019 and 2018, the Company capitalized borrowing costs which amounted to Ps.384,038, Ps. 456,313 and Ps.357,920, respectively (Note 21). The rate used to determine the amount of borrowing cost was 3.58%, 5.10% and 4.41%, for the years ended December 31, 2020, 2019 and 2018, 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 of these assets and any changes are accounted for prospectively. The Company identified one Cash Generating Unit (CGU), which includes the entire aircraft fleet and flight equipment. The Company assesses, at each reporting date, whether there is an objective evidence that rotable spare parts, furniture and equipment and right of use asset are impaired in the CGU. The Company records impairment charges on rotable spare parts, furniture and equipment and right of use assets used in operations when events and circumstances indicate that the assets may be impaired or when the carrying amount of a long-lived asset or related cash generating unit exceeds its recoverable amount, which is the higher of (i) its fair value less cost to sell and (ii) its value in use. The value in use calculation is based on a discounted cash flow model, using projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation. During 2020, the Company performed its annual impairment test. The recoverable amount of the CGU was determined based on a value in use calculation using cash flow projections from financial budgets approved by senior management, covering a five-year period. The projected cash flows have been updated to reflect the future operating cashflows. It was concluded that the carrying amount of the CGU did not exceed the value in use. Consequently, for the years ended December 31, 2020, 2019 and 2018, there were no impairment charges recorded in respect of the Company’s cash generating unit. For the years ended December 31, 2020, there was no impairment charges recorded in respect of the Company’s cash generating unit despite of the consequence of decreased operations as a result of Covid-19. |
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 and the OCI. For the year ended December 31, 2020, 2019 and 2018, 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 2020 as of 2020 for 2019 as of 2019 for 2018 as of 2018 Costa Rica Colon U.S. dollar ₵. 588.4240 ₵. 615.7800 ₵. 590.9574 ₵. 573.4400 ₵. 580.8534 ₵. 609.6100 Guatemala Quetzal U.S. dollar Q. 7.7292 Q. 7.8095 Q. 7.7066 Q. 7.6988 Q. 7.5337 Q. 7.7440 El Salvador U.S Dollar U.S. dollar $. 21.4961 $ 19.9487 $. $. $. — $. — The exchange rates used to translate the above amounts to Mexican pesos at December 31, 2020, 2019 and 2018, were Ps.19.9487, Ps.18.8452 and Ps.19.6829, 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, 2020, 2019 and 2018, were Ps.23,970, Ps.8,045 and Ps.22,156, 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, 2020 and 2019, 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, 2020. 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, 2020, 2019 and 2018 the Company expensed Ps.25,918, Ps.62,825 and Ps.67,680, 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, 2020, 2019 and 2018 the Company recorded an expense for an amount of Ps.0, Ps.80,634 and Ps.50,000, 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 2020, 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, 2020, 2019 and 2018, the Company expensed Ps.75,040, Ps.49,659 and Ps.19,980, 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, 2020, 2019 and 2018, the Company recorded an expense (benefit) expense for Ps.(1,901), Ps.2,964 and Ps.(186), 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, 2020, 2019 and 2018, the Company recorded an expense (benefit) for Ps.107,204, Ps.37,760 and Ps.(5,052), 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 2020, 2019 and 2018, the employee profit sharing is Ps.13,458, Ps.22,134 and Ps.14,106, 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, 2020, 2019 and 2018, there were no impairment charges recorded in respect of the Company right-of-use asset. iii) Sale and leaseback The Company enters into sale and leaseback agreements whereby an aircraft or engine is sold to a lessor upon delivery and the lessor agrees to lease such aircraft or engine back to the Company. The Company measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained by the seller-lessee. Accordingly, the Company recognizes in the Statement of Operations only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. The rest of the gain is amortized over the lease term. 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 no case are related to scheduled major maintenance, are estimated and recognized ratably as a provision from the time it becomes likely such costs will be incurred and can be estimated reliably. These return costs are recognized on a straight-line basis as a component of variable lease expenses and the provision is included as part of other liabilities, through the remaining lease term. The Company estimates the provision related to airframe, engine overhaul and limited life parts using certain assumptions including the projected usage of the aircraft and the expected costs of maintenance tasks to be performed. For the years ended December 31, 2020, 2019 and 2018, the Company expensed as variable rent of Ps.1,428,179, Ps.680,964 and Ps.659,106, 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 and non-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 in the statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. During the years ended December 31, 2019 and 2018, 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. During the year ended December 31, 2020, the Company recorded the ineffective portion of Ps.448.6 million with respect to derivative financial instruments. The realized gain or loss of derivative financial instruments and non-derivative financial instruments that qualify as CFH are recorded in the same caption of the hedged item in the consolidated statement of operations. 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, 2020. The Company has not early adopted any other standard interpretation or amendment that has been issued but is not yet effective. The nature and the effect of these changes are disclosed below: Amendments to IFRS 3: Definition of a Business The amendment to IFRS 3 Business Combinations clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that, together, significantly contribute to the ability to create output. Furthermore, it clarifies that a business can exist without including all of the inputs and processes needed to create outputs. These amendments did not have an impact on consolidated financial statements of the Company. Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate Benchmark Reform The amendments to IFRS 9 and IAS 39 Financial Instruments: Recognition and Measurement provide a number of reliefs, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is affected if the reform gives rise to uncertainty about the timing and/or amount of benchmark-based cash flows of the hedged item or the hedging instrument. These amendments had no impact on the consolidated financial statements of the Company. Amendments to IAS 1 and IAS 8 Definition of Material The amendments provide a new definition of material that states, “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the consolidated financial statements of, nor is there expected to be any future impact to the Company. Conceptual Framework for Financial Reporting issued on March 29, 2018 The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. This will affect those entities which developed their accounting policies based on the Conceptual Framework. The revised Conceptual Framework includes some new concepts, updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the consolidated financial statements of the Company. Amendments to IFRS 16 Covid-19 Related Rent Concessions On 28 May 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the Covid-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification. This amendment had impact on the consolidated financial statements of the Company (Note 14). 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. |
Convenience translation | y) Convenience translation U.S. dollar amounts at December 31, 2020 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.19.9487 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, 2020. 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, 2020 | |
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 2020 2019 Concesionaria Air transportation services for passengers, cargo and mail throughout Mexico and abroad Mexico 100 % 100 % Vuela Aviación, S.A. Air transportation services for passengers, cargo and mail in Costa Rica and abroad Costa Rica 100 % 100 % Vuela, S.A. (“Vuela”) * Air transportation services for passengers, cargo and mail in Guatemala and abroad Guatemala 100 % 100 % Vuela El Salvador, S.A. de C.V.* Air transportation services for passengers, cargo and mail in El Salvador and abroad El Salvador 100 % 100 % Comercializadora Volaris, S.A. de C.V. Merchandising of services Mexico 100 % 100 % Servicios Earhart, S.A.* Recruitment and payroll Guatemala 100 % 100 % Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”) Recruitment and payroll Mexico 100 % 100 % Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) Recruitment and payroll Mexico 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”) Travel agency Mexico 100 % 100 % Deutsche Bank México, S.A., Trust 1710 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % Deutsche Bank México, S.A., Trust 1711 Pre-delivery payments financing (Note 5) Mexico 100 % 100 % Irrevocable Administrative Trust number F/307750 “Administrative Trust” Share administration trust (Note 17) Mexico 100 % 100 % Irrevocable Administrative Trust number F/745291 “Administrative Trust” Share administration trust (Note 17) Mexico 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 % 100 % *The Companies have not started operations yet in Guatemala and El Salvador. **The Company has not started operations yet |
Schedule of breakdown of revenues | At the flight time At the sale Total Revenue recognition as of December 31, 2020 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 8,455,647 Ps. 4,417,527 Ps. — Ps. — Ps. 12,873,174 Other Passenger Revenues 6,920,141 1,536,206 124,450 32,601 8,613,398 15,375,788 5,953,733 124,450 32,601 21,486,572 Non-Passenger Revenues Other Non-Passenger revenues 875,610 6,750 — — 882,360 Cargo 196,349 5,532 — — 201,881 Total Ps. 16,447,747 Ps. 5,966,015 Ps. 124,450 Ps. 32,601 Ps. 22,570,813 Non-derivative financial instruments (411,222) Ps. 22,159,591 At the flight time At the sale Total Revenue recognition as of December 31, 2019 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues Ps. 15,833,878 Ps. 7,296,113 Ps. — Ps. — Ps. 23,129,991 Other Passenger Revenues 7,531,725 2,865,555 119,466 52,462 10,569,208 23,365,603 10,161,668 119,466 52,462 33,699,199 Non-Passenger Revenues Other Non-Passenger revenues 888,353 9,233 — — 897,586 Cargo 221,375 7,461 — — 228,836 Total Ps. 24,475,331 Ps. 10,178,362 Ps. 119,466 Ps. 52,462 Ps. 34,825,621 Non-derivative financial instruments (72,949) Ps. 34,752,672 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 |
Schedule of transactions from unearned transportation revenues | 2020 2019 January 1, Ps. 3,679,926 Ps. 2,438,516 Deferred 23,657,563 34,940,609 Recognized in revenue during the year (21,486,572) (33,699,199) December 31, Ps. 5,850,917 Ps. 3,679,926 |
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 2020 as of 2020 for 2019 as of 2019 for 2018 as of 2018 Costa Rica Colon U.S. dollar ₵. 588.4240 ₵. 615.7800 ₵. 590.9574 ₵. 573.4400 ₵. 580.8534 ₵. 609.6100 Guatemala Quetzal U.S. dollar Q. 7.7292 Q. 7.8095 Q. 7.7066 Q. 7.6988 Q. 7.5337 Q. 7.7440 El Salvador U.S Dollar U.S. dollar $. 21.4961 $ 19.9487 $. $. $. — $. — |
Summary of estimated useful lives of the assets | Aircraft and engines up to 18 years Spare engines up to 14 years Buildings leases one to ten years Maintenance component up to eight years |
Financial instruments and ris_2
Financial instruments and risk management (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Financial instruments and risk management | |
Schedule of notional amounts and strike prices of derivative financial instruments | Position as of December 31, 2020 Jet fuel Asian call and Zero-Cost collars option contracts maturities 1 Half 2021 2 Half 2021 2021 Total Jet fuel risk Asian Calls Notional volume in gallons (thousands)* 7,280 — 7,280 Strike price agreed rate per gallon (U.S.dollars) ** US$ 1.90 — US$ 1.90 Approximate percentage of hedge (of expected consumption value) 6 % — % 3 % Jet fuel risk Zero-Cost collars Notional volume in gallons (thousands)* 7,556 — 7,556 Strike price agreed rate per gallon (U.S. dollars) ** US$ 1.23 / 1.93 US$ — US$ 1.23 / 1.93 Approximate percentage of hedge (of expected consumption value) 6 % — % 3 % All-in Approximate percentage of hedge (of expected consumption value) 12 % — % 6 % * US Gulf Coast Jet 54 as underlying asset ** Weighted average 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 |
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, 2020 effect on equity (U.S. dollars) US Gulf Coast Jet Fuel 54 spot level +5% +0.16M -5% -0.16M 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 2020 2019 Assets: Cash and cash equivalents US$ 495,612 US$ 373,099 Other accounts receivable, net 39,997 23,620 Guarantee deposits 479,566 437,499 Derivative financial instruments 10 7,088 Total assets US$ 1,015,185 US$ 841,306 Liabilities: Financial debt (Note 5) US$ 183,806 US$ 176,927 Lease liabilities 2,334,153 2,263,849 Suppliers 174,553 76,471 Other taxes and fees payable 16,105 22,486 Derivative financial instruments 484 — Total liabilities 2,709,101 2,539,733 Net foreign currency position US$ (1,693,916) US$ (1,698,427) Thousands of U.S. dollars 2020 2019 Assets: Cash and cash equivalents US$ 495,612 US$ 373,099 Other accounts receivable, net 39,997 23,620 Guarantee deposits 479,566 437,499 Derivative financial instruments 10 7,088 Total assets US$ 1,015,185 US$ 841,306 Liabilities: Financial debt (Note 5) US$ 183,806 US$ 176,927 Lease liabilities 2,334,153 2,263,849 Suppliers 174,553 76,471 Other taxes and fees payable 16,105 22,486 Derivative financial instruments 484 — Total liabilities 2,709,101 2,539,733 Net foreign currency position US$ (1,693,916) US$ (1,698,427) |
Schedule of contractual principal payments required on financial liabilities and derivative instruments fair value | December 31, 2020 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) Ps. 1,096,543 Ps. 2,554,069 Ps. 3,650,612 Short-term working capital facilities (Note 5) 200,000 — 200,000 Asset backed trust note (Note 5) 250,000 1,250,000 1,500,000 Derivative financial instruments: Jet fuel Asian Zero-Cost collars options contracts 9,657 — 9,657 Lease liabilities: Aircraft, engines, land and buildings leases 6,484,092 37,646,450 44,130,542 Aircraft and engine lease return obligation 86,801 2,417,683 2,504,484 Total Ps. 8,127,093 Ps. 43,868,202 Ps. 51,995,295 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 |
Summary of impact on the equity due to changes in the fair value of forward exchange contracts | Change in Effect on profit USD rate before tax 2020 +5 % Ps. (253,763) -5 % 253,763 2019 +5 % Ps. (155,593) -5 % 155,593 |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair value measurements | |
Schedule of carrying amounts and fair values of financial instruments | Carrying amount Fair value 2020 2019 2020 2019 Assets Derivative financial instruments Ps. 532 Ps. 136,262 Ps. 532 Ps. 136,262 Liabilities Financial debt (5,350,612) (5,008,509) (5,527,332) (5,194,316) Derivative financial instruments (9,657) — (9,657) — Total Ps. (5,359,737) Ps. (4,872,247) Ps. (5,536,457) Ps. (5,058,054) The following table summarizes the fair value measurements at December 31, 2020: Fair value measurement Quoted prices Significant Significant in active observable unobservable markets inputs inputs Level 1 Level 2 Level 3 Total Assets Derivatives financial instruments: Jet fuel Asian call options contracts* Ps. — Ps. 206 Ps. — Ps. 206 Interest rate Caps — 326 — 326 Liabilities Derivatives financial instruments:Jet fuel Asian Zero-Cost collars options contracts* — (9,657) — (9,657) Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (5,527,332) — (5,527,332) Net Ps. — Ps. (5,536,457) Ps. — Ps. (5,536,457) * Jet fuel forwards levels and LIBOR curve. ** LIBOR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt. There were no transfers between level 1 and level 2 during the period. The following table summarizes the 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. |
Schedule of (loss) gain on derivatives recognized in consolidated statements of operations and comprehensive income | The following table summarizes the (loss) gain from derivatives financial instruments recognized in the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018: Instrument Financial statements line 2020 2019 2018 Jet fuel Asian call options contracts Fuel Ps. (20,646) Ps. (61,069) Ps. 402,493 Jet fuel Zero-Cost collars contracts Fuel (835,884) (9,477) — Jet fuel Asian call options contracts Finance cost (12,981) — — Jet fuel Zero-Cost collars contracts Finance cost (435,578) — — Foreign currency forward Aircraft and engine rent expenses — 4,199 52,516 Interest rate cap Finance cost (1,468) (1,282) — Total Ps. (1,306,557) Ps. (67,629) Ps. 455,009 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, 2020, 2019 and 2018: Consolidated statements of other comprehensive (loss) income Financial Instrument statements line 2020 2019 2018 Jet fuel Asian call options contracts OCI Ps. (11,993) Ps. 11,148 Ps. (174,984) Jet fuel Zero cost collars OCI (143,224) 256,515 (122,948) Foreign currency contracts OCI — (14,241) 14,241 Interest rate cap OCI (900) (4,023) — Non derivative financial instruments OCI (1,591,569) 14,096 — Total Ps. (1,747,686) Ps. 263,495 Ps. (283,691) |
Financial assets and liabilit_2
Financial assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Financial assets and liabilities | |
Schedule of financial assets | 2020 2019 Derivative financial instruments designated as cash flow hedges (effective portion recognized within OCI) Jet fuel Asian call options Ps. 206 Ps. — Jet fuel Zero-Cost collars — 133,567 Interest rate cap 326 2,695 Total financial assets Ps. 532 Ps. 136,262 Presented on the consolidated statements of financial position as follows: Current Ps. 206 Ps. 133,567 Non-current Ps. 326 Ps. 2,695 |
Schedule of short-term and long-term debt | 2020 2019 I. Revolving line of credit with Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander (“Santander”) and Banco Nacional de Comercio Exterior, S.N.C. (“Bancomext”), in U.S. dollars, to finance pre-delivery payments, maturing on October 31, 2022, bearing annual interest rate at the three-month LIBOR plus a spread of 260 basis points. Ps. 3,650,612 Ps. 3,308,509 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. 1,500,000 1,459,871 III. In December 2019, the Company entered into a short-term working capital facility with Banco Sabadell S.A., Institución de Banca Multiple (“Sabadell”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a 300 basis points. 200,000 200,000 IV. Amortized transaction costs (15,542) (22,472) V. Accrued interest and other financial cost 19,563 30,061 5,354,633 4,975,969 Less: Short-term maturities 1,558,884 2,086,017 Long-term Ps. 3,795,749 Ps. 2,889,952 TIIE: Mexican interbank rate |
Summary of scheduled principal payments of financial debt and accrued interest | 2021 2022 2023 2024 Total Santander/Bancomext Ps. 1,112,629 Ps. 2,554,069 Ps. — Ps. — Ps. 3,666,698 CEBUR 252,605 500,000 500,000 250,000 1,502,605 Banco Sabadell 200,872 — — — 200,872 Total Ps. 1,566,106 Ps. 3,054,069 Ps. 500,000 Ps. 250,000 Ps. 5,370,175 |
Schedule of changes in liabilities from financing activities | Foreign Current vs non- January 1, Net cash Accrued exchange current December 31, 2020 Flows Interest movement reclassification Other 2020 Current interest-bearing loans and borrowings Ps. 2,086,017 Ps. (1,231,695) Ps. (10,498) Ps. (32,491) Ps. 747,551 Ps. - Ps. 1,558,884 Non-current interest -bearing loans and borrowings 2,889,952 1,374,678 — 231,612 (747,551) 47,058 3,795,749 Total liabilities from financing activities Ps. 4,975,969 Ps. 142,983 Ps. (10,498) Ps. 199,121 Ps. - Ps. 47,058 Ps. 5,354,633 Current vs non- January 1, Net cash Accrued Foreign exchange current December 31, 2019 Flows Interest movement reclassification 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. - Ps. 2,086,017 Non-current interest -bearing loans and borrowings 2,310,939 2,273,143 — (122,466) (1,534,842) (36,822) 2,889,952 Total liabilities from financing activities Ps. 3,523,198 Ps. 1,639,534 Ps. 13,698 Ps. (163,639) Ps. - Ps. (36,822) Ps. 4,975,969 |
Schedule of other financial liabilities | 2020 2019 Derivative financial instruments designated as CFH (effective portion recognized within OCI): Zero-Cost Collar options Ps. 9,657 Ps. — Total financial liabilities Ps. 9,657 Ps. — Presented on the consolidated statements of financial position as follows: Current Ps. 9,657 Ps. — Non-current Ps. — Ps. — |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash and cash equivalents | |
Summary of cash and cash equivalents | 2020 2019 Cash in banks Ps. 6,907,295 Ps. 4,612,927 Short-term investments 3,068,618 3,231,125 Cash on hand 36,432 44,880 Restricted funds held in trust related to debt service reserves 91,040 91,040 Total cash and cash equivalents Ps. 10,103,385 Ps. 7,979,972 |
Related parties (Tables)
Related parties (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related parties | |
Schedule of balances due from/to related parties | Country Type of transaction of origin 2020 2019 Terms Due from: Frontier Airlines Inc. (“Frontier”) Code-share USA Ps. 72,629 Ps. 23,442 30 days Ps. 72,629 Ps. 23,442 Due to: Grupo Aeroportuario del Centro Norte (“OMA”) Airport Services Mexico Ps. 80,681 Ps. — 30 days Aeromantenimiento, S.A. (“Aeroman”) Aircraft and engine Mexico/El Salvador 39,284 1,474 30 days Chevez, Ruiz, Zamarripa y Cía., S.C. Professional fees Mexico 4,823 — 30 days Mijares, Angoitia, Cortés y Fuentes, S.C. Professional fees Mexico 166 996 30 days Frontier Airlines Inc. (“Frontier”) Code-share USA 39 16,246 30 days One Link, S.A. de C.V. (“One Link”) Call center fees El Salvador — 39,838 30 days Ps. 124,993 Ps. 58,554 |
Schedule of transactions with related parties | Related party transactions Country of origin 2020 2019 2018 Revenues: Transactions with affiliates Frontier Airlines Inc Code-share USA Ps. 148,964 Ps. 208,968 Ps. 8,358 Expenses: Transactions with affiliates Aeromantenimiento, S.A. Aircraft and engine maintenance Mexico/El Salvador Ps. 239,118 Ps. 201,624 Ps. 341,726 Technical support Mexico/El Salvador 3,945 5,815 4,796 Onelink, S.A. de C.V. Call center fees Mexico/El Salvador 73,167 37,026 — Grupo Aeroportuario del Centro Norte Airport services Mexico 32,193 — — Mijares, Angoitia, Cortés y Fuentes, S.C. Professional fees Mexico 5,582 1,321 1,672 Chevez, Ruiz, Zamarripa y Cía, S.C. Professional fees Mexico 4,823 — — Servprot, S.A. de C.V. México 3,464 3,120 2,804 Human Capital International HCI, S.A. México — — 324 |
Other accounts receivable, net
Other accounts receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other accounts receivable, net | |
Schedule of other accounts receivables | 2020 2019 Current: Credit cards Ps. 231,260 Ps. 389,634 Benefits from suppliers 105,947 26,989 Other accounts receivable 87,204 189,904 Other points of sales 67,315 102,002 Cargo clients 45,201 46,600 Employees 36,287 29,681 Travel agencies and insurance commissions 16,099 76,975 Marketing services receivable 4,020 7,024 Airport services 15 42,894 Affinity credit card — 49,040 Settlement receivable — 2,422 Insurance claims — 143 593,348 963,308 Allowance for credit losses (32,708) (40,308) Ps. 560,640 Ps. 923,000 |
Schedule of aging of accounts receivable | 2020 2020 Total 2019 2019 Total Days Impaired Not impaired 2020 Impaired Not impaired 2019 0–30 Ps. 4,090 Ps. 486,001 Ps. 490,091 Ps. 5,804 Ps. 722,651 Ps. 728,455 31–60 — 13,872 13,872 — 64,983 64,983 61–90 — 6,081 6,081 — 19,274 19,274 91–120 28,618 54,686 83,304 34,504 116,092 150,596 Ps. 32,708 Ps. 560,640 Ps. 593,348 Ps. 40,308 Ps. 923,000 Ps. 963,308 |
Schedule of movement in the allowance for doubtful accounts | Balance as of January 1st, 2018 Ps. (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 (40,308) Write-offs 21,264 Increase in allowance (13,664) Balance as of December 31, 2020 Ps. (32,708) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventories | |
Schedule of inventories | 2020 2019 Spare parts and accessories of flight equipment Ps. 271,454 Ps. 294,390 Miscellaneous supplies 7,505 7,518 Ps. 278,959 Ps. 301,908 |
Prepaid expenses and other cu_2
Prepaid expenses and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid expenses and other current assets | |
Schedule of prepaid expenses and other current assets | 2020 2019 Flight credits Ps. 389,927 Ps. — Advances to suppliers 163,044 283,340 Sales commission to travel agencies (Note 1d) 151,342 84,239 Other prepaid expenses 81,803 115,054 Prepaid insurance 64,309 88,941 Advances to components suppliers — 209,557 Ps. 850,425 Ps. 781,131 |
Guarantee deposits (Tables)
Guarantee deposits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Guarantee deposits | |
Schedule of guarantee deposits | 2020 2019 Current asset: Credit letters deposits Ps. 829,918 Ps. — Aircraft maintenance deposits paid to lessors (Note 1j) 279,390 576,505 Deposits for rental of flight equipment 23,584 — Other guarantee deposits 9,064 23,822 1,141,956 600,327 Non-current asset: Aircraft maintenance deposits paid to lessors (Note 1j) 7,641,544 7,047,360 Deposits for rental of flight equipment 741,871 557,530 Other guarantee deposits 41,323 39,531 8,424,738 7,644,421 Ps. 9,566,694 Ps. 8,244,748 |
Rotable spare parts, furnitur_2
Rotable spare parts, furniture and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Rotable spare parts, furniture and equipment, net | |
Summary of rotable spare parts, furniture and equipment, net | Gross value Accumulated depreciation Net carrying value At December At December At December At December At December At December 31, 2020 31, 2019 31, 2020 31, 2019 31, 2020 31, 2019 Leasehold improvements to flight equipment Ps. 5,092,049 Ps. 4,220,672 Ps. (3,354,166) Ps. (2,679,884) Ps. 1,737,883 Ps. 1,540,788 Pre-delivery payments* 4,920,126 4,507,770 — — 4,920,126 4,507,770 Flight equipment 1,689,473 1,287,102 (1,223,560) (553,852) 465,913 733,250 Construction and improvements in process 53,545 474,240 — — 53,545 474,240 Constructions and improvements 175,407 172,460 (148,391) (131,510) 27,016 40,950 Computer equipment 49,945 47,566 (42,126) (34,495) 7,819 13,071 Workshop tools 27,727 26,875 (24,398) (22,023) 3,329 4,852 Electric power equipment 20,448 20,412 (12,773) (11,400) 7,675 9,012 Communications equipment 14,803 14,099 (9,038) (8,322) 5,765 5,777 Workshop machinery and equipment 20,574 16,301 (7,641) (6,092) 12,933 10,209 Motorized transport equipment platform 15,247 15,026 (7,924) (5,392) 7,323 9,634 Service carts on board 9,216 7,675 (6,112) (5,554) 3,104 2,121 Office furniture and equipment 67,035 70,709 (35,309) (34,049) 31,726 36,660 Allowance for obsolescence (3,000) (3,000) — — (3,000) (3,000) Total Ps. 12,152,595 Ps. 10,877,907 Ps. (4,871,438) Ps. (3,492,573) Ps. 7,281,157 Ps. 7,385,334 * During the years ended December 31, 2020, 2019 and 2018, the Company capitalized borrowing costs of Ps.384,038, Ps.456,313 and Ps.357,920, respectively. The amount of this line is net of disposals of capitalized borrowing costs related to sale and leaseback transactions of Ps.401,862, Ps.328,571 and Ps.242,678, 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, 2018 Ps. Ps. 15,235 Ps. 16,547 Ps. 38,306 Ps. 5,122 Ps. 3,369 Ps. 446 Ps. 4,911 Ps. 4,481 Ps. 126 Ps. — Ps. 3,672,090 Ps. 142,738 Ps. 1,214,589 Ps. 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 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 Additions 668,376 128 1,648 733 — 851 — — — 1,541 — 2,185,902 176,607 646,219 3,682,005 Disposals and transfers (861,761) — — — — — — — — — — (1,755,724) (354,146) — (2,971,631) Borrowing costs, net* — — — — — — — — — — — (17,822) — — (17,822) Other movements — 2,317 713 101 36 — 222 1,083 4,273 — — — (243,156) 235,509 1,098 Depreciation (73,952) (16,379) (7,613) (5,768) (1,373) (2,374) (2,533) (1,095) (1,549) (558) — — — (684,633) (797,827) As of December 31, 2020 465,913 27,016 7,819 31,726 7,675 3,329 7,323 5,765 12,933 3,104 (3,000) 4,920,126 53,545 1,737,883 7,281,157 Cost 1,689,473 175,407 49,945 67,035 20,448 27,727 15,247 14,803 20,574 9,216 (3,000) 4,920,126 53,545 5,092,049 12,152,595 Accumulated depreciation (1,223,560) (148,391) (42,126) (35,309) (12,773) (24,398) (7,924) (9,038) (7,641) (6,112) — — — (3,354,166) (4,871,438) Net book amount as of December 31, 2020 Ps. 465,913 Ps. 27,016 Ps. 7,819 Ps. 31,726 Ps. 7,675 Ps. 3,329 Ps. 7,323 Ps. 5,765 Ps. 12,933 Ps. 3,104 Ps. (3,000) Ps. 4,920,126 Ps. 53,545 Ps. 1,737,883 Ps. 7,281,157 a) Depreciation expense for the years ended December 31, 2020, 2019 and 2018, was Ps.797,827, Ps.587,849 and Ps.427,756, 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. |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Intangible assets, net | |
Schedule of intangible assets, net | Useful Gross value Accumulated amortization Net carrying amount Life At December 31, years 2020 2019 2020 2019 2020 2019 Software 1 – 4 Ps. 704,257 Ps. 579,360 Ps. (512,695) Ps. (411,963) Ps. 191,562 Ps. 167,397 Balance as of January 1st, 2019 Ps. 179,124 Additions 77,325 Disposals — Amortization (87,667) Exchange differences (1,385) Balance as of December 31, 2019 167,397 Additions 124,724 Disposals — Amortization (100,618) Exchange differences 59 Balance as of December 31, 2020 Ps. 191,562 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of composition of fleet and spare engines, operating leases | Aircraft At December At December Type Model 31, 2020 31, 2019 A319 132 3 3 A319 133 2 4 A320 233 39 39 A320 232 1 2 A320NEO 271N 24 17 A321 231 10 10 A321NEO 271N 6 6 85 81 Engine spare At December At December Type Model 31, 2020 31, 2019 V2500 V2524-A5 2 2 V2500 V2527M-A5 3 3 V2500 V2527E-A5 5 3 V2500 V2527-A5 2 2 PW1100 PW1127G-JM 5 3 PW1100 PW1133G-JM 1 1 18 14 * 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. Aircraft At December At December Type Model 31, 2020 31, 2019 A319 132 3 3 A319 133 2 4 A320 233 39 39 A320 232 1 2 A320NEO 271N 24 17 A321 231 10 10 A321NEO 271N 6 6 85 81 |
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 January 1st, 2019 Ps. 31,126,169 Ps. 579,696 Ps. 176,188 Ps. 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 December 31, 2019 33,312,089 677,198 139,479 34,128,766 Additions 4,876,071 362,081 15,222 5,253,374 Disposals (17,742) — — (17,742) Foreign exchange effect — — 795 795 Depreciation on right of use assets (4,763,928) (210,079) (74,969) (5,048,976) As at December 31, 2020 Ps. 33,406,490 Ps. 829,200 Ps. 80,527 Ps. 34,316,217 |
Summary of carrying amounts of lease liabilities and the movements during the period | 2020 2019 As at January 1 st Ps. 40,517,045 Ps. 39,565,146 Additions 5,572,764 7,186,613 Disposals (231,566) — Accretion of interest 2,218,982 2,037,540 Foreign exchange effect 2,163,886 (1,772,452) Payments (6,110,569) (6,499,802) As at 31 December Ps. 44,130,542 Ps. 40,517,045 Current Ps. 6,484,092 Ps. 4,720,505 Non-current Ps. 37,646,450 Ps. |
Summary of amounts recognized in profit or loss | As of December As of December As of December 31, 2020 31, 2019 31, 2018 Depreciation of right-of-use assets Ps. (5,048,976) Ps. (4,702,971) Ps. (4,043,691) Interest expense on lease liabilities and aircraft and engine lease return obligation (Note 21) (2,350,250) (2,128,162) (1,755,978) Aircraft and engine variable expenses (1,845,254) (961,657) (956,010) Total amount recognized in profit or loss Ps. (9,244,480) Ps. (7,792,790) Ps. (6,755,679) |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued liabilities | |
Schedule of analysis of accrued liabilities short - term | 2020 2019 Fuel and traffic accrued expenses Ps. 1,285,931 Ps. 1,507,659 Salaries and benefits 337,467 296,829 Sales, marketing and distribution accrued expenses 179,342 230,935 Maintenance deposits 174,549 132,085 Accrued administrative expenses 122,729 81,124 Maintenance and aircraft parts accrued expenses 98,942 120,254 Others 86,374 48,526 Information and communication accrued expenses 35,359 67,808 Deferred revenue from V Club membership 20,830 35,465 Supplier services agreement 10,634 10,634 Benefits from suppliers 3,888 — Advances from travel agencies 242 542 Ps. 2,356,287 Ps. 2,531,861 |
Schedule of accrued liabilities long term | 2020 2019 Supplier services agreement Ps. 45,270 Ps. 55,905 Benefits from suppliers 16,847 19,439 Other 4,581 15,452 Ps. 66,698 Ps. 90,796 |
Schedule of other liabilities | Balance as of Balance as of January 1, Increase for December 31, 2020 the year Payments 2020 Aircraft and engine lease return obligation Ps. 1,852,688 Ps. 2,126,401 Ps. (1,474,605) Ps. 2,504,484 Guarantee deposit — 250,000 — 250,000 Employee profit sharing (Note 16) 24,097 20,810 (30,490) 14,417 Ps. 1,876,785 Ps. 2,397,211 Ps. (1,505,095) Ps. 2,768,901 Current maturities Ps. 101,218 Non-current Ps. 2,667,683 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 Current maturities Ps. 407,190 Non-current Ps. 1,469,595 |
Employee benefits (Tables)
Employee benefits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Employee benefits | |
Schedule of analysis of net period cost | 2020 2019 2018 Analysis of net period cost: Current service cost Ps. 8,449 Ps. 8,214 Ps. 4,977 Interest cost on benefit obligation 2,630 1,872 1,424 Net period cost Ps. 11,079 Ps. 10,086 Ps. 6,401 |
Schedule of changes in defined benefit obligation | 2020 2019 Defined benefit obligation at January 1, Ps. 38,151 Ps. 18,153 Net period cost charged to profit or loss: Current service cost 8,449 8,214 Interest cost on benefit obligation 2,630 1,872 Remeasurement losses in other comprehensive income: Actuarial changes arising from changes in assumptions 2,651 10,192 Payments made (1,254) (225) Defined benefit obligation at December 31, Ps. 50,627 Ps. 38,206 |
Summary of significant assumptions used in the computation of the seniority premium obligations | 2020 2019 2018 Financial: Discount rate 7.04 % 7.18 % 9.91 % Expected rate of salary increases 5.50 % 5.50 % 5.65 % Annual increase in minimum salary 4.00 % 4.00 % 4.15 % Biometric: Mortality (1) EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA EMSSA 09 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 | 2020 2019 Employee profit-sharing (Note 15c) Ps. 14,417 Ps. 24,097 |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2018 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 Purchased during the year 3,159,763 Granted during the year — Exercised/vested during the year (2,142,426) Forfeited during the year (327,217) Outstanding as of December 31, 2020 5,805,311 * * These shares are presented as treasury shares in the consolidated statement of financial position as of December 31, 2020, 2019 and 2018. |
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, 2018 Ps. 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 5.31 40,668 Granted during the year — — — Forfeited during the year — — — Exercised during the year — — — Outstanding as of December 31, 2020 Ps. 7,653,981 Ps. 5.31 Ps. 40,668 |
Schedule of retention plan (benefit) expenses recognized | 2020 2019 2018 Expense (benefit) arising from cash-settled share-based payments transactions Ps. 105,303 Ps. 40,724 Ps. (5,238) Expense arising from equity-settled share-based payments transactions 75,040 49,659 19,980 Total expense arising from share-based payments transactions Ps. 180,343 Ps. 90,383 Ps. 14,742 |
Share purchase plan | |
Share-based payments | |
Schedule of vesting period of shares granted | Number of Series A shares Vesting period 2,979,412 November 2020 – 2021 1,819,440 November 2021 – 2022 1,006,459 November 2022 – 2023 5,805,311 |
MIP II | |
Share-based payments | |
Schedule of vesting period of shares granted | Number of SARs Vesting date 3,391,020 February 2021 3,391,020 * * Includes forfeited SARs of 0,0 and 1,563,520, for the years ended December 31, 2020, 2019 and 2018, respectively. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity | |
Schedule of authorized shares | Shares Fixed Variable Class I Class II Total shares Series A shares (1) 10,478 1,077,914,326 1,077,924,804 Series B shares (1) 13,702 88,038,171 88,051,873 24,180 1,165,952,497 1,165,976,677 Treasury shares (Note 17) — (19,020,202) (19,020,202) (1) 24,180 1,146,932,295 1,146,956,475 (1) The number of forfeited shares as of December 31, 2020 were 327,217, which are include in treasury shares. 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) (1) 24,180 996,716,440 996,740,620 (1) The number of forfeited shares as of December 31, 2019 were 294,541, which are include in treasury shares. |
Schedule of basic and diluted earnings (loss) per share | At December 31, 2018 2020 2019 (Adjusted) Net (loss) income for the period Ps. (4,293,791) Ps. 2,639,063 Ps. (942,882) Weighted average number of shares outstanding (in thousands): Basic 1,021,561 1,011,877 1,011,877 Diluted 1,021,561 1,011,877 1,011,877 EPS - LPS: Basic (4.203) 2.608 (0.932) Diluted (4.203) 2.608 (0.932) |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income tax | |
Schedule of income tax in consolidated statements of operations | 2020 2019 2018 Current year income tax expense Ps. (90,609) Ps. (281,491) Ps. (232,824) Deferred income tax benefit (expense) 1,496,793 (1) (813,340) (2) 582,644 (3) Total income tax benefit (expense) Ps. 1,406,184 Ps. (1,094,831) Ps. 349,820 (1) Includes translation effect by Ps.2,035 (2) Includes translation effect by Ps.(2,278) (3) Includes translation effect by Ps.2,680 |
Schedule of income tax in consolidated statements of OCI | 2020 2019 2018 Deferred income tax related to items recognized in OCI during the year Net gain (loss) cash flow hedges Ps. 46,835 Ps. (74,820) Ps. 85,107 Remeasurement (loss) gain of employee benefits 794 3,058 (1,797) Deferred income tax charged to OCI Ps. 47,629 Ps. (71,762) Ps. 83,310 |
Schedule of reconciliation of corporate income tax rate to effective tax rate | 2020 2019 2018 Statutory income tax rate 30.00 % 30.00 % 30.00 % Amendment tax return effects and other tax adjustments 0.92 % (0.51) % 0.05 % Inflation on furniture, intangible and equipment 0.29 % (0.48) % 2.08 % Inflation of tax losses 0.23 % (0.21) % 1.16 % Foreign countries difference with Mexican statutory rate (0.06) % 0.11 % (0.02) % Annual inflation adjustment (0.91) % (0.05) % 0.26 % Unrecorded deferred taxes on tax losses (1.29) % 0.27 % (3.96) % Non-deductible expenses (4.51) % 0.19 % (2.51) % 24.67 % 29.32 % 27.06 % |
Schedule of consolidated deferred taxes | 2020 2019 Consolidated Consolidated Consolidated Consolidated statement of statement of statement of statement of financial position operations financial position operations Deferred income tax assets: Lease liability Ps. 13,239,254 Ps. 1,084,140 Ps. 12,155,114 Ps. 313,137 Unearned transportation revenue 1,233,661 436,598 797,063 61,708 Extension lease agreement 773,443 314,100 459,343 (137,639) Tax losses available for offsetting against future taxable income 576,422 272,452 303,970 (5,350) Intangible 420,908 (25,941) 446,849 (13,741) Allowance for doubtful accounts 61,565 47,476 14,089 9,187 Employee benefits 15,191 2,934 11,463 2,958 Financial instruments 7,948 (22) (38,865) — Employee profit sharing 4,323 (2,904) 7,227 2,734 Provisions (91,253) (442,598) 351,345 60,655 Non derivative financial instruments (473,242) (477,471) 4,229 4,229 15,768,220 1,208,764 14,511,827 297,878 Deferred income tax liabilities: Right of use asset 10,292,753 55,824 10,236,929 672,311 Supplemental rent 1,878,865 171,916 1,706,949 111,430 Rotable spare parts, furniture and equipment, net 707,092 (177,384) 884,476 239,452 Inventories 83,402 (6,885) 90,287 1,392 Other prepayments 9,786 (17,942) 27,728 (4,329) Prepaid expenses and other assets (132,462) (311,523) 179,061 88,683 12,839,436 (285,994) 13,125,430 1,108,939 Ps. 2,928,784 Ps. 1,494,758 Ps. 1,386,397 Ps. (811,061) |
Schedule of components of deferred taxes in the consolidated statement of financial position | 2020 2019 Deferred tax assets Ps. 3,128,555 Ps. 1,542,536 Deferred tax liabilities (199,771) (156,139) Deferred tax assets, net Ps. 2,928,784 Ps. 1,386,397 |
Schedule of reconciliation of deferred tax liability, net | 2020 2019 Opening balance as of January 1, Ps. 1,386,397 Ps. 2,269,220 Deferred income tax (expense) benefit during the current year recorded on profits 1,494,758 (811,061) Deferred income tax (expense) benefit during the current year recorded in accumulated other comprehensive income (loss) 47,629 (71,762) Closing balance as of December 31, Ps. 2,928,784 Ps. 1,386,397 |
Schedule of available tax carry-forwards | An analysis of the available tax losses carry-forward of the Company at December 31, 2020 is as follows: Year Historical Adjusted Total remaining Year of of loss loss tax loss Utilized amount expiration 2017 Ps. 1,067,836 Ps. 1,206,232 Ps. 217,393 Ps. 988,839 2018 92,604 92,604 78,849 13,755 2019 4,922 5,186 — 5,186 2020 863,847 878,533 — 878,533 2020 55,751 55,751 — 55,751 Ps. 2,084,960 Ps. 2,238,306 Ps. 296,242 Ps. 1,942,064 A breakdown of available tax loss carry-forward of Controladora and its subsidiaries at December 31, 2020 is as follows: Historical Adjusted Total loss tax loss Utilized remaining amount Comercializadora Ps. 42,777 Ps. 43,685 Ps. — Ps. 43,685 Concesionaria 1,875,180 2,027,302 217,393 1,809,909 Operaciones Volaris 18,648 18,965 — 18,965 Vuela Aviación 148,355 148,354 78,849 69,505 Ps. 2,084,960 Ps. 2,238,306 Ps. 296,242 Ps. 1,942,064 Unrecognized NOLs 20,657 Ps. 1,921,407 Tax rate 30 % Deferred income tax Ps. 576,422 |
Schedule of tax balances | 2020 Adjusted contributed capital account ( Cuenta de capital de aportación or “CUCA”) Ps. 4,607,752 CUFIN* 3,241,275 * 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, 2020 | |
Other operating income and expenses | |
Schedule of other operating income | 2020 2019 2018 Gain on sale and leaseback (Note 12) Ps. 710,522 Ps. 284,759 Ps. 609,168 Loss on sale of rotable spare parts furniture and equipment (2,604) (8,954) (2,356) Other income 22,415 51,403 15,161 Ps. 730,333 Ps. 327,208 Ps. 621,973 |
Schedule of other operating expenses | 2020 2019 2018 Administrative and operational support expenses Ps. 632,041 Ps. 581,181 Ps. 536,079 Technology and communications 383,648 381,055 385,841 Passenger services 87,850 65,477 70,337 Insurance 53,507 74,661 60,892 Others 194 10,553 5,949 Ps. 1,157,240 Ps. 1,112,927 Ps. 1,059,098 |
Finance income and cost (Tables
Finance income and cost (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Finance income and cost | |
Schedule of finance income | 2020 2019 2018 Interest on cash and equivalents Ps. 93,122 Ps. 201,191 Ps. 152,437 Interest on asset backed trust notes 6,342 6,525 — Interest on recovery of guarantee deposits 2,047 83 166 Ps. 101,511 Ps. 207,799 Ps. 152,603 |
Schedule of finance cost | 2020 2019 2018 Interest expense on lease liabilities and aircraft and engine lease return obligation Ps. 2,350,250 Ps. 2,128,162 Ps. 1,755,978 Financial instruments loss 448,559 — — Interest on asset backed trust notes 116,240 80,314 — Cost of letter credit notes 73,141 49,856 57,277 Bank fees and others 3,707 3,607 6,141 Interest on debts and borrowings* 16,368 1,660 56,916 Other finance costs 10,219 6,230 — Ps. 3,018,484 Ps. 2,269,829 Ps. 1,876,312 |
Schedule of capitalized interest | 2020 2019 2018 Interest on debts and borrowings Ps. 400,406 Ps. 457,973 Ps. 414,836 Capitalized interest (Note 12) (384,038) (456,313) (357,920) Net interest on debts and borrowing in the consolidated statements of operations Ps. 16,368 Ps. 1,660 Ps. 56,916 |
Components of other comprehen_2
Components of other comprehensive (loss) income (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Components of other comprehensive (loss) income | |
Schedule of components of other comprehensive (loss) income | 2020 2019 2018 Derivative financial instruments: Reclassification of call options and forwards during the year to profit or loss Ps. — Ps. — Ps. (455,009) Extrinsic value of changes on jet fuel Asian call options (11,993) 11,148 227,509 Extrinsic value of changes on jet fuel Zero cost collars (143,224) 256,515 (122,948) (Loss) gain of the matured foreign currency forward contracts — (14,241) 66,757 Loss of the interest rate Cap (900) (4,023) — Non derivative financial instruments (1,591,569) 14,096 — Total Ps. (1,747,686) Ps. 263,495 Ps. (283,691) |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and contingencies | |
Schedule of committed expenditures | Commitment Commitment expenditures expenditures in U.S. equivalent in dollars Mexican pesos (1) 2021 US$ 40,213 Ps. 802,197 2022 138,919 2,771,253 2023 265,836 5,303,083 2024 705,331 14,070,437 2025 and thereafter 3,221,596 64,266,652 US$ 4,371,895 Ps. 87,213,622 (1) Using the exchange rate as of December 31, 2020 of Ps.19.9487. |
Schedule of future minimum lease payments | Aircraft sale prices estimated in U.S. dollars in Mexican pesos (1) 2021 US$ 209,500 Ps. 4,179,253 2022 547,328 10,918,482 US$ 756,828 Ps. 15,097,735 (1) Using the exchange rate as of December 31, 2020 of Ps.19.9487. |
Summary of future lease payments from sale and leaseback | Aircraft leases in U.S. dollars in Mexican pesos (1) 2021 US$ 9,720 Ps. 193,901 2022 47,972 956,979 2023 63,222 1,261,197 2024 63,222 1,261,197 2025 and thereafter 574,529 11,461,107 US$ 758,665 Ps. 15,134,381 (1) Using the exchange rate as of December 31, 2020 of Ps.19.9487. |
Operating segments (Tables)
Operating segments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Operating segments | |
Schedule of geographic segments | 2020 2019 2018 Operating revenues: Domestic (Mexico) Ps. 16,572,198 Ps. 24,594,797 Ps. 18,493,476 International: United States of America and Central America* 5,998,615 10,230,824 8,811,674 Non-derivative financial instruments (411,222) (72,949) — Total operating revenues Ps. 22,159,591 Ps. 34,752,672 Ps. 27,305,150 *United States of America represents approximately 27%, 29% and 31% of total revenues from external customers in 2020, 2019 and 2018, respectively. |
Description of the business a_4
Description of the business and summary of significant accounting policies - Relevant events (Details) $ in Billions | Dec. 11, 2020$ / sharesshares | Feb. 24, 2020 | Jun. 20, 2019MXN ($)item | Feb. 16, 2018shares | 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 | ||||||
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 | ||||||
Notes issued | $ | $ 1.5 | ||||||
Authorized amount under the program | $ | $ 3 | ||||||
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 | 45,968,598 | ||||||
Series A shares | |||||||
Description of the business and summary of significant accounting policies | |||||||
Number of shares per CPO | 1 | ||||||
American Depositary Shares | |||||||
Description of the business and summary of significant accounting policies | |||||||
Weighted average share price | $ / shares | $ 11.25 | ||||||
Number of CPOs per ADS | 10 | ||||||
Primary follow-on equity offering | |||||||
Description of the business and summary of significant accounting policies | |||||||
Number of shares offered | 134,000,000 | ||||||
Over-allotment | American Depositary Shares | |||||||
Description of the business and summary of significant accounting policies | |||||||
Number of shares issued | 20,100,000 |
Description of the business a_5
Description of the business and summary of significant accounting policies - Subsidiaries (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Concesionaria | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% |
Volaris Costa Rica | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% |
Vuela, S.A. | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% |
Vuela El Salvador, S.A. de C.V. | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% |
Comercializadora Volaris, S.A. de C.V. | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% |
Servicios Earhart, S.A. | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% |
Servicios Corporativos | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% |
Servicios Administrativos | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 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% |
Deutsche Bank Mexico Sa Trust 1710 | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% |
Deutsche Bank Mexico Sa Trust 1711 | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% |
Irrevocable Administrative Trust number F/307750 | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 100.00% | 100.00% |
Irrevocable Administrative Trust number F/745291 | ||
Subsidiaries | ||
Proportion of ownership interest in subsidiary | 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% | 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, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Revenue recognition | ||||
Discounts, payment incentives, bonuses or other variable considerations | $ 0 | |||
Fare revenues | $ 645,314 | 12,873,174 | $ 23,129,991 | $ 18,487,858 |
Other passenger revenues | 431,777 | 8,613,398 | 10,569,208 | 7,892,497 |
Passenger revenues | 1,077,091 | 21,486,572 | 33,699,199 | 26,380,355 |
Other non-passenger revenues (Note 1d) | 44,231 | 882,360 | 897,586 | 697,357 |
Cargo | 10,120 | 201,881 | 228,836 | 227,438 |
Total | 22,570,813 | 34,825,621 | ||
Non-derivatives financial instruments | (20,614) | (411,222) | (72,949) | |
Operating revenues | $ 1,110,828 | 22,159,591 | 34,752,672 | 27,305,150 |
Transactions from unearned transportation revenues | ||||
January 1, | 3,679,926 | 2,438,516 | ||
Deferred | 23,657,563 | 34,940,609 | ||
Recognized in revenue during the year | (21,486,572) | (33,699,199) | ||
December 31, | 5,850,917 | 3,679,926 | 2,438,516 | |
Non-ticket revenues | ||||
Expected credit losses on accounts receivable | 13,664 | 40,393 | ||
Revenue related to Vouchers reedemed by passengers | 1,720,939 | |||
Domestic (Mexico) | ||||
Revenue recognition | ||||
Operating revenues | 16,572,198 | 24,594,797 | 18,493,476 | |
Domestic (Mexico) | At the flight time | ||||
Revenue recognition | ||||
Fare revenues | 8,455,647 | 15,833,878 | 12,336,095 | |
Other passenger revenues | 6,920,141 | 7,531,725 | 5,182,572 | |
Passenger revenues | 15,375,788 | 23,365,603 | 17,518,667 | |
Other non-passenger revenues (Note 1d) | 875,610 | 888,353 | 685,219 | |
Cargo | 196,349 | 221,375 | 221,324 | |
Total | 16,447,747 | 24,475,331 | ||
Operating revenues | 18,425,210 | |||
Domestic (Mexico) | At the sale | ||||
Revenue recognition | ||||
Other passenger revenues | 124,450 | 119,466 | 68,264 | |
Passenger revenues | 124,450 | 119,466 | 68,264 | |
Total | 124,450 | 119,466 | ||
Operating revenues | 68,264 | |||
International | At the flight time | ||||
Revenue recognition | ||||
Fare revenues | 4,417,527 | 7,296,113 | 6,151,763 | |
Other passenger revenues | 1,536,206 | 2,865,555 | 2,598,375 | |
Passenger revenues | 5,953,733 | 10,161,668 | 8,750,138 | |
Other non-passenger revenues (Note 1d) | 6,750 | 9,233 | 12,138 | |
Cargo | 5,532 | 7,461 | 6,114 | |
Total | 5,966,015 | 10,178,362 | ||
Operating revenues | 8,768,390 | |||
International | At the sale | ||||
Revenue recognition | ||||
Other passenger revenues | 32,601 | 52,462 | 43,286 | |
Passenger revenues | 32,601 | 52,462 | 43,286 | |
Total | $ 32,601 | $ 52,462 | ||
Operating revenues | $ 43,286 | |||
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, 2020 | |
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, 2020MXN ($)agreementaircraft | Dec. 31, 2019MXN ($)agreementengineaircraft | Dec. 31, 2018MXN ($)agreementengineaircraft | |
Aircraft, rotable spare parts, furniture and equipment, net | |||
Maintenance deposits expensed as supplemental rent | $ 421,030 | $ 295,720 | $ 299,601 |
Number of aircraft added to fleet | aircraft | 7 | 7 | 10 |
Number of aircraft with lease term extended | agreement | 2 | 1 | 2 |
Number of engine agreements for which lease term extended | engine | 1 | 2 | |
Maintenance deposits expensed to contingent rent prior to lease extensions | $ 0 | ||
Length of time before routine aircraft and engine maintenance is required | 22 months | ||
Depreciation | $ 797,827 | $ 587,849 | $ 427,756 |
Capitalized borrowing costs | $ 384,038 | $ 456,313 | $ 357,920 |
Rate used to determine amount of borrowing cost | 3.58% | 5.10% | 4.41% |
Flight equipment | |||
Aircraft, rotable spare parts, furniture and equipment, net | |||
Depreciation | $ 73,952 | $ 84,888 | |
Constructions and improvements | |||
Aircraft, rotable spare parts, furniture and equipment, net | |||
Depreciation | 16,379 | 14,721 | |
Computer equipment | |||
Aircraft, rotable spare parts, furniture and equipment, net | |||
Depreciation | $ 7,613 | 7,074 | |
Annual depreciation rate | 25.00% | ||
Workshop tools | |||
Aircraft, rotable spare parts, furniture and equipment, net | |||
Depreciation | $ 2,374 | 1,938 | |
Annual depreciation rate | 33.30% | ||
Electric power equipment | |||
Aircraft, rotable spare parts, furniture and equipment, net | |||
Depreciation | $ 1,373 | 1,084 | |
Annual depreciation rate | 10.00% | ||
Communications equipment | |||
Aircraft, rotable spare parts, furniture and equipment, net | |||
Depreciation | $ 1,095 | 933 | |
Annual depreciation rate | 10.00% | ||
Workshop machinery and equipment | |||
Aircraft, rotable spare parts, furniture and equipment, net | |||
Depreciation | $ 1,549 | 1,044 | |
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 | $ 558 | 278 | |
Annual depreciation rate | 20.00% | ||
Office furniture and equipment | |||
Aircraft, rotable spare parts, furniture and equipment, net | |||
Depreciation | $ 5,768 | 5,854 | |
Annual depreciation rate | 10.00% | ||
Leasehold improvements to flight equipment | |||
Aircraft, rotable spare parts, furniture and equipment, net | |||
Additions | $ 646,219 | 659,082 | |
Amortization of major maintenance leasehold improvement | 652,091 | 450,371 | |
Depreciation | 684,633 | 469,694 | |
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, 2020$ / $Q / $ | Dec. 31, 2020$ / $₡ / $ | Dec. 31, 2020USD ($)$ / $ | Dec. 31, 2020MXN ($)$ / $ | Dec. 31, 2019$ / $Q / $ | Dec. 31, 2019$ / $₡ / $ | Dec. 31, 2019$ / $USD ($) | Dec. 31, 2019MXN ($)$ / $ | Dec. 31, 2018$ / $Q / $ | Dec. 31, 2018$ / $₡ / $ | Dec. 31, 2018MXN ($)$ / $ | Apr. 29, 2021$ / $ | Dec. 31, 2020Q / $ | Dec. 31, 2020₡ / $ | Dec. 31, 2020USD ($) | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | |
Description of the business and summary of significant accounting policies | ||||||||||||||||||||
Average exchange rate for year | 7.7292 | 588.4240 | 21.4961 | 7.7066 | 590.9574 | 19.2618 | 7.5337 | 580.8534 | ||||||||||||
Exchange rate as of end of the year | 19.9487 | 19.9487 | 19.9487 | 19.9487 | 18.8452 | 18.8452 | 18.8452 | 18.8452 | 19.6829 | 19.6829 | 19.6829 | 19.9785 | 7.8095 | 615.7800 | 19.9487 | 7.6988 | 573.4400 | 18.8452 | 7.7440 | 609.6100 |
Exchange differences on translation of foreign operations | $ 1,202,000 | $ 23,970 | $ 8,045 | $ 22,156 |
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, 2020USD ($) | Dec. 31, 2020MXN ($)$ / shares | Dec. 31, 2019$ / shares | Dec. 31, 2019MXN ($)$ / shares | Dec. 31, 2018MXN ($)$ / shares |
Share-based payments | |||||||
Termination benefits provision | $ 0 | $ 0 | |||||
Number of days' wages for each year of service provided as seniority premium benefits | 12 days | 12 days | |||||
Minimum years of service to receive seniority premium benefits | 15 years | 15 years | |||||
Salaries and benefits | $ 173,113 | $ 3,453,382 | 3,600,762 | $ 3,125,393 | |||
Quarterly incentive bonuses | |||||||
Share-based payments | |||||||
Salaries and benefits | 25,918 | 62,825 | 67,680 | ||||
Short-term benefit plan for certain key personnel | |||||||
Share-based payments | |||||||
Salaries and benefits | 0 | 80,634 | 50,000 | ||||
Restricted Stock Units | |||||||
Share-based payments | |||||||
Salaries and benefits | 75,040 | 49,659 | 19,980 | ||||
SARs - cash settled | |||||||
Share-based payments | |||||||
Salaries and benefits | (1,901) | 2,964 | (186) | ||||
Vesting period | 3 years | ||||||
MIP I | |||||||
Share-based payments | |||||||
Exercise price | $ / shares | $ 5.31 | ||||||
MIP II | |||||||
Share-based payments | |||||||
Salaries and benefits | $ 107,204 | ||||||
Salaries and benefits | $ 37,760 | $ (5,052) | |||||
Vesting period | 5 years | 5 years | |||||
BODIP | |||||||
Share-based payments | |||||||
Vesting period | 4 years | ||||||
Exercise price | $ / shares | $ 16.12 | $ 9.74 | $ 16.80 | $ 16.12 | |||
Employee profit sharing | |||||||
Share-based payments | |||||||
Salaries and benefits | $ 13,458 | $ 22,134 | $ 14,106 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Impairment charges recorded in respect of right-of-use asset | $ 0 | $ 0 | $ 0 |
Variable rent | $ 1,428,179 | $ 680,964 | $ 659,106 |
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 | ||
Minimum | Buildings leases | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Estimated useful lives of the assets | 1 year | ||
Maximum | Buildings leases | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Estimated useful lives of the assets | 10 years | ||
Maximum | Maintenance component | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Estimated useful lives of the assets | 8 years |
Description of the business _12
Description of the business and summary of significant accounting policies - Derivative and non-derivative financial instruments and hedge accounting and Operating segments (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020MXN ($)segment | Dec. 31, 2019segment | Dec. 31, 2018segment | |
Description of the business and summary of significant accounting policies | |||
Number of operating segments | 1 | ||
Number of geographic segments | 2 | 2 | 2 |
Ineffective portion with respect to derivative financial instruments | $ | $ 448.6 |
Description of the business _13
Description of the business and summary of significant accounting policies - Additional details (Details) $ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2020USD ($) | May 31, 2020 | Apr. 30, 2020 | Dec. 31, 2020USD ($)item | Dec. 31, 2020MXN ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
IFRS Statement [Line Items] | |||||||||
Cash and cash equivalents. | $ 506,468 | $ 506,468 | $ 10,103,385 | $ 400,025 | $ 7,979,972 | $ 5,862,942 | $ 6,950,879 | ||
Covid [Member] | |||||||||
IFRS Statement [Line Items] | |||||||||
Maximum Reduction in Available Seat Miles | 90.00% | 80.00% | |||||||
Percentage of Available Seat Miles | 100.00% | ||||||||
Number Of Suppliers With Whom The Entity Negotiated Cost Reductions | item | 360 | ||||||||
Savings Through Cost Reductions And Deferral Agreements With Suppliers | $ | $ 200,000 | $ 200,000 |
Significant accounting judgme_2
Significant accounting judgments, estimates and assumptions (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Significant accounting judgments, estimates and assumptions | |||
Tax loss carry-forwards used | $ 0 | $ 214,460 | $ 154,353 |
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, 2020USD ($) | Dec. 31, 2020MXN ($)gal$ / gal | Dec. 31, 2019MXN ($)gal$ / gal | Dec. 31, 2018MXN ($) | Jun. 30, 2019$ / gal | |
Jet fuel price risk | |||||
Fair value of derivative financial liabilities | $ (9,657) | ||||
Intrinsic value recycled to the fuel cost | 1,271,462 | ||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | $ (1,306,557) | $ (67,629) | $ 455,009 | ||
Jet fuel | |||||
Jet fuel price risk | |||||
Percentage of operating expenses | 28.00% | 28.00% | 38.00% | 38.00% | |
Intrinsic value recycled to the fuel cost | $ 61,069 | ||||
Fuel cost | |||||
Jet fuel price risk | |||||
Intrinsic value recycled to the fuel cost | $ 835,884 | $ 9,477 | $ 9,477 | ||
Finance cost | |||||
Jet fuel price risk | |||||
Intrinsic value recycled to the fuel cost | $ 435,578 | ||||
Jet fuel Asian call options contracts | |||||
Jet fuel price risk | |||||
Notional volume (in gallons) | gal | 23,967 | 13,492 | |||
Fair value of derivative financial assets | $ 206 | $ 0 | |||
Cost of hedging recognized in other comprehensive income | 21,650 | $ (133,567) | 134,096 | ||
Jet fuel Asian call options contracts | Jet fuel | |||||
Jet fuel price risk | |||||
Intrinsic value recycled to the fuel cost | $ 33,627 | $ 402,493 | |||
Jet fuel Asian call options contracts | Within one year | |||||
Jet fuel price risk | |||||
Notional volume (in gallons) | gal | 7,280 | ||||
Strike price agreed rate | $ / gal | 1.90 | ||||
Approximate percentage of hedge (of expected consumption value) | 3.00% | ||||
Jet fuel Asian call options contracts | Within six months | |||||
Jet fuel price risk | |||||
Notional volume (in gallons) | gal | 7,280 | ||||
Strike price agreed rate | $ / gal | 1.90 | ||||
Approximate percentage of hedge (of expected consumption value) | 6.00% | ||||
Jet fuel Asian call options contracts | Fuel cost | Jet fuel | |||||
Jet fuel price risk | |||||
Intrinsic value recycled to the fuel cost | $ 20,646 | ||||
Jet fuel Asian call options contracts | Finance cost | Jet fuel | |||||
Jet fuel price risk | |||||
Intrinsic value recycled to the fuel cost | $ 12,981 | ||||
Jet fuel Zero-Cost collars | |||||
Jet fuel price risk | |||||
Notional volume (in gallons) | gal | 81,646 | 70,136 | |||
Fair value of derivative financial assets | $ 133,567 | ||||
Fair value of derivative financial liabilities | $ (9,657) | ||||
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 | $ 160 | ||||
Effect of downward movement in spot price on accumulated other comprehensive income | $ (160) | ||||
Unwind of Zero cost collar | $ 42,644 | ||||
Jet fuel Zero-Cost collars | Within one year | |||||
Jet fuel price risk | |||||
Notional volume (in gallons) | gal | 7,556 | 56,644 | |||
Approximate percentage of hedge (of expected consumption value) | 3.00% | 20.00% | |||
Jet fuel Zero-Cost collars | Within one year | Jet fuel | Minimum | |||||
Jet fuel price risk | |||||
Strike price agreed rate | $ / gal | 1.23 | 1.6400 | |||
Jet fuel Zero-Cost collars | Within one year | Jet fuel | Maximum | |||||
Jet fuel price risk | |||||
Strike price agreed rate | $ / gal | 1.93 | 1.8200 | |||
Jet fuel Zero-Cost collars | Within six months | |||||
Jet fuel price risk | |||||
Notional volume (in gallons) | gal | 7,556 | 34,480 | |||
Approximate percentage of hedge (of expected consumption value) | 6.00% | 25.00% | |||
Jet fuel Zero-Cost collars | Within six months | Jet fuel | Minimum | |||||
Jet fuel price risk | |||||
Strike price agreed rate | $ / gal | 1.23 | 1.6300 | |||
Jet fuel Zero-Cost collars | Within six months | Jet fuel | Maximum | |||||
Jet fuel price risk | |||||
Strike price agreed rate | $ / gal | 1.93 | 1.8200 | |||
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 | $ / gal | 1.6500 | ||||
Jet fuel Zero-Cost collars | Between six months and one year | Jet fuel | Maximum | |||||
Jet fuel price risk | |||||
Strike price agreed rate | $ / gal | 1.8100 | ||||
All-in | Within one year | |||||
Jet fuel price risk | |||||
Approximate percentage of hedge (of expected consumption value) | 6.00% | 20.00% | |||
All-in | Within six months | |||||
Jet fuel price risk | |||||
Approximate percentage of hedge (of expected consumption value) | 12.00% | 25.00% | |||
All-in | Between six months and one year | |||||
Jet fuel price risk | |||||
Approximate percentage of hedge (of expected consumption value) | 15.00% |
Financial instruments and ris_4
Financial instruments and risk management - Foreign currency risk (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Foreign currency risk | |||
Percentage of total collections denominated in U.S. dollars | 44.00% | 43.00% | 38.00% |
United States of America and Central America | |||
Foreign currency risk | |||
Percentage of revenues | 27.00% | 29.00% | 32.00% |
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 ($)$ / $ | Apr. 29, 2021$ / $ | Dec. 31, 2020$ / $ | Dec. 31, 2020Q / $ | Dec. 31, 2020₡ / $ | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) | |
Assets | ||||||||||||||||
Cash and cash equivalents | $ 506,468,000 | $ 10,103,385 | $ 400,025,000 | $ 7,979,972 | $ 5,862,942 | $ 6,950,879 | ||||||||||
Other accounts receivable, net | 28,104,000 | 560,640 | 923,000 | |||||||||||||
Total assets | 3,418,223,000 | 68,189,113 | 63,295,127 | |||||||||||||
Liabilities | ||||||||||||||||
Financial debt (Note 5) | 5,354,633 | 4,975,969 | 3,523,198 | |||||||||||||
Lease liabilities | 44,130,542 | 40,517,045 | $ 39,565,146 | |||||||||||||
Suppliers | 112,275,000 | 2,239,736 | 1,597,099 | |||||||||||||
Derivative financial instruments | 9,657 | |||||||||||||||
Total liabilities | $ 3,278,055,000 | $ 65,392,928 | $ 57,765,444 | |||||||||||||
Exchange rate | 18.8452 | 19.6829 | 19.9785 | 19.9487 | 7.8095 | 615.7800 | 19.9487 | 7.6988 | 573.4400 | 18.8452 | 7.7440 | 609.6100 | ||||
Unrealized gains relating to the foreign currency forward contracts is included in OCI | $ 14,241 | |||||||||||||||
Net gains on foreign currency forward contacts | $ 4,199 | |||||||||||||||
Net loss on foreign currency forward contract | $ 52,516 | |||||||||||||||
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 | |||||||||||||||
Recognized leasing liabilities, which have been designated as hedging instruments, forecasted revenues over the remaining lease term | 1,500,000,000 | 1,700,000,000 | ||||||||||||||
Recognized financial assets designated under hedging strategy | 60,500,000 | 166,700,000 | ||||||||||||||
Foreign currency | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | 495,612,000 | 373,099,000 | ||||||||||||||
Other accounts receivable, net | 39,997,000 | 23,620,000 | ||||||||||||||
Guarantee deposits | 479,566,000 | 437,499,000 | ||||||||||||||
Derivative financial instruments | 10,000 | 7,088,000 | ||||||||||||||
Total assets | 1,015,185,000 | 841,306,000 | ||||||||||||||
Liabilities | ||||||||||||||||
Financial debt (Note 5) | 183,806,000 | 176,927,000 | ||||||||||||||
Lease liabilities | 2,334,153,000 | 2,263,849,000 | ||||||||||||||
Suppliers | 174,553,000 | 76,471,000 | ||||||||||||||
Other taxes and fees payable | 16,105,000 | 22,486,000 | ||||||||||||||
Derivative financial instruments | 484,000 | |||||||||||||||
Total liabilities | 2,709,101,000 | 2,539,733,000 | ||||||||||||||
Net foreign currency position | $ (1,693,916,000) | $ (1,698,427,000) | ||||||||||||||
Aircraft rental expense | Foreign currency forward contract | ||||||||||||||||
Liabilities | ||||||||||||||||
Percentage of expense hedged | 20.00% |
Financial instruments and ris_6
Financial instruments and risk management - Foreign currency sensitivity (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, entity's own equity instruments [line items] | ||||
Net (loss) income for the period | $ (215,242) | $ (4,293,791) | $ 2,639,063 | $ (942,882) |
Covid [Member] | ||||
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, entity's own equity instruments [line items] | ||||
Net (loss) income for the period | 111 | |||
Comprehensive income | $ 94 | |||
USD | Foreign currency | Fair value | ||||
Disclosure of sensitivity analysis of fair value measurement to changes in unobservable inputs, entity's own equity instruments [line items] | ||||
Percentage of reasonably possible increase in exchange rate | 5.00% | 5.00% | 5.00% | |
Percentage of reasonably possible decrease in exchange rate | (5.00%) | (5.00%) | (5.00%) | |
Effect on profit before tax from reasonably possible increase in exchange rate | $ (253,763) | $ (155,593) | ||
Effect on profit before tax from reasonably possible decrease in exchange rate | $ 253,763 | $ 155,593 |
Financial instruments and ris_7
Financial instruments and risk management - Interest rate risk (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020MXN ($)item | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Interest rate risk | |||
Derivative financial liabilities | $ 9,657 | ||
Loss on cash flow hedges | 1,306,557 | $ 67,629 | $ (455,009) |
Interest rate swap contracts | |||
Interest rate risk | |||
Derivative financial liabilities | $ 326 | $ 2,695 | |
28-day TIIE | |||
Interest rate risk | |||
Spread on interest rate basis | 3.00% | ||
Number of caplets | item | 59 | ||
28-day TIIE | Maximum | |||
Interest rate risk | |||
Spread on interest rate basis | 10.00% |
Financial instruments and ris_8
Financial instruments and risk management - Maturity analysis for financial liabilities (Details) - MXN ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | $ 51,995,295 | |
Within one year | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 8,127,093 | |
Between one year and five years | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 43,868,202 | |
Jet fuel Zero-Cost collars | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 9,657 | |
Jet fuel Zero-Cost collars | Within one year | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 9,657 | |
Lease liabilities | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | $ 47,378,242 | |
Lease liabilities | Within one year | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 7,159,554 | |
Lease liabilities | Between one year and five years | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 40,218,688 | |
Aircraft, engines, land and buildings leases | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 44,130,542 | |
Aircraft, engines, land and buildings leases | Within one year | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 6,484,092 | |
Aircraft, engines, land and buildings leases | Between one year and five years | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 37,646,450 | |
Aircraft, engines, land and buildings leases | Lease liabilities | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 40,517,045 | |
Aircraft, engines, land and buildings leases | Lease liabilities | Within one year | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 4,720,505 | |
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 | 35,796,540 | |
Aircraft and engine lease return obligation | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 2,504,484 | |
Aircraft and engine lease return obligation | Within one year | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 86,801 | |
Aircraft and engine lease return obligation | Between one year and five years | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 2,417,683 | |
Aircraft and engine lease return obligation | Lease liabilities | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 1,852,688 | |
Aircraft and engine lease return obligation | Lease liabilities | Within one year | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 383,093 | |
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 | 1,469,595 | |
Revolving line of credit | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 3,650,612 | 3,308,509 |
Revolving line of credit | Within one year | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 1,096,543 | 1,855,956 |
Revolving line of credit | Between one year and five years | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 2,554,069 | 1,452,553 |
Short-term working capital facilities | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 200,000 | 200,000 |
Short-term working capital facilities | Within one year | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 200,000 | 200,000 |
Asset backed trust notes ("CEBUR"), in Mexican pesos | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 1,500,000 | 1,500,000 |
Asset backed trust notes ("CEBUR"), in Mexican pesos | Within one year | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 250,000 | |
Asset backed trust notes ("CEBUR"), in Mexican pesos | Between one year and five years | ||
Liquidity risk | ||
Contractual principal payments on financial liabilities and derivative financial instruments | $ 1,250,000 | $ 1,500,000 |
Fair value measurements - Carry
Fair value measurements - Carrying amount and fair value (Details) - MXN ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value measurements | ||
Carrying amount of derivative financial assets | $ 532 | $ 136,262 |
Fair value of derivative financial assets | 532 | 136,262 |
Fair value of financial liabilities | (9,657) | |
Net carrying amount | (5,359,737) | (4,872,247) |
Net fair value | (5,536,457) | (5,058,054) |
Transfers of assets from level 1 to level 2 | 0 | |
Transfers of assets from level 2 to level 1 | 0 | |
Transfers of liabilities from level 1 to level 2 | 0 | |
Transfers of liabilities from level 2 to level 1 | 0 | |
Financial debt | ||
Fair value measurements | ||
Carrying amount of financial liabilities | (5,350,612) | (5,008,509) |
Fair value of financial liabilities | (5,527,332) | (5,194,316) |
Interest-bearing loans and borrowings | ||
Fair value measurements | ||
Fair value of financial liabilities | (5,527,332) | (5,194,316) |
Non derivative financial instruments | ||
Fair value measurements | ||
Carrying amount of financial liabilities | (9,657) | |
Fair value of financial liabilities | (9,657) | |
Jet fuel Asian call options contracts | ||
Fair value measurements | ||
Carrying amount of derivative financial assets | 206 | |
Fair value of derivative financial assets | 206 | 133,567 |
Interest rate Cap | ||
Fair value measurements | ||
Fair value of derivative financial assets | 326 | 2,695 |
Level 2 | ||
Fair value measurements | ||
Fair value of financial liabilities | (9,657) | |
Net fair value | (5,536,457) | (5,058,054) |
Level 2 | Interest-bearing loans and borrowings | ||
Fair value measurements | ||
Fair value of financial liabilities | (5,527,332) | (5,194,316) |
Level 2 | Jet fuel Asian call options contracts | ||
Fair value measurements | ||
Fair value of derivative financial assets | 206 | 133,567 |
Level 2 | Interest rate Cap | ||
Fair value measurements | ||
Fair value of derivative financial assets | $ 326 | $ 2,695 |
Fair value measurements - Loss
Fair value measurements - Loss gain from financial instruments (Details) $ in Thousands | 12 Months Ended | ||||||||||||
Dec. 31, 2020USD ($)$ / $ | Dec. 31, 2020MXN ($)$ / $ | Dec. 31, 2019MXN ($)$ / $ | Dec. 31, 2018MXN ($)$ / $ | Apr. 29, 2021$ / $ | Dec. 31, 2020Q / $ | Dec. 31, 2020₡ / $ | Dec. 31, 2020USD ($) | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ | |
gain (loss) on financial instruments | |||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | $ (1,306,557) | $ (67,629) | $ 455,009 | ||||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | $ (87,609,000) | $ (1,747,686) | $ 263,495 | $ (283,691) | |||||||||
Exchange rate | 19.9487 | 19.9487 | 18.8452 | 19.6829 | 19.9785 | 7.8095 | 615.7800 | 19.9487 | 7.6988 | 573.4400 | 18.8452 | 7.7440 | 609.6100 |
Foreign currency forward contract | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | $ (14,241) | $ 14,241 | |||||||||||
Jet fuel Asian call options contracts | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | $ (11,993) | 11,148 | (174,984) | ||||||||||
Jet fuel Zero cost collars | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | (143,224) | 256,515 | (122,948) | ||||||||||
Interest rate Cap | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | (900) | (4,023) | |||||||||||
Non derivative financial instruments | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | (1,591,569) | 14,096 | |||||||||||
Fuel cost | Jet fuel Asian call options contracts | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (20,646) | (61,069) | 402,493 | ||||||||||
Fuel cost | Jet fuel Zero cost collars | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (835,884) | (9,477) | |||||||||||
Finance cost | Jet fuel Asian call options contracts | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (12,981) | ||||||||||||
Finance cost | Jet fuel Zero cost collars | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (435,578) | ||||||||||||
Finance cost | Interest rate Cap | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | $ (1,468) | (1,282) | |||||||||||
Aircraft and engine rent expenses | Foreign currency forward contract | |||||||||||||
gain (loss) on financial instruments | |||||||||||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | $ 4,199 | $ 52,516 |
Financial assets and liabilit_3
Financial assets and liabilities - Financial assets (Details) $ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) |
Financial assets | |||
Total financial assets | $ 532 | $ 136,262 | |
Current | $ 10 | 206 | 133,567 |
Non-current | $ 16 | 326 | 2,695 |
Jet fuel Asian call options contracts | |||
Financial assets | |||
Total financial assets | 206 | ||
Jet fuel Zero-Cost collars | |||
Financial assets | |||
Total financial assets | 133,567 | ||
Interest rate cap | |||
Financial assets | |||
Total financial assets | $ 326 | $ 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, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Jun. 20, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Short-term and long-term debt | ||||||
Amortized transaction costs | $ (22,472) | $ (15,542) | ||||
Accrued interest and other financial cost | 30,061 | 19,563 | ||||
Financial debt without unamortized cost | $ 5,370,175 | |||||
Total financial debt | 4,975,969 | 5,354,633 | $ 3,523,198 | |||
Less: Short-term maturities | 2,086,017 | $ 78,144 | 1,558,884 | 1,212,259 | ||
Long-term | $ 2,889,952 | $ 190,276 | 3,795,749 | $ 2,310,939 | ||
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 | 3.00% | |||||
Within one year | ||||||
Short-term and long-term debt | ||||||
Total financial debt | 1,566,106 | |||||
Between one year and two years | ||||||
Short-term and long-term debt | ||||||
Total financial debt | 3,054,069 | |||||
Between two and three years | ||||||
Short-term and long-term debt | ||||||
Total financial debt | 500,000 | |||||
Between three and four years | ||||||
Short-term and long-term debt | ||||||
Total financial debt | 250,000 | |||||
Revolving line of credit | ||||||
Short-term and long-term debt | ||||||
Financial debt excluding accrued interest | $ 3,308,509 | 3,650,612 | ||||
Total financial debt | $ 3,666,698 | |||||
Interest rate basis | three-month LIBOR plus a spread of 260 basis points | three-month LIBOR plus a spread of 260 basis points | ||||
Spread on interest rate basis | 2.60% | 2.60% | 2.60% | |||
Revolving line of credit | Within one year | ||||||
Short-term and long-term debt | ||||||
Total financial debt | $ 1,112,629 | |||||
Revolving line of credit | Between one year and two years | ||||||
Short-term and long-term debt | ||||||
Total financial debt | 2,554,069 | |||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | ||||||
Short-term and long-term debt | ||||||
Financial debt | $ 1,500,000 | $ 1,459,871 | ||||
Total financial debt | $ 1,502,605 | |||||
Spread on interest rate basis | 1.75% | |||||
Nominal amount of working capital facility (in USD) | $ 1,500,000 | |||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | 28-day TIIE | ||||||
Short-term and long-term debt | ||||||
Interest rate basis | TIIE 28 days plus 175 basis points | TIIE 28 days plus 175 basis points | ||||
Spread on interest rate basis | 1.75% | 1.75% | 1.75% | |||
Asset backed trust notes ("CEBUR"), in Mexican pesos | Within one year | ||||||
Short-term and long-term debt | ||||||
Total financial debt | $ 252,605 | |||||
Asset backed trust notes ("CEBUR"), in Mexican pesos | Between one year and two years | ||||||
Short-term and long-term debt | ||||||
Total financial debt | 500,000 | |||||
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 | 250,000 | |||||
Short-term working capital facility with Banco Sabadell S.A. | ||||||
Short-term and long-term debt | ||||||
Financial debt excluding accrued interest | $ 200,000 | 200,000 | ||||
Total financial debt | $ 200,872 | |||||
Interest rate basis | TIIE 28 days plus a 300 basis points | TIIE 28 days plus a 300 basis points | ||||
Spread on interest rate basis | 300.00% | 300.00% | ||||
Short-term working capital facility with Banco Sabadell S.A. | Within one year | ||||||
Short-term and long-term debt | ||||||
Total financial debt | $ 200,872 | |||||
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 ($)item | Dec. 31, 2020MXN ($)aircraft | Dec. 31, 2019MXN ($)aircraft | Dec. 31, 2018MXN ($)aircraft |
Aircraft financing | ||||
Number of aircraft incorporated to fleet | aircraft | 7 | 7 | 10 | |
Notes issued | $ 1,500,000 | |||
Authorized amount under the program | $ 3,000,000 | |||
Maturity of notes | 5 years | |||
Financial liabilities | $ 5,354,633 | $ 4,975,969 | $ 3,523,198 | |
Revolving line of credit | ||||
Aircraft financing | ||||
Basis points | 2.60% | 2.60% | ||
Financial liabilities | $ 3,666,698 | |||
Asset backed trust notes ("CEBUR"), in Mexican pesos | ||||
Aircraft financing | ||||
Number of notes issued | item | 15,000,000 | |||
Notes issued | $ 1,500,000 | |||
Authorized amount under the program | $ 3,000,000 | |||
Maturity of notes | 5 years | |||
Basis points | 1.75% | |||
Financial liabilities | $ 1,502,605 | |||
Short-term working capital facility with Banco Sabadell S.A. | ||||
Aircraft financing | ||||
Basis points | 300.00% | |||
Financial liabilities | $ 200,872 | |||
Within one year | ||||
Aircraft financing | ||||
Financial liabilities | 1,566,106 | |||
Within one year | Revolving line of credit | ||||
Aircraft financing | ||||
Financial liabilities | 1,112,629 | |||
Within one year | Asset backed trust notes ("CEBUR"), in Mexican pesos | ||||
Aircraft financing | ||||
Financial liabilities | 252,605 | |||
Within one year | Short-term working capital facility with Banco Sabadell S.A. | ||||
Aircraft financing | ||||
Financial liabilities | 200,872 | |||
Between one year and two years | ||||
Aircraft financing | ||||
Financial liabilities | 3,054,069 | |||
Between one year and two years | Revolving line of credit | ||||
Aircraft financing | ||||
Financial liabilities | 2,554,069 | |||
Between one year and two years | Asset backed trust notes ("CEBUR"), in Mexican pesos | ||||
Aircraft financing | ||||
Financial liabilities | 500,000 | |||
Between two and three years | ||||
Aircraft financing | ||||
Financial liabilities | 500,000 | |||
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 | 250,000 | |||
Between three and four years | Asset backed trust notes ("CEBUR"), in Mexican pesos | ||||
Aircraft financing | ||||
Financial liabilities | $ 250,000 | |||
28-day TIIE | ||||
Aircraft financing | ||||
Basis points | 3.00% | |||
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% | 1.75% | ||
28-day TIIE | Minimum | ||||
Aircraft financing | ||||
Debt service coverage ratio | 2.50 | |||
28-day TIIE | Maximum | ||||
Aircraft financing | ||||
Basis points | 10.00% |
Financial assets and liabilit_6
Financial assets and liabilities - Line of credit (Details) - MXN ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financial assets and liabilities | ||
Total available credit lines | $ 9,256,978 | $ 9,005,008 |
Available credit lines related to letters of credit | 2,405,640 | 2,355,650 |
Available credit lines related to financial debt | 6,851,338 | 6,649,358 |
Undrawn credit of financial debt | 1,500,726 | 1,640,849 |
Undrawn credit of letters of credit | $ 214,012 | $ 86,066 |
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, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | |
Financial assets and liabilities | |||
Net cash flows, current | $ (1,231,695) | $ (633,609) | |
Net cash flows, non-current | 1,374,678 | 2,273,143 | |
Net cash flows, total | 142,983 | 1,639,534 | |
Accrued Interest, Current | (10,498) | 13,698 | |
Accrued interest | (10,498) | 13,698 | |
Foreign exchange movement, current | (32,491) | (41,173) | |
Foreign exchange movement, non-current | 231,612 | (122,466) | |
Foreign exchange movement, total | 199,121 | (163,639) | |
Reclassification and other, current | 747,551 | 1,534,842 | |
Reclassification and other, non-current | (747,551) | (1,534,842) | |
Other, Non current | 47,058 | (36,822) | |
Other, Total | 47,058 | (36,822) | |
Current interest-bearing loans and borrowings, end of the year | $ 78,144 | 1,558,884 | 2,086,017 |
Non-current interest-bearing loans and borrowings, end of the year | $ 190,276 | 3,795,749 | 2,889,952 |
Total liabilities from financing activities, end of the year | $ 5,354,633 | $ 4,975,969 |
Financial assets and liabilit_8
Financial assets and liabilities - Other financial liabilities (Details) - Dec. 31, 2020 $ in Thousands, $ in Thousands | USD ($) | MXN ($) |
Other financial liabilities | ||
Total financial liabilities | $ 9,657 | |
Current | $ 484 | 9,657 |
Zero cost collar options | ||
Other financial liabilities | ||
Total financial liabilities | $ 9,657 |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) $ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2017MXN ($) |
Cash and cash equivalents | ||||||
Short-term investments | $ 3,068,618 | $ 3,231,125 | ||||
Cash in banks | 6,907,295 | 4,612,927 | ||||
Cash on hand | 36,432 | 44,880 | ||||
Restricted funds held in trust related to debt service reserves | 91,040 | 91,040 | ||||
Total cash and cash equivalents | $ 506,468 | $ 10,103,385 | $ 400,025 | $ 7,979,972 | $ 5,862,942 | $ 6,950,879 |
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, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | |
Disclosure of transactions between related parties | |||
Due from related parties | $ 3,641 | $ 72,629 | $ 23,442 |
Due to related parties | 124,993 | 58,554 | |
Frontier Airlines Inc | |||
Disclosure of transactions between related parties | |||
Due from related parties | 72,629 | 23,442 | |
Due to related parties | 39 | 16,246 | |
Term | 30 days | ||
One Link, S.A. de C.V. | |||
Disclosure of transactions between related parties | |||
Due to related parties | 0 | 39,838 | |
Term | 30 days | ||
Grupo Aeroportuario del Centro Norte | |||
Disclosure of transactions between related parties | |||
Due to related parties | 80,681 | ||
Term | 30 days | ||
Aeromantenimiento, S.A. | |||
Disclosure of transactions between related parties | |||
Due to related parties | 39,284 | 1,474 | |
Term | 30 days | ||
Chevez, Ruiz, Zamarripa y Ca., S.C | |||
Disclosure of transactions between related parties | |||
Due to related parties | 4,823 | ||
Term | 30 days | ||
Mijares, Angoitia, Corts y Fuentes, S.C. | |||
Disclosure of transactions between related parties | |||
Due to related parties | $ 166 | $ 996 | |
Term | 30 days |
Related parties - Transactions
Related parties - Transactions with related parties (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of transactions between related parties | |||
Guarantees provided | $ 0 | $ 0 | |
guarantees received | 0 | 0 | |
Provision for expected credit losses | 0 | 0 | |
Frontier Airlines Inc | |||
Disclosure of transactions between related parties | |||
Code-share | 148,964 | 208,968 | $ 8,358 |
Aeromantenimiento, S.A. | |||
Disclosure of transactions between related parties | |||
Aircraft and engine maintenance | 239,118 | 201,624 | 341,726 |
Technical support | 3,945 | 5,815 | 4,796 |
One Link, S.A. de C.V. | |||
Disclosure of transactions between related parties | |||
Call center fees and other professional fees | 73,167 | 37,026 | |
Mijares, Angoitia, Corts y Fuentes, S.C. | |||
Disclosure of transactions between related parties | |||
Professional fees | 5,582 | 1,321 | 1,672 |
Grupo Aeroportuario del Centro Norte | |||
Disclosure of transactions between related parties | |||
Airport service | 32,193 | ||
Chevez, Ruiz, Zamarripa y Ca., S.C | |||
Disclosure of transactions between related parties | |||
Professional fees | 4,823 | ||
Servprot S.A. de C.V. | |||
Disclosure of transactions between related parties | |||
Security service | $ 3,464 | $ 3,120 | 2,804 |
Human Capital International | |||
Disclosure of transactions between related parties | |||
Professional fees | $ 324 |
Related parties - Other informa
Related parties - Other information (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2020MXN ($) | |
Disclosure of transactions between related parties | |||||
Balances due under the agreement | $ 58,554 | $ 124,993 | |||
Due from related parties | $ 3,641 | 23,442 | 72,629 | ||
Aggregate compensation of short and long-term benefits | $ 173,113 | $ 3,453,382 | 3,600,762 | $ 3,125,393 | |
Expense (benefit) arising from cash-settled share-based payments transactions | 40,724 | (5,238) | |||
Expense arising from cash-settled share-based payments transactions | 105,303 | ||||
Servprot S.A. de C.V. | |||||
Disclosure of transactions between related parties | |||||
Security services expenses | $ 3,464 | 3,120 | 2,804 | ||
Aeromantenimiento, S.A. | |||||
Disclosure of transactions between related parties | |||||
Agreement term | 5 years | 5 years | |||
Balances due under the agreement | 1,474 | 39,284 | |||
Aircraft, engine maintenance and technical support | $ 243,063 | 207,439 | 346,522 | ||
Human Capital International | |||||
Disclosure of transactions between related parties | |||||
Balances due under the agreement | 0 | ||||
Professional services expenses | 324 | ||||
One Link, S.A. de C.V. | |||||
Disclosure of transactions between related parties | |||||
Balances due under the agreement | 39,838 | 0 | |||
Expenses under the agreement | 73,167 | 37,026 | 0 | ||
Mijares, Angoitia, Corts y Fuentes | |||||
Disclosure of transactions between related parties | |||||
Balances due under the agreement | 996 | 166 | |||
Expenses under the agreement | 5,582 | 1,321 | 1,672 | ||
Frontier Airlines Inc | |||||
Disclosure of transactions between related parties | |||||
Balances due under the agreement | 16,246 | 39 | |||
Due from related parties | 23,442 | 72,629 | |||
Revenue under this agreement | 148,964 | 208,968 | 8,358 | ||
Directors and officers | |||||
Disclosure of transactions between related parties | |||||
Share-based payments transactions | 75,040 | 49,659 | 19,980 | ||
Expense (benefit) arising from cash-settled share-based payments transactions | 40,724 | (5,238) | |||
Expense arising from cash-settled share-based payments transactions | 105,303 | ||||
Provision for cash bonuses | 80,634 | 50,000 | 0 | ||
Chairman and independent members of the board of directors | |||||
Disclosure of transactions between related parties | |||||
Aggregate compensation of short and long-term benefits | 5,762 | 8,085 | 7,178 | ||
Rest of the directors | |||||
Disclosure of transactions between related parties | |||||
Aggregate compensation of short and long-term benefits | 3,692 | 4,367 | 5,217 | ||
Senior managers | |||||
Disclosure of transactions between related parties | |||||
Aggregate compensation of short and long-term benefits | 253,681 | $ 237,846 | $ 180,001 | ||
Grupo Aeroportuario del Centro Norte | |||||
Disclosure of transactions between related parties | |||||
Balances due under the agreement | 80,681 | ||||
Account payable | 80,681 | ||||
Amount expensed | 32,193 | ||||
Chevez, Ruiz, Zamarripa y Ca., S.C | |||||
Disclosure of transactions between related parties | |||||
Balances due under the agreement | 4,823 | ||||
Account payable | $ 4,823 | ||||
Amount expensed | $ 4,823 |
Other accounts receivable, ne_2
Other accounts receivable, net (Details) - MXN ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Other accounts receivable, net | ||||
Credit cards | $ 231,260 | $ 389,634 | ||
Benefits from suppliers | 105,947 | 26,989 | ||
Other accounts receivable | 87,204 | 189,904 | ||
Other points of sales | 67,315 | 102,002 | ||
Cargo clients | 45,201 | 46,600 | ||
Employees | 36,287 | 29,681 | ||
Travel agencies and insurance commissions | 16,099 | 76,975 | ||
Marketing services receivable | 4,020 | 7,024 | ||
Airport services | 15 | 42,894 | ||
Affinity credit card | 49,040 | |||
Settlement receivable | 2,422 | |||
Insurance claims | 143 | |||
Other current accounts receivable, gross | 593,348 | 963,308 | ||
Allowance for credit losses | (32,708) | (40,308) | $ (11,304) | $ (17,809) |
Other accounts receivable, net | $ 560,640 | $ 923,000 |
Other accounts receivable, ne_3
Other accounts receivable, net - Aging of accounts receivable (Details) - MXN ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable aging | ||||
Impaired accounts receivable | $ 32,708 | $ 40,308 | $ 11,304 | $ 17,809 |
Not impaired accounts receivable | 560,640 | 923,000 | ||
Total accounts receivable | 593,348 | 963,308 | ||
0-30 Days | ||||
Accounts receivable aging | ||||
Impaired accounts receivable | 4,090 | 5,804 | ||
Not impaired accounts receivable | 486,001 | 722,651 | ||
Total accounts receivable | 490,091 | 728,455 | ||
31-60 Days | ||||
Accounts receivable aging | ||||
Not impaired accounts receivable | 13,872 | 64,983 | ||
Total accounts receivable | 13,872 | 64,983 | ||
61-90 Days | ||||
Accounts receivable aging | ||||
Not impaired accounts receivable | 6,081 | 19,274 | ||
Total accounts receivable | 6,081 | 19,274 | ||
91-120 Days | ||||
Accounts receivable aging | ||||
Impaired accounts receivable | 28,618 | 34,504 | ||
Not impaired accounts receivable | 54,686 | 116,092 | ||
Total accounts receivable | $ 83,304 | $ 150,596 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other accounts receivable, net | |||
Balance as of beginning of the year | $ (40,308) | $ (11,304) | $ (17,809) |
Write-offs | 21,264 | 11,389 | 17,126 |
Increase in allowance | (13,664) | (40,393) | (10,621) |
Balance as of end of the year | $ (32,708) | $ (40,308) | $ (11,304) |
Inventories (Details)
Inventories (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | |
Inventories | |||||
Spare parts and accessories of flight equipment | $ 294,390 | $ 271,454 | |||
Miscellaneous supplies | 7,518 | 7,505 | |||
Total | 301,908 | $ 13,984 | $ 278,959 | ||
Consumption of inventories included in maintenance expense | $ 234,691 | $ 284,687 | $ 290,206 |
Prepaid expenses and other cu_3
Prepaid expenses and other current assets (Details) $ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) |
Prepaid expenses and other current assets | |||
Flight credits | $ 389,927 | ||
Advances to suppliers | 163,044 | $ 283,340 | |
Sales commission to travel agencies | 151,342 | 84,239 | |
Other prepaid expenses | 81,803 | 115,054 | |
Prepaid insurance | 64,309 | 88,941 | |
Advances to components suppliers | 209,557 | ||
Total | $ 42,631 | $ 850,425 | $ 781,131 |
Guarantee deposits (Details)
Guarantee deposits (Details) $ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) |
Current assets: | |||
Credit letters deposits | $ 829,918 | ||
Aircraft maintenance deposits paid to lessors | 279,390 | $ 576,505 | |
Deposits for rental of flight equipment | 23,584 | ||
Other guarantee deposits | 9,064 | 23,822 | |
Total | $ 57,245 | 1,141,956 | 600,327 |
Non-current assets: | |||
Aircraft maintenance deposits paid to lessors | 7,641,544 | 7,047,360 | |
Deposits for rental of flight equipment | 741,871 | 557,530 | |
Other guarantee deposits | 41,323 | 39,531 | |
Total | $ 422,320 | 8,424,738 | 7,644,421 |
Total guarantee deposits | $ 9,566,694 | $ 8,244,748 |
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, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2017MXN ($) | |
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | $ 7,385,334 | $ 364,994 | $ 7,281,157 | $ 5,782,282 | ||
Capitalized borrowing costs | $ 384,038 | 456,313 | $ 357,920 | |||
Disposals of capitalized borrowing costs | $ 401,862 | 328,571 | $ 242,678 | |||
Leasehold improvements to flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 1,540,788 | 1,737,883 | 1,214,589 | |||
Pre-delivery payments | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 4,507,770 | 4,920,126 | 3,672,090 | |||
Flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 733,250 | 465,913 | 664,322 | |||
Aircraft Spare engines | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 54,771 | 52,984 | ||||
Construction and improvements in process | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 474,240 | 53,545 | 142,738 | |||
Constructions and improvements | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 40,950 | 27,016 | 15,235 | |||
Computer equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 13,071 | 7,819 | 16,547 | |||
Workshop tools | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 4,852 | 3,329 | 3,369 | |||
Electric power equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 9,012 | 7,675 | 5,122 | |||
Communications equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 5,777 | 5,765 | 4,911 | |||
Workshop machinery and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 10,209 | 12,933 | 4,481 | |||
Motorized transport equipment platform | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 9,634 | 7,323 | 446 | |||
Service carts on board | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 2,121 | 3,104 | 126 | |||
Office furniture and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 36,660 | 31,726 | $ 38,306 | |||
Allowance for obsolescence | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 3,000 | 3,000 | ||||
Gross value | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 10,877,907 | 12,152,595 | ||||
Gross value | Leasehold improvements to flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 4,220,672 | 5,092,049 | ||||
Gross value | Pre-delivery payments | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 4,507,770 | 4,920,126 | ||||
Gross value | Flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 1,287,102 | 1,689,473 | ||||
Gross value | Construction and improvements in process | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 474,240 | 53,545 | ||||
Gross value | Constructions and improvements | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 172,460 | 175,407 | ||||
Gross value | Computer equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 47,566 | 49,945 | ||||
Gross value | Workshop tools | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 26,875 | 27,727 | ||||
Gross value | Electric power equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 20,412 | 20,448 | ||||
Gross value | Communications equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 14,099 | 14,803 | ||||
Gross value | Workshop machinery and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 16,301 | 20,574 | ||||
Gross value | Motorized transport equipment platform | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 15,026 | 15,247 | ||||
Gross value | Service carts on board | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 7,675 | 9,216 | ||||
Gross value | Office furniture and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 70,709 | 67,035 | ||||
Gross value | Allowance for obsolescence | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | 3,000 | 3,000 | ||||
Accumulated depreciation / amortization | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (3,492,573) | (4,871,438) | ||||
Accumulated depreciation / amortization | Leasehold improvements to flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (2,679,884) | (3,354,166) | ||||
Accumulated depreciation / amortization | Flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (553,852) | (1,223,560) | ||||
Accumulated depreciation / amortization | Constructions and improvements | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (131,510) | (148,391) | ||||
Accumulated depreciation / amortization | Computer equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (34,495) | (42,126) | ||||
Accumulated depreciation / amortization | Workshop tools | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (22,023) | (24,398) | ||||
Accumulated depreciation / amortization | Electric power equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (11,400) | (12,773) | ||||
Accumulated depreciation / amortization | Communications equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (8,322) | (9,038) | ||||
Accumulated depreciation / amortization | Workshop machinery and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (6,092) | (7,641) | ||||
Accumulated depreciation / amortization | Motorized transport equipment platform | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (5,392) | (7,924) | ||||
Accumulated depreciation / amortization | Service carts on board | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | (5,554) | (6,112) | ||||
Accumulated depreciation / amortization | Office furniture and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net (Note 12) | $ (34,049) | $ (35,309) |
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, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | $ 7,385,334 | $ 5,782,282 | ||
Additions | 3,682,005 | $ 3,310,803 | ||
Disposals and transfers | (2,971,631) | (1,247,357) | ||
Borrowing costs, net | (17,822) | 127,742 | ||
Other movements | 1,098 | (287) | ||
Depreciation | (797,827) | (587,849) | (427,756) | |
Balance at end of the year | $ 364,994 | 7,281,157 | 7,385,334 | |
Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 10,877,907 | |||
Balance at end of the year | 12,152,595 | 10,877,907 | ||
Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (3,492,573) | |||
Balance at end of the year | (4,871,438) | (3,492,573) | ||
Aircraft Spare engines | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 54,771 | |||
Depreciation | (5,946) | (1,787) | ||
Balance at end of the year | 52,984 | 54,771 | ||
Flight equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 733,250 | 664,322 | ||
Additions | 668,376 | 692,186 | ||
Disposals and transfers | (861,761) | (538,370) | ||
Depreciation | (73,952) | (84,888) | ||
Balance at end of the year | 465,913 | 733,250 | ||
Flight equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 1,287,102 | |||
Balance at end of the year | 1,689,473 | 1,287,102 | ||
Flight equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (553,852) | |||
Balance at end of the year | (1,223,560) | (553,852) | ||
Constructions and improvements | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 40,950 | 15,235 | ||
Additions | 128 | 5,596 | ||
Other movements | 2,317 | 34,840 | ||
Depreciation | (16,379) | (14,721) | ||
Balance at end of the year | 27,016 | 40,950 | ||
Constructions and improvements | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 172,460 | |||
Balance at end of the year | 175,407 | 172,460 | ||
Constructions and improvements | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (131,510) | |||
Balance at end of the year | (148,391) | (131,510) | ||
Computer equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 13,071 | 16,547 | ||
Additions | 1,648 | 1,730 | ||
Disposals and transfers | (131) | |||
Other movements | 713 | 1,999 | ||
Depreciation | (7,613) | (7,074) | ||
Balance at end of the year | 7,819 | 13,071 | ||
Computer equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 47,566 | |||
Balance at end of the year | 49,945 | 47,566 | ||
Computer equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (34,495) | |||
Balance at end of the year | (42,126) | (34,495) | ||
Office furniture and equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 36,660 | 38,306 | ||
Additions | 733 | 1,461 | ||
Disposals and transfers | (10) | |||
Other movements | 101 | 2,757 | ||
Depreciation | (5,768) | (5,854) | ||
Balance at end of the year | 31,726 | 36,660 | ||
Office furniture and equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 70,709 | |||
Balance at end of the year | 67,035 | 70,709 | ||
Office furniture and equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (34,049) | |||
Balance at end of the year | (35,309) | (34,049) | ||
Electric power equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 9,012 | 5,122 | ||
Additions | 2,487 | |||
Other movements | 36 | 2,487 | ||
Depreciation | (1,373) | (1,084) | ||
Balance at end of the year | 7,675 | 9,012 | ||
Electric power equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 20,412 | |||
Balance at end of the year | 20,448 | 20,412 | ||
Electric power equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (11,400) | |||
Balance at end of the year | (12,773) | (11,400) | ||
Workshop tools | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 4,852 | 3,369 | ||
Additions | 851 | 3,137 | ||
Other movements | 284 | |||
Depreciation | (2,374) | (1,938) | ||
Balance at end of the year | 3,329 | 4,852 | ||
Workshop tools | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 26,875 | |||
Balance at end of the year | 27,727 | 26,875 | ||
Workshop tools | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (22,023) | |||
Balance at end of the year | (24,398) | (22,023) | ||
Motorized transport equipment platform | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 9,634 | 446 | ||
Other movements | 222 | 9,529 | ||
Depreciation | (2,533) | (341) | ||
Balance at end of the year | 7,323 | 9,634 | ||
Motorized transport equipment platform | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 15,026 | |||
Balance at end of the year | 15,247 | 15,026 | ||
Motorized transport equipment platform | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (5,392) | |||
Balance at end of the year | (7,924) | (5,392) | ||
Communications equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 5,777 | 4,911 | ||
Additions | 355 | |||
Disposals and transfers | (2) | |||
Other movements | 1,083 | 1,446 | ||
Depreciation | (1,095) | (933) | ||
Balance at end of the year | 5,765 | 5,777 | ||
Communications equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 14,099 | |||
Balance at end of the year | 14,803 | 14,099 | ||
Communications equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (8,322) | |||
Balance at end of the year | (9,038) | (8,322) | ||
Workshop machinery and equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 10,209 | 4,481 | ||
Additions | 4,278 | |||
Disposals and transfers | (35) | |||
Other movements | 4,273 | 2,529 | ||
Depreciation | (1,549) | (1,044) | ||
Balance at end of the year | 12,933 | 10,209 | ||
Workshop machinery and equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 16,301 | |||
Balance at end of the year | 20,574 | 16,301 | ||
Workshop machinery and equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (6,092) | |||
Balance at end of the year | (7,641) | (6,092) | ||
Service carts on board | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 2,121 | 126 | ||
Additions | 1,541 | 2,273 | ||
Depreciation | (558) | (278) | ||
Balance at end of the year | 3,104 | 2,121 | ||
Service carts on board | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 7,675 | |||
Balance at end of the year | 9,216 | 7,675 | ||
Service carts on board | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (5,554) | |||
Balance at end of the year | (6,112) | (5,554) | ||
Allowance for obsolescence [Member] | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 3,000 | |||
Additions | (3,000) | |||
Balance at end of the year | 3,000 | 3,000 | ||
Allowance for obsolescence [Member] | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 3,000 | |||
Balance at end of the year | 3,000 | 3,000 | ||
Pre-delivery payments | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 4,507,770 | 3,672,090 | ||
Additions | 2,185,902 | 1,412,790 | ||
Disposals and transfers | (1,755,724) | (704,852) | ||
Borrowing costs, net | (17,822) | 127,742 | ||
Balance at end of the year | 4,920,126 | 4,507,770 | ||
Pre-delivery payments | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 4,507,770 | |||
Balance at end of the year | 4,920,126 | 4,507,770 | ||
Construction and improvements in process | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 474,240 | 142,738 | ||
Additions | 176,607 | 525,556 | ||
Disposals and transfers | (354,146) | (3,957) | ||
Other movements | (243,156) | (190,097) | ||
Balance at end of the year | 53,545 | 474,240 | ||
Construction and improvements in process | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 474,240 | |||
Balance at end of the year | 53,545 | 474,240 | ||
Leasehold improvements to flight equipment | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 1,540,788 | $ 1,214,589 | ||
Additions | 646,219 | 661,954 | ||
Other movements | 235,509 | 133,939 | ||
Depreciation | (684,633) | (469,694) | ||
Balance at end of the year | 1,737,883 | 1,540,788 | ||
Leasehold improvements to flight equipment | Gross value | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | 4,220,672 | |||
Balance at end of the year | 5,092,049 | 4,220,672 | ||
Leasehold improvements to flight equipment | Accumulated depreciation / amortization | ||||
Rotable spare parts, furniture and equipment, net | ||||
Balance at beginning of the year | (2,679,884) | |||
Balance at end of the year | $ (3,354,166) | $ (2,679,884) |
Rotable spare parts, furnitur_5
Rotable spare parts, furniture and equipment, net - Additional Information (Details) $ in Thousands, $ in Thousands | Aug. 16, 2013engine | Nov. 30, 2018itemaircraft | Nov. 30, 2015engine | Dec. 31, 2020USD ($)aircraft | Dec. 31, 2020MXN ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($)aircraft | Dec. 31, 2017USD ($) | Dec. 31, 2017MXN ($) | Dec. 31, 2011aircraft | Dec. 31, 2020MXN ($)aircraft |
Rotable spare parts, furniture and equipment, net | ||||||||||||
Depreciation expense | $ | $ 797,827 | $ 587,849 | $ 427,756 | |||||||||
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 | $ | 4,878 | $ 4,878 | ||||||||||
Number of aircraft to be delivered | item | 26 | |||||||||||
Amounts paid for aircraft and spare engines | $ 169,263 | 3,376,576 | 3,483,368 | 2,743,155 | ||||||||
Total number of aircraft to be delivered | 96 | 96 | ||||||||||
Gain (loss) on sale and leaseback | $ | $ 710,522 | 284,759 | 609,168 | |||||||||
Term of aircraft delivery agreement | 8 years | 8 years | ||||||||||
Carrying amount of remaining owned aircraft | $ 364,994 | 7,385,334 | 5,782,282 | $ 7,281,157 | ||||||||
Between one year and two years | ||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||
Total number of aircraft to be delivered | 4 | 4 | ||||||||||
Between two and three years | ||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||
Total number of aircraft to be delivered | 12 | 12 | ||||||||||
Between three and four years | ||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||
Total number of aircraft to be delivered | 3 | 3 | ||||||||||
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 | 15 | 15 | ||||||||||
Between six and seven years | ||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||
Total number of aircraft to be delivered | 25 | 25 | ||||||||||
Between seven and eight years | ||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||
Total number of aircraft to be delivered | 11 | 11 | ||||||||||
Between eight and nine years | ||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||
Total number of aircraft to be delivered | 13 | 13 | ||||||||||
Lufthansa Technik AG - December 2016 Agreement | ||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||
Credit notes received | $ 1,500 | $ 28,110 | ||||||||||
Accumulated amortization of credit notes | $ | 5,230 | $ 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 | 44 | ||||||||||
A320CEO model | ||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||
Number of aircraft purchased | 14 | |||||||||||
Number of engines purchased | engine | 14 | |||||||||||
Number of spare engines purchased | engine | 1 | |||||||||||
A320NEO model | ||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||
Number of aircraft purchased | 46 | 30 | ||||||||||
Number of engines purchased | engine | 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 | |||||||||||
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 | $ 102,700 | $ 2,185,902 | $ 75,000 | 1,412,790 | ||||||||
Carrying amount of remaining owned aircraft | $ | 4,507,770 | $ 3,672,090 | 4,920,126 | |||||||||
Aircraft Spare engines | ||||||||||||
Rotable spare parts, furniture and equipment, net | ||||||||||||
Depreciation expense | $ | $ 5,946 | 1,787 | ||||||||||
Carrying amount of remaining owned aircraft | $ | $ 54,771 | $ 52,984 |
Intangible assets, net (Details
Intangible assets, net (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Composition and movement of intangible assets | ||||
Beginning balance | $ 167,397 | |||
Ending balance | $ 9,603 | 191,562 | $ 167,397 | |
Software | ||||
Composition and movement of intangible assets | ||||
Beginning balance | 167,397 | 179,124 | ||
Additions | 124,724 | 77,325 | ||
Amortization | (100,618) | (87,667) | ||
Exchange differences | 59 | (1,385) | ||
Ending balance | 191,562 | 167,397 | $ 179,124 | |
Amortization expense | 100,618 | 87,667 | $ 72,885 | |
Software | Gross value | ||||
Composition and movement of intangible assets | ||||
Beginning balance | 579,360 | |||
Ending balance | 704,257 | 579,360 | ||
Software | Accumulated depreciation / amortization | ||||
Composition and movement of intangible assets | ||||
Beginning balance | (411,963) | |||
Ending balance | $ (512,695) | $ (411,963) | ||
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 - Fleet and spare engine
Leases - Fleet and spare engines (Details) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2015engine | Dec. 31, 2020agreementengineaircraft | Dec. 31, 2019agreementengineaircraft | Dec. 31, 2018agreementengineaircraft | |
Leases | ||||
Number of aircraft leased | 85 | 81 | ||
Number of spare engines leased | engine | 18 | 14 | ||
Number of aircraft incorporated to fleet | 7 | 7 | 10 | |
Number of aircraft with lease term extended | agreement | 2 | 1 | 2 | |
Number of spare engines purchased | engine | 3 | |||
Airbus purchase agreement | ||||
Leases | ||||
Number of aircraft purchased | 7 | |||
Number of aircraft incorporated to fleet | 7 | |||
Number of aircraft returned to respective lessors | 3 | |||
Sale and Leaseback Transactions | ||||
Leases | ||||
Number of aircraft purchased | 7 | 10 | ||
Number of aircrafts purchased directly from lessor | 4 | |||
Number of aircraft incorporated to fleet | 7 | |||
Number of aircraft returned to respective lessors | 4 | |||
Number of aircraft with lease term extended | engine | 1 | |||
Number of aircraft spare engines with lease term extended | 2 | |||
Number of spare engines returned | engine | 2 | |||
Pratt and Whitney purchase agreement (FMP) | ||||
Leases | ||||
Number of NEO spare engines incorporated to fleet | engine | 2 | 2 | 2 | |
Number of CEO spare engines incorporated to fleet | engine | 2 | 2 | ||
Number of aircraft spare engines to be leased | engine | 4 | 4 | ||
Number of spare engines with lease term extended | engine | 1 | |||
A319 Model 132 | ||||
Leases | ||||
Number of aircraft leased | 3 | 3 | ||
A319 Model 133 | ||||
Leases | ||||
Number of aircraft leased | 2 | 4 | ||
A320 Model 233 | ||||
Leases | ||||
Number of aircraft leased | 39 | 39 | ||
A320 Model 232 | ||||
Leases | ||||
Number of aircraft leased | 1 | 2 | ||
A320NEO Model 271N | ||||
Leases | ||||
Number of aircraft leased | 24 | 17 | ||
A320NEO Model 271N | Sale and Leaseback Transactions | ||||
Leases | ||||
Number of aircraft purchased | 3 | |||
Number of aircraft incorporated to fleet | 3 | |||
A321 Model 231 | ||||
Leases | ||||
Number of aircraft leased | 10 | 10 | ||
A321NEO Model 271N | ||||
Leases | ||||
Number of aircraft leased | 6 | 6 | ||
V2500 Model V2524-A5 | ||||
Leases | ||||
Number of spare engines leased | engine | 2 | 2 | ||
V2500 Model V2527M-A5 | ||||
Leases | ||||
Number of spare engines leased | engine | 3 | 3 | ||
V2500 Model V2527E-A5 | ||||
Leases | ||||
Number of spare engines leased | engine | 5 | 3 | ||
V2500 Model V2527-A5 | ||||
Leases | ||||
Number of spare engines leased | engine | 2 | 2 | ||
PW1100 Model PW1127G-JM | ||||
Leases | ||||
Number of spare engines leased | engine | 5 | 3 | ||
PW1100 Model PW1133G-JM engine | ||||
Leases | ||||
Number of spare engines leased | engine | 1 | 1 |
Leases - Carrying amounts of ri
Leases - Carrying amounts of right-of use assets (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Balance at the beginning | $ 34,128,766 | $ 31,882,053 | ||
Additions | 5,253,374 | 6,949,684 | ||
Disposals | (17,742) | |||
Foreign exchange effect | 795 | |||
Depreciation on right of use assets | $ (253,098) | (5,048,976) | (4,702,971) | $ (4,043,691) |
Balance at the end | $ 1,720,223 | 34,316,217 | 34,128,766 | 31,882,053 |
Flight equipment | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Balance at the beginning | 33,312,089 | 31,126,169 | ||
Additions | 4,876,071 | 6,676,492 | ||
Disposals | (17,742) | |||
Depreciation on right of use assets | (4,763,928) | (4,490,572) | ||
Balance at the end | 33,406,490 | 33,312,089 | 31,126,169 | |
Aircraft Spare engines | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Balance at the beginning | 677,198 | 579,696 | ||
Additions | 362,081 | 230,200 | ||
Depreciation on right of use assets | (210,079) | (132,698) | ||
Balance at the end | 829,200 | 677,198 | 579,696 | |
Land and building leases | ||||
Disclosure of quantitative information about right-of-use assets [line items] | ||||
Balance at the beginning | 139,479 | 176,188 | ||
Additions | 15,222 | 42,992 | ||
Foreign exchange effect | 795 | |||
Depreciation on right of use assets | (74,969) | (79,701) | ||
Balance at the end | $ 80,527 | $ 139,479 | $ 176,188 |
Leases - Carrying amounts of le
Leases - Carrying amounts of lease liabilities (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | |
Leases | |||||
As at 1 January | $ 40,517,045 | $ 39,565,146 | |||
Additions | 5,572,764 | 7,186,613 | |||
Disposals | (231,566) | ||||
Accretion of interest | 2,218,982 | 2,037,540 | |||
Foreign exchange effect | 2,163,886 | (1,772,452) | |||
Payments | (6,110,569) | (6,499,802) | $ (5,710,907) | ||
As at 31 December | $ 44,130,542 | 40,517,045 | $ 39,565,146 | ||
Current | 4,720,505 | $ 325,038 | $ 6,484,092 | ||
Lease liabilities | $ 35,796,540 | $ 1,887,163 | $ 37,646,450 |
Leases - Amounts recognized in
Leases - Amounts recognized in profit and loss (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Leases | ||||
Depreciation of right of use assets | $ (253,098) | $ (5,048,976) | $ (4,702,971) | $ (4,043,691) |
Interest expense on lease liabilities | (2,350,250) | (2,128,162) | (1,755,978) | |
Aircraft and engine variable expenses | $ (92,500) | (1,845,254) | (961,657) | (956,010) |
Total amount recognized in profit or loss | (9,244,480) | (7,792,790) | (6,755,679) | |
Cash outflow for leases | 6,110,569 | 6,499,802 | 5,710,907 | |
Supplemental Rent | 1,428,179 | $ 680,964 | $ 659,106 | |
Changes to lease payments that arose from concessions of lease modifications | $ 190,811 |
Accrued liabilities - Short-ter
Accrued liabilities - Short-term (Details) $ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) |
Accrued liabilities | |||
Fuel and traffic accrued expenses | $ 1,285,931 | $ 1,507,659 | |
Maintenance and aircraft parts accrued expenses | 98,942 | 120,254 | |
Sales, marketing and distribution accrued expenses | 179,342 | 230,935 | |
Maintenance deposits | 174,549 | 132,085 | |
Salaries and benefits | 337,467 | 296,829 | |
Accrued administrative expenses | 122,729 | 81,124 | |
Deferred revenue from V Club membership | 20,830 | 35,465 | |
Information and communication accrued expenses | 35,359 | 67,808 | |
Supplier services agreement | 10,634 | 10,634 | |
Benefits from suppliers | 3,888 | ||
Advances from travel agencies | 242 | 542 | |
Others | 86,374 | 48,526 | |
Total accrued liabilities | $ 118,118 | $ 2,356,287 | $ 2,531,861 |
Accrued liabilities - Long-term
Accrued liabilities - Long-term (Details) $ in Thousands, $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) |
Accrued liabilities | |||
Supplier services agreement | $ 45,270 | $ 55,905 | |
Benefits from suppliers | 16,847 | 19,439 | |
Other | 4,581 | 15,452 | |
Total long-term accrued liabilities | $ 3,343 | $ 66,698 | $ 90,796 |
Accrued liabilities - Other lia
Accrued liabilities - Other liabilities (Details) - MXN ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Analysis of accrued liabilities | ||
Balance at beginning of the year | $ 1,876,785 | $ 1,846,029 |
Increase for the year | 2,397,211 | 747,640 |
Payments | (1,505,095) | (716,884) |
Balance at end of the year | 2,768,901 | 1,876,785 |
Aircraft and engine lease return obligation | ||
Analysis of accrued liabilities | ||
Balance at beginning of the year | 1,852,688 | 1,831,045 |
Increase for the year | 2,126,401 | 725,506 |
Payments | (1,474,605) | (703,863) |
Balance at end of the year | 2,504,484 | 1,852,688 |
Guarantee deposit | ||
Analysis of accrued liabilities | ||
Increase for the year | 250,000 | |
Balance at end of the year | 250,000 | |
Employee profit sharing | ||
Analysis of accrued liabilities | ||
Balance at beginning of the year | 24,097 | 14,984 |
Increase for the year | 20,810 | 22,134 |
Payments | (30,490) | (13,021) |
Balance at end of the year | $ 14,417 | $ 24,097 |
Accrued liabilities - Other l_2
Accrued liabilities - Other liabilities, short-term and long-term (Details) $ in Thousands, $ in Thousands | 24 Months Ended | |||
Dec. 31, 2020MXN ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | |
Accrued liabilities | ||||
Current maturities | $ 5,074 | $ 101,218 | $ 407,190 | |
Non-current | $ 133,727 | $ 2,667,683 | $ 1,469,595 | |
Cancellations, or write off related to liabilities | $ 0 |
Employee benefits - Analysis of
Employee benefits - Analysis of net period cost (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee benefits | |||
Current service cost | $ 8,449 | $ 8,214 | $ 4,977 |
Interest cost on benefit obligation | 2,630 | 1,872 | 1,424 |
Net period cost | $ 11,079 | $ 10,086 | $ 6,401 |
Employee benefits - Changes in
Employee benefits - Changes in the defined benefit obligation and actuarial assumptions (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined benefit obligation and significant assumptions | |||
Defined benefit obligation at beginning of the year | $ 38,151 | $ 18,153 | |
Net period cost charged to profit or loss: | |||
Current service cost | 8,449 | 8,214 | |
Interest cost on benefit obligation | 2,630 | 1,872 | |
Remeasurement losses in other comprehensive income: | |||
Actuarial changes arising from changes in assumptions | 2,651 | 10,192 | |
Payments made | (1,254) | (225) | |
Defined benefit obligation at end of the year | $ 50,627 | $ 38,206 | |
Discount rate | 7.04% | 7.18% | 9.91% |
Expected rate of salary increases | 5.50% | 5.50% | 5.65% |
Annual increase in minimum salary | 4.00% | 4.00% | 4.15% |
Employee profit-sharing (Note 15c) | $ 337,467 | $ 296,829 | |
Employee profit sharing | |||
Remeasurement losses in other comprehensive income: | |||
Employee profit-sharing (Note 15c) | $ 14,417 | $ 24,097 |
Share-based payments - Share pu
Share-based payments - Share purchase plan (Details) $ in Thousands | Nov. 11, 2014MXN ($) | Nov. 30, 2020MXN ($) | Nov. 30, 2019MXN ($) | Nov. 30, 2018MXN ($) | Nov. 30, 2014MXN ($) | Dec. 31, 2020EquityInstrumentsshares | Dec. 31, 2019EquityInstrumentsshares | Dec. 31, 2018EquityInstrumentsshares |
Share purchase plan | ||||||||
Forfeited during the year | (327,217) | (294,541) | ||||||
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 | $ | $ 92,132 | $ 86,772 | $ 63,961 | |||||
Cost of extensions net of withheld taxes | $ | $ 59,899 | $ 56,407 | $ 41,590 | |||||
Outstanding at beginning of the year | 5,115,191 | 3,553,295 | 820,088 | |||||
Purchased during the year | shares | 3,159,763 | 2,694,600 | 3,208,115 | |||||
Exercised/vested during the year | (2,142,426) | (959,614) | (353,457) | |||||
Forfeited during the year | (327,217) | (173,090) | (121,451) | |||||
Outstanding at end of the year | 5,805,311 | 5,115,191 | 3,553,295 |
Share-based payments - Vesting
Share-based payments - Vesting period of shares granted under share purchase plan (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020MXN ($)EquityInstruments | Dec. 31, 2019MXN ($)EquityInstruments | Dec. 31, 2018MXN ($)EquityInstruments | Dec. 31, 2017EquityInstruments | |
Share-based payments | ||||
Compensation expense recorded in the consolidated statement of operations | $ | $ 75,040 | $ 49,659 | $ 19,980 | |
Forfeited during the year | (327,217) | (294,541) | ||
Share purchase plan | ||||
Share-based payments | ||||
Shares outstanding | 5,805,311 | 5,115,191 | 3,553,295 | 820,088 |
Compensation expense recorded in the consolidated statement of operations | $ | $ 75,040 | $ 49,659 | $ 19,980 | |
Forfeited during the year | (327,217) | (173,090) | (121,451) | |
Share purchase plan | Vesting / Exercisable within one year | ||||
Share-based payments | ||||
Shares outstanding | 2,979,412 | |||
Share purchase plan | Vesting / Exercisable within two years | ||||
Share-based payments | ||||
Shares outstanding | 1,819,440 | |||
Share purchase plan | Vesting / Exercisable within three years | ||||
Share-based payments | ||||
Shares outstanding | 1,006,459 |
Share-based payments - SARs (ca
Share-based payments - SARs (cash settled) (Details) $ in Thousands | Nov. 06, 2014MXN ($)EquityInstruments | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) |
Share-based payments | ||||
Compensation expense recorded in the consolidated statement of operations | $ 105,303 | |||
Compensation (benefit) recorded in the consolidated statement of operations | $ 40,724 | $ (5,238) | ||
SARs - cash settled | ||||
Share-based payments | ||||
Granted | EquityInstruments | 4,315,264 | |||
Vesting period | 3 years | |||
Total amount granted | $ 10,831 | |||
Carrying amount of the liability | 1,901 | 537 | ||
Compensation expense recorded in the consolidated statement of operations | 2,964 | |||
Compensation (benefit) recorded in the consolidated statement of operations | $ (1,901) | $ (186) | ||
Cash payment related to key employees related to SARs plan | $ 2,395 |
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, 2020MXN ($) | Dec. 31, 2019MXN ($) |
Share-based payments | |||||
Cost of MIP related to the vested shares | $ 180,343 | $ 90,383 | |||
MIP I | |||||
Share-based payments | |||||
Exercise price of shares | $ / shares | $ 5.31 | ||||
Amount borrowed by trust | $ 133,723 | ||||
Maximum term of share options | 10 years | ||||
Total cost of MIP determined | $ 2,722 | ||||
Series A and B shares | MIP I | |||||
Share-based payments | |||||
Number of instruments granted in share-based payment arrangement | EquityInstruments | 25,164,126 | ||||
Shares issued as a percentage of diluted capital stock | 3.00% | ||||
Exercise price of shares | $ / shares | $ 5.31 |
Share-based payments - MIP I, a
Share-based payments - MIP I, assumptions (Details) - MIP I | Dec. 24, 2012MXN ($)Y$ / shares | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($)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 | ||
Series A shares | |||
Share-based payments | |||
Shares exercised | EquityInstruments | 2,780,000 | ||
Amount paid to Management Trust corresponding to exercised shares | $ | $ 0 | $ 14,773,000 |
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, 2020$ / shares | Dec. 31, 2020MXN ($)EquityInstruments | Dec. 31, 2019$ / shares | Dec. 31, 2019MXN ($)EquityInstruments | |
Share-based payments | ||||
Outstanding at beginning of the year (shares) | EquityInstruments | 7,653,981 | 10,433,981 | ||
Exercised during the year (shares) | EquityInstruments | (2,780,000) | |||
Outstanding at end of the year (shares) | EquityInstruments | 7,653,981 | 7,653,981 | ||
Outstanding at the beginning of the year (Exercise price) | $ / shares | $ 5.31 | $ 5.31 | ||
Exercise during the year (Exercise price) | $ / shares | 5.31 | |||
Outstanding at end of the year (Exercise price) | $ / shares | $ 5.31 | $ 5.31 | ||
Outstanding at beginning of the year (Total) | $ | $ 40,668 | $ 55,441 | ||
Exercised during the year (Total) | $ | (14,773) | |||
Outstanding at end of the year (Total) | $ | $ 40,668 | $ 40,668 |
Share-based payments - MIP II (
Share-based payments - MIP II (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020MXN ($)EquityInstruments | Dec. 31, 2019MXN ($)EquityInstruments | Dec. 31, 2018MXN ($)EquityInstruments | |
Share-based payments | |||
Compensation expense recorded in the consolidated statement of operations | $ | $ 75,040 | $ 49,659 | $ 19,980 |
Forfeited during the year | 327,217 | 294,541 | |
MIP II | |||
Share-based payments | |||
Vesting period | 5 years | ||
Extension of vesting period | 5 years | ||
Carrying amount of the liability | $ | $ 177,770 | $ 70,567 | |
Compensation expense recorded in the consolidated statement of operations | $ | $ 107,204 | ||
Compensation (benefit) recorded in the consolidated statement of operations | $ | $ 37,760 | ||
Exercised during the year (shares) | 0 | ||
Granted | 3,391,020 | ||
Forfeited during the year | 0 | 0 | 1,563,520 |
MIP II | Vesting / Exercisable within one year | |||
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based payments | |||
Expense (benefit) arising from cash-settled share-based payments transactions | $ 40,724 | $ (5,238) | |
Expense arising from cash-settled share-based payments transactions | $ 105,303 | ||
Expense arising from equity-settled share-based payments transactions | 75,040 | 49,659 | 19,980 |
Total expense arising from share-based payments transactions | $ 180,343 | $ 90,383 | |
Total (benefit) arising from share-based payments transactions | $ 14,742 |
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, 2020EquityInstruments$ / shares | Dec. 31, 2019EquityInstruments$ / shares | Dec. 31, 2018$ / shares | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||||
Vesting period | 4 years | |||
Exercise price | $ / shares | $ 16.12 | $ 9.74 | $ 16.80 | $ 16.12 |
Shares available to be exercised | EquityInstruments | 5,233,693 | 2,072,344 |
Equity - Authorized shares and
Equity - Authorized shares and secondary follow-on equity offering (Details) $ / shares in Units, $ / shares in Units, $ in Thousands | Dec. 11, 2020USD ($)$ / sharesshares | Dec. 11, 2020MXN ($)shares | Feb. 16, 2018shares | Dec. 31, 2020USD ($)EquityInstruments | Dec. 31, 2020MXN ($)EquityInstruments$ / sharesshares | Dec. 31, 2019EquityInstruments$ / sharesshares |
Equity | ||||||
Par value | $ / shares | $ 0 | $ 0 | ||||
Number of authorized shares | 1,165,976,677 | 1,011,876,677 | ||||
Treasury shares | (19,020,202) | (15,136,057) | ||||
Shares fully subscribed and paid | 1,146,956,475 | 996,740,620 | ||||
Forfeited during the year | EquityInstruments | 327,217 | 327,217 | 294,541 | |||
Proceeds from issuance of shares | $ 164,419,000 | $ 164,062,000 | $ 3,272,832 | |||
Increase in capital stock | $ | $ 3,272,832 | $ 3,272,832 | ||||
Series A shares | ||||||
Equity | ||||||
Number of authorized shares | 1,077,924,804 | 923,824,804 | ||||
Number of shares per CPO | 1 | 1 | ||||
Series B shares | ||||||
Equity | ||||||
Number of authorized shares | 88,051,873 | 88,051,873 | ||||
Conversion of equivalent number of shares | 45,968,598 | |||||
Fixed Class I | ||||||
Equity | ||||||
Number of authorized shares | 24,180 | 24,180 | ||||
Shares fully subscribed and paid | 24,180 | 24,180 | ||||
Fixed Class I | Series A shares | ||||||
Equity | ||||||
Number of authorized shares | 10,478 | 10,478 | ||||
Fixed Class I | Series B shares | ||||||
Equity | ||||||
Number of authorized shares | 13,702 | 13,702 | ||||
Variable Class II | ||||||
Equity | ||||||
Number of authorized shares | 1,165,952,497 | 1,011,852,497 | ||||
Treasury shares | (19,020,202) | (15,136,057) | ||||
Shares fully subscribed and paid | 1,146,932,295 | 996,716,440 | ||||
Variable Class II | Series A shares | ||||||
Equity | ||||||
Number of authorized shares | 1,077,914,326 | 923,814,326 | ||||
Variable Class II | Series B shares | ||||||
Equity | ||||||
Number of authorized shares | 88,038,171 | 88,038,171 | ||||
American Depositary Shares | ||||||
Equity | ||||||
Weighted average share price | $ / shares | $ 11.25 | |||||
Number of CPOs per ADS | 10 | 10 | ||||
Primary follow-on equity offering | ||||||
Equity | ||||||
Number of shares offered | 134,000,000 | 134,000,000 | ||||
Over-allotment | American Depositary Shares | ||||||
Equity | ||||||
Number of shares issued | 20,100,000 | 20,100,000 |
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 ($) | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2020MXN ($)$ / sharesshares | Dec. 31, 2019MXN ($)$ / sharesshares | Dec. 31, 2018MXN ($)$ / sharesshares | Dec. 31, 2020MXN ($) |
Equity | ||||||
Net (loss) income for the period | $ (215,242) | $ (4,293,791) | $ 2,639,063 | $ (942,882) | ||
Weighted average number of shares outstanding (in thousands): | ||||||
Basic | 1,021,561 | 1,021,561 | 1,011,877 | 1,011,877 | ||
Diluted | 1,021,561 | 1,021,561 | 1,011,877 | 1,011,877 | ||
EPS- LPS : | ||||||
Basic | (per share) | $ (0.211) | $ (4.203) | $ 2.608 | $ (0.932) | ||
Diluted | (per share) | $ (0.211) | $ (4.203) | $ 2.608 | $ (0.932) | ||
Legal reserve | $ 14,596 | $ 291,178 | $ 291,178 | $ 291,178 | ||
Legal reserve as a percent of capital stock | 8.50% | 9.80% | 9.80% | 8.50% | ||
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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 | $ 302,029 | $ 938,304 | $ 777,513 |
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, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Income tax | ||||
Current year income tax expense | $ (90,609) | $ (281,491) | $ (232,824) | |
Deferred income tax benefit (expense) | 1,496,793 | (813,340) | 582,644 | |
Total income tax benefit (expense) | $ 70,490 | 1,406,184 | (1,094,831) | 349,820 |
Deferred income tax expense, translation effect | 2,035 | (2,278) | 2,680 | |
Deferred tax related to items recognized in OCI during the year | ||||
Net gain (loss) cash flow hedges | 46,835 | (74,820) | 85,107 | |
Remeasurement (loss) gain of employee benefits | 794 | 3,058 | (1,797) | |
Deferred income tax charged to OCI | $ 47,629 | $ (71,762) | $ 83,310 |
Income tax - Reconciliation of
Income tax - Reconciliation of statutory corporate income tax rate to effective tax rate (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income tax | |||
Statutory income tax rate | 30.00% | 30.00% | 30.00% |
Amendment tax return effects and other tax adjustments | 0.92% | (0.51%) | 0.05% |
Inflation on furniture, intangible and equipment | 0.29% | (0.48%) | 2.08% |
Inflation of tax losses | 0.23% | (0.21%) | 1.16% |
Foreign countries difference with Mexican statutory rate | (0.06%) | 0.11% | (0.02%) |
Annual inflation adjustment | (0.91%) | (0.05%) | 0.26% |
Unrecorded deferred taxes on tax losses | (1.29%) | 0.27% | (3.96%) |
Non-deductible expenses | (4.51%) | 0.19% | (2.51%) |
Total effective tax rate | 24.67% | 29.32% | 27.06% |
Income tax - Analysis of deferr
Income tax - Analysis of deferred taxes (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Analysis of consolidated deferred taxes | |||||||
Net operating loss | $ 163,099 | $ 3,253,596 | $ (4,355,423) | $ (534,797) | |||
Deferred income tax assets | $ 15,768,220 | $ 14,511,827 | |||||
Deferred income taxes | 12,839,436 | 13,125,430 | |||||
Deferred tax liability, net | 2,928,784 | 1,386,397 | 2,269,220 | 2,928,784 | 1,386,397 | $ 2,269,220 | |
Reflected in consolidated statement of financial position | |||||||
Deferred tax assets | 156,830 | 3,128,555 | 1,542,536 | ||||
Deferred tax liabilities | $ (10,014) | (199,771) | (156,139) | ||||
Deferred tax liability, net | 2,928,784 | 1,386,397 | 2,269,220 | 2,928,784 | 1,386,397 | 2,269,220 | |
Reconciliation of deferred tax liability, net | |||||||
Deferred tax (liability) asset, net - beginning of the year | 1,386,397 | 2,269,220 | |||||
Deferred income tax (expense) benefit during the current year recorded on profits | 1,494,758 | (811,061) | |||||
Deferred income tax (expense) benefit during the current year recorded in accumulated other comprehensive income (loss) | 47,629 | (71,762) | 83,310 | ||||
Deferred tax (liability) asset, net - end of the year | 2,928,784 | 1,386,397 | 2,269,220 | ||||
Temporary differences associated with investments in subsidiaries | 150,683 | 276,393 | |||||
Deferred tax assets | |||||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 1,208,764 | 297,878 | |||||
Lease liabilities | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 13,239,254 | 12,155,114 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 1,084,140 | 313,137 | |||||
Unearned transportation revenue | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 1,233,661 | 797,063 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 436,598 | 61,708 | |||||
Extension lease agreement | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 773,443 | 459,343 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 314,100 | (137,639) | |||||
Intangible | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 420,908 | 446,849 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (25,941) | (13,741) | |||||
Allowance for doubtful accounts | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 61,565 | 14,089 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 47,476 | 9,187 | |||||
Tax losses available for offsetting against future taxable income | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 576,422 | 303,970 | 309,320 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 272,452 | (5,350) | |||||
Employee benefits | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 15,191 | 11,463 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 2,934 | 2,958 | |||||
Financial instruments | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 7,948 | 38,865 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (22) | ||||||
Employee profit sharing | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 4,323 | 7,227 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (2,904) | 2,734 | |||||
Provisions | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 91,253 | 351,345 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (442,598) | 60,655 | |||||
Non derivative financial instruments | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income tax assets | 473,242 | 4,229 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (477,471) | 4,229 | |||||
Deferred tax liabilities | |||||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (285,994) | 1,108,939 | |||||
Right of use asset | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 10,292,753 | 10,236,929 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 55,824 | 672,311 | |||||
Supplemental rent | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 1,878,865 | 1,706,949 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 171,916 | 111,430 | |||||
Rotable spare parts, furniture and equipment, net | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 707,092 | 884,476 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (177,384) | 239,452 | |||||
Inventories | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 83,402 | 90,287 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (6,885) | 1,392 | |||||
Other prepayments | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 9,786 | 27,728 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (17,942) | (4,329) | |||||
Prepaid expenses and other assets | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred income taxes | 132,462 | 179,061 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (311,523) | 88,683 | |||||
Guatemala | |||||||
Analysis of consolidated deferred taxes | |||||||
Net operating loss | (1,835) | (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 | 55,751 | 50,246 | $ 170,731 | ||||
El Salvador | |||||||
Analysis of consolidated deferred taxes | |||||||
Net operating loss | $ 16,619 | $ 32,494 |
Income tax - Tax loss carry-for
Income tax - Tax loss carry-forward (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Available tax loss carry-forward | |||
Historical Loss | $ 2,084,960 | ||
Restated tax loss | 2,238,306 | ||
Utilized | 296,242 | ||
Total remaining amount | 1,942,064 | ||
Unrecognized NOLs | 20,657 | ||
Net remaining amount | $ 1,921,407 | ||
Statutory income tax rate | 30.00% | 30.00% | 30.00% |
Deferred income tax | $ 15,768,220 | $ 14,511,827 | |
Tax balances | |||
Adjusted contributed capital account (CUCA) | 4,607,752 | ||
CUFIN | 3,241,275 | ||
Tax losses available for offsetting against future taxable income | |||
Available tax loss carry-forward | |||
Deferred income tax | 576,422 | $ 303,970 | $ 309,320 |
Comercializadora Volaris, S.A. de C.V. | |||
Available tax loss carry-forward | |||
Historical Loss | 42,777 | ||
Restated tax loss | 43,685 | ||
Total remaining amount | 43,685 | ||
Concesionaria | |||
Available tax loss carry-forward | |||
Historical Loss | 1,875,180 | ||
Restated tax loss | 2,027,302 | ||
Utilized | 217,393 | ||
Total remaining amount | 1,809,909 | ||
Operaciones Volaris | |||
Available tax loss carry-forward | |||
Historical Loss | 18,648 | ||
Restated tax loss | 18,965 | ||
Total remaining amount | 18,965 | ||
Vuela, S.A. | |||
Available tax loss carry-forward | |||
Historical Loss | 148,355 | ||
Restated tax loss | 148,354 | ||
Utilized | 78,849 | ||
Total remaining amount | 69,505 | ||
2017, Expiration 2027 | |||
Available tax loss carry-forward | |||
Historical Loss | 1,067,836 | ||
Restated tax loss | 1,206,232 | ||
Utilized | 217,393 | ||
Total remaining amount | 988,839 | ||
2018, Expiration 2021 | |||
Available tax loss carry-forward | |||
Historical Loss | 92,604 | ||
Restated tax loss | 92,604 | ||
Utilized | 78,849 | ||
Total remaining amount | 13,755 | ||
2019, Expiration 2029 | |||
Available tax loss carry-forward | |||
Historical Loss | 4,922 | ||
Restated tax loss | 5,186 | ||
Total remaining amount | 5,186 | ||
2020, Expiration 2030 | |||
Available tax loss carry-forward | |||
Historical Loss | 863,847 | ||
Restated tax loss | 878,533 | ||
Total remaining amount | 878,533 | ||
2020, Expiration 2023 | |||
Available tax loss carry-forward | |||
Historical Loss | 55,751 | ||
Restated tax loss | 55,751 | ||
Total remaining amount | $ 55,751 |
Other operating income and ex_3
Other operating income and expenses (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Analysis of other operating income | ||||
Gain on sale and leaseback transactions of aircraft and spare engines | $ 710,522 | $ 284,759 | $ 609,168 | |
Loss on sale of rotable spare parts furniture and equipment | (2,604) | (8,954) | (2,356) | |
Other income | 22,415 | 51,403 | 15,161 | |
Other operating income | $ 36,611 | 730,333 | 327,208 | 621,973 |
Analysis of other operating expenses | ||||
Administrative and operational support expenses | 632,041 | 581,181 | 536,079 | |
Technology and communications | 383,648 | 381,055 | 385,841 | |
Passenger services | 87,850 | 65,477 | 70,337 | |
Insurance | 53,507 | 74,661 | 60,892 | |
Others | 194 | 10,553 | 5,949 | |
Other operating expenses | $ 58,011 | $ 1,157,240 | $ 1,112,927 | $ 1,059,098 |
Finance income and cost (Detail
Finance income and cost (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Analysis of finance income | ||||
Interest on cash and equivalents | $ 93,122 | $ 201,191 | $ 152,437 | |
Interest on asset backed trust notes | 6,342 | 6,525 | ||
Interest on recovery of guarantee deposits | 2,047 | 83 | 166 | |
Total finance income | $ 5,089 | 101,511 | 207,799 | 152,603 |
Analysis of finance cost | ||||
Leases financial cost | 2,350,250 | 2,128,162 | 1,755,978 | |
Financial instruments loss | 448,559 | |||
Interest on asset backed trust notes | 116,240 | 80,314 | ||
Cost of letter credit notes | 73,141 | 49,856 | 57,277 | |
Interest on debts and borrowings | 16,368 | 1,660 | 56,916 | |
Bank fees and others | 3,707 | 3,607 | 6,141 | |
Other finance costs | 10,219 | 6,230 | ||
Total finance costs | $ 151,313 | 3,018,484 | 2,269,829 | 1,876,312 |
Capitalized borrowing costs | ||||
Interest on debts and borrowings | 400,406 | 457,973 | 414,836 | |
Capitalized interest | (384,038) | (456,313) | (357,920) | |
Interest on debts and borrowing in the consolidated statements of operations | $ 16,368 | $ 1,660 | $ 56,916 |
Components of other comprehen_3
Components of other comprehensive (loss) income (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019MXN ($) | Dec. 31, 2018MXN ($) | |
Derivative financial instruments: | ||||
Reclassification of call options and forwards during the year to profit or loss (Note 4) | $ (455,009) | |||
Net gain (loss) on cash flow hedges | $ (87,609) | $ (1,747,686) | $ 263,495 | (283,691) |
Jet fuel Asian call options contracts | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | (11,993) | 11,148 | 227,509 | |
Net gain (loss) on cash flow hedges | (11,993) | 11,148 | (174,984) | |
Jet fuel Zero cost collars | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | (143,224) | 256,515 | (122,948) | |
Net gain (loss) on cash flow hedges | (143,224) | 256,515 | (122,948) | |
Foreign currency forward contract | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | (14,241) | $ 66,757 | ||
Interest rate Cap | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | (900) | (4,023) | ||
Net gain (loss) on cash flow hedges | (900) | (4,023) | ||
Non derivative financial instruments | ||||
Derivative financial instruments: | ||||
Gains (losses) on cash flow hedges, before tax | $ (1,591,569) | $ 14,096 |
Commitments and contingencies_2
Commitments and contingencies (Details) $ in Thousands | Apr. 29, 2021$ / $ | Dec. 31, 2020$ / $ | Dec. 31, 2020Q / $ | Dec. 31, 2020₡ / $ | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ |
Commitments and contingencies | |||||||||||||
2021 | $ 40,213,000 | $ 802,197 | |||||||||||
2022 | 138,919,000 | 2,771,253 | |||||||||||
2023 | 265,836,000 | 5,303,083 | |||||||||||
2024 | 705,331,000 | 14,070,437 | |||||||||||
2025 and thereafter | 3,221,596,000 | 64,266,652 | |||||||||||
Total committed expenditures | $ 4,371,895,000 | $ 87,213,622 | |||||||||||
Exchange rate | 19.9785 | 19.9487 | 7.8095 | 615.7800 | 19.9487 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 |
Commitments and contingencies -
Commitments and contingencies - Sale and lease back commitments (Details) $ in Thousands | Apr. 29, 2021$ / $ | Dec. 31, 2020$ / $ | Dec. 31, 2020Q / $ | Dec. 31, 2020₡ / $ | Dec. 31, 2020USD ($) | Dec. 31, 2020MXN ($) | Dec. 31, 2019$ / $ | Dec. 31, 2019Q / $ | Dec. 31, 2019₡ / $ | Dec. 31, 2019USD ($) | Dec. 31, 2018$ / $ | Dec. 31, 2018Q / $ | Dec. 31, 2018₡ / $ |
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||||||
Estimated proceeds from aircraft sale | $ 756,828,000 | $ 15,097,735 | |||||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | $ 758,665,000 | 15,134,381 | |||||||||||
Exchange rate | 19.9785 | 19.9487 | 7.8095 | 615.7800 | 19.9487 | 18.8452 | 7.6988 | 573.4400 | 18.8452 | 19.6829 | 7.7440 | 609.6100 | |
Within one year | |||||||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||||||
Estimated proceeds from aircraft sale | $ 209,500,000 | 4,179,253 | |||||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | 9,720,000 | 193,901 | |||||||||||
Between one year and two years | |||||||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||||||
Estimated proceeds from aircraft sale | 547,328,000 | 10,918,482 | |||||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | 47,972,000 | 956,979 | |||||||||||
Between two and three years | |||||||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | 63,222,000 | 1,261,197 | |||||||||||
Between three and four years | |||||||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | 63,222,000 | 1,261,197 | |||||||||||
Later Than Four Years | |||||||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | $ 574,529,000 | $ 11,461,107 |
Operating segments (Details)
Operating segments (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($)segment | Dec. 31, 2020MXN ($)segment | Dec. 31, 2019MXN ($)segment | Dec. 31, 2018MXN ($)segment | |
Operating segments | ||||
Number of geographic segments | segment | 2 | 2 | 2 | 2 |
Total operating revenues | $ 1,110,828 | $ 22,159,591 | $ 34,752,672 | $ 27,305,150 |
Non-derivatives financial instruments | $ (20,614) | (411,222) | (72,949) | |
Domestic (Mexico) | ||||
Operating segments | ||||
Total operating revenues | 16,572,198 | 24,594,797 | 18,493,476 | |
United States of America and Central America | ||||
Operating segments | ||||
Total operating revenues | $ 5,998,615 | $ 10,230,824 | $ 8,811,674 | |
United States of America | ||||
Operating segments | ||||
Percentage of total revenues from external customers | 27.00% | 27.00% | 29.00% | 31.00% |
Subsequent events (Details) - E
Subsequent events (Details) - Exclude | 3 Months Ended |
Mar. 31, 2021 | |
Current Available Seat Miles [Member] | |
Disclosure of non-adjusting events after reporting period [line items] | |
Available seat miles (as a percent) | 88.30% |