Document and Entity Information
Document and Entity Information - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement | ||
Document Type | 20-F | |
Document Registration Statement | false | |
Document Annual Report | true | |
Document Period End Date | Dec. 31, 2022 | |
Entity Registrant Name | Controladora Vuela Compania de Aviacion, S.A.B. de C.V. | |
Document Transition Report | false | |
Document Shell Company Report | false | |
Entity File Number | 001-36059 | |
Entity Central Index Key | 0001520504 | |
Entity Incorporation, State or Country Code | O5 | |
Entity Address, Address Line One | Av. Antonio Dovalí Jaime | |
Entity Address, Address Line Two | No. 70, 13 Floor, Tower B | |
Entity Address, Address Line Three | Colonia Zedec Santa Fe | |
Entity Address, Country | MX | |
Entity Address, City or Town | Mexico City | |
Entity Address, Postal Zip Code | 01210 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
ICFR Auditor Attestation Flag | true | |
Document Accounting Standard | International Financial Reporting Standards | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | FY | |
Auditor Name | KPMG Cardenas Dosal S.C. | MANCERA, S.C. |
Auditor Firm ID | 1141 | 1284 |
Auditor Location | Mexico City, Mexico | Mexico City, Mexico |
Amendment Flag | false | |
Business Contact [Member] | ||
Statement | ||
Entity Address, Address Line One | Av. Antonio Dovalí Jaime | |
Entity Address, Address Line Two | No. 70, 13 Floor, Tower B | |
Entity Address, Address Line Three | Colonia Zedec Santa Fe | |
Entity Address, Country | MX | |
Entity Address, City or Town | Mexico City | |
Entity Address, Postal Zip Code | 01210 | |
Contact Personnel Name | Ricardo Martínez Gutiérrez | |
Contact Personnel Email Address | ir@volaris.com | |
American depositary shares | ||
Statement | ||
Title of 12(b) Security | American Depositary Shares (ADSs) | |
Trading Symbol | VLRS | |
Security Exchange Name | NYSE | |
Ordinary participation certificates | ||
Statement | ||
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 | 880,575,491 | |
Series A shares | ||
Statement | ||
Title of 12(b) Security | Series A shares of common stock, no par value | |
Trading Symbol | VOLARA | |
Security Exchange Name | MIAX | |
Entity Common Stock, Shares Outstanding | 1,108,462,804 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | [1] | Jan. 01, 2021 | ||
Current assets: | ||||||
Cash, cash equivalents and restricted cash | $ 711,853 | $ 741,122 | $ 506,468 | [1] | ||
Accounts receivable: | ||||||
Related parties | 2,155 | 4,662 | 3,641 | [1] | ||
Other accounts receivable, net | 78,849 | 50,264 | 28,104 | [1] | ||
Recoverable value added tax and others | 94,348 | 35,862 | 46,242 | [1] | ||
Recoverable income tax | 64,774 | 15,296 | 23,643 | [1] | ||
Inventories | 15,758 | 14,397 | 13,984 | [1] | ||
Prepaid expenses and other current assets | 33,189 | 38,387 | 42,631 | [1] | ||
Derivative financial instruments | [1] | 10 | ||||
Assets held for sale | 795 | |||||
Guarantee deposits | 64,357 | 78,990 | 57,245 | [1] | ||
Total current assets | 1,066,078 | 978,980 | 721,968 | [1] | ||
Non-current assets: | ||||||
Rotable spare parts, furniture and equipment, net | 478,771 | 454,602 | 364,994 | [1] | ||
Right-of-use assets | 2,180,931 | 1,917,235 | 1,720,223 | [1] | ||
Intangible assets, net | 12,725 | 12,632 | 9,603 | [1] | ||
Derivative financial instruments | 1,585 | 1,398 | 16 | [1] | ||
Deferred income taxes | 208,010 | 141,272 | 156,830 | [1] | ||
Guarantee deposits | 483,878 | 455,372 | 422,320 | [1] | ||
Other long-term assets | 35,675 | 23,077 | 22,269 | [1] | ||
Total non-current assets | 3,401,575 | 3,005,588 | 2,696,255 | [1] | ||
Total assets | 4,467,653 | 3,984,568 | 3,418,223 | [1] | ||
Current liabilities: | ||||||
Unearned transportation revenue | 346,469 | 303,982 | 293,298 | [1] | ||
Suppliers | 194,856 | 108,164 | 112,275 | [1] | ||
Related parties | 14,610 | 10,547 | 6,266 | [1] | ||
Accrued liabilities | 186,572 | 178,096 | 118,117 | [1] | ||
Lease liabilities | 335,620 | 283,843 | 325,038 | [1] | ||
Other taxes and fees payable | 218,329 | 131,182 | 112,096 | [1] | ||
Income taxes payable | 5,738 | 4,187 | 201 | [1] | ||
Derivative financial instruments | [1] | 484 | ||||
Financial debt | 112,148 | 196,898 | 78,145 | [1] | ||
Other liabilities | 5,398 | 34,635 | 5,074 | [1] | ||
Total current liabilities | 1,419,740 | 1,251,534 | 1,050,994 | [1] | ||
Non-current liabilities: | ||||||
Financial debt | 160,887 | 108,039 | 190,276 | [1] | ||
Accrued liabilities | 13,283 | 1,475 | 3,343 | [1] | ||
Lease liabilities | 2,373,103 | 2,128,294 | 1,887,163 | [1] | ||
Other liabilities | 244,454 | 166,930 | 133,727 | [1] | ||
Employee benefits | 10,987 | 3,968 | 2,538 | [1] | ||
Deferred income taxes | 10,462 | 11,191 | 10,014 | [1] | ||
Total non-current liabilities | 2,813,176 | 2,419,897 | 2,227,061 | [1] | ||
Total liabilities | 4,232,916 | 3,671,431 | 3,278,055 | [1] | ||
Equity: | ||||||
Capital stock | 248,278 | 248,278 | 248,278 | [1] | ||
Treasury shares | (12,866) | (8,652) | (9,412) | [1] | ||
Legal reserve | 17,363 | 17,363 | 17,363 | [1] | ||
Additional paid-in capital | 283,174 | 281,037 | 284,257 | [1] | ||
Accumulated deficit | (155,903) | (75,679) | (182,132) | [1] | ||
Accumulated other comprehensive loss | (145,309) | (149,210) | (218,186) | [1] | ||
Total equity | 234,737 | 313,137 | 140,168 | [1] | ||
Total liabilities and equity | $ 4,467,653 | $ 3,984,568 | $ 3,418,223 | [1] | ||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Consolidated Statements of Oper
Consolidated Statements of Operations $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | Dec. 31, 2020 USD ($) $ / shares | ||||
Operating revenues: | ||||||
Fare revenues | $ 1,661,176 | $ 1,265,980 | [1] | $ 626,909 | [1] | |
Other passenger revenues | 1,078,251 | 866,944 | [1] | 415,997 | [1] | |
Passenger revenues | 2,739,427 | 2,132,924 | [1] | 1,042,906 | [1] | |
Other non-passenger revenues | 92,977 | 76,872 | [1] | 41,841 | [1] | |
Cargo | 14,786 | 11,882 | [1] | 9,647 | [1] | |
Non-derivative financial instruments | [1] | (21,378) | (19,408) | |||
Operating revenues | 2,847,190 | 2,200,300 | [1] | 1,074,986 | [1] | |
Other operating income | (25,066) | (10,758) | [1] | (33,619) | [1] | |
Fuel expense, net | 1,299,254 | 609,390 | [1] | 321,541 | [1] | |
Landing, take-off and navigation expenses | 379,108 | 296,831 | [1] | 195,989 | [1] | |
Depreciation of right of use assets | 320,443 | 269,351 | [1] | 236,417 | [1] | |
Salaries and benefits | 283,089 | 239,215 | [1] | 163,776 | [1] | |
Aircraft and engine variable lease expenses | 124,532 | 83,373 | [1] | 85,957 | [1] | |
Sales, marketing and distribution expenses | 124,287 | 96,705 | [1] | 86,705 | [1] | |
Other operating expenses | 102,585 | 65,858 | [1] | 54,413 | [1] | |
Maintenance expenses | 97,783 | 96,256 | [1] | 55,227 | [1] | |
Depreciation and amortization | 97,486 | 57,049 | [1] | 42,098 | [1] | |
Operating income (loss) | 43,689 | 397,030 | [1] | (133,518) | [1] | |
Finance income | 12,902 | 3,531 | [1] | 4,784 | [1] | |
Finance cost | (192,535) | (139,374) | [1] | (138,320) | [1] | |
Foreign exchange gain (loss), net | 3,581 | (124,161) | [1] | 13,601 | [1] | |
(Loss) income before income tax | (132,363) | 137,026 | [1] | (253,453) | [1] | |
Income tax benefit (expense) | 52,139 | (30,573) | [1] | 61,731 | [1] | |
Net (loss) income | $ (80,224) | $ 106,453 | [1] | $ (191,722) | [1] | |
(Loss) earnings per share basic: | (per share) | $ (0.069) | $ 0.092 | $ (0.191) | |||
(Loss) earnings per share diluted: | (per share) | $ (0.069) | $ 0.091 | $ (0.188) | |||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||
Consolidated Statements of Comprehensive Income | ||||||
Net (loss) income for the year | $ (80,224) | $ 106,453 | [1] | $ (191,722) | [1] | |
Other comprehensive (loss) income to be reclassified to profit or (loss) in subsequent periods: | ||||||
Discontinuation of hedge relationships | [1] | 79,076 | (79,824) | |||
Net gain (loss) on cash flow hedges | 336 | 957 | [1] | (8,207) | [1] | |
Income tax effect | (80) | (274) | [1] | 2,347 | [1] | |
Exchange differences on translation of foreign operations | 3,471 | (10,489) | [1] | (38,699) | [1] | |
Other comprehensive (loss) income not to be reclassified to profit or (loss) in subsequent periods: | ||||||
Remeasurement gain (loss) of employee benefits | 253 | (432) | [1] | (105) | [1] | |
Income tax effect | (79) | 138 | [1] | 39 | [1] | |
Other comprehensive income (loss) for the year, net of tax | 3,901 | 68,976 | [1] | (124,449) | [1] | |
Total comprehensive (loss) income for the year | $ (76,323) | $ 175,429 | [1] | $ (316,171) | [1] | |
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Capital stock | Treasury Shares | Legal reserve | Additional paid-in capital | Accumulated Deficit | Other comprehensive (loss) income | Total | ||||||||
Balance as of beginning of the year at Dec. 31, 2019 | [1] | $ 225,531 | $ (6,968) | $ 17,363 | $ 141,648 | $ 9,590 | $ (93,737) | $ 293,427 | |||||||
Capital stock increase | 22,747 | 141,652 | 164,399 | ||||||||||||
Treasury shares | (4,511) | 3,024 | (1,487) | ||||||||||||
Long-term incentive plan cost | 2,067 | (2,067) | |||||||||||||
Net income (loss) for the year | (191,722) | (191,722) | [1] | ||||||||||||
Other comprehensive income (loss) items | (124,449) | (124,449) | [1] | ||||||||||||
Total comprehensive (loss) income for the year | (191,722) | (124,449) | (316,171) | [1] | |||||||||||
Balance as of end of the year at Dec. 31, 2020 | [1] | 248,278 | (9,412) | 17,363 | 284,257 | (182,132) | (218,186) | 140,168 | |||||||
Treasury shares | (4,366) | (953) | (5,319) | ||||||||||||
Exercise of stock options | 2,859 | 2,859 | |||||||||||||
Long-term incentive plan cost | 2,267 | (2,267) | |||||||||||||
Net income (loss) for the year | 106,453 | 106,453 | [1] | ||||||||||||
Other comprehensive income (loss) items | 68,976 | 68,976 | [1] | ||||||||||||
Total comprehensive (loss) income for the year | 106,453 | 68,976 | 175,429 | [1] | |||||||||||
Balance as of end of the year at Dec. 31, 2021 | 248,278 | [1] | (8,652) | [1] | 17,363 | [1] | 281,037 | [1] | (75,679) | [1] | (149,210) | [1] | 313,137 | [2] | |
Treasury shares | (5,239) | 3,162 | (2,077) | ||||||||||||
Long-term incentive plan cost | 1,025 | (1,025) | |||||||||||||
Net income (loss) for the year | (80,224) | (80,224) | |||||||||||||
Other comprehensive income (loss) items | 3,901 | 3,901 | |||||||||||||
Total comprehensive (loss) income for the year | (80,224) | 3,901 | (76,323) | ||||||||||||
Balance as of end of the year at Dec. 31, 2022 | $ 248,278 | $ (12,866) | $ 17,363 | $ 283,174 | $ (155,903) | $ (145,309) | $ 234,737 | ||||||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency.[2]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||
Operating activities | ||||||
(Loss) income before income tax | $ (132,363) | $ 137,026 | [1] | $ (253,453) | [1] | |
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) | 417,929 | 326,400 | 278,515 | |||
Allowance for credit losses | 1,672 | 795 | 636 | |||
Finance income | (12,902) | (3,531) | (4,784) | |||
Finance cost | 191,809 | 138,890 | 118,796 | |||
Net foreign exchange (gain) loss differences | (8,669) | 80,372 | (26,693) | |||
Derivative financial instruments | 161 | 688 | 58,261 | |||
Amortized Cost (CEBUR) | 566 | 412 | 323 | |||
Net gain on disposal of rotable spare parts, furniture and equipment and gain on sale of aircraft | (19,548) | (9,546) | (32,568) | |||
Employee benefits | 7,210 | 552 | 521 | |||
Aircraft and engine lease extension benefit and other benefits from service agreements | (517) | (519) | (614) | |||
Management incentive and long-term incentive plans | 709 | (1,273) | 2,288 | |||
Cash flows from operating activities before changes in working capital | 446,057 | 670,266 | 141,228 | |||
Changes in operating assets and liabilities: | ||||||
Related parties | 6,570 | 3,392 | 803 | |||
Other accounts receivable | 49,670 | (15,787) | 36,905 | |||
Recoverable and prepaid taxes | (33,293) | 16,918 | (1,024) | |||
Inventories | (1,361) | (857) | 1,068 | |||
Prepaid expenses | (21,489) | 645 | 3,407 | |||
Other assets | (12,494) | 3,435 | 2,639 | |||
Guarantee deposits | (13,445) | (52,048) | (65,017) | |||
Suppliers | 86,627 | 6,168 | 41,521 | |||
Accrued liabilities | 17,201 | 45,053 | (26,118) | |||
Other taxes and fees payable | 44,985 | 12,972 | 7,668 | |||
Unearned transportation revenue | 42,487 | 20,023 | 101,030 | |||
Derivative Financial instruments | (1,854) | (59,190) | ||||
Other liabilities | 40,429 | 76,687 | 35,890 | |||
Cash generated from operating activities | 651,944 | 785,013 | 220,810 | |||
Interest received | 12,902 | 3,531 | 4,784 | |||
Income taxes paid | (51,244) | (3,188) | (11,845) | |||
Net cash flows provided by operating activities | 613,602 | 785,356 | 213,749 | |||
Investing activities | ||||||
Acquisitions of rotable spare parts, furniture and equipment | (347,147) | (186,121) | (157,133) | |||
Acquisitions of intangible assets | (6,790) | (10,063) | (5,804) | |||
Acquisitions of subsidiaries | (79) | |||||
Pre-delivery payments reimbursements | 221,253 | 43,678 | 79,593 | |||
Proceeds from disposals of rotable spare parts, furniture and equipment | 1,990 | 17,940 | 80,192 | |||
Net cash flows used in investing activities | (130,694) | (134,645) | (3,152) | |||
Financing activities | ||||||
Net proceeds from public offering | 164,399 | |||||
Proceeds from exercised stock options | 2,859 | |||||
Treasury shares purchase | (5,239) | (4,366) | (4,511) | |||
Interest paid | (17,637) | (12,477) | (13,614) | |||
Payments of principal portion of lease liabilities | (449,004) | (458,968) | (284,363) | |||
Payments of financial debt | (196,565) | (76,936) | (99,596) | |||
Proceeds from financial debt | 155,357 | 114,704 | 108,117 | |||
Net cash flows used in financing activities | (513,088) | (435,184) | (129,568) | |||
(Decrease) increase in cash, cash equivalents and restricted cash | (30,180) | 215,527 | 81,029 | |||
Net foreign exchange differences on cash balance | 911 | 19,127 | 1,990 | |||
Cash, cash equivalents and restricted cash at beginning of year | 741,122 | [2] | 506,468 | |||
Cash, cash equivalents and restricted cash at end of year | $ 711,853 | $ 741,122 | [2] | $ 506,468 | ||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency.[2]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Description of the business and
Description of the business and summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2022 | |
Description of the business and summary of significant accounting policies | |
Description of the business and summary of significant accounting policies | 1. Description of the business and summary of significant accounting policies Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (“Controladora” or the “Company”) was incorporated in Mexico in accordance with the laws of Mexico on October 27, 2005. Controladora is domiciled in Mexico City at Av. Antonio Dovali Jaime No. 70, 13 th Floor, Tower B, Colonia Zedec Santa Fe, Mexico City, Mexico, 01210. The Company, through its subsidiary Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. (“Concesionaria”), has a concession to provide air transportation services for passengers, cargo and mail throughout Mexico and abroad. Concesionaria’s concession was granted by the Mexican federal government through the Mexican Infrastructure, Communications and Transportation Ministry ( Secretaría de Infraestructura, Comunicaciones y Transportes Concesionaria made its first commercial flight as a low-cost airline on March 13, 2006. Concesionaria operates under the trade name of “Volaris”. On June 11, 2013, Controladora Vuela Compañía de Aviación, S.A.P.I. de C.V. changed its corporate name to Controladora Vuela Compañía de Aviación, S.A.B. de C.V. On September 23, 2013, the Company completed its dual listing Initial Public Offering on the New York Stock Exchange (“NYSE”) and on the Mexican Stock Exchange (Bolsa Mexicana de Valores, or “BMV”), and on September 18, 2013 its shares started trading under the ticker symbol “VLRS” and “VOLAR”, respectively. On November 16, 2015, certain shareholders of the Company completed a secondary follow-on equity offering on the NYSE. On December 11, 2020, the Company announced the closing of an upsized primary follow-on equity offering in which the Company offered 134,000,000 of its Ordinary Participation Certificates (Certificados de Participación Ordinarios), or CPOs, in the form of American Depositary Shares, or ADSs, at a price to the public of US$11.25 per ADS in the United States and other countries outside of Mexico, pursuant to the Company’s shelf registration statement filed with the Securities and Exchange Commission (the “SEC”). In connection with the offering, the underwriters exercised their option to purchase up to 20,100,000 additional CPOs in the form of ADSs. Each ADS represents 10 CPOs and each CPO represents a financial interest in one Series A share of common stock of the Company. On November 10, 2016, the Company, through its subsidiary Vuela Aviación, S.A. (“Volaris Costa Rica”), obtained from the Costa Rica Civil Aviation Authority an Air Operator Certificate to provide air transportation services for passengers, cargo and mail, in scheduled and non-scheduled flights for an initial period of five years. On December 20, 2021 Volaris Costa Rica´s Air Operator Certificate was renewed, modified and extended for an additional 15- years term. Volaris Costa Rica started operations on December 1, 2016. On August 25, 2021, the Company through its subsidiary Vuela El Salvador, S.A. de C.V. (“Volaris El Salvador”) obtained from the El Salvadorian Civil Aviation Authority an Operation Permit, for scheduled and non-scheduled international public air transportation services for passengers, cargo and mail valid until May 30, 2024. Volaris El Salvador started operations on September 15, 2021. On June 20, 2019, Concesionaria, issued fifteen million (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 (US$78.5 million, based on an exchange rate of Ps.19.10 to US$1 on June 20, 2019) 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 (US$157.1 million based on an exchange rate of Ps.19.10 to US$1 on June 20, 2019). The Trust Notes are backed by future receivables under agreements entered into with credit card processors with respect to funds received from the sale of airplane tickets and ancillaries denominated in Mexican pesos, through credit cards VISA and Mastercard, via the Company’s website, mobile app and travel agencies. The Trust Notes were listed on the Mexican Stock Exchange, have a maturity of five years and will pay an interest rate of Tasa de Interes Interbancaria de Equilibrio (“TIIE”) 28 plus 175 basis points. On October 13, 2021, Concesionaria, completed the issuance of fifteen million (15,000,000) of asset backed trust notes (certificados bursátiles fiduciarios) (the “Trust Notes”) issued under the ticker VOLARCB 21L for an amount of Ps.1.5 billion Mexican pesos (US$72.1 million, based on an exchange rate of Ps.20.80 to US$1 on October 13, 2021), issued by CIBanco, S.A., Institución de Banca Múltiple, acting as Trustee of the Irrevocable Trust number CIB/3249 created by Concesionaria, in the second offering under the program authorized by the Mexican National Banking and Securities Commission for an amount of up to Ps.3.0 billion (three billion pesos 00/100 national currency) (US$144.2 million, based on an exchange rate of Ps.20.80 to US$1 on October 13, 2021). The Trust Notes comply with the Sustainability-Linked Bond Principles 2020, administered by the International Capital Market Association (ICMA) and has Sustainability Objectives (SPT) for the Key Performance Indicator (KPI), to reduce carbon dioxide emissions from Volaris´ operations, measured as grams of CO2 emissions per revenue passenger/kilometer (gCO2 / RPK) by 21.54%, 24.08% and 25.53% by 2022, 2023 and 2024, respectively, compared to 2015. This offering will help the Company to accomplish its long-term sustainable goals, among which are to reduce CO2 emissions by 35.42% gCO2 / RPK by 2030 vs 2015. On December 20, 2021, one of the Company’s shareholders concluded the conversion of 30,538,000 Series B Shares for the equivalent number of Series A Shares. This conversion has no impact either on the total number of outstanding shares nor on the earnings-per-share calculation. The accompanying consolidated financial statements and notes were approved for issuance by the Company’s Chief Executive Officer, Enrique J. Beltranena Mejicano, and the Chief Financial Officer, Jaime E. Pous Fernández, on April 18, 2023 and subsequent events were considered through that date. These consolidated financial statements were authorized by the Board of Directors of the Company on April 19,2023 and will be submitted for authorization to the Annual General Ordinary Shareholder´s Meeting of the Company on April 21,2023. a) Relevant events relating to fleet financing On April 1st, 2022, the Company entered into an agreement with JSA International U.S. Holdings, LLC, which provides financing for pre-delivery payments in connection with our purchase of four A320 family aircraft. On April 13, 2022, the Company obtained financing for the pre-delivery payments with certain lessors in respect of 18 aircraft (including the four aircraft mentioned below) to be delivered in the years 2023 and 2024. On June 8, 2022, the Company entered into an agreement with certain financial institutions, which provides financing for pre-delivery payments in connection with our purchase of thirteen aircrafts to be delivered during the years 2023, 2024 and 2025. On July 27th, 2022, the Company entered into an agreement with CMB Financial Leasing (Ireland) Limited, which provides financing for pre-delivery payments in connection with our purchase of seven A320 family aircraft. Conflict between Russia and Ukraine The airline industry has been impacted by the price and availability of fuel. However, the airline industry and the Company are implementing strategies to mitigate these effects. The Company has been taking actions to mitigate this impact over the business, through revenue management and has continued with the efforts towards a reduced fuel consumption. Nonetheless, the ability to transfer any significant fuel cost increases through fare increases is limited by our ultra-low-cost business model and market high price elasticity in the market. Change in presentation currency The Company has changed the presentation currency from Mexican peso to the dollar of the United States of America (“U.S. dollar”) as of January 1st, 2022. The change in presentation currency was made to more accurately reflect the Company´s financial performance aligned to the economic environment in which it operates. The Company believes that the change in presentation currency provides investors and other stakeholders with greater comparability of financial information with its industry peers. Prior to the change, the financial statements had been reported in Mexican pesos. A change in presentation currency is a change in accounting policy which is accounted for retrospectively. In making this change in presentation currency, the Company followed the requirements set out in IAS 21 “The Effects of Changes in Foreign Exchange Rates” (“IAS21”). (Note 1b)) b) Basis of preparation Statement of compliance These consolidated financial statements which comprise the financial statements of the Company and its subsidiaries at December 31, 2022, 2021 and January 1 st International Accounting Standards Board Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which each entity operates (“functional currency”). The functional currency of Company and its subsidiary Concesionaria was the Mexican peso until December 31, 2021, and since such date changed to U.S. dollar. The presentation currency of the Company’s consolidated financial statements is the U.S. dollar. All values in the consolidated financial statements are rounded to the nearest thousand (US$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, except for the effects of changes in functional currency that are affected prospectively. (Note 3b). Basis of measurement and presentation The accompanying consolidated financial statements have been prepared under the historical-cost convention, except for derivative financial instruments that are measured at fair value. The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from those estimates. Presentation currency and definition of terms Beginning January 1, 2022, and for all subsequent periods, as permitted by IAS 21 under IFRS and with the authorization of the Board of Directors, considering the previous favorable opinion of its Audit and Corporate Governance Committee, the Company changed its presentation currency from the Mexican peso to the U.S. dollar. The consolidated financial statements, including comparative amounts and the accompanying notes to the consolidated financial statements, are presented as if the new presentation currency had always been the Company´s presentation currency. The comparative financial statements and their related notes were re-presented for the change in presentation currency by applying the methodology set out in IAS 21, using the closing exchange rates for the consolidated statements of financial position and the average exchange rates of each month within the respective periods for consolidated statements of operations, consolidated statements of comprehensive income and consolidated statements of cash flows. Historic equity transactions were translated at the foreign exchange rate on the date of the transactions and were subsequently carried at historical value. The exchange rates used in translation were as described in note 1 n). In addition, resulting from this change in presentation currency and in compliance with IAS 1, Presentation of Financial Statements (“IAS 1”), the Company includes a third statement of financial position as of January 1, 2021. The consolidated financial statements and the accompanying notes are presented in U.S. dollars, except when specific reference is made to a different currency. When reference is made to U.S. dollars or “$” it means dollars of the United States. All amounts in the consolidated financial statements and the accompanying notes are stated in thousands, except when references are made to earnings or loss per share and/or prices per share. When reference is made to “Ps” or “pesos”, it means Mexican pesos. When it is deemed relevant, certain amounts in foreign currency presented in the notes to the consolidated financial statements include between parentheses a convenience translation into dollars and/or into pesos, as applicable. Change in functional currency An entity’s functional currency is the currency of the primary economic environment in which it operates. During the second half of 2021 management identified indicators of changes in the primary economic environment in which its main subsidiary Concesionaria operates, as follows: (i) increase in the international market transactions during 2021, (ii) change in the determination of rates (iii) most representative costs are determined and denominated in U.S. dollars. As a result, the Company evaluated the functional currency of its main subsidiary in accordance with the provisions contained in IAS-21 “Effects of Variations in Foreign Currency Exchange Rates”, concluding that the functional currency changed from the Mexican peso to the U.S dollar as of December 31, 2021. In addition, considering the dependency of the Company in its operations related to its wholly owned subsidiary Concesionaria, management evaluated and concluded that its functional currency also changed from the Mexican peso to U.S. dollar as of December 31, 2021. The change in functional currency was prospectively applied from the date of the change. Derived from the foregoing, once the authorization of the Board of Directors and considering the previous favorable opinion of the Audit and Corporate Governance Committee, as of December 31, 2021 the Company changed prospectively its functional currency from the Mexican peso to the U.S dollar (Note 3b). c) Basis of consolidation The accompanying consolidated financial statements comprise the financial statements of the Company and its subsidiaries. As of December 31, 2022, 2021 and January 1 st % Equity interest Principal January Name Activities Country 2022 2021 1st 2021 Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V. Air transportation services for passengers, cargo and mail throughout Mexico and abroad Mexico 100 % 100 % 100 % Vuela Aviación, S.A. Air transportation services for passengers, cargo and mail in Costa Rica and abroad Costa Rica 100 % 100 % 100 % Vuela, S.A. (“Vuela”) * Air transportation services for passengers, cargo and mail in Guatemala and abroad Guatemala 100 % 100 % 100 % Vuela El Salvador, S.A. de C.V. Air transportation services for passengers, cargo and mail in El Salvador and abroad El Salvador 100 % 100 % 100 % Comercializadora Volaris, S.A. de C.V. (“Comercializadora”) Merchandising of services Mexico 100 % 100 % 100 % Servicios Earhart, S.A.* Rendering specialized services to its affiliates Guatemala 100 % 100 % 100 % Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”) Rendering specialized services to its affiliates Mexico 100 % 100 % 100 % Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) (3) Recruitment and payroll Mexico — — 100 % Comercializadora V Frecuenta, S.A. de C.V. (“Loyalty Program”) * Loyalty Program Mexico 100 % 100 % 100 % Viajes Vuela, S.A. de C.V. (“Viajes Vuela”) Travel agency Mexico 100 % 100 % 100 % Guatemala Dispatch Service, S.A., (“GDS, S.A.”) (4) Aeronautical Technical Services Guatemala 100 % 100 % — CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso 1710 (1) Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso 1711 (2) Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % Fideicomiso Irrevocable de Administración número F/307750 “Administrative Trust” ** Share administration trust (Note 18) Mexico 100 % 100 % 100 % Fideicomiso Irrevocable de Administración número F/745291 “Administrative Trust” Share administration trust (Note 18) Mexico 100 % 100 % 100 % Fideicomiso de Administración número CIB/3081 “Administrative Trust” Share administration trust (Note 18) Mexico 100 % 100 % 100 % Fideicomiso Irrevocable de Administración número CIB/3249 “Administrative Trust” Asset backed securities trustor & administrator (Note 5) Mexico 100 % 100 % 100 % CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3853 (5) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3855 (6) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3866 (6) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3867 (7) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S. A, Institución de Banca Múltiple, Fideicomiso CIB/3921 (8) Pre-delivery payments financing (Note 5) Mexico 100 % — — *The Company has not started operations. **The Trust was terminated on August 9, 2022. (1) With effect from October 16, 2020, the Successor of the Trust 1710 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple. (2) With effect from October 16, 2020, the Successor of the Trust 1711 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple. (3) From August 31,2021, the Company merged with Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V. (4) The Company was acquired on October 5, 2021. (5) With effect from June 8, 2022 the trust was constituted. (6) With effect from April 1st, 2022 the trusts were constituted. (7) With effect from April 13, 2022 the trust was constituted. (8) With effect from July 21, 2022 the trust was constituted. 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, and (iii) The Company’s voting rights and potential voting rights. The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Company gains control until the date the Company ceases to control the subsidiary. All intercompany balances, transactions, unrealized gains and losses resulting from intercompany transactions are eliminated in full on consolidation in the consolidated financial statements. On consolidation, the assets and liabilities of foreign operations are translated into U.S.dollar at the exchange rates prevailing at the reporting date and their statements of profit or loss are translated at the average exchange rates prevailing at the time. The exchange differences arising on translation for consolidation are recognized in other comprehensive income (“OCI”). On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognized in profit or loss. d) Revenue recognition Passenger revenues Revenues from the air transportation of passengers are recognized at the earlier of when the service is provided or when the non-refundable ticket expires at the date of the scheduled travel. Ticket sales for future flights are initially recognized as contract liabilities under the caption “unearned transportation revenue” and, once the transportation service is provided by the Company or when the non-refundable ticket expires at the date of the scheduled travel, the earned revenue is recognized as passenger ticket revenues and the unearned transportation revenue is reduced by the same amount. All the Company’s tickets are non-refundable and are subject to change upon a payment of a fee. Additionally, the Company does not operate a frequent flier program. The most significant passenger revenue includes revenues generated from: (i) fare revenue and (ii) other passenger revenues. Other passenger services include but are not limited to fees charged for excess baggage, bookings through the call center or third-party agencies, advanced seat selection, itinerary changes and charters. They are recognized as revenue when the obligation of passenger transportation service is provided by the Company or when the non-refundable ticket expires at the date of the scheduled travel. The Company also classifies as other passenger revenue “V Club” and other similar services, which are recognized as revenue over time when the service is provided. The Company sells certain tickets with connecting flights with one or more segments operated by its other airline partner. For segments operated by its other airline partner, the Company has determined that it is acting as an agent on behalf of the other airline as is responsible for its portion of the contract (i.e., transportation of the passenger). The Company, as the agent, recognizes revenue within other operating revenue at the time of the travel, for the net amount retained by the Company for any segments flown by other airline. 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 trip insurance, rental cars, and advertising spaces to third parties. They as well as cargo services, 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. Code-share tickets can be purchased directly from the Volaris’ website. The airline that provides the transportation recognize the revenue when the service is provided to the customer. 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 48 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 COVID-19 voucher is redeemed, and the associated flight occurs, or the voucher expires. When vouchers issued exceed the amount of the original amount paid by the passenger the excess is recorded as reduction of the operating revenues. All of the Company´s revenues related to future services are rendered through an approximate period of 12 months. e) Cash, cash equivalents and restricted cash Cash and cash equivalents are represented by bank deposits and highly liquid investments with maturities of 90 days or less at the original purchase date. For the purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash and short-term investments as defined above. The Company has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. These credit card processing agreements do not have significant cash reserve requirements. Restricted cash are used to constitute the debt service reserves and cannot be used for purposes other than those established. f) Financial instruments initial recognition and subsequent measurement A financial instrument is any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity. i) Financial assets Initial recognition Classification of financial assets and initial recognition The Company determines the classification and measurement of financial assets, in accordance with the categories in IFRS 9, which are based on both: the characteristics of the contractual cash flows of these assets and the business model objective for holding them. Financial assets include those carried at fair value through profit and losses (“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 other comprehensive income (“OCI”) with recycling of cumulative gains and losses. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when: a) The rights to receive cash flows from the asset have expired; b) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. ii) Impairment of financial assets The Company assesses at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is credit - impaired. A financial asset is credit- impaired when one or more events have occurred since the initial recognition of an asset (an incurred ‘loss event’), that has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence that a financial asset is credit – impaired may 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. During the years ended December 31, 2022, 2021 and 2020 the Company recorded expected credit losses on accounts receivable of US$1,672, US$795 and US$636, respectively (Note 8). iii) Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, including loans and borrowings, accounts payables to suppliers, unearned transportation revenue, other accounts payable and financial instruments. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. Subsequent measurement The measurement of financial liabilities depends on their classification as described below: Financial liabilities at amortized cost Accounts payable, are subsequently measured at amortized cost and do not bear interest or result in gains and losses due to their short-term nature. Loans and borrowings are the category m |
Significant accounting judgment
Significant accounting judgments, estimates and assumptions | 12 Months Ended |
Dec. 31, 2022 | |
Significant accounting judgments, estimates and assumptions | |
Significant accounting judgments, estimates and assumptions | 2. Significant accounting judgments, estimates and assumptions The preparation of these consolidated 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. 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. (Note 1). Actual results could differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimate is revised. Revisions to estimates are recognized prospectively. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. For leases significant accounting judgments, estimates and assumptions refer to (Note 1q). i) Return obligations The aircraft lease agreements of the Company also require that the aircraft components (airframe, APU and landing gears) and engines (overhaul and limited life parts) be returned to lessors under specific conditions of maintenance. The costs of return, which in no case are related to scheduled major maintenance, are estimated and recognized ratably as a provision from the time it becomes likely such costs will be incurred and can be estimated reliably. These return costs are recognized on a straight-line basis as a component of variable lease expenses and the provision is included as part of other liabilities, through the remaining lease term. The Company estimates the provision related to aircraft components and engines using certain assumptions including the projected usage of the aircraft and the expected costs of maintenance tasks to be performed. This provision is made in relation to the present value of the expected future costs of meeting the return conditions (Note 14 and 16). ii) Deferred taxes Deferred tax assets are recognized for all available tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Management’s judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning opportunities to advance taxable profit before expiration of available tax losses. Tax losses relate to operations of the Company on a stand-alone basis, in conformity with current Tax Law and may be carried forward against taxable income generated in the succeeding years at each country and may not be used to offset taxable income elsewhere in the Company’s consolidated group (Note 20). 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 At each reporting date, the Company assesses whether there are indicators of impairment of its long-lived assets and right of use assets. Impairment exists when the carrying amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less cost to sell and its value-in-use. In making these determinations, the Company uses certain assumptions, including, but not limited to estimated, undiscounted future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company’s operations, excluding additions and extensions. The Company’s assumptions about future conditions important to its assessment of potential impairment of its long-lived assets, including the impact of the COVID-19 pandemic to its business, are subject to uncertainty, and the Company will continue to monitor these conditions in future periods as new information becomes available, and will updated its analyses accordingly. For the years ended December 31, 2022 and 2021, the Company has reviewed through an analysis if there were signs of impairment in its long- lived assets and right- of use assets and according to the result it was concluded there were no signs of impairment. v) Leases - Estimating the incremental borrowing rate The Company cannot readily determine the interest rate implicit in its leases, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating). |
Financial instruments and risk
Financial instruments and risk management | 12 Months Ended |
Dec. 31, 2022 | |
Financial instruments and risk management | |
Financial instruments and risk management | 3. Financial instruments and risk management Financial risk management The Company’s activities are exposed to different financial risks stemmed from exogenous variables which are not under their control but whose effects might be potentially adverse such as: (i) market risk, (ii) credit risk, and (iii) liquidity risk. The Company’s global risk management program is focused on uncertainty in the financial markets and tries to minimize the potential adverse effects on net earnings and working capital requirements. The Company uses derivative financial instruments to hedge part of such risks. The Company does not enter into derivatives for trading or speculative purposes. The sources of these financial risk exposures are included in both “on balance sheet” exposures, such as recognized financial assets and liabilities, as well as in “off-balance sheet” contractual agreements and on highly expected forecasted transactions. These on and off-balance sheet exposures, depending on their profiles, do represent potential cash flow variability exposure, in terms of receiving less inflows or facing the need to meet outflows which are higher than expected, therefore increase the working capital requirements. Since adverse movements erode the value of recognized financial assets and liabilities, as well some other off-balance sheet financial exposures, there is a need for value preservation, by transforming the profiles of these fair value exposures. The Company has a Finance and Risk Management department, which identifies and measures financial risk exposures, in order to design strategies to mitigate or transform the profile of certain risk exposures, which are taken up to the corporate governance level for approval. Market risk a) Jet fuel price risk Since the contractual agreements with jet fuel suppliers include reference to jet fuel index, the Company is exposed to fuel price risk which might have an impact on the forecasted consumption volumes. The Company’s jet fuel risk management policy aims to provide the Company with protection against increases in jet fuel prices. In an effort to achieve the aforesaid, the risk management policy allows the use of derivative financial instruments available on over the counter (“OTC”) markets with approved counterparties and within approved limits. Aircraft jet fuel consumed in the years ended December 31, 2022, 2021 and 2020 represented 46%, 34% and 27% (includes derivative and non-derivative financial instruments for 2021 and 2020) of the Company’s operating expenses, respectively. The foreign currency risk is disclosed within subsection b) in this note. During the years ended December 31, 2022 and 2021, the Company did not enter into derivative financial instruments to hedge US Gulf Coast Jet Fuel 54 Asian call options and US Gulf Coast Jet Fuel 54 Asian Zero-Cost collar options. As of the year ended December 31, 2020, the Company entered into US Gulf Coast Jet fuel 54 Asian call options designated to hedge 23,967 thousand gallons. Such hedges represented a portion of the projected consumption for the 2Q20, 3Q20 and 1Q21. Additionally, during the year ended December 31, 2020, the Company entered into US Gulf Coast Jet Fuel 54 Asian Zero-Cost collar options designated to hedge 81,646 thousand gallons. Such hedges represented a portion of the projected consumption for the 2Q20, 2H20 and 2Q21. During the year ended December 31, 2020 the Company recognized an unwind of the Zero cost collar of US$1,984 which was recognized as part of finance cost. In accordance with IFRS 9 the Company separates the intrinsic value from the extrinsic value of an option contract; as such, the change in the intrinsic value can be designated as hedge accounting. Because extrinsic value (time and volatility values) of the Asian call options is related to a “transaction related hedged item”, it is required to be segregated and accounted for as a cost of hedging in OCI and accrued as a separate component of stockholders’ equity until the related hedged item matures and therefore impacts profit and loss. The underlying (US Gulf Coast Jet Fuel 54) of the options held by the Company is a consumption asset (energy commodity), which is not in the Company’s inventory. Instead, it is directly consumed by the Company’s fleet at different airport terminals. Therefore, although a non-financial asset is involved, its initial recognition does not generate an adjustment in the Company’s inventories. Rather, it is initially accounted for in the Company’s OCI and a reclassification adjustment is made from OCI to profit and loss and recognized in the same period or periods in which the hedged item is expected to be allocated to profit and loss. Furthermore, the Company hedges its forecasted jet fuel consumption month after month, which is congruent with the maturity date of the monthly serial “Asian call options and Zero-Cost Collars”. All the Company’s Asian calls matured throughout the first quarter of 2021. The Zero-Cost Collars matured throughout the second quarter of 2021, leaving no outstanding fuel position going forward as of December 31, 2022, and 2021. During the year ended December 31, 2021, the intrinsic value of the Asian call options recycled to the fuel cost was an expense of US$619. During the year ended December 31, 2020, the intrinsic value of the Asian call options recycled to the fuel cost was an expense of US$1,488 (US$931 which was recognized in the fuel cost and an expense of US$557 in finance cost). During the years ended December 31, 2022 and 2021 there was no cash flow to recycle for the Zero-Cost collar position. During the year ended December 31, 2020, the intrinsic value of the Zero-Cost Collars recycled to the fuel cost was an expense of US$56,695 (US$38,122 which was recognized in the fuel cost and an expense of US$18,573 in finance cost). During the year ended December 31, 2021, all the derivative financial instruments were effective. For the period ended December 31, 2021, there was no cost of hedging as all the derivatives position matured through 2Q21. As of December 31, 2022, and 2021, the Company didn´t hold any outstanding fuel position. Fuel Sensitivity The sensitivity analysis provided below presents the impact of a change of US$0.01 per gallon in fuel market spot price in the Company´s financial performance. Considering these figures, an increase of US$0.01 per gallon in the fuel prices during 2022, 2021 and 2020 would have impacted the Company’s operating costs in US$3,399, US$2,731 and US$1,762, respectively. As of December 31, 2022 2021 2020 Operating costs Operating costs Operating costs (In thousands of U.S. dollars) + US$0.01 per gallon 3,399 2,731 1,762 - US$0.01 per gallon (3,399) (2,731) (1,762) The Company has been proactively trying to mitigate this impact over our business through revenue yielding and a continued effort towards a reduced fuel consumption. Nonetheless, our ability to pass on any significant increases in fuel costs through fare increases is also limited by our ultra-low-cost business model and market high elasticity to price. b) Foreign currency risk On December 31, 2021 the Company and its main subsidiary Concesionaria changed their functional currency from the Mexican pesos to the US Dollar. The change of functional currency was accounted for prospectively with no impact on prior periods information (Note 1n). Through the year ending December 31, 2021, and before the change, the Mexican peso was the functional currency of Controladora and its main subsidiary Concesionaria. Most of the operating Company’s expenses are denominated in U.S. dollar; thus, the Company relies on sustained U.S. dollar cash flows coming from operations in the United States of America, Central America and South America to support part of its commitments in such currency. Foreign currency risk arises from possible unfavorable movements in the exchange rate which could have a negative impact in the Company’s cash flows. To mitigate this risk, the Company may use foreign exchange derivative financial instruments and non-derivative financial instruments. Company’s expenditures, particularly those related to aircraft leasing and acquisition, are denominated in U.S. dollar. In addition, although jet fuel for those flights originated in Mexico are paid in Mexican pesos, the price formula is impacted by the Mexican peso /U.S. dollar exchange rate. The summary of quantitative data about the Company’s exposure to currency risk as of December 31, 2022 is as set forth below: Mexican Pesos Others* (In thousands of U.S. dollars) Assets: Cash, cash equivalents and restricted cash US$ 39,962 US$ 6,129 Other accounts receivable, net 66,254 12,595 Guarantee deposits 23,981 252 Other assets — — Derivative financial instruments 1,585 — Total assets US$ 131,782 US$ 18,976 Liabilities: Financial debt US$ 133,837 US$ — Lease liabilities 17,003 103 Suppliers 124,374 1,496 Other liabilities 81,378 1,277 Total liabilities US$ 356,592 US$ 2,876 Net foreign currency position US$ (224,810) US$ 16,100 * The foreign exchange exposure includes: Quetzales, Colombian pesos and Colones. The summary of quantitative data about the Company’s exposure to currency risk as of December 31, 2021 is as set forth below: Mexican Pesos Others* (In thousands of U.S. dollars) Assets: Cash, cash equivalents and restricted cash US 39,728 US 6,102 Other accounts receivable, net 9,412 495 Guarantee deposits — 329 Total assets US 49,140 US 6,926 Liabilities: Financial debt US 132,367 US — Lease liabilities — 77 Suppliers 159,842 6,202 Other taxes and fees payable 111,766 16,378 Total liabilities US 403,975 US 22,657 Net foreign currency position US (354,835) US (15,731) * The foreign exchange exposure includes: Quetzales, Colombian pesos and Colones. At April 18, 2023, the exchange rate was 1 US$ per 18.0638 MXP. 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, 2022,2021 and January 1,2021, the Company did not enter into foreign exchange rate derivatives financial instruments. Foreign currency sensitivity The following table demonstrates the sensitivity of a reasonably possible change in Mexican peso exchange. The rate to U.S dollar that would have occurred as of December 31, 2022, with all other variables held constant. The movement in the pre-tax effect shown below represents the result of a change in the fair value of assets and liabilities denominated in Mexican peso. The Company’s exposure to foreign currency exchange rates for all other currencies is not material. Change in Effect on profit MXN$ rate before tax (In thousands of U.S. dollars) 2022 +5 % US$ (10,436) -5 % 10,436 On December 31,2021, the Company and its main subsidiary Concesionaria changed its functional currency from the Mexican peso to the U.S dollar. The following table demonstrates the sensitivity of a possible change in Mexican peso exchange rate to U.S dollar that would affect the Company prospectively from December 31, 2021 considering the change in functional currency, with all other variables held constant. The movement in the pre-tax effect shown below represents the result of a change in fair value of assets and liabilities denominated in Mexican peso. The Company´s exposure to foreign currency exchange rates for all other currencies is not material. Change in Effect on profit MXN$ rate before tax (In thousands of U.S. dollars) 2021 +5 % US$ (18,528) -5 % 18,528 The following tables demonstrate the sensitivity to a reasonably possible change in US$ exchange rates that would have occurred as of December 31, 2021 before consideration of the change in functional currency of Concesionaria and Controladora, with all other variables held constant. The movement in the pre-tax effect is a result of a change in the fair value of assets and liabilities denominated in US dollars before the change in functional currency. The Company’s exposure to foreign currency changes for all other currencies is not material. Change in Effect on profit USD$ rate before tax (In thousands of U.S. dollars) 2021 +5 % US$ (80,919) -5 % 80,919 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 In the first FX hedging strategy, the Company designated a hedge to mitigate the variability in FX fluctuation denominated in US$ associated to forecasted revenues by using a portion of US$ denominated financial liabilities associated to a portfolio of leasing liabilities up until the terms of the remaining leasing arrangements. As of December 31, 2022 and 2021, there was not outstanding US$ balance designated under this hedging strategy due to the discontinuation of the hedge relationships. The outstanding US$ balance designated under this hedging strategy as of December 31, 2020 amounted to US $1.5 billion, represented by recognized leasing liabilities, which have been designated as hedging instruments tagged to US$ denominated forecasted revenues over the remaining lease term. Additionally, during the years ended December 31, 2021 and 2020, the impact of these hedges was US$21,378 and US$19,408, respectively, which has been presented as part of the total operating revenue. The second FX strategy consisted on designating a hedging relationship by using a portion of US$ denominated non-derivative financial assets as hedging instruments, to mitigate the FX variability (MXN/US$) contractually included as a component in the purchase of a portion of future Jet Fuel consumption. For this strategy designated in 2019, a portion of the Jet Fuel consumption over the two following years was designated as hedged item; while the hedging instrument was represented by US$ denominated recognized assets, including guaranteed deposits and cash and cash equivalents equivalent to US$ 410 million, which represent a portion of the financial assets denominated in US$. During the first quarter of 2021, the designated hedging instrument back in 2019 for US$410 million expired consistent with the same foreign exchange strategy, the Company decided to designate a new hedging relationship, like the one concluded. For this new strategy a portion of the Jet Fuel consumption over the two following years was designated as hedged item; while the hedging instrument was represented by US$ denominated recognized assets, including guaranteed deposits and cash and cash equivalents equivalent to US$350 million, which represent a portion of the financial assets denominated in US$. As of December 31, 2021 , as a result of the change in functional currency from the Mexican peso to the US dollar, the Company concluded that these hedging strategies will no longer be effective, for which reason it accounted for the discontinuation of the hedge relationships. Accordingly, the cash flow hedge reserve in other comprehensive income at the date of the change of US $109 million was reclassified to the income statement, which represented a loss within the foreign exchange (loss) gain, net caption. As of December 31, 2022 and 2021, there was not outstanding US$ balance designated under this hedging strategy due to the discontinuation of the hedge relationships. The outstanding US$ balance designated under this hedging strategy as of December 31, 2020 amount to US$60.5 million, which does represent a portion of the recognized financial assets. During the years ended December 31, 2021 and 2020, the impact of these hedges was US$8,945 and US$18,590, respectively, presented as part of the total fuel expense. Since the hedged items for both hedging strategies were targeted at mitigating the cash flow variability of highly expected forecasted transactions, these were represented by multiple hedging relationships which followed the Cash Flow Hedge Accounting Model. In accordance with IFRS 9, the effective portion related to changes in the fair value of the hedging instruments, was taken to the hedge reserve within the OCI, and was presented under a separate caption within the Company’s Stakeholders Equity. The amounts recorded in OCI were recycled to the consolidated statement of operations on a timely basis as the corresponding US$ denominated income and/or Jet Fuel consumption, affecting the Company’s operating margins, the recycled amounts are presented as adjustments to operating income and expenses related to each FX hedging strategy. 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 For the replacement of the rate US$ LIBOR by the Secured Overnight Financing Rate (“SOFR”) the company is taking the necessary measures to adopt the new benchmark rates. Although rate US$ LIBOR was planned to be discontinued by the end of 2021, in November 2020 the ICE Benchmark Administration (“IBA”), the FCA-regulated and authorized administrator of LIBOR, announced that it had started to consult on its intention to cease the publication of certain rate US$ LIBORs after June 2023. In early 2022 as announced by the FCA, the panel bank submissions for rate US$ LIBOR will cease in mid-2023. As of December 31, 2022, all financial facilities in US$ are referenced to SOFR. The financial facilities contracted during 2022 were referenced to SOFR. (Note 5 b)). 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. During July 2019 the Irrevocable Trust number CIB/3249, whose trustor is the Company, entered a cap to mitigate the risk due to interest rate increases on the CEBUR (VOLARCB19) coupon payments. The floating rate coupons reference to TIIE 28 are limited under the cap to 10% on the reference rate for the life of the CEBUR (VOLARCB19) and have the same amortization schedule. Thus, the cash flows of the CEBUR (VOLARCB19) are perfectly matched by the hedging instrument. The following table shows the sensitivity analysis of the change that would have occurred in the fair value of the interest hedging instrument on the CEBUR (VOLARCB19) in 2022 and 2021 as a result of a reasonably possible change in rates, keeping all other variables constant is as set forth below: Change in interest rate Effect on cap* (In thousands of U.S. dollars) 2022 +0.50 % US$ (121) -0.50 % 121 2021 +0.01 % US$ (2) -0.01 % 2 * The cap start date was July 19, 2019, and the maturity date is June 20, 2024; consisting of 59 “caplets” with the same specifications as the CEBUR (VOLARCB19) coupons for reference rate determination, coupon term, and fair value. In addition, during November 2021 the Trust entered into a cap to mitigate the risk due to interest rate increases on the CEBUR (VOLARCB21L) coupon payments. The floating rate coupons reference to TIIE 28 are limited under the cap to 10% on the reference rate for the life of the CEBUR (VOLARCB21L) and have the same amortization schedule. Thus, the cash flows of the CEBUR (VOLARCB21L) are perfectly matched by the hedging instrument. The cap start date was November 3, 2021, and the maturity date is October 20, 2026; consisting of 59 “caplets” with the same specifications as the CEBUR (VOLARCB21L) coupons for reference rate determination, coupon term, and fair value. The following table shows the sensitivity analysis of the change that would have occurred in the fair value of the interest hedging instrument on the CEBUR (VOLARCB21L) in 2022 and 2021 as a result of a reasonably possible change in rates, keeping all other variables constant is as set forth below: Change in interest rate Effect on cap* (In thousands of U.S. dollars) 2022 +0.50 % US$ (590) -0.50 % 590 2021 +0.01 % US$ (8) -0.01 % 8 * The effect would affect OCI in relation to the interest rate caps. As of December 31, 2022 and 2021, the Company’s outstanding hedging contracts in the form of interest rate caps with notional amount of Ps.2.25 billion (US$116.2 million based on an exchange rate of Ps.19.36 to US$1 on December 31, 2022) and Ps.2.75 billion (US$133.6 million based on an exchange rate of Ps.20.58 to US$1 on December 31, 2021), respectively, had fair values of US$1,585 and US$1,398, respectively, and are presented as part of the financial assets in the consolidated statement of financial position. As of December 31, 2022 and 2021 the effect allocated in OCI in relation to the interest rate caps amounts to US$109 and US$365, respectively. For the years ended December 31, 2022 , 2021 and 2020 the amortization of the intrinsic value of the cap was US$161, US$69 and US$78 respectively, recycled to the statement of operations as part of the finance cost. During 2022 and 2021 there was no ineffective portion resulting from these hedging instruments. Debt Sensitivity Analysis The following sensitivity analysis considers the position exposed to variable interest rates. The Interbank Equilibrium Interest Rate of the Banco de Mexico (TIIE) 28 days increased 505 bp in 2022, going from 5.72% to 10.77%. The Secured Overnight Financing Rate (SOFR) three months increased 450 bp in 2022 going from 0.09% to 4.59% SOFR one month increased 430 bp in 2022, going from 0.05% to 4.36%. In addition to the reference rate changes, if the interest rate had changed on an annual average in the magnitude shown, the impact on results would have been as shown below: Year ended December 31, 2022 Year ended December 31, 2021 + 100 BP - 100 BP + 100 BP - 100 BP (In thousands of U.S. dollars) Banco Nacional de Comercio Exterior, S.N.C. (“Bancomext”) 961 (961) 1,751 (1,751) Asset backed trust notes (“CEBUR”) (1) 1,320 (1,320) 867 (867) Banco Sabadell S.A., Institución de Banca Múltiple (“Sabadell”) 49 (49) 91 (91) Banco Santander México, S.A. y Banco Nacional de Comercio Exterior, S.N.C. (“Santander-Bancomext 2022”) 96 (96) — — JSA International U.S. Holdings, LLC (PDP JSA) 88 (88) — — GY Aviation Lease 1714 Co. Limited (PDP CDB) 38 (38) — — Incline II B Shannon 18 Limited (PDP BBAM) 224 (224) — — Oriental Leasing 6 Company Limited (PDP CMB) 19 (19) — — Banco Actinver S.A., Institución de banca múltiple (“Actinver”) 6 (6) — — Total 2,801 (2,801) 2,709 (2,709) (1) Every Trust Note (CEBUR) issuance has a 10% CAP on TIIE 28 to limit interest payments to increasing rates. 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 exposure outside consolidated statements of financial position 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 company has debts related to the Pre-delivery payments, which are settled with the reimbursement of the Pre-delivery payments when the sale and leaseback transaction is carried out (Note 25). As of December 31, 2022, our cash, cash equivalents and restricted cash were US$711,853. The table below presents the Company’s contractual principal payments required on its financial liabilities and the derivative financial instruments fair value: December 31, 2022 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) US$ 62,209 US$ 75,698 US$ 137,907 Asset backed trust note (“CEBUR”) (Note 5) 30,128 86,082 116,210 Working Capital Facilities (Note 5) 18,077 — 18,077 Lease liabilities: Aircraft, engines, land and buildings leases 335,620 2,373,103 2,708,723 Aircraft and engine lease return obligation 5,012 244,454 249,466 Total US$ 451,046 US$ 2,779,337 US$ 3,230,383 December 31, 2021 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) US$ 171,771 US$ — US$ 171,771 Asset backed trust note (“CEBUR”) (Note 5) 24,291 109,311 133,602 Lease liabilities: Aircraft, engines, land and buildings leases 283,843 2,128,294 2,412,137 Aircraft and engine lease return obligation 21,949 166,930 188,879 Total US$ 501,854 US$ 2,404,535 US$ 2,906,389 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 financial institutions. Credit risk on accounts receivable relates primarily to amounts receivable from the 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 evaluated by management as 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 non-performance 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. As of December 31, 2022, 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 investment grade assigned by international credit-rating agencies. f) Capital management Management believes that the resources available to the Company are enough for its present requirements and will be sufficient to meet its anticipated requirements for capital expenditures and other cash requirements for the next fiscal year. The primary objective of the Company’s capital management is to ensure that it maintains healthy capital ratios to support its business and maximize the shareholder’s value. No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2022 and 2021. The Company is not subject to any externally imposed capital requirement, other than the legal reserve (Note 19). As part of the management strategies related to acquisition of its aircrafts (pre-delivery payments), the Company pays the associated short-term obligations by entering into sale-leaseback agreements, whereby an aircraft is sold to a lessor upon delivery (Note 5b). |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair value measurements | |
Fair value measurements | 4. Fair value measurements The only financial assets and liabilities measured at fair value after initial recognition are the derivative financial instruments. Fair value is the price that would be received from sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: (i) In the principal market for the asset or liability, or (ii) In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to the Company. The fair value of an asset or a liability is assessed using the course of thought which market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The assessment of a non-financial asset’s fair value considers the market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: ● Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities. ● Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. ● Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. Set out below, is a comparison by class of the carrying amounts and fair values of the Company’s financial instruments, other than those for which carrying amounts are reasonable approximations of fair values: Carrying amount Fair value December 31, December 31, December 31, December 31, 2022 2021 2022 2021 Assets Derivative financial Instruments US$ 1,585 US$ 1,398 US$ 1,585 US$ 1,398 Liabilities Financial debt (Interest-bearing loans and borrowings) (272,194) (305,373) (282,868) (302,876) Derivative financial Instruments — — — — Total US$ (270,609) US$ (303,975) US$ (281,283) US$ (301,478) The following table summarizes the fair value measurements by hierarchy as of December 31, 2022: Fair value measurement Quoted prices Significant Significant in active observable unobservable markets inputs inputs Level 1 Level 2 Level 3 Total Assets Derivatives financial instruments: Interest rate Caps US$ — US$ 1,585 US$ — US$ 1,585 Liabilities Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (282,868) — (282,868) Net US$ — US$ (281,283) US$ — US$ (281,283) ** SOFR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt. There were no transfers 1 2 The following table summarizes the fair value measurements by hierarchy as of December 31, 2021: Fair value measurement Quoted prices Significant Significant in active observable unobservable markets inputs inputs Level 1 Level 2 Level 3 Total Assets Derivatives financial instruments: Interest rate Caps US$ — US$ 1,398 US$ — US$ 1,398 Liabilities Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (302,876) — (302,876) Net US$ — US$ (301,478) US$ — US$ (301,478) ** LIBOR, SOFR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt. There were no transfers 1 2 The following table summarizes the losses from derivatives financial instruments recognized in the consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020: Instrument Financial statements caption 2022 2021 2020 Jet fuel Asian call options contracts Fuel US$ — US$ (619) US$ (931) Jet fuel Zero-Cost collars contracts Fuel — — (38,122) Jet fuel Asian call options contracts Finance cost — — (557) Jet fuel Zero-Cost collars contracts Finance cost — — (18,573) Interest rate cap Finance cost (161) (69) (78) Total US$ (161) US$ (688) US$ (58,261) 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, 2022, 2021 and 2020: Consolidated statements of other comprehensive income (loss) Financial Instrument statements caption 2022 2021 2020 Jet fuel Asian call options contracts OCI US$ — US$ 601 US$ (601) Jet fuel Zero cost collars OCI — 484 (7,572) Interest rate cap OCI 336 (128) (34) Non derivative financial instruments* OCI — 79,076 (79,824) Total US$ 336 US$ 80,033 US$ (88,031) *As of December 31, 2021, includes the effect of the discontinuation of the hedging strategies by US$109 million as described in note 3b (i). |
Financial assets and liabilitie
Financial assets and liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Financial assets and liabilities | |
Financial assets and liabilities | 5. Financial assets and liabilities As of December 31, 2022 and 2021, the Company’s financial assets measured at amortized cost are represented by cash, cash equivalents and restricted cash, trade and other accounts receivable, for which their carrying amount is a reasonable approximation of fair value. a) Financial assets December 31, December 31, 2022 2021 Derivative financial instruments designated as cash flow hedges (effective portion recognized within OCI) Interest rate cap US$ 1,585 US$ 1,398 Total derivative financial assets US$ 1,585 US$ 1,398 Presented on the consolidated statements of financial position as follows: Current US$ — US$ — Non-current US$ 1,585 US$ 1,398 b) Financial debt (i) As of December 31, 2022 and 2021, the Company’s short-term and long-term debt consists of the following: December 31, December 31, 2022 2021 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 LIBOR plus a spread of 260 basis points. US$ — US$ 171,771 II. In June 2019 the Company issued in the Mexico market Asset backed trust notes (“CEBUR”), in Mexican pesos, maturing on June 20th, 2024 bearing annual interest rate at TIIE plus 175 basis points. 38,737 60,728 III. In October 2021 the Company issued in the Mexico market a second tranche of its Asset backed trust notes (“CEBUR”), in Mexican pesos, maturing on October 20th, 2026 bearing annual interest rate at TIIE plus 200 basis points. 77,473 72,874 IV. In December 2019, the Company entered into a short-term working capital facility with Banco Sabadell S.A., Institucion de Banca Multiple (“Sabadell”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a spread of 300 basis points. 10,330 — V. Revolving credit line 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 June 8, 2027, bearing annual interest rate at the three-month SOFR plus a spread of 298 basis points. 38,635 — VI. Pre-delivery payments financing with JSA International U.S. Holdings, LLC, with maturity on November 30, 2025, bearing annual interest SOFR plus a spread of 300 basis points. 27,962 — VII. Pre-delivery payments financing with GY Aviation Lease 1714 Co. Limited, with maturity on November 30, 2025, bearing annual interest SOFR plus a spread of 425 basis points. 15,880 — VIII. Pre-delivery payments financing with Incline II B Shannon 18 Limited, with maturity on May 31, 2025, bearing annual interest SOFR plus a spread of 390 basis points. 48,048 — IX. Pre-delivery payments financing with Oriental Leasing 6 Company Limited, with maturity on May 31, 2026, bearing annual interest of SOFR plus a spread of 200 basis points. 7,382 — X. The company acquired a short-term working capital facility with Banco Actinver S.A, Institución de banca multiple (“Actinver”) with national currency, bearing annual interest rate at TIIE plus 250 basis points. 7,747 — XI. Transaction costs to be amortized (1,034) (1,526) XII. Accrued interest and other financial cost 1,875 1,090 273,035 304,937 Less: Short-term maturities 112,148 196,898 Long-term Financial debt US$ 160,887 US$ 108,039 TIIE: Mexican interbank rate LIBOR: London Inter Bank Offered Rate SOFR: Secured Overnight Financing Rate (ii) The following table provides a summary of the Company’s scheduled remaining principal payments of financial debt and projected interest on December 31, 2022: January 2024- January 2025- Within one December December January 2026- year 2024 2025 onwards Total Santander/Bancomext (1) US$ 12,364 US$ 18,030 US$ 8,655 US$ — US$ 39,049 Banco Sabadell S.A. 10,421 — — — 10,421 CEBUR program (2) 30,577 38,738 25,824 21,520 116,659 JSA International U.S. Holdings, LLCA 25,272 3,159 — — 28,431 GY Aviation Lease 1714 Co. Limited — 15,880 — — 15,880 Incline II B Shannon 18 Limited 25,788 22,592 — — 48,380 Oriental Leasing 6 Company Limited 76 — 7,382 — 7,458 Actinver 7,791 — — — 7,791 Financial debt 112,289 98,399 41,861 21,520 274,069 Projected interest 22,242 9,428 4,312 1,033 37,015 Total US$ 134,531 US$ 107,827 US$ 46,173 US$ 22,553 US$ 311,084 (1) Revolving line of credit with Banco Santander S.A. and Banco Nacional de Comercio Exterior, S.N.C., Institución de Banca de Desarrollo contracted on June 8, 2022. (2) Every Trust Note (CEBUR) issuance has a 10% CAP on TIIE 28 to limit interest payments to increasing rates. 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 2018” loan agreement provides for certain covenants, including limits to the ability to, among others: i) Incur debt above a specified debt basket unless certain financial ratios are met. ii) Create liens. iii) Merge with or acquire any other entity without the previous authorization of the Banks. iv) Dispose of certain assets. v) Declare and pay dividends or make any distribution on the Company’s share capital unless certain financial ratios ( that the long-term adjusted net debt is less than or equal to 6.5 ( six point five) times the EBITDAR, which on any determination date) are met. As of December 31, 2022 the Company paid the dispositions made during the year, therefore, it does not have a balance pending settlement. As of December 31, 2021 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 (CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso (previously Deutsche Bank México, S.A. Fideicomisos 1710 and 1711)). On June 8, 2022 the Company entered into a new pre-delivery payment financing with Santander/Bancomext for the acquisition of its aircraft through a revolving facility. The “Santander/Bancomext 2022” 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 distributions on the Company’s share capital, except for distributions that do not exceed 15 percent ( 15% ) of the profit before taxes. As of December 31, 2022, the Company was in compliance with the covenants under the above-mentioned loan agreement. As of December 31, 2022, the outstanding balance of the financial debt related to finance pre-delivery payments of aircraft amounts to US$137,907, the company covers this obligation through the sale and the collection made by the transaction denominated as sale and leaseback at the time of delivery, therefore, it does not represent a disbursement that directly impacts the company’s working capital. As of December 31, 2022, the Company has signed credit lines totaling US$859,098 of which US$701,220 were related to financial debt (US$390,289 were undrawn) and US$157,878 were related to letters of credit (US$16,129 were undrawn). As of December 31, 2021, the Company had signed credit lines totaling US$483,379 of which US$338,501 were related to financial debt (US$9,717 were undrawn) and US$144,878 were related to letters of credit (US$23,159 were undrawn). For purposes of financing the pre-delivery payments, a Mexican trust was 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 trust, and the Company guaranteed the obligations of the Mexican trusts under the financing agreement (CIBanco, S.A. Institución de Banca Múltiple, Fidecomiso) Trust 3853. The Company signed in May of 2022 three new pre-delivery payments financing with lessors for the acquisition of its aircraft. For this purpose, a Mexican trust was created for each contract with (CIBanco, S.A. Institución de Banca Múltiple), for JSA International U.S. Holdings, LLC signed the Trust 3866, for GY Aviation Lease 1714 Co. Limited signed the Trust 3855, and for Incline II B Shannon 18 Limited signed the Trust 3867. These facilities do not include covenants or restrictions. The Company signed a new pre-delivery payment financing with lessors for the acquisition of seven aircraft distributed between Oriental Leasing 6 Company Limited, Oriental Leasing 26 Company Limited and Oriental Leasing 36 Company Limited. For this purpose, the Mexican Trust 3921 was created with CI Banco, S.A. Institución de Banca Múltiple. This facility does not include covenants or restrictions. On June 20, 2019, the Company, through its subsidiary Concesionaria issued 15,000,000 asset backed trust notes (“CEBUR”) under the ticket VOLARCB 19 for Ps.1.5 billion Mexican pesos (US$77.5 million as of December 31, 2022 based on an exchange rate of Ps.19.36 to US$1) through the Fideicomiso Irrevocable de Administración número CIB/3249 created by Concesionaria. The issuance amount is part of a program approved by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) for an amount of up to Ps.3.0 billion Mexican pesos (US$ 155.0 million as of December 31, 2022 based on an exchange rate of Ps.19.36 to US$1). The notes have a five-year maturity annual reduction of Ps.250,000, Ps.500,000, Ps.500,000 and Ps.250,000 (US$12.9 million, US$25.8 million, US$25.8 million and US$12.9 million as of December 31, 2022 based on an exchange rate of Ps.19.36 to US$1), in 2021, 2022, 2023 and 2024, respectively, with a floating one-month coupon rate referenced to TIIE 28 plus with a 175 On October 13, 2021, the Company, through its subsidiary Concesionaria issued in the Mexico market a second issuance of 15,000,000 asset backed trust notes (“CEBUR”) under the ticket VOLARCB21L for Ps.1.5 billion Mexican pesos (US$77.5 million as of December 31,2022 based on an exchange rate of Ps.19.36 to US$1) through the Fideicomiso Irrevocable de Administración número CIB/3249 created by Concesionaria. The issuance amount is part of a program approved by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) for an amount of up to Ps.3.0 billion Mexican pesos (US$155.0 million as of December 31, 2022 based on an exchange rate of Ps.19.36 to US$1). With this second issuance the total amount approved for the program has been reached. The Trust Notes under the ticket VOLARCB21L comply with the Sustainability-Linked Bond Principles 2020, administered by the International Capital Market Association (ICMA). Which has Sustainability Objectives (SPT) for the KPI, to reduce carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer (gCO2 / RPK) by 21.54%, 24.08% and 25.53% by 2022, 2023 and 2024, respectively, compared to 2015. This offering will help the Company to accomplish its long-term sustainable goals, among which are to reduce CO2 emissions by 35.42% by 2030. A feature of the asset backed trust notes is that they will pay an additional twenty-five (25) basis points to the interest rate if the sustainability goals are not met, with the possibility of mitigating the additional rate if the 2023 or 2024 targets are met. The notes have a five -year 200 The asset backed trust note’s structure operate on specific rules and provide a DSCR “Debt Service Coverage Ratio” which is computed by comparing the Mexican Peso collections over the previous six months to the next 6 months of debt service. In general, no retention of funds exists if the ratio exceeds 2.5 times. Amortization on the asset backed trust notes began in July of 2021 for the first issuance and the second issuance will begin in November of 2023. In addition, early amortization applies if: i) The Debt Coverage Ratio is less than 1.75x on any of the determination dates; ii) An event of retention is not covered in a period of 90 consecutive days; iii) The debt service reserve account of any series maintains on deposit an amount less than the required balance of the debt service reserve account for a period that includes two or more consecutive payment methods; iv) Insolvency event of Concesionaria; v) The update of a new insolvency event in relation to the Concesionaria; vi) Updating a new event of default. In the event of default, the Trustee will refrain from delivering any amount that it would otherwise be to require to deliver to Concesionaria and will dedicate use such cash flow to amortize the principal of the trust notes (“CEBUR”). As of December 31, 2022, the Company was in compliance with the conditions of the asset backed trusted notes. 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 300 240 The “Sabadell” working capital facility has the following covenant: i) Joint obligor (Concesionaria) must represent 85% of EBITDA of the holding. As of December 31, 2022, the Company was not in compliance with the covenant of Sabadell loan agreement. The Company settled this short-term loan on January 5, 2023, as such any potential effects of the non-compliance were solved with the payment. The non-compliance did not trigger any cross-default provisions in other debt instruments or any lease agreement of the Company. In December 2022, the Company renewed the working capital facility with Banco Actinver S.A., Institución de Banca Múltiple (“Actinver”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a 250 The “Actinver” working capital facility does not include obligations or restrictions. At December 31, 2021, the Company was in compliance with the covenants under the terms of the working capital facilities. Changes in liabilities arising from financing activities For the years ended December 31, 2022 and 2021 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 Conversion December 31, 2022 Flows Interest movement reclassification Other effects 2022 Current interest-bearing loans and borrowings US$ 196,898 US$ (152,984) US$ 761 US$ 739 US$ 65,063 US$ 124 US$ 1,547 US$ 112,148 Non-current interest -bearing loans and borrowings 108,039 111,776 — — (65,063) 442 5,693 160,887 Total liabilities from financing activities US$ 304,937 US$ (41,208) US$ 761 US$ 739 US$ — US$ 566 US$ 7,240 US$ 273,035 Foreign Current vs non- January 1, Net cash Accrued* exchange current Conversion December 31, 2021 Flows Interest movement reclassification Other effects 2021 Current interest-bearing loans and borrowings US$ 78,145 US$ (60,322) US$ 142 US$ 3,794 US$ 179,355 US$ — US$ (4,216) US$ 196,898 Non-current interest -bearing loans and borrowings 190,276 99,759 — 1,734 (179,355) 356 (4,731) 108,039 Total liabilities from financing activities US$ 268,421 US$ 39,437 US$ 142 US$ 5,528 US$ — US$ 356 US$ (8,947) US$ 304,937 * This balance is net of interest provisions and interest effectively paid as of December 31, 2022 and 2021, respectively. |
Cash, cash equivalents and rest
Cash, cash equivalents and restricted cash | 12 Months Ended |
Dec. 31, 2022 | |
Cash, cash equivalents and restricted cash | |
Cash, cash equivalents and restricted cash | 6. Cash, cash equivalents and restricted cash As of December 31, 2022 and 2021 this caption is comprised as follow: 2022 2021 Cash in banks US$ 77,224 US$ 463,666 Cash on hand 425 266 Short-term investments 627,331 270,028 Restricted funds held in trust related to debt service reserves 6,873 7,162 Total cash, cash equivalents and restricted cash US$ 711,853 US$ 741,122 As of December 31, 2022 and 2021, the Company recorded a portion of advance ticket sales by an amount of US$6,873 and US$7,162, respectively, as a restricted fund (Note 1e). The restricted funds held in Trusts are used to constitute the debt service reserves and cannot be used for purposes other than those established in the contracts of the Trusts. |
Related parties
Related parties | 12 Months Ended |
Dec. 31, 2022 | |
Related parties | |
Related parties | 7. Related parties a) An analysis of balances due from/to related parties at December 31, 2022 and 2021 is provided below. All companies are considered affiliates, since the Company’s primary shareholders or directors are also direct or indirect shareholders of the related parties: Country Type of transaction of origin 2022 2021 Terms Due from: Frontier Airlines Inc. (“Frontier”) Code-share USA US$ 2,155 US$ 4,662 30 days Due to: Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (“OMA”) Airport Services Mexico US$ 13,579 US$ 9,687 30 days Chevez, Ruiz, Zamarripa y Cía., S.C. Professional fees Mexico 815 455 30 days A&P International Services, S.A.P.I de C.V. (“AISG”) Aircraft maintenance Mexico 191 — 30 days Mijares, Angoitia, Cortés y Fuentes, S.C. Professional fees Mexico 22 — 30 days Frontier Airlines Inc. (“Frontier”) Code-share USA 2 2 30 days MRO Commercial, S.A. (“MRO”) Aircraft maintenance and technical support El Salvador 1 — 30 days Aeromantenimiento, S.A. (“Aeroman”) Aircraft maintenance and technical support El Salvador — 403 30 days US$ 14,610 US$ 10,547 b) During the years ended December 31, 2022, 2021 and 2020, the Company had the following transactions with related parties: Related party transactions Country of origin 2022 2021 2020 Revenues: Transactions with affiliates Frontier Airlines Inc (“Frontier”) Code-share USA US$ 5 US$ 3,547 US$ 7,385 Expenses: Transactions with affiliates MRO Commercial, S.A. Aircraft maintenance * El Salvador US$ 11,097 US$ — US$ — Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (“OMA”) Airport services Mexico 9,792 6,607 1,486 Aeromantenimiento, S.A. Aircraft maintenance El Salvador 3,690 7,964 11,556 Technical support El Salvador 170 143 187 Chevez, Ruiz, Zamarripa y Cía, S.C. Professional fees Mexico 923 238 224 A&P International Services, S.A.P.I de C.V. (“AISG”) Aircraft maintenance Mexico 914 — — Servprot, S.A. de C.V. Security services Mexico 207 175 161 Mijares, Angoitia, Cortés y Fuentes, S.C. Professional fees Mexico 196 214 260 Onelink, S.A. de C.V. Call center fees Mexico/El Salvador — — 3,634 *Includes amounts as part of major maintenance. c) Frontier Airlines Inc. (“Frontier”) Frontier is a related party because Mr. William A. Franke and Brian H. Franke are members of the board of the Company and Frontier as well as Indigo Partners, the latest has investments in both companies. As of December 31, 2022 and 2021, the accounts receivable from Frontier were US$2,155 and US$4,662, respectively. Additionally, as of December 31, 2022 and 2021, the account payable was US$2 and US$2, respectively. During the years ended December 31, 2022, 2021 and 2020 the Company recognized revenue under this agreement of US$5, US$3,547 and US$7,385, respectively. Frontier started having transactions with the Company in August 2018. As of December 31, 2022 and 2021, there have not been guarantees provided or received for any related party receivables or payables. For the years ended December 31, 2022 and 2021, no provision for expected credit losses has been recognized, due to the Company considers the credit risk is minimal, and these balances are current accounts. d) Servprot S.A. de C.V. (“Servprot”) Servprot is a related party because Enrique Beltranena Mejicano, the Company’s Chief Executive Officer and director is shareholder of such company. Servprot provides security services for Mr. Beltranena and his family. As of December 31, 2022 and 2021 there are not outstanding balances due to Servprot under this agreement. During the years ended December 31, 2022, 2021 and 2020 the Company expensed US$207, US$175 and US$161, respectively for this concept. e) Aeromantenimiento, S.A. (“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. On January 1, 2017, the Company entered into an aircraft maintenance and repair services agreement with Aeroman, which was extended and amended to be entered into with MRO Commercial, S.A. (“MRO”), an affiliate of Aeroman on January 1 st, 2022. This agreement provides for the exclusive use of Aeroman´s services for the repair and maintenance of aircraft, 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 5 As of December 31, 2022 there are not outstanding balance due to Aeroman under this agreement. As of December 31, 2021, the balance due under the agreement to Aeroman were US$403. The Company incurred expenses in aircraft maintenance and technical support with Aeroman amounted to US$3,860, US$8,107 and US$11,743 for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, the balance due under the agreement with MRO were US$1. During the year ended December 2022, the Company incurred expenses in aircraft with MRO amounted to US$11,097. f) Onelink, S.A. de C.V. (“Onelink”) Onelink was a related party until December 31, 2017, because Marco Baldocchi, a member of the board, was a director of Onelink. From October 24, 2019 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 provides “ Agencia Mercantil During the years ended December 31, 2022 and 2021, the Company did not recognize any revenue and expense transactions as a related party. During the year ended December 31, 2020, the Company recognized an expense under this agreement of US$3,634. g) Mijares, Angoitia, Cortés y Fuentes, S.C. (“MACF”) MACF is a related party because Ricardo Maldonado Yañez and Eugenio Macouzet de León, member and alternate member, respectively, of the board of the Company since April 2018, are partners of MACF which provides legal services to us. As of December 31, 2022, the balance due for the services received from MACF were US$22. As of December 31, 2021, the Company did not have outstanding balance due to MACF. During the years ended December 31, 2022, 2021 and 2020, the Company recognized expenses of legal services with this related party of US$196, US$214 and US$260, respectively. h) Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (“OMA”) On April 22, 2020, OMA became a related party because Mr. Ricardo Maldonado Yañez is an independent member of our board of directors and a member of the board of directors of OMA and Mrs. Guadalupe Phillips Margain, our independent member, was a member of the board of directors of OMA until November 2022. As of December 31, 2022 and 2021 the account payable with OMA was US$13,579 and US$9,687, respectively. During the years ended December 31, 2022, 2021 and 2020, the Company recognized expenses with OMA of US$9,792, US$6,607 and US$1,486, respectively. i) Chevez, Ruiz, Zamarripa y Cia, S.C. (“Chevez”) 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 the Company. As of December 31, 2022 and 2021, the account payable with Chevez was US$815 and US$455, respectively. During the years ended December 31, 2022, 2021 and 2020, the Company recognized expenses with Chevez of US$923, US$238 and US$224, respectively. j) A&P International Services, S.A.P.I. de C.V. (“AISG”) On July 4, 2022, AISG became a related party since Harry F. Krensky, a member of our Board of Directors, is the Chairman of the Board of Directors of AISG. Additionally, Harry F. Krensky is managing partner of Discovery Americas, a private equity firm that indirectly holds/manages an investment position in AISG. As of December 31, 2022 the account payable from AISG was US$191. During the year ended December 31, 2022, the Company recognized expenses with AISG of US$914. k) Directors and officers During the year ended December 31, 2022, the chairman and the independent members of the Company’s board of directors received a net compensation of US$561 and the rest of the directors received a net compensation of US$177. During the years ended December 31, 2021 and 2020, the chairman and the independent members of the Company’s board of directors received a net compensation of US$622 and US$257, respectively, and the rest of the directors received a net compensation of US$179 and US$165, respectively. During the years ended December 31, 2022, 2021 and 2020, all the Company’s senior managers received an aggregate compensation of short and long-term benefits of US$17,630, US$18,829 and US$11,913, respectively: these amounts were recognized in salaries and benefits in the consolidated statement of operations. During the years ended December 31, 2022, 2021 and 2020 the cost of the share-based payments MIP transactions was US$5,074, US$4,410 and US$3,519, respectively. The (benefit) cost of the cash-settled payments transactions MIP II and SARs was US$(4,365), US$(2,984) and US$5,362, respectively (Note 18). The Company has a short-term benefit plan to certain personnel whereby cash bonuses are awarded for meeting certain Company’s performance targets. As of December 31, 2022 and 2021 the Company recorded a provision in the amount of US$7,027 and US$7,602, respectively. In relation with this cash bonuses, during the years ended December 31, 2022, 2021 and 2020 the Company recorded an expense for an amount of US$6,893, US$7,602 and US$0, respectively, under the caption salaries and benefits. |
Other accounts receivable, net
Other accounts receivable, net | 12 Months Ended |
Dec. 31, 2022 | |
Other accounts receivable, net | |
Other accounts receivable, net | 8. Other accounts receivable, net An analysis of other accounts receivable as of December 31, 2022 and 2021, is detailed below: 2022 2021 Current: Credit cards US$ 43,942 US$ 36,924 Benefits from suppliers 11,491 516 Affinity credit card 9,432 — Other accounts receivable 4,448 1,636 Cargo clients 4,291 2,516 Travel agencies and insurance commissions 3,731 1,645 Other points of sales 1,968 6,848 Airport services 287 — Employees 68 760 Marketing services receivable — 34 79,658 50,879 Allowance for expected credit losses (809) (615) US$ 78,849 US$ 50,264 Accounts receivable have the following aging: 2022 2022 Total 2021 2021 Total Days Impaired Not impaired 2022 Impaired Not impaired 2021 0–30 US$ 622 US$ 68,356 US$ 68,978 US$ 502 US$ 47,432 US$ 47,934 31–60 — 1,580 1,580 — 1,332 1,332 61–90 — 4,865 4,865 — 410 410 91–120 187 4,048 4,235 113 1,090 1,203 US$ 809 US$ 78,849 US$ 79,658 US$ 615 US$ 50,264 US$ 50,879 The movement in the allowance for expected credit losses from January 1, 2021 to December 31, 2022 is as follows: Balance as of January 1st, 2021 US$ (1,640) Write-offs 1,783 Increase in allowance (795) Foreign currency translation effect 37 Balance as of December 31, 2021 (615) Write-offs 1,478 Increase in allowance (1,672) Balance as of December 31, 2022 US$ (809) The allowance for expected credit losses on accounts receivables is established in accordance with the information mentioned in Note 1f) ii). |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventories. | |
Inventories | 9. Inventories An analysis of inventories as of December 31, 2022 and 2021 is as follows: 2022 2021 Spare parts and accessories of flight equipment US$ 15,758 US$ 14,397 US$ 15,758 US$ 14,397 The inventory items are consumed during or used mainly in delivery of in-flight services and for maintenance services by the Company and are valued at the lower of cost or replacement value. The Company recognizes the necessary estimates for decreases in the value of its inventories due to impairment, obsolescence, slow movement and causes that indicate that the use or realization of the aircraft spare parts and flight equipment accessories that are part of the inventory will be less than recorded value. For the years ended December 31, 2022, 2021, and 2020, the Company did not record any impairment loss in the value of its inventories. During the years ended as of December 31, 2022, 2021 and 2020, the amount of consumption of inventories, recorded as an operating expense as part of maintenance expense was US$17,825, US$15,406 and US$10,922, respectively. |
Prepaid expenses and other curr
Prepaid expenses and other current assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid expenses and other current assets | |
Prepaid expenses and other current assets | 10. Prepaid expenses and other current assets An analysis of prepaid expenses and other current assets at December 31, 2022 and 2021 is as follows: 2022 2021 Sales commission to travel agencies (Note 1d) US$ 9,037 US$ 9,233 Other prepaid expenses 8,371 10,440 Advances to suppliers 6,446 8,542 Prepaid insurance 5,816 4,150 Flight credits 3,519 6,022 US$ 33,189 US$ 38,387 |
Guarantee deposits
Guarantee deposits | 12 Months Ended |
Dec. 31, 2022 | |
Guarantee deposits | |
Guarantee deposits | 11. Guarantee deposits An analysis of this caption as of December 31, 2022 and 2021 is as follows: 2022 2021 Current asset: Credit letters deposits US$ 44,609 US$ 54,767 Aircraft maintenance deposits paid to lessors (Note 1k) 16,767 21,127 Deposits for rental of flight equipment 1,583 1,687 Other guarantee deposits 1,398 1,409 64,357 78,990 Non-current asset: Aircraft maintenance deposits paid to lessors (Note 1k) 424,347 404,237 Deposits for rental of flight equipment 56,049 50,007 Other guarantee deposits 3,482 1,128 483,878 455,372 US$ 548,235 US$ 534,362 |
Rotable spare parts, furniture
Rotable spare parts, furniture and equipment, net | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 31, 2021 31, 2022 31, 2021 31, 2022 31, 2021 Leasehold improvements to flight equipment US$ 421,130 US$ 258,878 US$ (215,238) US$ (131,017) US$ 205,892 US$ 127,861 Pre-delivery payments* 185,455 253,826 — — 185,455 253,826 Flight equipment 110,959 106,575 (58,792) (64,661) 52,167 41,914 Construction and improvements in process 31,900 26,522 — — 31,900 26,522 Constructions and improvements 7,564 7,457 (6,818) (6,211) 746 1,246 Office furniture and equipment 2,997 2,933 (1,903) (1,681) 1,094 1,252 Computer equipment 1,409 1,400 (1,297) (1,200) 112 200 Workshop machinery and equipment 1,131 1,101 (489) (400) 642 701 Communications equipment 582 585 (397) (362) 185 223 Motorized transport equipment platform 565 561 (315) (163) 250 398 Electric power equipment 530 535 (295) (246) 235 289 Service carts on board 452 448 (368) (334) 84 114 Workshop tools 429 421 (420) (365) 9 56 Total US$ 765,103 US$ 661,242 US$ (286,332) US$ (206,640) US$ 478,771 US$ 454,602 * During the years ended December 31, 2022, 2021 and 2020 the Company capitalized borrowing costs of US$ 7,915, US $7,098 and US$ 17,872, respectively The amount of this line is net of disposals of capitalized borrowing costs related to sale and leaseback transactions of US$ 21,591, US $4,155 and US$ 18,701 , respectively. Motorized Workshop Constructions transport machinery Service Construction and Leasehold Flight and Computer Office furniture Electric power Workshop equipment Communications and carts on Allowance for Pre-delivery improvements improvements to equipment improvements equipment and equipment equipment Tools platform equipment equipment board obsolescence payments in process flight equipment Total Net balance as of January 1, 2021 US$ 23,356 US$ 1,354 US$ 392 US$ 1,590 US$ 385 US$ 167 US$ 367 US$ 289 US$ 648 US$ 156 US$ (150) US$ 246,639 US$ 2,684 US$ 87,117 US$ 364,994 Additions 25,503 — 72 3 96 84 236 — 206 — — 55,749 26,982 86,563 195,494 Disposals and transfers (137) (1) (3) (171) (123) (14) (250) (29) (43) — 148 (43,678) (1,385) — (45,686) Borrowing costs, net* — — — — — — — — — — — 2,943 — — 2,943 Other movements — 735 26 148 — — 176 21 6 — — — (1,318) 213 7 Conversion effects (1,018) (42) (10) (44) (7) (3) (16) (8) (21) (4) 2 (7,827) (441) (3,414) (12,853) Depreciation (5,790) (800) (277) (274) (62) (178) (115) (50) (95) (38) — — — (42,618) (50,297) As of December 31, 2021 41,914 1,246 200 1,252 289 56 398 223 701 114 — 253,826 26,522 127,861 454,602 Cost 106,575 7,457 1,400 2,933 535 421 561 585 1,101 448 — 253,826 26,522 258,878 661,242 Accumulated depreciation (64,661) (6,211) (1,200) (1,681) (246) (365) (163) (362) (400) (334) — — — (131,017) (206,640) Net balance as of December 31, 2021 41,914 1,246 200 1,252 289 56 398 223 701 114 — 253,826 26,522 127,861 454,602 Additions 17,091 — 8 9 4 8 — — 47 7 — 166,571 33,838 138,811 356,394 Disposals and transfers (1,656) — — (2) — — — (1) — — — (221,253) (4,838) — (227,750) Borrowing costs, net* — — — — — — — — — — — (13,676) — — (13,676) Other movements — 107 (1) 67 (7) — 7 1 4 — — (13) (23,622) 23,448 (9) Depreciation (5,182) (607) (95) (232) (51) (55) (155) (38) (110) (37) — — — (84,228) (90,790) As of December 31, 2022 52,167 746 112 1,094 235 9 250 185 642 84 — 185,455 31,900 205,892 478,771 Cost 110,959 7,564 1,409 2,997 530 429 565 582 1,131 452 — 185,455 31,900 421,130 765,103 Accumulated depreciation (58,792) (6,818) (1,297) (1,903) (295) (420) (315) (397) (489) (368) — — — (215,238) (286,332) Net balance as of December 31, 2022 US$ 52,167 US$ 746 US$ 112 US$ 1,094 US$ 235 US$ 9 US$ 250 US$ 185 US$ 642 US$ 84 US$ — US$ 185,455 US$ 31,900 US$ 205,892 US$ 478,771 a) b) c) d) 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 order included 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 order includes 46 A320NEO and 34 A321NEO. Under such agreement and prior to the delivery of each aircraft, the Company agreed to make pre-delivery payments, which shall be calculated based on the reference price of each aircraft, and following a formula established for such purpose in the agreement. In November 2018, the Company amended the agreement with Airbus to reschedule the remaining 26 fleet deliveries between 2019 and 2022. Also, in this amendment the Company used its rights on the Airbus Purchase Agreement to convert six A320NEO into A321NEO. In July 2020, the Company amended the agreement with Airbus to reschedule the 80 aircraft deliveries between 2023 and 2028. In October 2020, the Company amended the agreement with Airbus to reschedule the remaining 18 fleet deliveries between 2020 and 2022. In 2021, the Company amended the agreement with Airbus for the purchase of 39 A320 family aircraft to be delivered from 2023 to 2029. The order includes only A321NEO aircraft. Under such agreement and prior to the delivery of each aircraft, the Company agreed to make pre-delivery payments, which shall be calculated based on the reference price of each aircraft, and following a formula established for such purpose in the agreement. Also, in this agreement the Company used its rights on the Airbus Purchase Agreement to convert twenty A320NEO into A321NEO. In 2022, the Company amended the agreement with Airbus for the purchase of 25 A320 family aircraft to be delivered in 2030. The order includes only A321NEO aircraft. Under such agreement and prior to the delivery of each aircraft, the Company agreed to make pre-delivery payments, which shall be calculated based on the reference price of each aircraft, and following a formula established for such purpose in the agreement. 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 16 aircrafts (10 A320NEO and six A321NEO). This agreement also includes the purchase of three spare engines, two of them for the A320NEO fleet, and one for the A321NEO fleet. In April 2021, the Company amended the agreement with the engine supplier to provide major maintenance services for the engines of two aircrafts A320NEO. On May 12, 2020, the Company entered into certain agreements with IAE, which included the purchase of the engines for 46 A320NEO and 34 A321NEO respectively, to be delivered between 2022 and 2028. This agreement also included the purchase of eleven firm spare engines for the A320NEO fleet to be received from 2022 to 2029. In October 2021, the Company amended the agreement with the engine supplier to provide major maintenance services for the engines of 13 aircrafts (all A320NEO). This agreement also includes the purchase of one spare engine for the A320NEO fleet. The Company received credit notes from P&W in December 2017 of US$3.1 million, which are being amortized on a straight-line basis, prospectively during the term of the agreement. As of December 31, 2022, 2021 and 2020, the Company amortized a corresponding benefit from these credit notes of US$225, US$241 and US$228, respectively, which is recognized as an offset to maintenance expenses in the consolidated statements of operations. During the years ended December 31, 2022 and 2021, the amounts paid for aircraft and spare engine pre-delivery payments were of US$166.6 million and US$55.7 million, respectively. The current purchase agreement with Airbus requires the Company to accept delivery of 144 Airbus A320 family aircraft during a period of eight years (from January 2023 to December 2030). The agreement provides for the addition of 144 Aircraft to its fleet as follows: five in 2023, seventeen in 2024, sixteen in 2025, 27 in 2026, twenty-one in 2027, nineteen 2028, fourteen in 2029 and twenty-five to be delivered during 2030. Commitments to acquisitions of property and equipment are disclosed in Note 25. During the years ended December 31, 2022, 2021 and 2020 the Company entered into aircraft and spare engines sale and leaseback transactions, resulting in gains of US$21,193, US$9,668 and US$32,695, respectively, these were recorded under the caption other operating income in the consolidated statement of operations, that represented only the amount of gains that relate to the rights transferred to the buyer-lessor. (Note 22). e) 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 US$5 million in 2022 and US$1.5 million in 2017, which are amortized on a straight-line basis, prospectively during the term of the agreement. For the years ended December 31, 2022, 2021 and 2020, the Company amortized a corresponding benefit from these credit notes of US$452, US$258 and US$245, respectively, recognized as an offset to maintenance expenses in the consolidated statements of operations. As of December 31, 2022 the carrying amount of assets held for sale was US$795. For the year ended December 31, 2022 the depreciation expense was of US$309. (See Note 1 j). As of December 31, 2021 the carrying amount of assets held for sale was US$382 and for the year ended December 31,2021 the depreciation expense was of US$1,917. For the years ended December 31, 2022, 2021 and 2020, there were no impairments of rotable spare parts, furniture and equipment, net. |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2022 | |
Intangible assets, net | |
Intangible assets, net | 13. Intangible assets, net The composition and movement of intangible assets is as follows: Useful Gross value Accumulated amortization Net carrying amount Life At December 31, years 2022 2021 2022 2021 2022 2021 Software 1 - 4 US$ 47,850 US$ 41,048 US$ (35,125) US$ (28,416) US$ 12,725 US$ 12,632 Balance as of January 1st, 2021 US$ 9,603 Additions 10,142 Disposals (1) Amortization (6,752) Exchange differences (360) Balance as of December 31, 2021 12,632 Additions 6,790 Amortization (6,696) Exchange differences (1) Balance as of December 31, 2022 US$ 12,725 During the second half of 2021 and beginning of 2022 the Company implemented the SAP S/4HANA software. During 2022 and 2021 the costs directly attributable to developments and improvements to systems were recognized as an intangible asset and other non-qualifying costs as part of the implementation were recognized in the statements of operations. Software amortization expense for the years ended December 31, 2022, 2021 and 2020 was US$6,696, US$6,752 and US$4,715, respectively. These amounts were recognized in depreciation and amortization caption on the consolidated statements of operations. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 14. Leases As of December 31, 2022 and 2021 the most significant leases are as follows: a) Aircraft and engines represent the Company’s most significant lease agreements. As of December 31, 2022, the Company leases 116 aircraft (100 as of December 31, 2021) and 23 spare engines under lease agreements (20 as of December 31, 2021) that have maximum terms through 2034. 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, 2022 31, 2021 A319 132 3 3 A319 133 — 2 A320 233 39 39 A320 232 1 1 A320NEO 271N 48 39 A321 231 10 10 A321NEO 271N 15 6 116 100 Engine spare At December At December Type Model 31, 2022 31, 2021 V2500 V2524-A5 2 2 V2500 V2527M-A5 3 3 V2500 V2527E-A5 6 5 V2500 V2527-A5 6 4 PW1100 PW1127G-JM 5 5 PW1100 PW1133G-JM 1 1 23 20 * Certain of the Company’s aircraft and engine lease agreements include an option to extend the lease term period. Management evaluates extensions based on the market conditions at the time of renewal. During the year ended December 31, 2022, the Company added eighteen new leased aircraft to its fleet (six A320 NEO´s and seven A321 NEO acquired through sale and leaseback transactions under the Company´s existing Airbus purchase agreement. Additionally, three A320 NEO and two A321 NEO AC were obtained directly from the lessor´s aircraft order book). Also, the Company extended the lease term of two A321CEO (effective from 2023), two A320CEO (effective from September 2022 and July 2023) and one A319CEO (effective from March 2021). Finally, the Company returned two aircraft to their respective lessors (two A319CEO aircraft). All the aircraft incorporated through the lessor´s aircraft order were not subject to sale and leaseback transactions. During the year ended December 31, 2022, the Company also incorporated three CEO spare engines. Such leases were not subject to sale and leaseback transactions. Also, the Company extended the lease term of two spare engines (effective from February 2022). During the year ended December 31, 2021, the Company added fifteennew leased aircraft to its fleet (five A320 NEO´s acquired through sale and leaseback transactions under the Company’s existing Airbus purchase agreement and ten obtained directly from the lessor’s aircraft order book). Also, the Company extended the lease term of thirteen A320CEO (effective from 2022, 2023 and 2025) and two A319CEO (effective from 2021). All the aircraft incorporated through the lessor´s aircraft order were not subject to sale and leaseback transactions. During the year ended December 31, 2021, the Company also incorporated two NEO spare engines. Such leases were not subject to sale and leaseback transactions. Also, the Company extended the lease term of three spare engines (two of them effective from February 2021 and the other Set out below are the carrying amounts of right-of-use assets recognized and the movements during the period: Spare engine Land and Aircraft leases leases building leases Total As of January 1 st US$ 1,674,620 US$ 41,567 US$ 4,036 US$ 1,720,223 Additions 437,334 2,928 13,894 454,156 Modifications 60,239 2,084 6,928 69,251 Disposals — — (273) (273) Foreign currency translation effects (56,768) — (3) (56,771) Depreciation on right of use assets (252,761) (11,626) (4,964) (269,351) As of December 31, 2021 1,862,664 34,953 19,618 1,917,235 Additions 521,711 1,023 30,597 553,331 Modifications 25,895 (168) 5,081 30,808 Depreciation on right of use assets (299,517) (11,627) (9,299) (320,443) As of December 31, 2022 US$ 2,110,753 US$ 24,181 US$ 45,997 US$ 2,180,931 Set out below are the carrying amounts of lease liabilities and the movements during the period: 2022 2021 As of January 1 st, US$ 2,412,137 US$ 2,212,201 Additions 550,834 464,049 Modifications 29,842 67,589 Disposals — (291) Accretion of interest 165,043 127,329 Foreign exchange effect (129) 72,449 Foreign currency translation effects — (72,221) Payments (449,004) (458,968) As of 31 December, US$ 2,708,723 US$ 2,412,137 Current US$ 335,620 US$ 283,843 Non-current US$ 2,373,103 US$ 2,128,294 The Company had total cash outflows for leases of US$449,004 in 2022 (US$458,968 in 2021 and US$284,363 in 2020). During 2020 the Company applied practical expedients to leases in accordance with IFRS 16 guidance on lease modification accounting for rent concessions for those lease modifications arising as a direct result of COVID-19. The net impact on the consolidated statement of operations for 2020 was US$8,880 which reflects the changes to lease payments that arose from such concessions. During the years ended of December 31, 2022 and 2021, the Company did not have lease modifications arising as a direct result of COVID-19. For the years ended December 31, 2022, 2021 and 2020 the amounts recognized in profit or loss were as follow: For the year ended December 31, 2022 December 31, 2021 December 31, 2020 Depreciation of right-of-use assets US$ (320,443) US$ (269,351) US$ (236,417) Interest expense on lease liabilities and aircraft and engine lease return obligation (Note 23) (174,769) (128,159) (108,907) Aircraft and engine variable lease expenses (124,532) (83,373) (85,957) Total amount recognized in profit or loss US$ (619,744) US$ (480,883) US$ (431,281) i) Return obligations The aircraft lease agreements of the Company also require that the aircraft and engines be returned to lessors under specific conditions of maintenance. The costs of return, which in no case are related to scheduled major maintenance, are estimated and recognized ratably as a provision from the time it becomes likely such costs will be incurred and can be estimated reliably. These return costs are recognized on a straight-line basis as a component of 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, 2022, 2021 and 2020, in relation with this provision the Company expensed as supplemental rent US$58,658, US$55,668 and US$65,986, respectively. Extension options Certain lease agreements contain extension options, which the Company evaluates exercising once the lease period comes to its end, based on the market conditions at such moment. The lease liabilities corresponding to leases on which it was decided to extend are remeasured for the period negotiated between the Company and the lessor. During 2022 and 2021 the Company decided to exercise extension options for some agreements that resulted in an increase in the lease liability and the corresponding right of use assets by an amount of US$30,653 and US$66,850, respectively. |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued liabilities | |
Accrued liabilities | 15. Accrued liabilities a) The detail of current accrued liabilities as of December 31, 2022 and 2021 is as follows: 2022 2021 Fuel and traffic accrued expenses US$ 105,284 US$ 88,389 Maintenance and aircraft parts accrued expenses 25,172 22,667 Salaries and benefits 19,091 21,017 Accrued administrative expenses 12,517 9,564 Sales, marketing and distribution accrued expenses 7,636 18,772 Maintenance deposits 5,933 8,267 Deferred revenue from V Club membership 4,967 3,665 Information and communication accrued expenses 2,979 1,987 Supplier services agreement 2,262 1,154 Others 408 2,233 Benefits from suppliers 270 378 Advances from travel agencies 53 3 US$ 186,572 US$ 178,096 b) Non-current accrued liabilities as of December 31, 2022 and 2021 is as follows: 2022 2021 Supplier services agreement US$ 12,914 US$ 763 Benefits from suppliers — 441 Other 369 271 US$ 13,283 US$ 1,475 |
Other liabilities
Other liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Other liabilities. | |
Other liabilities | 16. Other liabilities Balance as of Balance as of January 1, Increase for December 31, 2022 the year Payments 2022 Aircraft and engine lease return obligation (Note 1r and 2i) US$ 188,879 US$ 94,815 US$ (34,228) US$ 249,466 Employee profit sharing (Note 17) 12,686 136 (12,436) 386 US$ 201,565 US$ 94,951 US$ (46,664) US$ 249,852 Current maturities US$ 5,398 Non-current US$ 244,454 Balance as of Balance as of January 1, Increase for Conversion December 31, 2021 the year Payments effects 2021 Aircraft and engine lease return obligation (Note 1r and 2i) US$ 125,546 US$ 70,120 US$ (1,914) US$ (4,873) US$ 188,879 Guarantee deposit (Note 1k) 12,532 — (12,327) (205) — Employee profit sharing (Note 17) 723 12,951 (787) (201) 12,686 US$ 138,801 US$ 83,071 US$ (15,028) US$ (5,279) US$ 201,565 Current maturities US$ 34,635 Non-current US$ 166,930 During the years ended December 31, 2022 and 2021 no cancellations or write-offs related to these liabilities were recorded. Since 2012, the Company holds a cobrand credit card agreement with Banco Invex, S.A., Institución de Banca Múltiple, Invex, Grupo Financiero Invex “Invex”. Through this agreement, Invex pays certain commissions to Volaris related to the cobrand credit card and Invex’s clients receive vouchers to be redeemed in different Volaris services under certain conditions. A portion of the voucher cost is paid by Volaris and the remaining amount by Invex. |
Employee benefits
Employee benefits | 12 Months Ended |
Dec. 31, 2022 | |
Employee benefits | |
Employee benefits | 17. Employee benefits The components of net period cost recognized in the consolidated statement of operations and the obligations for seniority premium for the years ended December 31, 2022, 2021 and 2020, are as follows: 2022 2021 2020 Analysis of net period cost: Current service cost US$ 6,518 US$ 425 US$ 398 Interest cost on benefit obligation 692 127 123 Net period cost US$ 7,210 US$ 552 US$ 521 Changes in the defined benefit obligation are as follows: 2022 2021 Defined benefit obligation as of January 1, US$ 3,968 US$ 2,538 Net period cost charged to profit or loss: Current service cost 6,518 425 Interest cost on benefit obligation 692 127 Remeasurement losses in other comprehensive income: Actuarial changes arising from changes in assumptions (253) 432 Payments made (179) (71) Conversion effect foreign currency 241 (67) Others — 584 Defined benefit obligation as of December 31, US$ 10,987 US$ 3,968 The significant assumptions used in the computation of the seniority premium obligations are shown below: 2022 2021 2020 Financial: Discount rate 9.21 % 7.84 % 7.04 % Expected rate of salary increases 5.50 % 5.50 % 5.50 % Annual increase in minimum salary 19.00 / 4.00 %* 19.00/4.50 % 4.00 % *19.00% applies to the General Zone and 4.00% to the Border Zone in Mexico* Biometric: Mortality (1) EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA Disability (2) IMSS-97 IMSS-97 IMSS-97 (1) Mexican Experience of social security (EMSSA), Economic Commission for Latin America and the Caribbean (CEPAL for its Spanish acronym). (2) Mexican Experience of Instituto Mexicano del Seguro Social (IMSS). * Border Zone, is made up of the states that border with the United States and the General Zone is made up by the rest states of the country. Accruals for short-term employee benefits (included as part of other liabilities). As of December 31, 2022 and 2021, respectively, are as follows: 2022 2021 Employee profit-sharing (Note 16) US$ 386 US$ 12,686 The key management personnel of the Company include the members of the Board of Directors (Note 7). Sensitivity analysis A reasonably possible variation at the date of the report, in one of the most significant actuarial assumptions, and assuming that the rest of the variables had remained constant, would have affected the benefit obligations defined as of December 31, 2022 in the amounts shown below: Present value of the defined benefit obligation (In thousands of U.S. dollars) Assumptions Increase Decrease Discount rate: 50 US$ 10,431 US$ 11,589 Statutory minimum wage increase rate: 50 US$ 11,197 US$ 10,789 Salary increase rate: 50 US$ 11,678 US$ 10,380 |
Share-based payments
Share-based payments | 12 Months Ended |
Dec. 31, 2022 | |
Share-based payments | |
Share-based payments | 18. Share-based payments a) LTRP On November 6, 2014, the shareholders of the Company and the shareholders of its subsidiary Servicios Corporativos, approved an amendment to the current LTRP for the benefit of certain key employees, based on the recommendations of the Board of Directors of the Company at its meetings held on July 24 and August 29, 2014. For such purposes on November 10, 2014 an irrevocable Administrative Trust was created by Servicios Corporativos and the key employees. The new plan was restructured and named LTIP, which consists of a share purchase plan (equity-settled transaction) and SARs plan (cash settled). On October 18, 2018, the Board of Directors of the Company approved a new long-term retention plan LTRP for certain executives of the Company, through which the beneficiaries of the plan, will receive shares of the Company once the service conditions are met. This plan does not include cash compensations granted through appreciation rights on the Company’s shares. The retention plans granted in previous periods under LTRP will continue in full force and effect until their respective due dates and the cash compensation derived from them will be settled according to the conditions established in each plan. b) LTIP - Share purchase plan (equity-settled) Under the share purchase plan (equity- settled), in November 2014 certain key employees of the Company were granted with a special bonus by an amount of Ps.10,831 (US$797 as of November 11, 2014 based on an exchange rate of Ps.13.58 to US$1), 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 (US $520 as of November 11, 2014 based on an exchange rate of Ps. 13.58 to US$1), 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 2022, 2021 and 2020, the extensions to the LTIP were approved by the Company’s shareholder’s and the Company’s Board of Directors, respectively. The total cost of the extensions approved were US$5,703 (US$3,707 net of withheld taxes), US$5,086 (US$3,307 net of withheld taxes) and US$4,618 (US$3,003 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, 2022 and 2021, 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, 2021 5,805,311 * Purchased during the year 1,849,417 Granted during the year — Exercised/vested during the year (2,612,575) Forfeited during the year (551,732) Outstanding as of December 31, 2021 4,490,421 * Purchased during the year 4,354,473 Granted during the year — Exercised/vested during the year (2,161,968) Forfeited during the year (103,712) Outstanding as of December 31, 2022 6,579,214 * * These shares are presented as treasury shares in the consolidated statement of financial position as of December 31, 2022, 2021 and January 1, 2021. The vesting period of the shares granted under the Company’s share purchase plans is as follows: Number of Series A shares Vesting period 3,084,981 November 2023 2,042,732 November 2024 1,451,501 November 2025 6,579,214 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, 2022, 2021 and 2020, the compensation expense recorded in the consolidated statement of operations amounted to US$5,074, US$4,410 and US$3,519, respectively. During 2022, 2021 and 2020, some key employees left the Company; therefore, the vesting conditions were not fulfilled. In accordance with the terms of the plan, Servicios Corporativos is entitled to receive the proceeds of the sale of such shares, the number of forfeited shares as of December 31, 2022, 2021 and 2020, were 103,712, 551,732 and 327,217, respectively. - SARs (cash settled) On November 6, 2014, the Company granted 4,315,264 SARs to key employees that entitle them to a cash payment and vest as long as the employee continues to be employed by the Company at the end of each anniversary, during a three Fair value of the SARs was measured at each reporting date. The retention plan granted in previous periods expired in November 2020. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits over the service period. During the year ended December 31, 2020, the Company recorded a benefit of US$(95) 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. Such payment was 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 (US$10,305 as of December 27 ,2012 based on an exchange rate of Ps. 12.97 to US$1) 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 (US$213 as of December 24, 2012 based on an exchange rate of Ps.12.77 to US$1) 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. During 2020, there were no exercised shares under the MIP. For the year ended December 31, 2021, the key employees exercised 7,653,981 Series A shares. As a result, the key employees paid to the Management Trust Ps.40,668 (US$1,976) corresponding to the exercised shares for the year ended December 31, 2021. Thereafter, the Company has received from the Management Trust the payment related to the exercised shares by the key employees as a repayment of the loan between the Company and the Management Trust. Movements in share options The table of the next page illustrates the number of shares options and fixed exercise prices during the year 2021. Total in Number of share Exercise price thousands of options in Mexican pesos Mexican pesos Outstanding as of January 1st, 2021 7,653,981 Ps. 5.31 Ps. 40,668 Granted during the year — — — Forfeited during the year — — — Exercised during the year (7,653,981) 5.31 (40,668) Outstanding as of December 31, 2021 — Ps. — Ps. — As of December 31, 2021 all the share options were exercised. On August 9, 2022, the Irrevocable Trust number F-307750 with HSBC Mexico S.A., Institución de Banca Múltiple, were terminated through payment of the outstanding amounts. - 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 on 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, 2022 and 2021 was US$1,562 and US$5,927, respectively. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits over the service period. During the years ended December 31, 2022, 2021 and 2020, the Company recorded a (benefit) expense of US$(4,365), US$(2,984) and US$5,457, respectively, in the consolidated statement of operations. During the years ended 2022, 2021 and 2020 were not exercised any SARs. The summary related to (benefit) expense recognized for the Company’s retention plans during the years 2022, 2021 and 2020 is shown in the following table: 2022 2021 2020 (Benefit) expense arising from cash-settled share-based payments transactions US$ (4,365) US$ (2,984) US$ 5,362 * Expense arising from equity-settled share-based payments transactions 5,074 4,410 3,519 Total expense arising from share-based payments transactions US$ 709 US$ 1,426 US$ 8,881 * The figures included LTIP – SARs (cash settled) benefit of US$(95). 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 “Share based payment”. In April 2018, the Board of Directors of the Company authorized a Board of Directors Incentive Plan “BoDIP”, for the benefit of certain board members. The BoDIP grants options to acquire shares of the Company or CPOs during a five For such purposes on August 29, 2018 the Fideicomiso Irrevocable de Administración número CIB/3081 was created by Controladora Vuela Compañía de Aviación S.A.B de C.V as trustee and CIBanco, S.A., Institucion de Banco Multiple as trustor. The number of shares held as of December 31, 2022, 2021 and 2020 available to be exercised is 5,945,417, 4,589,726 and 5,233,693, respectively and are included in treasury shares. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity | |
Equity | 19. Equity As of December 31, 2022, the total number of the Company’s authorized shares was 1,165,976,677; represented by common registered shares, issued and with no par value, fully subscribed and paid, comprised as follows: Shares Fixed Variable Class I Class II Total shares Series A shares (1) 10,478 1,108,452,326 1,108,462,804 Series B shares (1) 13,702 57,500,171 57,513,873 24,180 1,165,952,497 1,165,976,677 Treasury shares (Note 18) — (13,452,393) (13,452,393) (1) 24,180 1,152,500,104 1,152,524,284 (1) As of December 31, 2021, the total number of the Company’s authorized shares was 1,165,976,677; represented by common registered shares, issued and with no par value, fully subscribed and paid, comprised as follows: Shares Fixed Variable Class I Class II Total shares Series A shares (1) 10,478 1,108,452,326 1,108,462,804 Series B shares (1) 13,702 57,500,171 57,513,873 24,180 1,165,952,497 1,165,976,677 Treasury shares (Note 18) — (9,904,197) (9,904,197) (1) 24,180 1,156,048,300 1,156,072,480 (1) On December 11, 2020, the Company announced the closing of an upsized primary follow-on equity offering in which the Company offered 134,000,000 of its Ordinary Participation Certificates (Certificados de Participación Ordinarios), or CPOs, in the form of American Depositary Shares, or ADSs, at a price to the public of US$11.25 per ADS in the United States and other countries outside of Mexico, pursuant to the Company’s shelf registration statement filed with the Securities and Exchange Commission. In connection with the offering, the underwriters exercised their option to purchase up to 20,100,000 additional CPOs in the form of ADSs. Each ADS represents 10 CPOs and each CPO represents a financial interest in one Series A share of common stock of the Company. The net proceeds of US$164.4 million (after the deduction of the underwriters´ commission and expenses payable by the Company) obtained from the offering are to be used for general corporate purposes. The increase in capital stock amounted US$164.4 million. On December 20, 2021, one of the Company´s shareholders concluded the conversion of 30’538,000 Series B Shares for the equivalent number of Series A Shares. This conversion had not impact either on the total number of outstanding shares nor on the earnings-per-share calculation. All shares representing the Company’s capital stock, either Series A shares or Series B shares, grant the holders the same economic rights and there are no preferences and/or restrictions attaching to any class of shares on the distribution of dividends and the repayment of capital. Holders of the Company’s Series A common stock and Series B common stock are entitled to dividends when, and if, declared by a shareholders’ resolution. The Company’s revolving line of credit with Santander and Bancomext limits the Company’s ability to declare and pay dividends if the Company fails to comply with the payment terms thereunder. Only Series A shares from the Company are listed. During the years ended December 31, 2022, 2021 and 2020 the Company did not declare any dividends. 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, 2022 and 2021, the Company’s legal reserve was US$17,363, or 8.5% and 8.5% respectively of our capital stock. For the years ended December 31, 2022, 2021 and 2020, we did not allocate any amount to our legal reserve fund. As of December 31, 2022, 2021 and 2020 the Company’s legal reserve has not reached the 20% of its capital stock. Any distribution of earnings in excess of the net tax profit account ( Cuenta de utilidad fiscal neta Shareholders may contribute certain amounts for future increases in capital stock, either in the fixed or variable capital. Said contributions will be kept in a special account until the shareholders meeting authorizes an increase in the capital stock of the Company, at which time each shareholder will have a preferential right to subscribe and pay the increase with the a) (Loss) earnings per share Basic (loss) earnings per share (“LPS or EPS”) amounts are calculated by dividing the net (loss) earnings for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period. Diluted ( LPS) EPS amounts are calculated by dividing the (loss) earnings attributable to ordinary equity holders of the parent (after adjusting for interest on the convertible preference shares, if any), by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares (to the extent that their effect is dilutive). The following table shows the calculations of the basic and diluted earnings income per share for the years ended December 31, 2022, 2021 and 2020. As of December 31, 2022 2021 2020 Net (loss) income for the period US$ (80,224) US$ 106,453 US$ (191,722) Weighted average number of shares outstanding (in thousands): Basic 1,155,030 1,152,256 1,004,965 Diluted 1,165,135 1,165,612 1,021,286 LPS – EPS: Basic US$ (0.069) US$ 0.092 US$ (0.191) Diluted US$ (0.069) US$ 0.091 US$ (0.188) 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. |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2022 | |
Income tax | |
Income tax | 20. Income tax a) In accordance with the MITL, the Company and its Mexican subsidiaries are subject to income tax and each files its tax returns on an individual entity basis and the related tax results are included in the accompanying consolidated financial statements. The income tax is computed taking into consideration the taxable and deductible effects of inflation, such as depreciation calculated on Adjusted assets values. Taxable income is increased or reduced by the effects of inflation on certain monetary assets and liabilities through the annual inflation adjustment. (i) Based on the approved law, corporate income tax current rate for 2022, 2021 and 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 2022, 2021 and 2020 were in Guatemala 25%, Costa Rica 30% and El Salvador 30%. b) For the years ended December 31, 2022, 2021 and 2020, the Company reported on a combined basis taxable income of US$53,293, US$59,472 and US$15,140, respectively, which was partially offset by tax losses from prior years. In accordance with the MITL and Costa Rican Income Tax Law (CRITL), tax losses may be carried forward against taxable income generated in the succeeding ten In accordance with Guatemala Income Tax Law (GITL) and El Salvador Income Tax Law (ESITL), tax losses cannot be carried forward against taxable income generated. c) An analysis of consolidated income tax expense for the years ended December 31, 2022, 2021 and 2020 is as follows: Consolidated statements of operations 2022 2021 2020 Current year income tax expense US$ (15,456) US$ (17,903) US$ (3,978) Deferred income tax (expense) benefit 67,595 (12,670) (1) 65,709 (2) Total income tax benefit (expense) US$ 52,139 US$ (30,573) US$ 61,731 (1) (2) Consolidated statements of comprehensive income 2022 2021 2020 Deferred income tax related to items recognized in OCI during the year Net (loss) gain cash flow hedges US$ (80) US$ (274) US$ 2,347 Remeasurement (loss) gain of employee benefits (79) 138 39 Deferred income tax recognized in OCI US$ (159) US$ (136) US$ 2,386 d) A reconciliation of the statutory corporate income tax rate to the Company’s effective tax rate for financial reporting purposes is as follows: The Company’s effective income tax reconciliation using domestic tax rate 2022 % 2021 % 2020 % Statutory income tax rate (39,709) 30.00 % 41,108 30.00 % (76,036) 30.00 % Amendment tax return effects and other tax adjustments 1,242 (0.94) % (29) (0.02) % (3,563) 1.41 % Inflation on furniture, intangible and equipment (309) 0.23 % (2,323) (1.70) % (873) 0.34 % Inflation of tax losses (4,335) 3.28 % (1,971) (1.44) % (676) 0.27 % Foreign countries difference with Mexican statutory rate (9) 0.00 % 124 0.10 % 175 (0.07) % Annual inflation adjustment (11,200) 8.46 % (7,971) (5.82) % 2,591 (1.02) % Recorded deferred taxes on tax losses 7 0.00 % (434) (0.32) % 3,733 (1.47) % Non-deductible expenses 7,695 (5.81) % 2,069 1.51 % 12,918 (5.10) % Difference in Foreign Exchange income (loss) for tax purposes (5,521) 4.17 % — — — — (52,139) 39.39 % 30,573 22.31 % (61,731) 24.36 % Mexican income tax matters For Mexican purposes, corporate income tax is computed on accrued basis. MITL requires taxable profit to be determined by considering revenue net of tax deductions. Prior years’ tax losses can be utilized to offset current year taxable income. Income tax is determined by applying the 30% rate on the net amount after tax losses utilization. For tax purposes, income is considered taxable at the earlier of: (i) the time the revenue is collected, (ii) the service is provided or (iii) the time of the issuance of the invoice. Expenses are deductible for tax purposes generally on accrual basis, with some exceptions, once the requirements established in the tax law are fulfilled. Central America (Guatemala, Costa Rica and El Salvador) According to Guatemala Corporate Income tax law, under the regime on profits from business activities, net operating losses cannot offset taxable income in prior or future years. For the years ended December 31, 2022, 2021 and 2020, our subsidiary in Guatemala generated tax losses of US$10, US$32 and US$91, respectively. According to Costa Rica Corporate Income tax law, under the regime on profits from business activities, tax losses can offset taxable income in a term of three years. For the year ended December 31, 2022, our subsidiary in Costa Rica generated net operating gain for an amount of US$3,869. For the years ended December 31, 2021 and 2020, our subsidiary in Costa Rica generated net operating losses for an amount of US$5,947 and US$2,794, respectively, for which no deferred tax asset has been recognized. According to El Salvador Corporate Income tax law, under the regime on profits from business activities, net operating losses cannot offset taxable income in prior or future years. For the year ended December 31, 2022, our subsidiary in El Salvador generated net operating gain for an amount of US$17,078. For the years ended December 31, 2021 and 2020, our subsidiary in El Salvador generated net operating losses for an amount of US$2,601 and US$833, respectively. e) An analysis of consolidated deferred taxes is as follows: 2022 2021 Consolidated Consolidated Consolidated Consolidated statement of statement of statement of statement of financial position operations financial position operations Deferred income tax assets: Lease liability US$ 755,855 US$ 122,856 US$ 633,033 US$ (7,745) Unearned transportation revenue 58,010 48,176 9,885 (53,134) Aircraft and engine lease return obligation 77,007 23,951 53,056 15,448 Tax losses available for offsetting against future taxable income 38,387 33,122 4,865 (24,499) Intangible 29,687 (364) 30,052 10,430 Allowance for doubtful accounts 4,854 (1,510) 6,356 3,599 Employee benefits 2,486 2,104 294 (391) Employee profit sharing 134 (3,672) 3,805 4,076 Non derivative financial instruments — — — 24,360 966,420 224,663 741,346 (27,856) Deferred income tax liabilities: Right of use asset 571,521 106,233 465,382 (57,188) Supplemental rent 55,479 (7,872) 63,351 (29,592) Rotable spare parts, furniture and equipment, net 120,561 54,960 65,618 29,015 Provisions 7,345 4,200 2,430 12,789 Inventories 4,594 338 4,256 215 Other prepayments 376 (1,034) 1,431 675 Derivative Financial instruments 33 — 113 — Prepaid expenses and other assets 8,963 243 8,684 29,017 768,872 157,068 611,265 (15,069) US$ 197,548 US$ 67,595 US$ 130,081 US$ (12,787) Reflected in the consolidated statement of financial position as follows: 2022 2021 Deferred tax assets US$ 208,010 US$ 141,272 Deferred tax liabilities (10,462) (11,191) Deferred tax assets, net US$ 197,548 US$ 130,081 A reconciliation of deferred tax asset, net is as follows: 2022 2021 Opening balance as of January 1, US$ 130,081 US$ 146,816 Deferred income tax benefit (expense) during the current year recorded on profits* 67,595 (12,787) Deferred income tax expense during the current year recorded in accumulated other comprehensive loss (159) (136) Conversion effects 31 (3,812) Closing balance as of December 31, US$ 197,548 US$ 130,081 * According to IAS 12, Income Taxes An analysis of the available tax losses carry-forward of the Company at December 31, 2022 is as follows: Year Historical Inflation adjusted Total remaining Year of of loss Loss tax loss Utilized amount expiration 2019 US$ 239 US$ 304 US$ 166 US$ 138 2029 2020 5,461 5,461 2,126 3,335 2023 2020 2,745 3,427 103 3,324 2030 2021 6,457 6,404 — 6,404 2024 2021 550 651 — 651 2031 2022 110,922 114,105 — 114,105 2032 US$ 126,374 US$ 130,352 US$ 2,395 US$ 127,957 During the years ended December 31, 2022 and 2021 the Company utilized US$4,035 and US$94,489, respectively of the available tax loss carry-forwards. During the year ended December 31, 2022 the Company recognized US$110,922 of the available tax loss carry-forwards. A breakdown of available tax loss carry-forward of Controladora and its subsidiaries as of December 31, 2022 is as follows: Historical Inflation adjusted Total loss tax loss Utilized remaining amount Concesionaria US$ 110,685 US$ 113,861 US$ — US$ 113,861 Vuela Aviación 13,476 13,423 3,684 9,739 Comercializadora 2,628 3,256 166 3,090 Viajes Vuela 1,143 1,370 103 1,267 US$ 127,932 US$ 131,910 US$ 3,953 US$ 127,957 Unrecognized NOLs — US$ 127,957 Tax rate 30 % Deferred income tax US$ 38,387 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 in 2022 was US$ 7,143 ( 2021 US$7,648). The Company has determined that the undistributed profits of its subsidiaries will not be distributed in the foreseeable future. The Company has an agreement with its associate that the profits of the associate will not be distributed until it obtains the consent of the Company. The Company does not anticipate giving such consent at the reporting date. Furthermore, the Group will not distribute its profits until it obtains the consent of all venture partners. e) At December 31, 2022 the Company had the following tax balances: 2022 Adjusted contributed capital account ( Cuenta de capital de aportación US$ 489,080 CUFIN* 226,885 * As of December 31, 2022, the Company has tax proceedings regarding uncertain tax positions by an amount of about U.S. $31 million, associated to the deductibility of certain Company expenses during 2013 and 2014. The Company has filed legal administrative procedures. Volaris considers that has solid arguments to believe that it will not have adverse effects. Nonetheless, until all stages in the procedures are exhausted in each proceeding, the Company cannot assure the achievement of a final favorable resolution. |
Operating Revenues
Operating Revenues | 12 Months Ended |
Dec. 31, 2022 | |
Operating Revenues | |
Operating Revenues | 21. Operating Revenues For the years ended December 31, 2022, 2020 and 2021, the revenues from contracts with customers is described as follows: At the flight time At the sale Total Revenue recognition for the year ended December 31, 2022 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues US$ 1,097,480 US$ 563,696 US$ — US$ — US$ 1,661,176 Other Passenger Revenues 695,602 365,243 11,403 6,003 1,078,251 1,793,082 928,939 11,403 6,003 2,739,427 Non-Passenger Revenues Other Non-Passenger revenues 92,088 889 — — 92,977 Cargo 13,171 1,615 — — 14,786 Total US$ 1,898,341 US$ 931,443 US$ 11,403 US$ 6,003 US$ 2,847,190 At the flight time At the sale Total Revenue recognition for the year ended December 31, 2021 Domestic International Domestic International Revenues Passenger Revenues US$ 860,143 US$ 405,837 US$ — US$ — US$ 1,265,980 Fare Revenues 707,368 151,261 6,700 1,615 866,944 Other Passenger Revenues 1,567,511 557,098 6,700 1,615 2,132,924 Non-Passenger Revenues Other Non-Passenger revenues 76,306 566 — — 76,872 Cargo 11,410 472 — — 11,882 Total US$ 1,655,227 US$ 558,136 US$ 6,700 US$ 1,615 US$ 2,221,678 Non-derivative financial instruments (21,378) US$ 2,200,300 At the flight time At the sale Total Revenue recognition for the year ended December 31, 2020 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues US$ 411,107 US$ 215,802 US$ — US$ — US$ 626,909 Other Passenger Revenues 332,497 75,865 6,014 1,621 415,997 743,604 291,667 6,014 1,621 1,042,906 Non-Passenger Revenues Other Non-Passenger revenues 41,520 321 — — 41,841 Cargo 9,387 260 — — 9,647 Total US$ 794,511 US$ 292,248 US$ 6,014 US$ 1,621 US$ 1,094,394 Non-derivative financial instruments (19,408) US$ 1,074,986 Transactions from unearned transportation revenues 2022 2021 January 1, US$ 303,982 US$ 293,298 Deferred 2,781,914 2,154,865 Recognized in revenue during the year (2,739,427) (2,132,924) Foreign currency translation effect — (11,257) December 31, US$ 346,469 US$ 303,982 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. |
Other operating income and expe
Other operating income and expenses | 12 Months Ended |
Dec. 31, 2022 | |
Other operating income and expenses | |
Other operating income and expenses | 22. Other operating income and expenses An analysis of other operating income is as follows: 2022 2021 2020 Gain on sale and leaseback (Note 12) US$ 21,193 US$ 9,668 US$ 32,695 Loss on sale of rotable spare parts, furniture and equipment (1,645) (122) (127) Other income 5,518 1,212 1,051 US$ 25,066 US$ 10,758 US$ 33,619 An analysis of other operating expenses is as follows: 2022 2021 2020 Administrative and operational support expenses US$ 49,431 US$ 37,042 US$ 29,827 Technology and communications 25,708 21,296 17,913 Others 15,756 92 9 Insurance 6,574 3,753 2,561 Passenger services 5,116 3,675 4,103 US$ 102,585 US$ 65,858 US$ 54,413 |
Finance income and cost
Finance income and cost | 12 Months Ended |
Dec. 31, 2022 | |
Finance income and cost | |
Finance income and cost | 23. Finance income and cost An analysis of finance income is as follows: 2022 2021 2020 Interest on cash and equivalents US$ 12,036 US$ 2,872 US$ 4,384 Interest on cash and equivalents held in the trust CIB/3249 711 280 301 Interest on recovery of guarantee deposits 155 379 99 US$ 12,902 US$ 3,531 US$ 4,784 An analysis of finance cost is as follows: 2022 2021 2020 Interest expense on lease liabilities and aircraft and engine lease return obligation US$ 174,769 US$ 128,159 US$ 108,907 Interest on asset backed trust notes 12,049 5,672 5,448 Cost of letter credit notes 4,131 3,025 3,410 Other finance costs 584 1,589 481 Interest on debts and borrowings* 533 703 768 Bank fees and others 308 226 176 Derivative financial instruments loss 161 — 19,130 US$ 192,535 US$ 139,374 US$ 138,320 * 2022 2021 2020 Interest on debts and borrowings US$ 8,448 US$ 7,801 US$ 18,640 Capitalized interest (Note 12) (7,915) (7,098) (17,872) Net interest on debts and borrowing in the consolidated statements of operations US$ 533 US$ 703 US$ 768 |
Components of other comprehensi
Components of other comprehensive (loss) income | 12 Months Ended |
Dec. 31, 2022 | |
Components of other comprehensive (loss) income | |
Components of other comprehensive (loss) income | 24. Components of other comprehensive loss a. An analysis of the other comprehensive loss for the years ended December 31, 2022 and 2021 is as follows: Derivative and Exchange Remeasurements non-derivative differences on of employee financial the translation benefits instruments of foreign Total Other comprehensive loss: Balance as of January 1st, 2021 US$ (427) US$ (80,124) US$ (137,635) US$ (218,186) Comprehensive (loss) income of the year (432) 80,033 (10,489) 69,112 Deferred tax effect 138 (274) — (136) Balances as of December 31, 2021 (721) (365) (148,124) (149,210) Comprehensive income of the year 253 336 3,471 4,060 Deferred tax effect (79) (80) — (159) Net balances as of December 31, 2022 US$ (547) US$ (109) US$ (144,653) US$ (145,309) b. An analysis of the effects of the derivative financial instruments in other comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020 is as follows: 9 2022 2021 2020 Derivative and non-derivative financial instruments: Extrinsic value of changes on jet fuel Asian call options US$ — US$ 601 US$ (601) Extrinsic value of changes on jet fuel Zero cost collars — 484 (7,572) Income (loss) of the interest rate Cap 336 (128) (34) 336 957 (8,207) Non derivative financial instruments* — 79,076 (79,824) Total US$ 336 US$ 80,033 US$ (88,031) *As of December 31, 2021, includes the effect of the discontinuation of the hedging strategies by US$109 million as described in note 3b (i). |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and contingencies | |
Commitments and contingencies | 25. Commitments and contingencies Aircraft related commitments and financing arrangements Committed expenditures for aircraft purchase and related flight equipment related to the Airbus purchase agreement, including estimated amounts for contractual prices escalations and pre-delivery payments, will be as follows: Commitment expenditures in thousands of U.S. dollars 2023 US$ 224,629 2024 275,363 2025 711,455 2026 1,410,003 2027 and thereafter 4,204,369 US$ 6,825,819 All aircraft acquired by the Company through the Airbus purchase agreement through December 31, 2022, have been executed through sale and leaseback transactions. In addition, we have commitments to execute sale and leaseback over the next three years. The estimated proceeds from these commitments are as follows: Aircraft sale prices estimated in thousands of U.S. dollars 2023 US$ 165,500 2024 998,000 2025 389,500 US$ 1,553,000 For future aircraft deliveries the Company will review the lease and financing structure applicable based on the then current market conditions. The future lease payments for these non-cancellable sale and leaseback contracts are as follows: Aircraft leases in thousands of U.S. dollars 2023 US$ 7,977 2024 51,720 2025 104,014 2026 108,400 2027 and thereafter 1,028,688 US$ 1,300,799 Purchase of additional A320 New Engine Option (“NEO”) family aircraft On December 28, 2017, the Company amended the agreement with Airbus, S.A.S. (“Airbus”) for the purchase of additional 80 A320NEO family aircraft to be delivered from 2022 to 2026, which was further amended in July 2020 to reschedule the deliveries between 2023 and 2028. Additionally, in November 2021 the Company entered into a new amendment to the referred agreement to purchase 39 additional A32O New Engine Option Family Aircraft to be delivered between 2023 and 2029, in addition to the acquisition of these 39 aircraft, the Company exercised its rights under the purchase agreement with Airbus to convert 20 aircraft from A320NEO to A321NEO aircraft of its current order, all to support the Company’s targeted growth markets in Mexico, United States, Central America and South America. On October 10th, 2022, the Company executed an amendment to our existing Airbus purchase agreement for the purchase of 25 A32NEO aircraft, all to be delivered in 2030. Litigation The Company is a party to legal proceedings and claims that arise during the ordinary course of business. Certain proceedings are considered possible obligations. Based on the plaintiffs’ claims, as of December 31, 2022, 2021 and 2020 these possible contingencies amount to a total of US$7.8 million, US$8 million and US$6 million, respectively. |
Operating segments
Operating segments | 12 Months Ended |
Dec. 31, 2022 | |
Operating segments | |
Operating segments | 26. Operating segments The Company is managed as a single business unit that provides air transportation services. The Company has two geographic segments identified below: 2022 2021 2020 Operating revenues: Domestic (Mexico) US$ 1,909,744 US$ 1,661,927 US$ 800,525 International*: United States of America 758,609 509,976 271,899 Central America and South America 178,837 49,775 21,970 Non-derivative financial instruments — (21,378) (19,408) Total operating revenues US$ 2,847,190 US$ 2,200,300 US$ 1,074,986 * 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, 2022 | |
Subsequent events | |
Subsequent events | 27. Subsequent events Subsequent to December 31, 2022 and through April 18, 2023: Execution of a contract to be adhered to a Loyalty Program On January 23, 2023, the Company through its subsidiary Concesionaria entered into an agreement with Lealtad Mercadotecnia y Conocimientos Agregados, S.A.P.I. de C.V. (the “Supplier”), a subsidiary of Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA), through the aforementioned contract Concesionaria is adhered as a participating company to the Loyalty Program established and managed by the Supplier (the “Program”). The Program will offer exclusive benefits to its users, allowing them to accumulate and redeem reward points with OXXO and Volaris. |
Description of the business a_2
Description of the business and summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Description of the business and summary of significant accounting policies | |
Basis of preparation | b) Basis of preparation Statement of compliance These consolidated financial statements which comprise the financial statements of the Company and its subsidiaries at December 31, 2022, 2021 and January 1 st International Accounting Standards Board Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which each entity operates (“functional currency”). The functional currency of Company and its subsidiary Concesionaria was the Mexican peso until December 31, 2021, and since such date changed to U.S. dollar. The presentation currency of the Company’s consolidated financial statements is the U.S. dollar. All values in the consolidated financial statements are rounded to the nearest thousand (US$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, except for the effects of changes in functional currency that are affected prospectively. (Note 3b). Basis of measurement and presentation The accompanying consolidated financial statements have been prepared under the historical-cost convention, except for derivative financial instruments that are measured at fair value. The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from those estimates. Presentation currency and definition of terms Beginning January 1, 2022, and for all subsequent periods, as permitted by IAS 21 under IFRS and with the authorization of the Board of Directors, considering the previous favorable opinion of its Audit and Corporate Governance Committee, the Company changed its presentation currency from the Mexican peso to the U.S. dollar. The consolidated financial statements, including comparative amounts and the accompanying notes to the consolidated financial statements, are presented as if the new presentation currency had always been the Company´s presentation currency. The comparative financial statements and their related notes were re-presented for the change in presentation currency by applying the methodology set out in IAS 21, using the closing exchange rates for the consolidated statements of financial position and the average exchange rates of each month within the respective periods for consolidated statements of operations, consolidated statements of comprehensive income and consolidated statements of cash flows. Historic equity transactions were translated at the foreign exchange rate on the date of the transactions and were subsequently carried at historical value. The exchange rates used in translation were as described in note 1 n). In addition, resulting from this change in presentation currency and in compliance with IAS 1, Presentation of Financial Statements (“IAS 1”), the Company includes a third statement of financial position as of January 1, 2021. The consolidated financial statements and the accompanying notes are presented in U.S. dollars, except when specific reference is made to a different currency. When reference is made to U.S. dollars or “$” it means dollars of the United States. All amounts in the consolidated financial statements and the accompanying notes are stated in thousands, except when references are made to earnings or loss per share and/or prices per share. When reference is made to “Ps” or “pesos”, it means Mexican pesos. When it is deemed relevant, certain amounts in foreign currency presented in the notes to the consolidated financial statements include between parentheses a convenience translation into dollars and/or into pesos, as applicable. Change in functional currency An entity’s functional currency is the currency of the primary economic environment in which it operates. During the second half of 2021 management identified indicators of changes in the primary economic environment in which its main subsidiary Concesionaria operates, as follows: (i) increase in the international market transactions during 2021, (ii) change in the determination of rates (iii) most representative costs are determined and denominated in U.S. dollars. As a result, the Company evaluated the functional currency of its main subsidiary in accordance with the provisions contained in IAS-21 “Effects of Variations in Foreign Currency Exchange Rates”, concluding that the functional currency changed from the Mexican peso to the U.S dollar as of December 31, 2021. In addition, considering the dependency of the Company in its operations related to its wholly owned subsidiary Concesionaria, management evaluated and concluded that its functional currency also changed from the Mexican peso to U.S. dollar as of December 31, 2021. The change in functional currency was prospectively applied from the date of the change. Derived from the foregoing, once the authorization of the Board of Directors and considering the previous favorable opinion of the Audit and Corporate Governance Committee, as of December 31, 2021 the Company changed prospectively its functional currency from the Mexican peso to the U.S dollar (Note 3b). |
Basis of consolidation | c) Basis of consolidation The accompanying consolidated financial statements comprise the financial statements of the Company and its subsidiaries. As of December 31, 2022, 2021 and January 1 st % Equity interest Principal January Name Activities Country 2022 2021 1st 2021 Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V. Air transportation services for passengers, cargo and mail throughout Mexico and abroad Mexico 100 % 100 % 100 % Vuela Aviación, S.A. Air transportation services for passengers, cargo and mail in Costa Rica and abroad Costa Rica 100 % 100 % 100 % Vuela, S.A. (“Vuela”) * Air transportation services for passengers, cargo and mail in Guatemala and abroad Guatemala 100 % 100 % 100 % Vuela El Salvador, S.A. de C.V. Air transportation services for passengers, cargo and mail in El Salvador and abroad El Salvador 100 % 100 % 100 % Comercializadora Volaris, S.A. de C.V. (“Comercializadora”) Merchandising of services Mexico 100 % 100 % 100 % Servicios Earhart, S.A.* Rendering specialized services to its affiliates Guatemala 100 % 100 % 100 % Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”) Rendering specialized services to its affiliates Mexico 100 % 100 % 100 % Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) (3) Recruitment and payroll Mexico — — 100 % Comercializadora V Frecuenta, S.A. de C.V. (“Loyalty Program”) * Loyalty Program Mexico 100 % 100 % 100 % Viajes Vuela, S.A. de C.V. (“Viajes Vuela”) Travel agency Mexico 100 % 100 % 100 % Guatemala Dispatch Service, S.A., (“GDS, S.A.”) (4) Aeronautical Technical Services Guatemala 100 % 100 % — CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso 1710 (1) Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso 1711 (2) Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % Fideicomiso Irrevocable de Administración número F/307750 “Administrative Trust” ** Share administration trust (Note 18) Mexico 100 % 100 % 100 % Fideicomiso Irrevocable de Administración número F/745291 “Administrative Trust” Share administration trust (Note 18) Mexico 100 % 100 % 100 % Fideicomiso de Administración número CIB/3081 “Administrative Trust” Share administration trust (Note 18) Mexico 100 % 100 % 100 % Fideicomiso Irrevocable de Administración número CIB/3249 “Administrative Trust” Asset backed securities trustor & administrator (Note 5) Mexico 100 % 100 % 100 % CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3853 (5) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3855 (6) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3866 (6) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3867 (7) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S. A, Institución de Banca Múltiple, Fideicomiso CIB/3921 (8) Pre-delivery payments financing (Note 5) Mexico 100 % — — *The Company has not started operations. **The Trust was terminated on August 9, 2022. (1) With effect from October 16, 2020, the Successor of the Trust 1710 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple. (2) With effect from October 16, 2020, the Successor of the Trust 1711 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple. (3) From August 31,2021, the Company merged with Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V. (4) The Company was acquired on October 5, 2021. (5) With effect from June 8, 2022 the trust was constituted. (6) With effect from April 1st, 2022 the trusts were constituted. (7) With effect from April 13, 2022 the trust was constituted. (8) With effect from July 21, 2022 the trust was constituted. 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, and (iii) The Company’s voting rights and potential voting rights. The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Company gains control until the date the Company ceases to control the subsidiary. All intercompany balances, transactions, unrealized gains and losses resulting from intercompany transactions are eliminated in full on consolidation in the consolidated financial statements. On consolidation, the assets and liabilities of foreign operations are translated into U.S.dollar at the exchange rates prevailing at the reporting date and their statements of profit or loss are translated at the average exchange rates prevailing at the time. The exchange differences arising on translation for consolidation are recognized in other comprehensive income (“OCI”). On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognized in profit or loss. |
Revenue recognition | d) Revenue recognition Passenger revenues Revenues from the air transportation of passengers are recognized at the earlier of when the service is provided or when the non-refundable ticket expires at the date of the scheduled travel. Ticket sales for future flights are initially recognized as contract liabilities under the caption “unearned transportation revenue” and, once the transportation service is provided by the Company or when the non-refundable ticket expires at the date of the scheduled travel, the earned revenue is recognized as passenger ticket revenues and the unearned transportation revenue is reduced by the same amount. All the Company’s tickets are non-refundable and are subject to change upon a payment of a fee. Additionally, the Company does not operate a frequent flier program. The most significant passenger revenue includes revenues generated from: (i) fare revenue and (ii) other passenger revenues. Other passenger services include but are not limited to fees charged for excess baggage, bookings through the call center or third-party agencies, advanced seat selection, itinerary changes and charters. They are recognized as revenue when the obligation of passenger transportation service is provided by the Company or when the non-refundable ticket expires at the date of the scheduled travel. The Company also classifies as other passenger revenue “V Club” and other similar services, which are recognized as revenue over time when the service is provided. The Company sells certain tickets with connecting flights with one or more segments operated by its other airline partner. For segments operated by its other airline partner, the Company has determined that it is acting as an agent on behalf of the other airline as is responsible for its portion of the contract (i.e., transportation of the passenger). The Company, as the agent, recognizes revenue within other operating revenue at the time of the travel, for the net amount retained by the Company for any segments flown by other airline. 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 trip insurance, rental cars, and advertising spaces to third parties. They as well as cargo services, 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. Code-share tickets can be purchased directly from the Volaris’ website. The airline that provides the transportation recognize the revenue when the service is provided to the customer. 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 48 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 COVID-19 voucher is redeemed, and the associated flight occurs, or the voucher expires. When vouchers issued exceed the amount of the original amount paid by the passenger the excess is recorded as reduction of the operating revenues. All of the Company´s revenues related to future services are rendered through an approximate period of 12 months. |
Cash and cash equivalents | e) Cash, cash equivalents and restricted cash Cash and cash equivalents are represented by bank deposits and highly liquid investments with maturities of 90 days or less at the original purchase date. For the purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash and short-term investments as defined above. The Company has agreements with financial institutions that process customer credit card transactions for the sale of air travel and other services. These credit card processing agreements do not have significant cash reserve requirements. Restricted cash are used to constitute the debt service reserves and cannot be used for purposes other than those established. |
Financial instruments initial recognition and subsequent measurement | f) Financial instruments initial recognition and subsequent measurement A financial instrument is any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity. i) Financial assets Initial recognition Classification of financial assets and initial recognition The Company determines the classification and measurement of financial assets, in accordance with the categories in IFRS 9, which are based on both: the characteristics of the contractual cash flows of these assets and the business model objective for holding them. Financial assets include those carried at fair value through profit and losses (“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 other comprehensive income (“OCI”) with recycling of cumulative gains and losses. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when: a) The rights to receive cash flows from the asset have expired; b) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset; or When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the extent of the Company’s continuing involvement in the asset. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. ii) Impairment of financial assets The Company assesses at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is credit - impaired. A financial asset is credit- impaired when one or more events have occurred since the initial recognition of an asset (an incurred ‘loss event’), that has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence that a financial asset is credit – impaired may 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. During the years ended December 31, 2022, 2021 and 2020 the Company recorded expected credit losses on accounts receivable of US$1,672, US$795 and US$636, respectively (Note 8). iii) Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, including loans and borrowings, accounts payables to suppliers, unearned transportation revenue, other accounts payable and financial instruments. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. Subsequent measurement The measurement of financial liabilities depends on their classification as described below: Financial liabilities at amortized cost Accounts payable, are subsequently measured at amortized cost and do not bear interest or result in gains and losses due to their short-term nature. Loans and borrowings are the category most relevant to the Company. After initial recognition at fair value (consideration received), interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method (EIR). Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on issuance and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the consolidated statements of operations. This amortized cost category generally applies to interest-bearing loans and borrowings (Note 5). Financial liabilities at FVTPL Financial liabilities at FVTPL include financial liabilities under the fair value option, which are classified as held for trading, if they are acquired for the purpose of selling them in the near future. This category includes derivative financial instruments that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the consolidated statements of operations. Offsetting of financial instruments Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of financial position if there is: (i) A currently enforceable legal right to offset the recognized amounts, and (ii) An intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously. |
Other accounts receivable | g) Other accounts receivable Other accounts receivable are due primarily from major credit card processors associated with the sales of tickets and are stated at cost less allowances made for credit losses, which approximates fair value given their short-term nature. |
Inventories | h) Inventories Inventories consist primarily of flight equipment expendable parts, materials and supplies, and are initially recorded at acquisition cost. Inventories are carried at the lower of cost and their net realization value. The cost is determined based on the method of specific identification and expensed when used in operations. The Company recognizes the necessary estimates for decreases in the value of its inventories due to impairment, obsolescence, slow movement and causes that indicate that the use or realization of the aircraft spare parts and flight equipment accessories that are part of the inventory will be less than recorded value. The cost of inventories is determined based on the specific identification method and is recorded as an expense as it is used in operations. |
Intangible assets | i) Intangible assets Cost related to the purchase or development of computer software that is separable from an item of related hardware 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, 2022, 2021, and 2020, the Company did not record any impairment loss in the value of its intangible assets. Software Acquired computer software licenses are capitalized on the basis of cost incurred to acquire, implement and bring the software into use. Costs associated with maintaining computer software programs are expensed as incurred. In case of development or improvement to systems that will generate probable future economic benefits, the Company capitalizes software development costs, including directly attributable expenditures on materials, labor, and other direct costs. Acquired software cost is amortized on a straight-line basis over its useful life. Licenses and software rights acquired by the Company have finite useful lives and are amortized on a straight–line basis over the term of the contract. Amortization expense is recognized in the consolidated statements of operations. |
Assets held for sale | j) Assets held for sale Assets held for sale, formerly non-current assets or groups of assets that are expected to be sold within the next twelve months are measured at the lower of their carrying amount at the time they are reclassified, and fair value less sell costs. Fair value less sell costs is derived from recent market transactions, if available. On December 22, 2022, Concesionaria signed an aircraft sale and purchase agreement with SETNA IO LLC., by a total amount of US$901. As of December 31, 2022 the carrying amount of the remaining owned aircraft is US$795. |
Guarantee deposits | k) Guarantee deposits Guarantee deposits consist primarily of aircraft maintenance deposits paid to lessors, deposits for rent of flight equipment and other guarantee deposits. Aircraft and engine deposits are held by lessors in U.S. dollars and are presented as current assets and non-current assets, based on the recovery dates of each deposit established in the related agreements (Note 11). Deposits for flight equipment maintenance paid to lessors Most of the Company’s lease contracts stipulate the obligation to pay maintenance deposits to aircraft lessors, in order to guarantee major maintenance work. These lease agreements establish that maintenance deposits are reimbursable to the Company at the time the major maintenance event is concluded for an amount equal to: (i) the maintenance deposit held by the lessor associated with the specific maintenance event, or (ii) the qualifying costs related to the specific maintenance event. Substantially all major maintenance deposits are generally calculated based on the use of leased aircraft and engines (flight hours or operating cycles). The sole purpose of these deposits is to guarantee to the lessor the execution of maintenance work on the aircraft and engines. Maintenance deposits that the Company expects to recover from lessors are presented as security deposits in the consolidated statement of financial position. According to the term of the lease, in each contract it is evaluated whether major maintenance of the leased aircraft and engines is expected to be carried out. In the event that major maintenance is not expected to be performed on its own account, the deposit is recorded as a variable lease payment, since it represents part of the use of the leased goods and is determined based on time or flight cycles. For the years ended December 31, 2022, 2021 and 2020, the Company recognized supplemental lease payments of US$48,172, US$38,227 and US$20,063, respectively. When modifications are made to the lease agreements that entail an extension of the lease term, the maintenance deposits which had been recorded previously as variable lease payments can be converted into recoverable deposits and presented as recoverable assets, at the modification date. During the years ended December 31, 2022 and 2021, the Company added eighteen and fifteen net new aircrafts to its fleet, respectively (Note 14). During the year ended December 31, 2022, the Company extended the lease period of five aircrafts and two engines. During the year ended December 31, 2021, the Company extended the lease period of 15 aircrafts and three engines. Certain other aircraft lease agreements do not require the obligation to pay maintenance deposits in advance to lessors to guarantee important maintenance activities; therefore, the Company does not record or make payments for guarantee deposits with respect to these aircrafts. However, some of these lease agreements include the obligation to make maintenance adjustment payments to lessors at the end of the lease period. These maintenance adjustments cover maintenance events that are not expected to be performed before the termination of the lease; for such agreements, the Company accumulates a liability related to the amount of the costs that will be incurred at the end of the lease, since no maintenance deposits have been made (Note 16). |
Aircraft and engine maintenance | l) 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 (utilization). Fleet maintenance requirements may include preventive maintenance tasks and specific manufacturers recommendations, for example, component checks, monthly checks, airframe and systems checks, periodic major maintenance and engine checks. Aircraft maintenance and repair consists of routine and non-routine works, divided mainly into three general categories: (i) routine line maintenance, (ii) major maintenance and (iii) component service . (i) Routine line 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 normally performed by Company mechanics and are primarily completed at the main airports that the Company currently serves, supported by sub-contracted companies. Other maintenance activities are sub-contracted to qualified maintenance business partners, repair and overhaul organizations. Routine maintenance also includes scheduled tasks that can typically take from 6 (ii) Major maintenance for the aircraft consists of a series of more complex tasks, including structural checks for the airframe, that can take up to six weeks Major maintenance is accounted for under the deferral method, whereby the cost of major maintenance, major overhaul and repair is capitalized (leasehold improvements to flight equipment) and amortized over the shorter of the period to the next major maintenance event or the remaining contractual lease term. The next major maintenance event is estimated based on assumptions including estimated time of usage. The United States Federal Aviation Administration (“FAA”) and the Mexican Federal Civil Aviation Agency (Agencia Federal de Aviación Civil - AFAC 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, 2022 and 2021, the Company capitalized major maintenance events as part of leasehold improvements to flight equipment for an amount of US$138,811 and US$85,940, respectively. For the years ended December 31, 2022, 2021 and 2020, the amortization of major maintenance leasehold improvement costs was US$83,071, US$40,744 and US$30,555 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 components for the Company’s fleet when they are required. It also provides aircraft components that are included in the redelivery conditions of the contract (hard time) with a fixed priced 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 for the engines shop visits, provides miscellaneous engines coverage, supports the cost of foreign objects damage events, ensures there is protection from annual escalations, and grants credit for certain 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 | m) 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 of spare engine parts (major components) (Note 12). Pre-delivery payments refer to prepayments made to aircraft and engine manufacturers during the manufacturing stage of the aircraft. The borrowing costs related to the acquisition or construction of a qualifying asset are capitalized as part of the cost of that asset. Depreciation rates are as follows: Annual depreciation rate Flight equipment 4.0-16.7% Constructions and improvements Remaining contractual lease term Computer equipment 25% Workshop tools 33.3% Electric power equipment 10% Communications equipment 10% Workshop machinery and equipment 10% Motorized transport equipment platform 25% Service carts on board 20% Office furniture and equipment 10% Leasehold improvements to flight equipment The shorter of: (i) remaining contractual lease term, or (ii) the next major maintenance event The Company reviews annually the useful lives of these assets and any changes are accounted for prospectively. The Company identified one Cash Generating Unit (CGU), which includes the entire aircraft fleet and flight equipment. The Company assesses at each reporting date, whether there is objective evidence that rotable spare parts, furniture and equipment and right of use asset are impaired in the CGU. The Company records impairment charges on rotable spare parts, furniture and equipment and right of use assets used in operations when events and circumstances indicate that the assets may be impaired or when the carrying amount of a long-lived asset or related cash generating unit exceeds its recoverable amount, which is the higher of (i) its fair value less cost to sell and (ii) its value in use. The value in use calculation is based on a discounted cash flow model, using projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation. |
Foreign currency transactions and exchange differences | n) Foreign currency transactions and exchange differences The Company’s consolidated financial statements are presented in U.S. dollars, which is the presentation and functional currency of the parent company and its subsidiaries. For each subsidiary, the Company determines the functional currency and items included in the financial statements of each entity are measured using the currency of the primary economic environment in which each entity operates (“the functional currency”). The financial statements of foreign subsidiaries prepared under IFRS and denominated in their respective local currencies different from its functional currency are translated into their functional currency as follows: ● Transactions in foreign currencies are translated into the respective functional currencies at the exchange rates at the dates of the transactions. ● All monetary assets and liabilities are translated into the functional currency at the exchange rate at the consolidated statement of financial reporting date. ● All non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. ● Equity accounts are translated at the prevailing exchange rate at the time the capital contributions were made, and the profits were generated. ● Revenues, costs and expenses are translated at the average exchange rate during the applicable period. Any differences resulting from the currency functional translation are recognized in the consolidated statements of operations. The Company’s consolidated financial statements are presented in U.S. dollars. Assets and liabilities from foreign subsidiaries are converted from the functional currency to the presentation currency at the exchange rate on the reporting date; revenues and expenses are translated at each month during the year at the monthly average exchange rate. Foreign currency differences arising on translation into the presentation currency are recognized in OCI. Exchange differences on translation of foreign entities for the years ended December 31, 2022 and 2021, were US$3,471 and US$(10,489), respectively. For the years ended December 31, 2022, 2021 and 2020, the most relevant exchange rates utilized in the conversions to US$ dollar, are as follows: 2022 2021 2020 End of period Average End of period Average End of period Average Currency exchange rate exchange rate exchange rate exchange rate exchange rate exchange rate Mexican Peso Ps. 19.3615 Ps. 20.1254 Ps. 20.5835 Ps. 20.2818 Ps. 19.9487 Ps. 21.4961 Colon ₵. 594.9700 ₵. 649.5908 ₵. 645.900 ₵. 624.3460 ₵. 615.7800 ₵. 588.4240 Quetzal Q. 7.8515 Q. 7.7765 Q. 7.7285 Q. 7.7589 Q. 7.8095 Q. 7.7292 Colombian Peso COP. 4,810.20 COP. 4,255.44 COP. 3,981.16 COP. 3,751.33 COP. 3,428.26 COP. 3,695.48 |
Liabilities and provisions | o) 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 | p) 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 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, 2022 and 2021, 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, 2022. 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 The Company has a short-term benefit plan for certain key personnel whereby cash bonuses are awarded when certain Company’s performance targets are met. These incentives are payable shortly after the end of each year and also are accounted for as a short-term benefit under IAS 19. A provision is recognized based on the estimated amount of the incentive payment (Note 7). v) Long-term incentive plan (“LTIP”) and long-term retention plan (LTRP) The Company has adopted a Long-term incentive plan (“LTIP”). This plan consists of a share purchase plan (equity-settled) and a share appreciation rights “SARs” plan (cash settled), and therefore accounted under IFRS 2 “Share based payment”. The Company measures the cost of its equity-settled transactions at fair value at the date the equity benefits are conditionally granted to employees. The cost of equity-settled transactions is recognized in the statement of operations, together with a corresponding increase in treasury shares, over the period in which the performance and/or service conditions are fulfilled. During 2022, 2021 and 2020, the Company approved a new long-term retention plan (“LTRP”), which consisted in a purchase plan (equity-settled). This plan does not include cash compensations granted through appreciation rights on the Company’s shares. The retention plans granted in previous periods will continue in full force and effect until their respective due dates and the cash compensation derived from them will be settled according to the conditions established in each plan. vi) Share-based payments a) LTIP - Share purchase plan (equity-settled) Certain key employees of the Company receive additional benefits through a share purchase plan denominated in Restricted Stock Units (“RSUs”), which has been classified as an equity-settled share-based payment. The cost of the equity-settled share purchase plan is measured at grant date, taking into account the terms and conditions on which the share options were granted. The equity-settled compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the requisite service period (Note 18). - SARs plan (cash settled) The Company granted SARs to key employees, which entitle them to a cash payment after a service period. The amount of the cash payment is determined based on the increase in the share price of the Company between the grant date and the time of exercise. The liability for the SARs is measured, initially and at the end of each reporting period until settled, at the fair value of the SARs, taking into account the terms and conditions on which the SARs were granted. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the requisite service period (Note 18). The retention plan granted in previous periods expired in November 2020. During the year ended December 31, 2020, the Company recorded a (benefit) for US$(95), related to the SARs included in the LTIP. These amounts were recorded under the caption salaries and benefits. The cost of the SARs plan is measured initially at fair value at the grant date, further details of which are given in (Note 18). This fair value is expensed over the period until the vesting date with recognition of a corresponding liability. Similar to the equity settled awards described above, the valuation of cash settled award also requires using similar inputs, as appropriate. b) Management incentive plan (“MIP”) - MIP I Certain key employees of the Company receive additional benefits through a share purchase plan, which has been classified as an equity-settled share-based payment. The equity-settled compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the requisite service period (Note 18). The total cost of this plan has been totally recognized during the required service period. - MIP II On February 19, 2016, the Board of Directors of the Company authorized an extension to the MIP for certain key employees, this plan was named MIP II. In accordance with this plan, the Company granted SARs to key employees, which entitle them to a cash payment after a service period. The amount of the cash payment is determined based on the increase in the share price of the Company between the grant date and the time of exercise. The liability for the SARs is measured initially and at the end of each reporting period until settled at the fair value of the SARs, taking into account the terms and conditions on which the SARs were granted. The compensation cost is recognized in the consolidated statement of operations under the caption of salaries and benefits, over the requisite service period (Note 18). 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 “Share based payment”. In April 2018, the Board of Directors of the Company authorized a Board of Directors Incentive Plan “BoDIP”, for the benefit of certain board members. The BoDIP grants options to acquire shares of the Company or CPOs during a five- year 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%. The Mexican Federal Labor Law (“MFLL”) establishes a limit for employee profit sharing payment, up to three months of the employee´s current salary or the average employee profit sharing received by the employee in the previous three years. For the years ended December 31, 2022, 2021 and 2020, the employee profit sharing is US$136, US$12,951 and US$968 operating expense in the consolidated statements of operations. Subsidiaries in Central America do not have such profit -sharing benefit, as it is not required by local regulations. |
Leases | q) Leases The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognizes lease liabilities for payments to be made under the lease term and the right-of-use assets representing the right to use the underlying assets. i. Right-of-use assets The Company recognizes right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, an estimate of costs to be incurred by the Company in dismantling and removing the underlying asset to the condition required by the terms and conditions of the lease, and lease payments made at or before the commencement date less any lease incentives received. Components of the right-of-use assets are depreciated on a straight-line basis over the shorter of the remining lease term and the estimated useful lives of the assets, as follows: Aircraft and engines up to 18 years Spare engines up to 18 years Buildings leases one 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, 2022, 2021 and 2020, there were no impairment charges recorded in respect of the right-of-use assets. iii. Sale and leaseback The Company enters into a 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 Consolidated Statement of Operations only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. If the fair value of the consideration for the sale of an asset does not equal the fair value of the asset, or if the payments for the lease are not at market rates, then the Company adjusts the difference to measure the sale proceeds at fair value and accounts for any below-market terms as a prepayment of lease payments and any above market terms as additional financing provided by the buyer-lessor to the seller-lessee . First, the sale and leaseback transactions are analyzed within the scope of IFRS 15 - Revenue from Contracts with Customers, in order to verify whether the performance obligation has been satisfied and, therefore, are accounted for the sale of the asset. If this requirement is not met, it is a financing with the asset given as collateral. If the requirements related to the performance obligation established in IFRS 15 are met, the Company measures an asset for right of use that arises from the sale transaction with subsequent lease in proportion to the book value of the asset related to the right-of-use assets retained by the Company. Consequently, only the gains or losses related to the rights transferred to the lessor-buyer are recognized. r) Return obligations The aircraft lease agreements of the Company also require that the aircraft components (airframe, APU and landing gears) and engines (overhaul and limited life parts) be returned to lessors under specific conditions of maintenance. The costs of return, which in no case are related to scheduled major maintenance, are estimated, and recognized ratably as a provision from the time it becomes likely such costs will be incurred and can be estimated reliably. These return costs are recognized on a straight-line basis as a component of variable lease expenses and the provision is included as part of other liabilities, through the remaining lease term. The Company estimates the provision related to aircraft components and engines using certain assumptions including the projected usage of the aircraft and the expected costs of maintenance tasks to be performed. This provision is made in relation to the present value of the expected future costs of meeting the return conditions (Note 14 and 16). |
Other taxes and fees payable | s) 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 | t) Income taxes Current income tax Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred tax Deferred tax is recognized in respect of temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences, except, in respect of taxable temporary differences associated with investments in subsidiaries when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognized for all deductible temporary differences, the carry-forward of unused tax credits and any available tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and available tax losses can be utilized, except, in respect of deductible temporary differences associated with investments in subsidiaries deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profits will be available against which the temporary differences can be utilized. The Company considers the following criteria in assessing the probability that taxable profit will be available against which the unused tax losses or unused tax credits can be utilized: (a) whether the entity has sufficient taxable temporary differences relating to the same taxation authority and the same taxable entity, which will result in taxable amounts against which the unused tax losses or unused tax credits can be utilized before they expire; (b) whether it is probable that the Company will have taxable profits before the unused tax losses or unused tax credits expire; (c) whether the unused tax losses result from identifiable causes which are unlikely to recur; and (d) whether tax planning opportunities are available to the Company that will create taxable profit in the period in which the unused tax losses or unused tax credits can be utilized. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction in OCI. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Income taxes are computed based on tax laws approved in Mexico, Costa Rica, Guatemala and El Salvador at the date of the consolidated statement of financial position. The IFRIC Interpretation 23 Uncertainty over Income Tax Treatment addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 Income Taxes. It does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The interpretation specifically addresses the following: ● Whether an entity considers uncertain tax treatments separately. ● The assumptions an entity makes about the examination of tax treatments by taxation authorities. ● How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates. ● How an entity considers changes in facts and circumstances. The Company determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments and uses the approach that better predicts the resolution of the uncertainty. The Company applies significant judgement in identifying uncertainties over income tax treatments. Since the Company operates in a complex multinational environment, it assessed whether the Interpretation had an impact on its consolidated financial statements. Upon adoption of the Interpretation, the Company considered whether it has any uncertain tax positions, particularly those relating to transfer pricing. The Company’s and the subsidiaries’ tax filings in different jurisdictions include deductions related to transfer pricing and the taxation authorities may challenge those tax treatments. The Company determined, based on its tax compliance and transfer pricing studies, that it is probable that its tax treatments (including those for the subsidiaries) will be accepted by the taxation authorities. As of December 31, 2022 and 2021 the Interpretation did not have an impact on the consolidated financial statements of the Company. |
Derivative and non-derivative financial instruments and hedge accounting | u) Derivative and non-derivative financial instruments and hedge accounting The Company mitigates certain financial risks, such as volatility in the price of jet fuel, adverse changes in interest rates and exchange rate fluctuations, through a risk management program that includes the use of derivative financial instruments and non-derivative financial instrument. In accordance with IFRS 9, derivative financial instruments and non-derivative financial instruments are recognized in the consolidated statement of financial position at fair value. At inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which it wishes to apply hedge accounting, as well as the risk management objective and strategy for undertaking the hedge. The documentation includes the hedging strategy and objective, identification of the hedging instrument, the hedged item or transaction, the nature of the risks being hedged and how the entity will assess the effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk(s). Only if such hedges are expected to be effective in achieving offsetting changes in fair value or cash flows of the hedge item(s) and are assessed on an ongoing basis to determine that they have been effective throughout the financial reporting periods for which they were designated, hedge accounting treatment can be used. Under the cash flow hedge (CFH) accounting model, the effective portion of the hedging instrument’s changes in fair value is recognized in OCI, while the ineffective portion is recognized in current year earnings in the statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. The amounts recognized in OCI are transferred to earnings in the period in which the hedged transaction affects earnings. During the years ended December 31, 2022 and 2021, the Company did not recognize an ineffective portion with respect to derivative financial instruments. As of December 31,2020, the Company recorded the ineffective portion of US$19.1 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 (Note 3 b (i)). Accounting for the time value of options The Company accounts for the time value of options in accordance with IFRS 9, which requires all derivative financial instruments to be initially recognized at fair value. Subsequent measurement for options purchased and designated as CFH requires that the option’s changes in fair value be segregated into its intrinsic value (which will be considered the hedging instrument’s effective portion in OCI) and its correspondent changes in extrinsic value (time value and volatility). The extrinsic value changes will be considered as a cost of hedging (recognized in OCI in a separate component of equity) and accounted for in income when the hedged items also are recognized in income. |
Financial instruments - Disclosures | v) 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 | w) Treasury shares The Company’s equity instruments that are reacquired (treasury shares), are recognized at cost and deducted from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of treasury shares. Any difference between the carrying amount and the consideration received, if reissued, is recognized in additional paid in capital. Share-based payment options exercised during the reporting period were settled with treasury shares (Note 18). |
Operating segments | x) Operating segments Management of Controladora monitors the Company as a single business unit that provides air transportation and related services, accordingly it has only one operating segment. The Company has two geographic areas identified as domestic (Mexico) and international (United States of America, Central America and South America) (Note 26). |
Current versus non-current classification | y) 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 | z) 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, 2022. The Company has not early adopted any other standard interpretation or amendment that has been issued but is not yet effective. The nature and the effect of these changes are disclosed below: Covid-19-Related Rent Concessions beyond June 30, 2021, Amendments to IFRS 16 On May 28, 2020, the IASB issued Covid-19-Related Rent Concessions - amendment to IFRS 16 Leases The amendments provide relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the Covid-19 related rent concession the same way it would account for the change under IFRS 16 if the change were not a lease modification. The amendment was intended to apply until June 30, 2021, but as the impact of the Covid-19 pandemic is continuing, on March 31, 2021, the IASB extended the period of application of the practical expedient to June 30, 2022. The amendment applies to annual reporting periods beginning on or after April 1st, 2021. As of December 31, 2022, this amendment did not have impact on the consolidated financial statements of the Company (Note 14). Annual Improvements to IFRS Standards 2018–2020 IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is effective for annual reporting periods beginning on or after January 1 st , 2022, with earlier adoption permitted. As of December 31, 2022, this amendment did not have impact on the consolidated financial statements of the Company (Note 1f) iii) and Note 5). Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16 In May 2020, the IASB issued Property, Plant and Equipment - Proceeds before Intended Use, which prohibits entities deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the costs of producing those items, in profit or loss. The amendment is effective for annual reporting periods beginning on or after January 1 st , 2022 and must be applied retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The Company expects to adopt the amendments in their effective dates considering preliminarily no significant effects. As of December 31, 2022, this amendment did not have impact on the consolidated financial statements of the Company (Note 12). Reference to the Conceptual Framework – Amendments to IFRS 3 In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements. The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately. At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements. The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively. As of December 31, 2022 this amendment did not have impact on the consolidated financial statements of the Company. Standards issued but not yet effective IFRS 17 Insurance Contracts In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Once effective, IFRS 17 will replace IFRS 4 Insurance Contracts (IFRS 4) that was issued in 2005. IFRS 17 applies to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. A few scope exceptions will apply. The overall objective of IFRS 17 is to provide an accounting model for insurance contracts that is more useful and consistent for insurers. In contrast to the requirements in IFRS 4, which are largely based on grandfathering previous local accounting policies, IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. The core of IFRS 17 is the general model, supplemented by: ● A specific adaptation for contracts with direct participation features (the variable fee approach). ● A simplified approach (the premium allocation approach) mainly for short-duration contracts. IFRS 17 is effective for reporting periods beginning on or after 1 January 2023, with comparative figures required. Early application is permitted, provided the entity also applies IFRS 9 and IFRS 15 on or before the date it first applies IFRS 17. The Company is currently assessing the impact of this standard which expects to adopt in their effective date. Amendments to IAS 1: Classification of Liabilities as Current or Non-current In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify: ● What is meant by a right to defer settlement. ● That a right to defer must exist at the end of the reporting period. ● That classification is unaffected by the likelihood that an entity will exercise its deferral right. ● That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification. The amendments are effective for annual reporting periods beginning on or after January 1 st , 2023, and must be applied retrospectively. The Company is currently assessing the impact of these amendments which expects to adopt in their effective date. Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The amendments to IAS 1 are applicable for annual periods beginning on or after January 1 st , 2023, with earlier application permitted. Since the amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the definition of material to accounting policy information, an effective date for these amendments is not necessary. The Company is currently assessing the impact of these amendments. Definition of Accounting Estimates – Amendments to IAS 8 In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of “accounting estimates”. The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates. The amendments are effective for annual reporting periods beginning on or after January 1 st , 2023, and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period. Earlier application is permitted as long as this fact is disclosed. The Company is currently assessing the impact of these amendments which expects to adopt in their effective date. Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 The amendments to IAS 12 Income Taxes require companies to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations and will require the recognition of additional deferred tax assets and liabilities. The amendment is effective for annual reporting periods beginning on January 1 st , 2023, and should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, entities should recognize deferred tax assets (to the extent that it is probable that they can be utilized) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary differences associated with: ● Right-of-use assets and lease liabilities, and ● Decommissioning, restoration and similar liabilities, and the corresponding amounts recognized as part of the cost of the related assets. The cumulative effect of recognizing these adjustments is recognized in retained earnings, or another component of equity, as appropriate. IAS 12 did not previously address how to account for the tax effects of on-balance sheet leases and similar transactions and various approaches were considered acceptable. At the date of adoption of IFRS 16, the Company applied the criterion of recognizing the deferred assets and liabilities associated with the lease liability and the right of use, which is consistent with this amendment to IAS 12, and therefore this will not generate effects in the Company. (Note 20). |
Description of the business a_3
Description of the business and summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Description of the business and summary of significant accounting policies | |
Schedule of companies included in the consolidated financial statements | % Equity interest Principal January Name Activities Country 2022 2021 1st 2021 Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V. Air transportation services for passengers, cargo and mail throughout Mexico and abroad Mexico 100 % 100 % 100 % Vuela Aviación, S.A. Air transportation services for passengers, cargo and mail in Costa Rica and abroad Costa Rica 100 % 100 % 100 % Vuela, S.A. (“Vuela”) * Air transportation services for passengers, cargo and mail in Guatemala and abroad Guatemala 100 % 100 % 100 % Vuela El Salvador, S.A. de C.V. Air transportation services for passengers, cargo and mail in El Salvador and abroad El Salvador 100 % 100 % 100 % Comercializadora Volaris, S.A. de C.V. (“Comercializadora”) Merchandising of services Mexico 100 % 100 % 100 % Servicios Earhart, S.A.* Rendering specialized services to its affiliates Guatemala 100 % 100 % 100 % Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”) Rendering specialized services to its affiliates Mexico 100 % 100 % 100 % Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) (3) Recruitment and payroll Mexico — — 100 % Comercializadora V Frecuenta, S.A. de C.V. (“Loyalty Program”) * Loyalty Program Mexico 100 % 100 % 100 % Viajes Vuela, S.A. de C.V. (“Viajes Vuela”) Travel agency Mexico 100 % 100 % 100 % Guatemala Dispatch Service, S.A., (“GDS, S.A.”) (4) Aeronautical Technical Services Guatemala 100 % 100 % — CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso 1710 (1) Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % CIBanco, S.A., Institución de Banca Múltiple, Fidecomiso 1711 (2) Pre-delivery payments financing (Note 5) Mexico 100 % 100 % 100 % Fideicomiso Irrevocable de Administración número F/307750 “Administrative Trust” ** Share administration trust (Note 18) Mexico 100 % 100 % 100 % Fideicomiso Irrevocable de Administración número F/745291 “Administrative Trust” Share administration trust (Note 18) Mexico 100 % 100 % 100 % Fideicomiso de Administración número CIB/3081 “Administrative Trust” Share administration trust (Note 18) Mexico 100 % 100 % 100 % Fideicomiso Irrevocable de Administración número CIB/3249 “Administrative Trust” Asset backed securities trustor & administrator (Note 5) Mexico 100 % 100 % 100 % CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3853 (5) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3855 (6) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3866 (6) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S.A., Institución de Banca Múltiple, Fideicomiso CIB/3867 (7) Pre-delivery payments financing (Note 5) Mexico 100 % — — CIBanco, S. A, Institución de Banca Múltiple, Fideicomiso CIB/3921 (8) Pre-delivery payments financing (Note 5) Mexico 100 % — — *The Company has not started operations. **The Trust was terminated on August 9, 2022. (1) With effect from October 16, 2020, the Successor of the Trust 1710 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple. (2) With effect from October 16, 2020, the Successor of the Trust 1711 was changed from Deutsche Bank México, S.A. to CIBanco, S.A., Institución de Banca Múltiple. (3) From August 31,2021, the Company merged with Concesionaria Vuela Compañía de Aviación S.A.P.I. de C.V. (4) The Company was acquired on October 5, 2021. (5) With effect from June 8, 2022 the trust was constituted. (6) With effect from April 1st, 2022 the trusts were constituted. (7) With effect from April 13, 2022 the trust was constituted. (8) With effect from July 21, 2022 the trust was constituted. |
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 most relevant exchange rates utilized in the conversions to USD dollar | 2022 2021 2020 End of period Average End of period Average End of period Average Currency exchange rate exchange rate exchange rate exchange rate exchange rate exchange rate Mexican Peso Ps. 19.3615 Ps. 20.1254 Ps. 20.5835 Ps. 20.2818 Ps. 19.9487 Ps. 21.4961 Colon ₵. 594.9700 ₵. 649.5908 ₵. 645.900 ₵. 624.3460 ₵. 615.7800 ₵. 588.4240 Quetzal Q. 7.8515 Q. 7.7765 Q. 7.7285 Q. 7.7589 Q. 7.8095 Q. 7.7292 Colombian Peso COP. 4,810.20 COP. 4,255.44 COP. 3,981.16 COP. 3,751.33 COP. 3,428.26 COP. 3,695.48 |
Schedule of exchange rates of local currencies translated to functional currencies | 2022 2021 2020 End of period Average End of period Average End of period Average Currency exchange rate exchange rate exchange rate exchange rate exchange rate exchange rate Mexican Peso Ps. 19.3615 Ps. 20.1254 Ps. 20.5835 Ps. 20.2818 Ps. 19.9487 Ps. 21.4961 Colon ₵. 594.9700 ₵. 649.5908 ₵. 645.900 ₵. 624.3460 ₵. 615.7800 ₵. 588.4240 Quetzal Q. 7.8515 Q. 7.7765 Q. 7.7285 Q. 7.7589 Q. 7.8095 Q. 7.7292 Colombian Peso COP. 4,810.20 COP. 4,255.44 COP. 3,981.16 COP. 3,751.33 COP. 3,428.26 COP. 3,695.48 |
Summary of estimated useful lives of the assets | Aircraft and engines up to 18 years Spare engines up to 18 years Buildings leases one ten years Maintenance component up to eight years |
Financial instruments and ris_2
Financial instruments and risk management (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Financial instruments and risk management | |
Schedule of Fuel Sensitivity | As of December 31, 2022 2021 2020 Operating costs Operating costs Operating costs (In thousands of U.S. dollars) + US$0.01 per gallon 3,399 2,731 1,762 - US$0.01 per gallon (3,399) (2,731) (1,762) |
Schedule of foreign exchange exposure | Mexican Pesos Others* (In thousands of U.S. dollars) Assets: Cash, cash equivalents and restricted cash US$ 39,962 US$ 6,129 Other accounts receivable, net 66,254 12,595 Guarantee deposits 23,981 252 Other assets — — Derivative financial instruments 1,585 — Total assets US$ 131,782 US$ 18,976 Liabilities: Financial debt US$ 133,837 US$ — Lease liabilities 17,003 103 Suppliers 124,374 1,496 Other liabilities 81,378 1,277 Total liabilities US$ 356,592 US$ 2,876 Net foreign currency position US$ (224,810) US$ 16,100 * The foreign exchange exposure includes: Quetzales, Colombian pesos and Colones. Mexican Pesos Others* (In thousands of U.S. dollars) Assets: Cash, cash equivalents and restricted cash US 39,728 US 6,102 Other accounts receivable, net 9,412 495 Guarantee deposits — 329 Total assets US 49,140 US 6,926 Liabilities: Financial debt US 132,367 US — Lease liabilities — 77 Suppliers 159,842 6,202 Other taxes and fees payable 111,766 16,378 Total liabilities US 403,975 US 22,657 Net foreign currency position US (354,835) US (15,731) |
Schedule of contractual principal payments required on financial liabilities and derivative instruments fair value | December 31, 2022 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) US$ 62,209 US$ 75,698 US$ 137,907 Asset backed trust note (“CEBUR”) (Note 5) 30,128 86,082 116,210 Working Capital Facilities (Note 5) 18,077 — 18,077 Lease liabilities: Aircraft, engines, land and buildings leases 335,620 2,373,103 2,708,723 Aircraft and engine lease return obligation 5,012 244,454 249,466 Total US$ 451,046 US$ 2,779,337 US$ 3,230,383 December 31, 2021 Within one One to five year years Total Interest-bearing borrowings: Pre-delivery payments facilities (Note 5) US$ 171,771 US$ — US$ 171,771 Asset backed trust note (“CEBUR”) (Note 5) 24,291 109,311 133,602 Lease liabilities: Aircraft, engines, land and buildings leases 283,843 2,128,294 2,412,137 Aircraft and engine lease return obligation 21,949 166,930 188,879 Total US$ 501,854 US$ 2,404,535 US$ 2,906,389 |
Summary of impact on the equity due to changes in the fair value of forward exchange contracts | Change in Effect on profit MXN$ rate before tax (In thousands of U.S. dollars) 2022 +5 % US$ (10,436) -5 % 10,436 Change in Effect on profit MXN$ rate before tax (In thousands of U.S. dollars) 2021 +5 % US$ (18,528) -5 % 18,528 Change in Effect on profit USD$ rate before tax (In thousands of U.S. dollars) 2021 +5 % US$ (80,919) -5 % 80,919 |
Schedule of sensitivity analysis of change in fair value of interest hedging instrument | Change in interest rate Effect on cap* (In thousands of U.S. dollars) 2022 +0.50 % US$ (121) -0.50 % 121 2021 +0.01 % US$ (2) -0.01 % 2 * Change in interest rate Effect on cap* (In thousands of U.S. dollars) 2022 +0.50 % US$ (590) -0.50 % 590 2021 +0.01 % US$ (8) -0.01 % 8 |
Schedule of debt sensitivity analysis | Year ended December 31, 2022 Year ended December 31, 2021 + 100 BP - 100 BP + 100 BP - 100 BP (In thousands of U.S. dollars) Banco Nacional de Comercio Exterior, S.N.C. (“Bancomext”) 961 (961) 1,751 (1,751) Asset backed trust notes (“CEBUR”) (1) 1,320 (1,320) 867 (867) Banco Sabadell S.A., Institución de Banca Múltiple (“Sabadell”) 49 (49) 91 (91) Banco Santander México, S.A. y Banco Nacional de Comercio Exterior, S.N.C. (“Santander-Bancomext 2022”) 96 (96) — — JSA International U.S. Holdings, LLC (PDP JSA) 88 (88) — — GY Aviation Lease 1714 Co. Limited (PDP CDB) 38 (38) — — Incline II B Shannon 18 Limited (PDP BBAM) 224 (224) — — Oriental Leasing 6 Company Limited (PDP CMB) 19 (19) — — Banco Actinver S.A., Institución de banca múltiple (“Actinver”) 6 (6) — — Total 2,801 (2,801) 2,709 (2,709) (1) Every Trust Note (CEBUR) issuance has a 10% CAP on TIIE 28 to limit interest payments to increasing rates. |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair value measurements | |
Schedule of carrying amounts and fair values of financial instruments | Carrying amount Fair value December 31, December 31, December 31, December 31, 2022 2021 2022 2021 Assets Derivative financial Instruments US$ 1,585 US$ 1,398 US$ 1,585 US$ 1,398 Liabilities Financial debt (Interest-bearing loans and borrowings) (272,194) (305,373) (282,868) (302,876) Derivative financial Instruments — — — — Total US$ (270,609) US$ (303,975) US$ (281,283) US$ (301,478) The following table summarizes the fair value measurements by hierarchy as of December 31, 2022: Fair value measurement Quoted prices Significant Significant in active observable unobservable markets inputs inputs Level 1 Level 2 Level 3 Total Assets Derivatives financial instruments: Interest rate Caps US$ — US$ 1,585 US$ — US$ 1,585 Liabilities Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (282,868) — (282,868) Net US$ — US$ (281,283) US$ — US$ (281,283) ** SOFR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt. There were no transfers 1 2 The following table summarizes the fair value measurements by hierarchy as of December 31, 2021: Fair value measurement Quoted prices Significant Significant in active observable unobservable markets inputs inputs Level 1 Level 2 Level 3 Total Assets Derivatives financial instruments: Interest rate Caps US$ — US$ 1,398 US$ — US$ 1,398 Liabilities Liabilities for which fair values are disclosed: Interest-bearing loans and borrowings** — (302,876) — (302,876) Net US$ — US$ (301,478) US$ — US$ (301,478) ** LIBOR, SOFR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt. There were no transfers 1 2 |
Schedule of (loss) gain on derivatives recognized in consolidated statements of operations and comprehensive income | The following table summarizes the losses from derivatives financial instruments recognized in the consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020: Instrument Financial statements caption 2022 2021 2020 Jet fuel Asian call options contracts Fuel US$ — US$ (619) US$ (931) Jet fuel Zero-Cost collars contracts Fuel — — (38,122) Jet fuel Asian call options contracts Finance cost — — (557) Jet fuel Zero-Cost collars contracts Finance cost — — (18,573) Interest rate cap Finance cost (161) (69) (78) Total US$ (161) US$ (688) US$ (58,261) 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, 2022, 2021 and 2020: Consolidated statements of other comprehensive income (loss) Financial Instrument statements caption 2022 2021 2020 Jet fuel Asian call options contracts OCI US$ — US$ 601 US$ (601) Jet fuel Zero cost collars OCI — 484 (7,572) Interest rate cap OCI 336 (128) (34) Non derivative financial instruments* OCI — 79,076 (79,824) Total US$ 336 US$ 80,033 US$ (88,031) *As of December 31, 2021, includes the effect of the discontinuation of the hedging strategies by US$109 million as described in note 3b (i). |
Financial assets and liabilit_2
Financial assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Financial assets and liabilities | |
Schedule of financial assets | December 31, December 31, 2022 2021 Derivative financial instruments designated as cash flow hedges (effective portion recognized within OCI) Interest rate cap US$ 1,585 US$ 1,398 Total derivative financial assets US$ 1,585 US$ 1,398 Presented on the consolidated statements of financial position as follows: Current US$ — US$ — Non-current US$ 1,585 US$ 1,398 |
Schedule of short-term and long-term debt | December 31, December 31, 2022 2021 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 LIBOR plus a spread of 260 basis points. US$ — US$ 171,771 II. In June 2019 the Company issued in the Mexico market Asset backed trust notes (“CEBUR”), in Mexican pesos, maturing on June 20th, 2024 bearing annual interest rate at TIIE plus 175 basis points. 38,737 60,728 III. In October 2021 the Company issued in the Mexico market a second tranche of its Asset backed trust notes (“CEBUR”), in Mexican pesos, maturing on October 20th, 2026 bearing annual interest rate at TIIE plus 200 basis points. 77,473 72,874 IV. In December 2019, the Company entered into a short-term working capital facility with Banco Sabadell S.A., Institucion de Banca Multiple (“Sabadell”) in Mexican pesos, bearing annual interest rate at TIIE 28 days plus a spread of 300 basis points. 10,330 — V. Revolving credit line 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 June 8, 2027, bearing annual interest rate at the three-month SOFR plus a spread of 298 basis points. 38,635 — VI. Pre-delivery payments financing with JSA International U.S. Holdings, LLC, with maturity on November 30, 2025, bearing annual interest SOFR plus a spread of 300 basis points. 27,962 — VII. Pre-delivery payments financing with GY Aviation Lease 1714 Co. Limited, with maturity on November 30, 2025, bearing annual interest SOFR plus a spread of 425 basis points. 15,880 — VIII. Pre-delivery payments financing with Incline II B Shannon 18 Limited, with maturity on May 31, 2025, bearing annual interest SOFR plus a spread of 390 basis points. 48,048 — IX. Pre-delivery payments financing with Oriental Leasing 6 Company Limited, with maturity on May 31, 2026, bearing annual interest of SOFR plus a spread of 200 basis points. 7,382 — X. The company acquired a short-term working capital facility with Banco Actinver S.A, Institución de banca multiple (“Actinver”) with national currency, bearing annual interest rate at TIIE plus 250 basis points. 7,747 — XI. Transaction costs to be amortized (1,034) (1,526) XII. Accrued interest and other financial cost 1,875 1,090 273,035 304,937 Less: Short-term maturities 112,148 196,898 Long-term Financial debt US$ 160,887 US$ 108,039 |
Schedule of principal payments of financial debt and accrued interest | January 2024- January 2025- Within one December December January 2026- year 2024 2025 onwards Total Santander/Bancomext (1) US$ 12,364 US$ 18,030 US$ 8,655 US$ — US$ 39,049 Banco Sabadell S.A. 10,421 — — — 10,421 CEBUR program (2) 30,577 38,738 25,824 21,520 116,659 JSA International U.S. Holdings, LLCA 25,272 3,159 — — 28,431 GY Aviation Lease 1714 Co. Limited — 15,880 — — 15,880 Incline II B Shannon 18 Limited 25,788 22,592 — — 48,380 Oriental Leasing 6 Company Limited 76 — 7,382 — 7,458 Actinver 7,791 — — — 7,791 Financial debt 112,289 98,399 41,861 21,520 274,069 Projected interest 22,242 9,428 4,312 1,033 37,015 Total US$ 134,531 US$ 107,827 US$ 46,173 US$ 22,553 US$ 311,084 (1) Revolving line of credit with Banco Santander S.A. and Banco Nacional de Comercio Exterior, S.N.C., Institución de Banca de Desarrollo contracted on June 8, 2022. (2) Every Trust Note (CEBUR) issuance has a 10% CAP on TIIE 28 to limit interest payments to increasing rates. |
Schedule of changes in liabilities from financing activities | Foreign Current vs non- January 1, Net cash Accrued* exchange current Conversion December 31, 2022 Flows Interest movement reclassification Other effects 2022 Current interest-bearing loans and borrowings US$ 196,898 US$ (152,984) US$ 761 US$ 739 US$ 65,063 US$ 124 US$ 1,547 US$ 112,148 Non-current interest -bearing loans and borrowings 108,039 111,776 — — (65,063) 442 5,693 160,887 Total liabilities from financing activities US$ 304,937 US$ (41,208) US$ 761 US$ 739 US$ — US$ 566 US$ 7,240 US$ 273,035 Foreign Current vs non- January 1, Net cash Accrued* exchange current Conversion December 31, 2021 Flows Interest movement reclassification Other effects 2021 Current interest-bearing loans and borrowings US$ 78,145 US$ (60,322) US$ 142 US$ 3,794 US$ 179,355 US$ — US$ (4,216) US$ 196,898 Non-current interest -bearing loans and borrowings 190,276 99,759 — 1,734 (179,355) 356 (4,731) 108,039 Total liabilities from financing activities US$ 268,421 US$ 39,437 US$ 142 US$ 5,528 US$ — US$ 356 US$ (8,947) US$ 304,937 * This balance is net of interest provisions and interest effectively paid as of December 31, 2022 and 2021, respectively. |
Cash, cash equivalents and re_2
Cash, cash equivalents and restricted cash (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Cash, cash equivalents and restricted cash | |
Summary of Cash, cash equivalents and restricted cash | 2022 2021 Cash in banks US$ 77,224 US$ 463,666 Cash on hand 425 266 Short-term investments 627,331 270,028 Restricted funds held in trust related to debt service reserves 6,873 7,162 Total cash, cash equivalents and restricted cash US$ 711,853 US$ 741,122 |
Related parties (Tables)
Related parties (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related parties | |
Schedule of balances due from/to related parties | Country Type of transaction of origin 2022 2021 Terms Due from: Frontier Airlines Inc. (“Frontier”) Code-share USA US$ 2,155 US$ 4,662 30 days Due to: Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (“OMA”) Airport Services Mexico US$ 13,579 US$ 9,687 30 days Chevez, Ruiz, Zamarripa y Cía., S.C. Professional fees Mexico 815 455 30 days A&P International Services, S.A.P.I de C.V. (“AISG”) Aircraft maintenance Mexico 191 — 30 days Mijares, Angoitia, Cortés y Fuentes, S.C. Professional fees Mexico 22 — 30 days Frontier Airlines Inc. (“Frontier”) Code-share USA 2 2 30 days MRO Commercial, S.A. (“MRO”) Aircraft maintenance and technical support El Salvador 1 — 30 days Aeromantenimiento, S.A. (“Aeroman”) Aircraft maintenance and technical support El Salvador — 403 30 days US$ 14,610 US$ 10,547 |
Schedule of transactions with related parties | Related party transactions Country of origin 2022 2021 2020 Revenues: Transactions with affiliates Frontier Airlines Inc (“Frontier”) Code-share USA US$ 5 US$ 3,547 US$ 7,385 Expenses: Transactions with affiliates MRO Commercial, S.A. Aircraft maintenance * El Salvador US$ 11,097 US$ — US$ — Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (“OMA”) Airport services Mexico 9,792 6,607 1,486 Aeromantenimiento, S.A. Aircraft maintenance El Salvador 3,690 7,964 11,556 Technical support El Salvador 170 143 187 Chevez, Ruiz, Zamarripa y Cía, S.C. Professional fees Mexico 923 238 224 A&P International Services, S.A.P.I de C.V. (“AISG”) Aircraft maintenance Mexico 914 — — Servprot, S.A. de C.V. Security services Mexico 207 175 161 Mijares, Angoitia, Cortés y Fuentes, S.C. Professional fees Mexico 196 214 260 Onelink, S.A. de C.V. Call center fees Mexico/El Salvador — — 3,634 |
Other accounts receivable, net
Other accounts receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other accounts receivable, net | |
Schedule of other accounts receivables | 2022 2021 Current: Credit cards US$ 43,942 US$ 36,924 Benefits from suppliers 11,491 516 Affinity credit card 9,432 — Other accounts receivable 4,448 1,636 Cargo clients 4,291 2,516 Travel agencies and insurance commissions 3,731 1,645 Other points of sales 1,968 6,848 Airport services 287 — Employees 68 760 Marketing services receivable — 34 79,658 50,879 Allowance for expected credit losses (809) (615) US$ 78,849 US$ 50,264 |
Schedule of aging of accounts receivable | 2022 2022 Total 2021 2021 Total Days Impaired Not impaired 2022 Impaired Not impaired 2021 0–30 US$ 622 US$ 68,356 US$ 68,978 US$ 502 US$ 47,432 US$ 47,934 31–60 — 1,580 1,580 — 1,332 1,332 61–90 — 4,865 4,865 — 410 410 91–120 187 4,048 4,235 113 1,090 1,203 US$ 809 US$ 78,849 US$ 79,658 US$ 615 US$ 50,264 US$ 50,879 |
Schedule of movement in the allowance for doubtful accounts | Balance as of January 1st, 2021 US$ (1,640) Write-offs 1,783 Increase in allowance (795) Foreign currency translation effect 37 Balance as of December 31, 2021 (615) Write-offs 1,478 Increase in allowance (1,672) Balance as of December 31, 2022 US$ (809) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventories. | |
Schedule of inventories | 2022 2021 Spare parts and accessories of flight equipment US$ 15,758 US$ 14,397 US$ 15,758 US$ 14,397 |
Prepaid expenses and other cu_2
Prepaid expenses and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid expenses and other current assets | |
Schedule of prepaid expenses and other current assets | 2022 2021 Sales commission to travel agencies (Note 1d) US$ 9,037 US$ 9,233 Other prepaid expenses 8,371 10,440 Advances to suppliers 6,446 8,542 Prepaid insurance 5,816 4,150 Flight credits 3,519 6,022 US$ 33,189 US$ 38,387 |
Guarantee deposits (Tables)
Guarantee deposits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Guarantee deposits | |
Schedule of guarantee deposits | 2022 2021 Current asset: Credit letters deposits US$ 44,609 US$ 54,767 Aircraft maintenance deposits paid to lessors (Note 1k) 16,767 21,127 Deposits for rental of flight equipment 1,583 1,687 Other guarantee deposits 1,398 1,409 64,357 78,990 Non-current asset: Aircraft maintenance deposits paid to lessors (Note 1k) 424,347 404,237 Deposits for rental of flight equipment 56,049 50,007 Other guarantee deposits 3,482 1,128 483,878 455,372 US$ 548,235 US$ 534,362 |
Rotable spare parts, furnitur_2
Rotable spare parts, furniture and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 31, 2021 31, 2022 31, 2021 31, 2022 31, 2021 Leasehold improvements to flight equipment US$ 421,130 US$ 258,878 US$ (215,238) US$ (131,017) US$ 205,892 US$ 127,861 Pre-delivery payments* 185,455 253,826 — — 185,455 253,826 Flight equipment 110,959 106,575 (58,792) (64,661) 52,167 41,914 Construction and improvements in process 31,900 26,522 — — 31,900 26,522 Constructions and improvements 7,564 7,457 (6,818) (6,211) 746 1,246 Office furniture and equipment 2,997 2,933 (1,903) (1,681) 1,094 1,252 Computer equipment 1,409 1,400 (1,297) (1,200) 112 200 Workshop machinery and equipment 1,131 1,101 (489) (400) 642 701 Communications equipment 582 585 (397) (362) 185 223 Motorized transport equipment platform 565 561 (315) (163) 250 398 Electric power equipment 530 535 (295) (246) 235 289 Service carts on board 452 448 (368) (334) 84 114 Workshop tools 429 421 (420) (365) 9 56 Total US$ 765,103 US$ 661,242 US$ (286,332) US$ (206,640) US$ 478,771 US$ 454,602 * During the years ended December 31, 2022, 2021 and 2020 the Company capitalized borrowing costs of US$ 7,915, US $7,098 and US$ 17,872, respectively The amount of this line is net of disposals of capitalized borrowing costs related to sale and leaseback transactions of US$ 21,591, US $4,155 and US$ 18,701 , respectively. Motorized Workshop Constructions transport machinery Service Construction and Leasehold Flight and Computer Office furniture Electric power Workshop equipment Communications and carts on Allowance for Pre-delivery improvements improvements to equipment improvements equipment and equipment equipment Tools platform equipment equipment board obsolescence payments in process flight equipment Total Net balance as of January 1, 2021 US$ 23,356 US$ 1,354 US$ 392 US$ 1,590 US$ 385 US$ 167 US$ 367 US$ 289 US$ 648 US$ 156 US$ (150) US$ 246,639 US$ 2,684 US$ 87,117 US$ 364,994 Additions 25,503 — 72 3 96 84 236 — 206 — — 55,749 26,982 86,563 195,494 Disposals and transfers (137) (1) (3) (171) (123) (14) (250) (29) (43) — 148 (43,678) (1,385) — (45,686) Borrowing costs, net* — — — — — — — — — — — 2,943 — — 2,943 Other movements — 735 26 148 — — 176 21 6 — — — (1,318) 213 7 Conversion effects (1,018) (42) (10) (44) (7) (3) (16) (8) (21) (4) 2 (7,827) (441) (3,414) (12,853) Depreciation (5,790) (800) (277) (274) (62) (178) (115) (50) (95) (38) — — — (42,618) (50,297) As of December 31, 2021 41,914 1,246 200 1,252 289 56 398 223 701 114 — 253,826 26,522 127,861 454,602 Cost 106,575 7,457 1,400 2,933 535 421 561 585 1,101 448 — 253,826 26,522 258,878 661,242 Accumulated depreciation (64,661) (6,211) (1,200) (1,681) (246) (365) (163) (362) (400) (334) — — — (131,017) (206,640) Net balance as of December 31, 2021 41,914 1,246 200 1,252 289 56 398 223 701 114 — 253,826 26,522 127,861 454,602 Additions 17,091 — 8 9 4 8 — — 47 7 — 166,571 33,838 138,811 356,394 Disposals and transfers (1,656) — — (2) — — — (1) — — — (221,253) (4,838) — (227,750) Borrowing costs, net* — — — — — — — — — — — (13,676) — — (13,676) Other movements — 107 (1) 67 (7) — 7 1 4 — — (13) (23,622) 23,448 (9) Depreciation (5,182) (607) (95) (232) (51) (55) (155) (38) (110) (37) — — — (84,228) (90,790) As of December 31, 2022 52,167 746 112 1,094 235 9 250 185 642 84 — 185,455 31,900 205,892 478,771 Cost 110,959 7,564 1,409 2,997 530 429 565 582 1,131 452 — 185,455 31,900 421,130 765,103 Accumulated depreciation (58,792) (6,818) (1,297) (1,903) (295) (420) (315) (397) (489) (368) — — — (215,238) (286,332) Net balance as of December 31, 2022 US$ 52,167 US$ 746 US$ 112 US$ 1,094 US$ 235 US$ 9 US$ 250 US$ 185 US$ 642 US$ 84 US$ — US$ 185,455 US$ 31,900 US$ 205,892 US$ 478,771 a) b) c) d) |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible assets, net | |
Schedule of intangible assets, net | Useful Gross value Accumulated amortization Net carrying amount Life At December 31, years 2022 2021 2022 2021 2022 2021 Software 1 - 4 US$ 47,850 US$ 41,048 US$ (35,125) US$ (28,416) US$ 12,725 US$ 12,632 Balance as of January 1st, 2021 US$ 9,603 Additions 10,142 Disposals (1) Amortization (6,752) Exchange differences (360) Balance as of December 31, 2021 12,632 Additions 6,790 Amortization (6,696) Exchange differences (1) Balance as of December 31, 2022 US$ 12,725 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of composition of the fleet and spare engines, leases | Aircraft At December At December Type Model 31, 2022 31, 2021 A319 132 3 3 A319 133 — 2 A320 233 39 39 A320 232 1 1 A320NEO 271N 48 39 A321 231 10 10 A321NEO 271N 15 6 116 100 Engine spare At December At December Type Model 31, 2022 31, 2021 V2500 V2524-A5 2 2 V2500 V2527M-A5 3 3 V2500 V2527E-A5 6 5 V2500 V2527-A5 6 4 PW1100 PW1127G-JM 5 5 PW1100 PW1133G-JM 1 1 23 20 * Certain of the Company’s aircraft and engine lease agreements include an option to extend the lease term period. Management evaluates extensions based on the market conditions at the time of renewal. |
Summary of carrying amounts of right-of-use assets recognized and the movements during the period | Spare engine Land and Aircraft leases leases building leases Total As of January 1 st US$ 1,674,620 US$ 41,567 US$ 4,036 US$ 1,720,223 Additions 437,334 2,928 13,894 454,156 Modifications 60,239 2,084 6,928 69,251 Disposals — — (273) (273) Foreign currency translation effects (56,768) — (3) (56,771) Depreciation on right of use assets (252,761) (11,626) (4,964) (269,351) As of December 31, 2021 1,862,664 34,953 19,618 1,917,235 Additions 521,711 1,023 30,597 553,331 Modifications 25,895 (168) 5,081 30,808 Depreciation on right of use assets (299,517) (11,627) (9,299) (320,443) As of December 31, 2022 US$ 2,110,753 US$ 24,181 US$ 45,997 US$ 2,180,931 |
Summary of carrying amounts of lease liabilities and the movements during the period | 2022 2021 As of January 1 st, US$ 2,412,137 US$ 2,212,201 Additions 550,834 464,049 Modifications 29,842 67,589 Disposals — (291) Accretion of interest 165,043 127,329 Foreign exchange effect (129) 72,449 Foreign currency translation effects — (72,221) Payments (449,004) (458,968) As of 31 December, US$ 2,708,723 US$ 2,412,137 Current US$ 335,620 US$ 283,843 Non-current US$ 2,373,103 US$ 2,128,294 |
Summary of amounts recognized in profit or loss | For the year ended December 31, 2022 December 31, 2021 December 31, 2020 Depreciation of right-of-use assets US$ (320,443) US$ (269,351) US$ (236,417) Interest expense on lease liabilities and aircraft and engine lease return obligation (Note 23) (174,769) (128,159) (108,907) Aircraft and engine variable lease expenses (124,532) (83,373) (85,957) Total amount recognized in profit or loss US$ (619,744) US$ (480,883) US$ (431,281) |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued liabilities | |
Schedule of current accrued liabilities | 2022 2021 Fuel and traffic accrued expenses US$ 105,284 US$ 88,389 Maintenance and aircraft parts accrued expenses 25,172 22,667 Salaries and benefits 19,091 21,017 Accrued administrative expenses 12,517 9,564 Sales, marketing and distribution accrued expenses 7,636 18,772 Maintenance deposits 5,933 8,267 Deferred revenue from V Club membership 4,967 3,665 Information and communication accrued expenses 2,979 1,987 Supplier services agreement 2,262 1,154 Others 408 2,233 Benefits from suppliers 270 378 Advances from travel agencies 53 3 US$ 186,572 US$ 178,096 |
Schedule of non-current accrued liabilities | 2022 2021 Supplier services agreement US$ 12,914 US$ 763 Benefits from suppliers — 441 Other 369 271 US$ 13,283 US$ 1,475 |
Other liabilities (Tables)
Other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other liabilities. | |
Schedule of other liabilities | Balance as of Balance as of January 1, Increase for December 31, 2022 the year Payments 2022 Aircraft and engine lease return obligation (Note 1r and 2i) US$ 188,879 US$ 94,815 US$ (34,228) US$ 249,466 Employee profit sharing (Note 17) 12,686 136 (12,436) 386 US$ 201,565 US$ 94,951 US$ (46,664) US$ 249,852 Current maturities US$ 5,398 Non-current US$ 244,454 Balance as of Balance as of January 1, Increase for Conversion December 31, 2021 the year Payments effects 2021 Aircraft and engine lease return obligation (Note 1r and 2i) US$ 125,546 US$ 70,120 US$ (1,914) US$ (4,873) US$ 188,879 Guarantee deposit (Note 1k) 12,532 — (12,327) (205) — Employee profit sharing (Note 17) 723 12,951 (787) (201) 12,686 US$ 138,801 US$ 83,071 US$ (15,028) US$ (5,279) US$ 201,565 Current maturities US$ 34,635 Non-current US$ 166,930 |
Employee benefits (Tables)
Employee benefits (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Employee benefits | |
Schedule of analysis of net period cost | 2022 2021 2020 Analysis of net period cost: Current service cost US$ 6,518 US$ 425 US$ 398 Interest cost on benefit obligation 692 127 123 Net period cost US$ 7,210 US$ 552 US$ 521 |
Schedule of changes in defined benefit obligation | 2022 2021 Defined benefit obligation as of January 1, US$ 3,968 US$ 2,538 Net period cost charged to profit or loss: Current service cost 6,518 425 Interest cost on benefit obligation 692 127 Remeasurement losses in other comprehensive income: Actuarial changes arising from changes in assumptions (253) 432 Payments made (179) (71) Conversion effect foreign currency 241 (67) Others — 584 Defined benefit obligation as of December 31, US$ 10,987 US$ 3,968 |
Summary of significant assumptions used in the computation of the seniority premium obligations | 2022 2021 2020 Financial: Discount rate 9.21 % 7.84 % 7.04 % Expected rate of salary increases 5.50 % 5.50 % 5.50 % Annual increase in minimum salary 19.00 / 4.00 %* 19.00/4.50 % 4.00 % *19.00% applies to the General Zone and 4.00% to the Border Zone in Mexico* Biometric: Mortality (1) EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA EMSSA 09, CEPAL* 2010 EL SALVADOR, CEPAL*2010 COSTA RICA Disability (2) IMSS-97 IMSS-97 IMSS-97 (1) Mexican Experience of social security (EMSSA), Economic Commission for Latin America and the Caribbean (CEPAL for its Spanish acronym). (2) Mexican Experience of Instituto Mexicano del Seguro Social (IMSS). * Border Zone, is made up of the states that border with the United States and the General Zone is made up by the rest states of the country. Present value of the defined benefit obligation (In thousands of U.S. dollars) Assumptions Increase Decrease Discount rate: 50 US$ 10,431 US$ 11,589 Statutory minimum wage increase rate: 50 US$ 11,197 US$ 10,789 Salary increase rate: 50 US$ 11,678 US$ 10,380 |
Schedule of accruals for short-term employee benefits | 2022 2021 Employee profit-sharing (Note 16) US$ 386 US$ 12,686 |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2021 5,805,311 * Purchased during the year 1,849,417 Granted during the year — Exercised/vested during the year (2,612,575) Forfeited during the year (551,732) Outstanding as of December 31, 2021 4,490,421 * Purchased during the year 4,354,473 Granted during the year — Exercised/vested during the year (2,161,968) Forfeited during the year (103,712) Outstanding as of December 31, 2022 6,579,214 * * These shares are presented as treasury shares in the consolidated statement of financial position as of December 31, 2022, 2021 and January 1, 2021. |
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 January 1st, 2021 7,653,981 Ps. 5.31 Ps. 40,668 Granted during the year — — — Forfeited during the year — — — Exercised during the year (7,653,981) 5.31 (40,668) Outstanding as of December 31, 2021 — Ps. — Ps. — |
Schedule of retention plan (benefit) expenses recognized | 2022 2021 2020 (Benefit) expense arising from cash-settled share-based payments transactions US$ (4,365) US$ (2,984) US$ 5,362 * Expense arising from equity-settled share-based payments transactions 5,074 4,410 3,519 Total expense arising from share-based payments transactions US$ 709 US$ 1,426 US$ 8,881 * The figures included LTIP – SARs (cash settled) benefit of US$(95). |
Share purchase plan | |
Share-based payments | |
Schedule of vesting period of shares granted | Number of Series A shares Vesting period 3,084,981 November 2023 2,042,732 November 2024 1,451,501 November 2025 6,579,214 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity | |
Schedule of authorized shares | Shares Fixed Variable Class I Class II Total shares Series A shares (1) 10,478 1,108,452,326 1,108,462,804 Series B shares (1) 13,702 57,500,171 57,513,873 24,180 1,165,952,497 1,165,976,677 Treasury shares (Note 18) — (13,452,393) (13,452,393) (1) 24,180 1,152,500,104 1,152,524,284 (1) Shares Fixed Variable Class I Class II Total shares Series A shares (1) 10,478 1,108,452,326 1,108,462,804 Series B shares (1) 13,702 57,500,171 57,513,873 24,180 1,165,952,497 1,165,976,677 Treasury shares (Note 18) — (9,904,197) (9,904,197) (1) 24,180 1,156,048,300 1,156,072,480 (1) |
Schedule of basic and diluted earnings (loss) per share | As of December 31, 2022 2021 2020 Net (loss) income for the period US$ (80,224) US$ 106,453 US$ (191,722) Weighted average number of shares outstanding (in thousands): Basic 1,155,030 1,152,256 1,004,965 Diluted 1,165,135 1,165,612 1,021,286 LPS – EPS: Basic US$ (0.069) US$ 0.092 US$ (0.191) Diluted US$ (0.069) US$ 0.091 US$ (0.188) |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income tax | |
Schedule of income tax in consolidated statements of operations | 2022 2021 2020 Current year income tax expense US$ (15,456) US$ (17,903) US$ (3,978) Deferred income tax (expense) benefit 67,595 (12,670) (1) 65,709 (2) Total income tax benefit (expense) US$ 52,139 US$ (30,573) US$ 61,731 (1) |
Schedule of income tax in consolidated statements of OCI | 2022 2021 2020 Deferred income tax related to items recognized in OCI during the year Net (loss) gain cash flow hedges US$ (80) US$ (274) US$ 2,347 Remeasurement (loss) gain of employee benefits (79) 138 39 Deferred income tax recognized in OCI US$ (159) US$ (136) US$ 2,386 |
Schedule of reconciliation of corporate income tax rate to effective tax rate | 2022 % 2021 % 2020 % Statutory income tax rate (39,709) 30.00 % 41,108 30.00 % (76,036) 30.00 % Amendment tax return effects and other tax adjustments 1,242 (0.94) % (29) (0.02) % (3,563) 1.41 % Inflation on furniture, intangible and equipment (309) 0.23 % (2,323) (1.70) % (873) 0.34 % Inflation of tax losses (4,335) 3.28 % (1,971) (1.44) % (676) 0.27 % Foreign countries difference with Mexican statutory rate (9) 0.00 % 124 0.10 % 175 (0.07) % Annual inflation adjustment (11,200) 8.46 % (7,971) (5.82) % 2,591 (1.02) % Recorded deferred taxes on tax losses 7 0.00 % (434) (0.32) % 3,733 (1.47) % Non-deductible expenses 7,695 (5.81) % 2,069 1.51 % 12,918 (5.10) % Difference in Foreign Exchange income (loss) for tax purposes (5,521) 4.17 % — — — — (52,139) 39.39 % 30,573 22.31 % (61,731) 24.36 % |
Schedule of consolidated deferred taxes | 2022 2021 Consolidated Consolidated Consolidated Consolidated statement of statement of statement of statement of financial position operations financial position operations Deferred income tax assets: Lease liability US$ 755,855 US$ 122,856 US$ 633,033 US$ (7,745) Unearned transportation revenue 58,010 48,176 9,885 (53,134) Aircraft and engine lease return obligation 77,007 23,951 53,056 15,448 Tax losses available for offsetting against future taxable income 38,387 33,122 4,865 (24,499) Intangible 29,687 (364) 30,052 10,430 Allowance for doubtful accounts 4,854 (1,510) 6,356 3,599 Employee benefits 2,486 2,104 294 (391) Employee profit sharing 134 (3,672) 3,805 4,076 Non derivative financial instruments — — — 24,360 966,420 224,663 741,346 (27,856) Deferred income tax liabilities: Right of use asset 571,521 106,233 465,382 (57,188) Supplemental rent 55,479 (7,872) 63,351 (29,592) Rotable spare parts, furniture and equipment, net 120,561 54,960 65,618 29,015 Provisions 7,345 4,200 2,430 12,789 Inventories 4,594 338 4,256 215 Other prepayments 376 (1,034) 1,431 675 Derivative Financial instruments 33 — 113 — Prepaid expenses and other assets 8,963 243 8,684 29,017 768,872 157,068 611,265 (15,069) US$ 197,548 US$ 67,595 US$ 130,081 US$ (12,787) |
Schedule of components of deferred taxes in the consolidated statement of financial position | 2022 2021 Deferred tax assets US$ 208,010 US$ 141,272 Deferred tax liabilities (10,462) (11,191) Deferred tax assets, net US$ 197,548 US$ 130,081 |
Schedule of reconciliation of deferred tax liability, net | 2022 2021 Opening balance as of January 1, US$ 130,081 US$ 146,816 Deferred income tax benefit (expense) during the current year recorded on profits* 67,595 (12,787) Deferred income tax expense during the current year recorded in accumulated other comprehensive loss (159) (136) Conversion effects 31 (3,812) Closing balance as of December 31, US$ 197,548 US$ 130,081 |
Schedule of available tax carry-forwards | An analysis of the available tax losses carry-forward of the Company at December 31, 2022 is as follows: Year Historical Inflation adjusted Total remaining Year of of loss Loss tax loss Utilized amount expiration 2019 US$ 239 US$ 304 US$ 166 US$ 138 2029 2020 5,461 5,461 2,126 3,335 2023 2020 2,745 3,427 103 3,324 2030 2021 6,457 6,404 — 6,404 2024 2021 550 651 — 651 2031 2022 110,922 114,105 — 114,105 2032 US$ 126,374 US$ 130,352 US$ 2,395 US$ 127,957 A breakdown of available tax loss carry-forward of Controladora and its subsidiaries as of December 31, 2022 is as follows: Historical Inflation adjusted Total loss tax loss Utilized remaining amount Concesionaria US$ 110,685 US$ 113,861 US$ — US$ 113,861 Vuela Aviación 13,476 13,423 3,684 9,739 Comercializadora 2,628 3,256 166 3,090 Viajes Vuela 1,143 1,370 103 1,267 US$ 127,932 US$ 131,910 US$ 3,953 US$ 127,957 Unrecognized NOLs — US$ 127,957 Tax rate 30 % Deferred income tax US$ 38,387 |
Schedule of tax balances | 2022 Adjusted contributed capital account ( Cuenta de capital de aportación US$ 489,080 CUFIN* 226,885 * |
Operating Revenues (Tables)
Operating Revenues (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Operating Revenues | |
Schedule of revenues from contracts with customers | At the flight time At the sale Total Revenue recognition for the year ended December 31, 2022 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues US$ 1,097,480 US$ 563,696 US$ — US$ — US$ 1,661,176 Other Passenger Revenues 695,602 365,243 11,403 6,003 1,078,251 1,793,082 928,939 11,403 6,003 2,739,427 Non-Passenger Revenues Other Non-Passenger revenues 92,088 889 — — 92,977 Cargo 13,171 1,615 — — 14,786 Total US$ 1,898,341 US$ 931,443 US$ 11,403 US$ 6,003 US$ 2,847,190 At the flight time At the sale Total Revenue recognition for the year ended December 31, 2021 Domestic International Domestic International Revenues Passenger Revenues US$ 860,143 US$ 405,837 US$ — US$ — US$ 1,265,980 Fare Revenues 707,368 151,261 6,700 1,615 866,944 Other Passenger Revenues 1,567,511 557,098 6,700 1,615 2,132,924 Non-Passenger Revenues Other Non-Passenger revenues 76,306 566 — — 76,872 Cargo 11,410 472 — — 11,882 Total US$ 1,655,227 US$ 558,136 US$ 6,700 US$ 1,615 US$ 2,221,678 Non-derivative financial instruments (21,378) US$ 2,200,300 At the flight time At the sale Total Revenue recognition for the year ended December 31, 2020 Domestic International Domestic International Revenues Passenger Revenues Fare Revenues US$ 411,107 US$ 215,802 US$ — US$ — US$ 626,909 Other Passenger Revenues 332,497 75,865 6,014 1,621 415,997 743,604 291,667 6,014 1,621 1,042,906 Non-Passenger Revenues Other Non-Passenger revenues 41,520 321 — — 41,841 Cargo 9,387 260 — — 9,647 Total US$ 794,511 US$ 292,248 US$ 6,014 US$ 1,621 US$ 1,094,394 Non-derivative financial instruments (19,408) US$ 1,074,986 Transactions from unearned transportation revenues 2022 2021 January 1, US$ 303,982 US$ 293,298 Deferred 2,781,914 2,154,865 Recognized in revenue during the year (2,739,427) (2,132,924) Foreign currency translation effect — (11,257) December 31, US$ 346,469 US$ 303,982 |
Other operating income and ex_2
Other operating income and expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other operating income and expenses | |
Schedule of other operating income | 2022 2021 2020 Gain on sale and leaseback (Note 12) US$ 21,193 US$ 9,668 US$ 32,695 Loss on sale of rotable spare parts, furniture and equipment (1,645) (122) (127) Other income 5,518 1,212 1,051 US$ 25,066 US$ 10,758 US$ 33,619 |
Schedule of other operating expenses | 2022 2021 2020 Administrative and operational support expenses US$ 49,431 US$ 37,042 US$ 29,827 Technology and communications 25,708 21,296 17,913 Others 15,756 92 9 Insurance 6,574 3,753 2,561 Passenger services 5,116 3,675 4,103 US$ 102,585 US$ 65,858 US$ 54,413 |
Finance income and cost (Tables
Finance income and cost (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Finance income and cost | |
Schedule of finance income | 2022 2021 2020 Interest on cash and equivalents US$ 12,036 US$ 2,872 US$ 4,384 Interest on cash and equivalents held in the trust CIB/3249 711 280 301 Interest on recovery of guarantee deposits 155 379 99 US$ 12,902 US$ 3,531 US$ 4,784 |
Schedule of finance cost | 2022 2021 2020 Interest expense on lease liabilities and aircraft and engine lease return obligation US$ 174,769 US$ 128,159 US$ 108,907 Interest on asset backed trust notes 12,049 5,672 5,448 Cost of letter credit notes 4,131 3,025 3,410 Other finance costs 584 1,589 481 Interest on debts and borrowings* 533 703 768 Bank fees and others 308 226 176 Derivative financial instruments loss 161 — 19,130 US$ 192,535 US$ 139,374 US$ 138,320 |
Schedule of capitalized interest | 2022 2021 2020 Interest on debts and borrowings US$ 8,448 US$ 7,801 US$ 18,640 Capitalized interest (Note 12) (7,915) (7,098) (17,872) Net interest on debts and borrowing in the consolidated statements of operations US$ 533 US$ 703 US$ 768 |
Components of other comprehen_2
Components of other comprehensive (loss) income (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Components of other comprehensive (loss) income | |
Schedule of analysis of other comprehensive income | Derivative and Exchange Remeasurements non-derivative differences on of employee financial the translation benefits instruments of foreign Total Other comprehensive loss: Balance as of January 1st, 2021 US$ (427) US$ (80,124) US$ (137,635) US$ (218,186) Comprehensive (loss) income of the year (432) 80,033 (10,489) 69,112 Deferred tax effect 138 (274) — (136) Balances as of December 31, 2021 (721) (365) (148,124) (149,210) Comprehensive income of the year 253 336 3,471 4,060 Deferred tax effect (79) (80) — (159) Net balances as of December 31, 2022 US$ (547) US$ (109) US$ (144,653) US$ (145,309) |
Schedule of components of other comprehensive (loss) income | 9 2022 2021 2020 Derivative and non-derivative financial instruments: Extrinsic value of changes on jet fuel Asian call options US$ — US$ 601 US$ (601) Extrinsic value of changes on jet fuel Zero cost collars — 484 (7,572) Income (loss) of the interest rate Cap 336 (128) (34) 336 957 (8,207) Non derivative financial instruments* — 79,076 (79,824) Total US$ 336 US$ 80,033 US$ (88,031) |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and contingencies | |
Schedule of committed expenditures | Commitment expenditures in thousands of U.S. dollars 2023 US$ 224,629 2024 275,363 2025 711,455 2026 1,410,003 2027 and thereafter 4,204,369 US$ 6,825,819 |
Schedule of future minimum lease payments | Aircraft sale prices estimated in thousands of U.S. dollars 2023 US$ 165,500 2024 998,000 2025 389,500 US$ 1,553,000 |
Summary of future lease payments from sale and leaseback | Aircraft leases in thousands of U.S. dollars 2023 US$ 7,977 2024 51,720 2025 104,014 2026 108,400 2027 and thereafter 1,028,688 US$ 1,300,799 |
Operating segments (Tables)
Operating segments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Operating segments | |
Schedule of geographic segments | 2022 2021 2020 Operating revenues: Domestic (Mexico) US$ 1,909,744 US$ 1,661,927 US$ 800,525 International*: United States of America 758,609 509,976 271,899 Central America and South America 178,837 49,775 21,970 Non-derivative financial instruments — (21,378) (19,408) Total operating revenues US$ 2,847,190 US$ 2,200,300 US$ 1,074,986 |
Description of the business a_4
Description of the business and summary of significant accounting policies - Relevant events (Details) | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 20, 2021 shares | Oct. 13, 2021 USD ($) item | Dec. 11, 2020 $ / shares shares | May 12, 2020 engine | Feb. 24, 2020 | Jun. 20, 2019 USD ($) item | Feb. 17, 2010 | May 09, 2005 | Nov. 30, 2018 aircraft | Dec. 31, 2017 aircraft | Dec. 31, 2022 | Dec. 31, 2021 aircraft | Apr. 18, 2023 MXN ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 MXN ($) | Dec. 31, 2022 $ / $ | Dec. 31, 2022 ₡ / $ | Dec. 31, 2022 Q / $ | Dec. 31, 2021 USD ($) | Dec. 31, 2021 $ / $ | Dec. 31, 2021 ₡ / $ | Dec. 31, 2021 Q / $ | Oct. 13, 2021 MXN ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 $ / $ | Dec. 31, 2020 ₡ / $ | Dec. 31, 2020 Q / $ | Jun. 20, 2019 MXN ($) | |
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Exchange rate | 18.0638 | 4,810.20 | 19.36 | 594.9700 | 7.8515 | 3,981.16 | 20.58 | 645.900 | 7.7285 | 3,428.26 | 19.9487 | 615.7800 | 7.8095 | |||||||||||||||
Maturity of notes | 5 years | |||||||||||||||||||||||||||
Basis points | 0.25% | |||||||||||||||||||||||||||
A321NEO model | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Number of aircraft purchased | 34 | 34 | ||||||||||||||||||||||||||
A320NEO Into A321NEO | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Number of aircraft purchased | aircraft | 6 | 20 | ||||||||||||||||||||||||||
Concesionaria | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Term of authorization to provide air transportation services | 20 years | 10 years | 5 years | |||||||||||||||||||||||||
Asset backed trust notes | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Number of notes issued | item | 15,000,000 | 15,000,000 | ||||||||||||||||||||||||||
Notes issued | $ 78,500,000 | $ 77,500,000 | $ 1,500,000,000 | $ 1,500,000,000 | ||||||||||||||||||||||||
Exchange rate | 1 | 0.1936 | 0.1936 | 0.1936 | 20.80 | 0.1936 | ||||||||||||||||||||||
Authorized amount under the program | $ 144,200,000 | $ 157,100,000 | $ 155,000,000 | $ 3,000,000,000 | $ 3,000,000,000 | |||||||||||||||||||||||
Maturity of notes | 5 years | |||||||||||||||||||||||||||
Basis points | 1.75% | 1.75% | ||||||||||||||||||||||||||
Asset backed trust notes | Concesionaria | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Notes issued | $ 72,100,000 | $ 1,500,000,000 | ||||||||||||||||||||||||||
Exchange rate | $ | 1 | |||||||||||||||||||||||||||
Asset backed trust notes | 28-day TIIE | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Basis points | 1.75% | 1.75% | ||||||||||||||||||||||||||
Sustainability Linked Bond Principles 2020 | 2022 | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer | 21.54% | |||||||||||||||||||||||||||
Sustainability Linked Bond Principles 2020 | 2023 | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer | 24.08% | |||||||||||||||||||||||||||
Sustainability Linked Bond Principles 2020 | 2024 | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer | 25.53% | |||||||||||||||||||||||||||
Sustainability Linked Bond Principles 2020 | 2030 | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer | 35.42% | |||||||||||||||||||||||||||
Series B shares | ||||||||||||||||||||||||||||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||||||
Conversion of equivalent number of shares | 30,538,000 | |||||||||||||||||||||||||||
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 | ||
Jan. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Concesionaria | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Vuela Aviacion, S.A | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Vuela, S.A. | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Vuela El Salvador, S.A. de C.V. | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Comercializadora Volaris, S.A. de C.V. | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Servicios Earhart, S.A. | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Servicios Corporativos | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Servicios Administrativos | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | ||
Loyalty Program | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Viajes Vuela | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Guatemala Dispatch Service, S.A | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | |
CIBanco, S.A., Institucion de Banca Multiple, Fidecomiso 1710 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
CIBanco, S.A., Institucion de Banca Multiple, Fidecomiso 1711 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Fideicomiso Irrevocable de Administracion numero F/307750 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Fideicomiso Irrevocable de Administracion numero F/745291 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Fideicomiso de Administracion numero CIB/3081 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
Fideicomiso Irrevocable de Administracin nmero CIB/3249 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | 100% | 100% |
CIBanco, S.A., Institucin de Banca Mltiple, Fideicomiso CIB/3853 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | ||
CIBanco, S.A., Institucin de Banca Mltiple, Fideicomiso CIB/3855 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | ||
CIBanco, S.A., Institucin de Banca Mltiple, Fideicomiso CIB/3866 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | ||
CIBanco, S.A., Institucin de Banca Mltiple, Fideicomiso CIB/3867 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% | ||
CIBanco, S. A, Institucin de Banca Mltiple, Fideicomiso CIB/3921 | |||
Subsidiaries | |||
Proportion of ownership interest in subsidiary | 100% |
Description of the business a_6
Description of the business and summary of significant accounting policies - financial instruments (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 MXN ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Revenue recognition | ||||
Discounts, payment incentives, bonuses or other variable considerations | $ 0 | |||
Non-ticket revenues | ||||
Expected credit losses on accounts receivable | $ 1,672 | $ 795 | $ 636 | |
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 - Aircraft, rotable spare parts, furniture and equipment, net (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Dec. 22, 2022 USD ($) | Oct. 31, 2021 engine | Feb. 28, 2021 engine | Dec. 31, 2022 USD ($) agreement aircraft | Dec. 31, 2021 engine | Dec. 31, 2021 USD ($) | Dec. 31, 2021 aircraft | Dec. 31, 2021 agreement | Dec. 31, 2021 | Dec. 31, 2020 USD ($) | |
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Maintenance deposits expensed as supplemental rent | $ 48,172 | $ 38,227 | $ 20,063 | |||||||
Number of aircraft added to fleet | aircraft | 18 | 15 | ||||||||
Number of aircraft with lease term extended | 1 | 2 | 5 | 3 | 15 | |||||
Number of engine agreements for which lease term extended | agreement | 2 | 3 | ||||||||
Maintenance deposits expensed to contingent rent prior to lease extensions | $ 0 | |||||||||
Length of time before routine aircraft and engine maintenance is required | 24 months | |||||||||
Maximum length of time before routine aircraft and engine maintenance | 36 months | |||||||||
Length of time before major aircraft and engine maintenance is required | 6 years | |||||||||
Depreciation | $ 90,790 | 50,297 | 37,383 | |||||||
Capitalized borrowing costs | $ 7,915 | 7,098 | 17,872 | |||||||
Rate used to determine amount of borrowing cost | 5.34% | 2.76% | ||||||||
Impairment charges on rotable spare parts, furniture and equipment | $ 0 | 0 | 0 | |||||||
Airframe sale and purchase agreement with SETNA IO LLC, total amount of the transaction | $ 901 | |||||||||
Carrying amount of the remaining owned aircraft | 795 | |||||||||
Aircraft leases | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Depreciation | 5,182 | 5,790 | ||||||||
Constructions and improvements | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Depreciation | 607 | 800 | ||||||||
Computer equipment | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Depreciation | $ 95 | 277 | ||||||||
Annual depreciation rate | 25% | |||||||||
Workshop tools | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Depreciation | $ 55 | 178 | ||||||||
Annual depreciation rate | 33.30% | |||||||||
Electric power equipment | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Depreciation | $ 51 | 62 | ||||||||
Annual depreciation rate | 10% | |||||||||
Communications equipment | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Depreciation | $ 38 | 50 | ||||||||
Annual depreciation rate | 10% | |||||||||
Workshop machinery and equipment | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Depreciation | $ 110 | 95 | ||||||||
Annual depreciation rate | 10% | |||||||||
Motorized transport equipment platform. | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Annual depreciation rate | 25% | |||||||||
Service carts on board | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Depreciation | $ 37 | 38 | ||||||||
Annual depreciation rate | 20% | |||||||||
Office furniture and equipment | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Depreciation | $ 232 | 274 | ||||||||
Annual depreciation rate | 10% | |||||||||
Leasehold improvements to flight equipment | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Additions | $ 138,811 | 85,940 | ||||||||
Amortization of major maintenance leasehold improvement | 83,071 | 40,744 | $ 30,555 | |||||||
Depreciation | $ 84,228 | $ 42,618 | ||||||||
Minimum | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Duration of routine aircraft and engine maintenance | 7 days | |||||||||
Minimum | Aircraft leases | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Annual depreciation rate | 4% | |||||||||
Maximum | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Duration of routine aircraft and engine maintenance | 12 days | |||||||||
Duration of major aircraft and engine maintenance | 42 days | |||||||||
Maximum | Aircraft leases | ||||||||||
Aircraft, rotable spare parts, furniture and equipment, net | ||||||||||
Annual depreciation rate | 16.70% |
Description of the business a_8
Description of the business and summary of significant accounting policies - Foreign currency exchange differences and liabilities and provisions (Details) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 $ / $ USD ($) | Dec. 31, 2022 ₡ / $ USD ($) | Dec. 31, 2022 USD ($) Q / $ | Dec. 31, 2021 USD ($) | Dec. 31, 2021 $ / $ USD ($) | Dec. 31, 2021 ₡ / $ USD ($) | Dec. 31, 2021 Q / $ USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 $ / $ USD ($) | Dec. 31, 2020 ₡ / $ USD ($) | Dec. 31, 2020 USD ($) Q / $ | Apr. 18, 2023 MXN ($) | Dec. 31, 2022 $ / $ | Dec. 31, 2022 ₡ / $ | Dec. 31, 2022 Q / $ | Dec. 31, 2021 $ / $ | Dec. 31, 2021 ₡ / $ | Dec. 31, 2021 Q / $ | Dec. 31, 2020 $ / $ | Dec. 31, 2020 ₡ / $ | Dec. 31, 2020 Q / $ | |||
Description of the business and summary of significant accounting policies | ||||||||||||||||||||||||
Average exchange rate for year | 4,255.44 | 20.1254 | 649.5908 | 7.7765 | 3,751.33 | 20.2818 | 624.3460 | 7.7589 | 3,695.48 | 21.4961 | 588.4240 | 7.7292 | ||||||||||||
Exchange rate | 4,810.20 | 4,810.20 | 4,810.20 | 4,810.20 | 3,981.16 | 3,981.16 | 3,981.16 | 3,981.16 | 3,428.26 | 3,428.26 | 3,428.26 | 3,428.26 | 18.0638 | 19.36 | 594.9700 | 7.8515 | 20.58 | 645.900 | 7.7285 | 19.9487 | 615.7800 | 7.8095 | ||
Exchange differences on translation of foreign operations | $ 3,471,000 | $ (10,489,000) | [1] | $ (38,699,000) | [1] | |||||||||||||||||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Description of the business a_9
Description of the business and summary of significant accounting policies - Employee benefits (Details) $ / shares in Units, $ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Nov. 06, 2014 | Apr. 30, 2018 | Dec. 31, 2022 USD ($) | Dec. 31, 2022 MXN ($) $ / shares | Dec. 31, 2021 USD ($) | [1] | Dec. 31, 2021 MXN ($) $ / shares | Dec. 31, 2020 USD ($) | [1] | Dec. 31, 2020 MXN ($) $ / shares | |
Share-based payments | ||||||||||
Termination benefits provision | $ 0 | $ 0 | ||||||||
Number of days' wages for each year of service provided as seniority premium benefits | 12 days | 12 days | ||||||||
Minimum years of service to receive seniority premium benefits | 15 years | 15 years | ||||||||
Salaries and benefits | $ 283,089 | $ 239,215 | $ 163,776 | |||||||
Quarterly incentive bonuses | ||||||||||
Share-based payments | ||||||||||
Salaries and benefits | $ 2,992 | $ 3,701 | $ 1,266 | |||||||
SARs - cash settled | ||||||||||
Share-based payments | ||||||||||
Salaries and benefits | $ (95) | |||||||||
Vesting period | 3 years | |||||||||
MIP I | ||||||||||
Share-based payments | ||||||||||
Exercise price | $ / shares | $ 5.31 | |||||||||
MIP II | ||||||||||
Share-based payments | ||||||||||
Vesting period | 5 years | 5 years | ||||||||
BODIP | ||||||||||
Share-based payments | ||||||||||
Vesting period | 5 years | 5 years | 5 years | |||||||
Exercise price | $ / shares | $ 33.80 | $ 32.23 | $ 9.74 | |||||||
Employee profit sharing | ||||||||||
Share-based payments | ||||||||||
Salaries and benefits | $ 136 | $ 12,951 | $ 968 | |||||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Description of the business _10
Description of the business and summary of significant accounting policies - Leases (Details) - MXN ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Impairment charges recorded in respect of right-of-use asset | $ 0 | $ 0 | $ 0 |
Aircraft and engines | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Estimated useful lives of the assets | 18 years | ||
Spare engines | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Estimated useful lives of the assets | 18 years | ||
Minimum | Buildings leases | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Estimated useful lives of the assets | 1 year | ||
Maximum | Buildings leases | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Estimated useful lives of the assets | 10 years | ||
Maximum | Maintenance component | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Estimated useful lives of the assets | 8 years |
Description of the business _11
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, 2022 segment | Dec. 31, 2021 MXN ($) | |
Description of the business and summary of significant accounting policies | ||
Number of operating segments | 1 | |
Number of geographic segments | 2 | |
Ineffective portion with respect to derivative financial instruments | $ | $ 19.1 |
Description of the business _12
Description of the business and summary of significant accounting policies - Additional details (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | ||
Description of the business and summary of significant accounting policies | |||||||
Cash and cash equivalents. | $ 711,853 | $ 741,122 | [1] | $ 506,468 | [1] | $ 506,468 | $ 423,449 |
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
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, 2022 | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) gal | |
Financial instruments and risk management | |||
Intrinsic value recycled to the fuel cost | $ 56,695 | ||
Jet fuel | |||
Financial instruments and risk management | |||
Percentage of operating expenses | 46% | 34% | 27% |
Intrinsic value recycled to the fuel cost | $ 1,488 | ||
Fuel cost | |||
Financial instruments and risk management | |||
Intrinsic value recycled to the fuel cost | 38,122 | ||
Fuel cost | Jet fuel | |||
Financial instruments and risk management | |||
Intrinsic value recycled to the fuel cost | 931 | ||
Finance cost | |||
Financial instruments and risk management | |||
Intrinsic value recycled to the fuel cost | 18,573 | ||
Finance cost | Jet fuel | |||
Financial instruments and risk management | |||
Intrinsic value recycled to the fuel cost | $ 557 | ||
Jet fuel Asian call options contracts | |||
Financial instruments and risk management | |||
Notional volume (in gallons) | 23,967 | ||
Jet fuel Asian call options contracts | Finance cost | Jet fuel | |||
Financial instruments and risk management | |||
Intrinsic value recycled to the fuel cost | $ 619 | ||
Jet fuel Zero-Cost collars | |||
Financial instruments and risk management | |||
Notional volume (in gallons) | gal | 81,646 | ||
Unwind of Zero cost collar | $ 1,984 |
Financial instruments and ris_4
Financial instruments and risk management - Fuel Sensitivity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financial instruments and risk management | |||
+ US$0.01 per gallon | $ 0.01 | $ 0.01 | $ 0.01 |
- US$0.01 per gallon | $ 0.01 | ||
Increase in operating costs | $ 3,399 | $ 2,731 | $ 1,762 |
Decrease in operating costs | $ (3,399) | $ (2,731) | $ (1,762) |
Financial instruments and ris_5
Financial instruments and risk management - Foreign exchange on and off-balance sheet exposure (Details) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Apr. 18, 2023 MXN ($) | Dec. 31, 2022 $ / $ | Dec. 31, 2022 ₡ / $ | Dec. 31, 2022 Q / $ | Dec. 31, 2021 $ / $ | Dec. 31, 2021 ₡ / $ | Dec. 31, 2021 Q / $ | Mar. 31, 2021 USD ($) | Jan. 01, 2021 USD ($) | [1] | Dec. 31, 2020 $ / $ | Dec. 31, 2020 ₡ / $ | Dec. 31, 2020 Q / $ | Dec. 31, 2018 USD ($) | |||
Assets | |||||||||||||||||||
Cash, cash equivalents and restricted cash | $ 711,853,000 | $ 741,122,000 | [1] | $ 506,468,000 | $ 506,468,000 | $ 423,449,000 | |||||||||||||
Other accounts receivable, net | 78,849,000 | 50,264,000 | [1] | 28,104,000 | |||||||||||||||
Total assets | 4,467,653,000 | 3,984,568,000 | [1] | 3,418,223,000 | |||||||||||||||
Liabilities | |||||||||||||||||||
Financial debt | 273,035,000 | 304,937,000 | 268,421,000 | ||||||||||||||||
Lease liabilities | 2,708,723,000 | 2,412,137,000 | 2,212,201,000 | ||||||||||||||||
Suppliers | 194,856,000 | 108,164,000 | [1] | 112,275,000 | |||||||||||||||
Other liabilities | 249,852,000 | 201,565,000 | $ 138,801,000 | ||||||||||||||||
Total liabilities | $ 4,232,916,000 | $ 3,671,431,000 | [1] | $ 3,278,055,000 | |||||||||||||||
Exchange rate | 4,810.20 | 3,981.16 | 3,428.26 | 18.0638 | 19.36 | 594.9700 | 7.8515 | 20.58 | 645.900 | 7.7285 | 19.9487 | 615.7800 | 7.8095 | ||||||
Hedging relationship for foreign exchange rate with non-derivative financial instruments, which represent a portion of the financial assets denominated in USD | $ 410,000,000 | $ 350,000,000 | |||||||||||||||||
Recognized leasing liabilities, which have been designated as hedging instruments, forecasted revenues over the remaining lease term | $ 1,500,000,000 | ||||||||||||||||||
Recognized financial assets designated under hedging strategy | 60,500,000 | ||||||||||||||||||
Impact of hedges | [2] | $ (21,378,000) | (19,408,000) | ||||||||||||||||
Financial instruments designated as hedging instruments, at fair value | 410,000,000 | ||||||||||||||||||
Reserve of exchange differences on translation, hedging relationships for which hedge accounting is no longer applied | 410,000,000 | $ 350,000,000 | |||||||||||||||||
Reclassification amount | 109,000,000 | 109,000,000 | |||||||||||||||||
Fuel Expense [Member] | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Impact of hedges | 8,945,000 | $ 18,590,000 | |||||||||||||||||
Foreign currency forward contract | Denominated in Mexican pesos | |||||||||||||||||||
Assets | |||||||||||||||||||
Cash, cash equivalents and restricted cash | 39,962,000 | 39,728,000 | |||||||||||||||||
Other accounts receivable, net | 66,254,000 | 9,412,000 | |||||||||||||||||
Guarantee deposits | 23,981,000 | ||||||||||||||||||
Derivative financial instruments | 1,585,000 | ||||||||||||||||||
Total assets | 131,782,000 | 49,140,000 | |||||||||||||||||
Liabilities | |||||||||||||||||||
Financial debt | 133,837,000 | 132,367,000 | |||||||||||||||||
Lease liabilities | 17,003,000 | ||||||||||||||||||
Suppliers | 124,374,000 | 159,842,000 | |||||||||||||||||
Other liabilities | 81,378,000 | ||||||||||||||||||
Other taxes and fees payable | 111,766,000 | ||||||||||||||||||
Total liabilities | 356,592,000 | 403,975,000 | |||||||||||||||||
Net foreign currency position | (224,810,000) | (354,835,000) | |||||||||||||||||
Foreign currency forward contract | Others | |||||||||||||||||||
Assets | |||||||||||||||||||
Cash, cash equivalents and restricted cash | 6,129,000 | 6,102,000 | |||||||||||||||||
Other accounts receivable, net | 12,595,000 | 495,000 | |||||||||||||||||
Guarantee deposits | 252,000 | 329,000 | |||||||||||||||||
Total assets | 18,976,000 | 6,926,000 | |||||||||||||||||
Liabilities | |||||||||||||||||||
Lease liabilities | 103,000 | 77,000 | |||||||||||||||||
Suppliers | 1,496,000 | 6,202,000 | |||||||||||||||||
Other liabilities | 1,277,000 | ||||||||||||||||||
Other taxes and fees payable | 16,378,000 | ||||||||||||||||||
Total liabilities | 2,876,000 | 22,657,000 | |||||||||||||||||
Net foreign currency position | $ 16,100,000 | $ (15,731,000) | |||||||||||||||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency.[2]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Financial instruments and ris_6
Financial instruments and risk management - Foreign currency sensitivity (Details) - Foreign currency - Fair value - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
USD | |||
Financial instruments and risk management | |||
Percentage of reasonably possible increase in exchange rate | 5% | ||
Percentage of reasonably possible decrease in exchange rate | (5.00%) | ||
Effect on profit before tax from reasonably possible increase in exchange rate | $ (80,919) | ||
Effect on profit before tax from reasonably possible decrease in exchange rate | $ 80,919 | ||
Denominated in Mexican pesos | |||
Financial instruments and risk management | |||
Percentage of reasonably possible increase in exchange rate | 5% | 5% | |
Percentage of reasonably possible decrease in exchange rate | (5.00%) | (5.00%) | |
Effect on profit before tax from reasonably possible increase in exchange rate | $ (10,436) | $ (18,528) | |
Effect on profit before tax from reasonably possible decrease in exchange rate | $ 10,436 | $ 18,528 |
Financial instruments and ris_7
Financial instruments and risk management - Interest rate risk (Details) | 12 Months Ended | ||||||||||||||||||||||
Nov. 03, 2021 | Jul. 19, 2019 item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Apr. 18, 2023 MXN ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 MXN ($) | Dec. 31, 2022 $ / $ | Dec. 31, 2022 ₡ / $ | Dec. 31, 2022 Q / $ | Dec. 31, 2021 USD ($) | Dec. 31, 2021 MXN ($) | Dec. 31, 2021 $ / $ | Dec. 31, 2021 ₡ / $ | Dec. 31, 2021 Q / $ | Mar. 31, 2021 USD ($) | Dec. 31, 2020 $ / $ | Dec. 31, 2020 ₡ / $ | Dec. 31, 2020 Q / $ | Dec. 31, 2019 | |||
Financial instruments and risk management | |||||||||||||||||||||||
Spread on interest rate basis | 0.25% | ||||||||||||||||||||||
End of period exchange rate | 3,428.26 | 18.0638 | 4,810.20 | 19.36 | 594.9700 | 7.8515 | 3,981.16 | 20.58 | 645.900 | 7.7285 | 19.9487 | 615.7800 | 7.8095 | ||||||||||
Fair value of financial instruments designated as hedging instruments | $ 410,000,000 | ||||||||||||||||||||||
Net gain (loss) on cash flow hedges | $ 336,000 | $ 957,000 | [1] | $ (8,207,000) | [1] | ||||||||||||||||||
Fair value | |||||||||||||||||||||||
Financial instruments and risk management | |||||||||||||||||||||||
Net gain (loss) on cash flow hedges | 336,000 | 80,033,000 | (88,031,000) | ||||||||||||||||||||
Fair value | Interest rate Cap | |||||||||||||||||||||||
Financial instruments and risk management | |||||||||||||||||||||||
Net gain (loss) on cash flow hedges | 336,000 | (128,000) | (34,000) | ||||||||||||||||||||
CEBUR (VOLARCB19) | |||||||||||||||||||||||
Financial instruments and risk management | |||||||||||||||||||||||
Decrease in caplets due to increase in interest hedging instruments | (121,000) | (2,000) | |||||||||||||||||||||
Increase in caplets due to decrease in interest hedging instruments | $ 121,000 | $ 2,000 | |||||||||||||||||||||
CEBUR (VOLARCB19) | Fair value | |||||||||||||||||||||||
Financial instruments and risk management | |||||||||||||||||||||||
Increase in rate | 0.50% | 0.01% | |||||||||||||||||||||
Decrease in rate | (0.50%) | (0.01%) | |||||||||||||||||||||
CEBUR (VOLARCB21L) | |||||||||||||||||||||||
Financial instruments and risk management | |||||||||||||||||||||||
Number of caplets | 59 | ||||||||||||||||||||||
Increase in rate | 0.50% | 0.01% | |||||||||||||||||||||
Decrease in rate | (0.50%) | (0.01%) | |||||||||||||||||||||
Decrease in caplets due to increase in interest hedging instruments | $ (590,000) | $ (8,000) | |||||||||||||||||||||
Increase in caplets due to decrease in interest hedging instruments | 590,000 | 8,000 | |||||||||||||||||||||
CEBUR (VOLARCB21L) | Interest rate Cap | |||||||||||||||||||||||
Financial instruments and risk management | |||||||||||||||||||||||
Notional amount (in USD) | 116,200,000 | 2,250,000,000 | 133,600,000 | 2,750,000,000 | |||||||||||||||||||
Fair value of financial instruments designated as hedging instruments | $ 1,585,000 | $ 1,398,000 | |||||||||||||||||||||
Net gain (loss) on cash flow hedges | 109,000 | 365,000 | |||||||||||||||||||||
Amortization of the intrinsic value | $ 161,000 | $ 69,000 | $ 78,000 | ||||||||||||||||||||
28-day TIIE | |||||||||||||||||||||||
Financial instruments and risk management | |||||||||||||||||||||||
Spread on interest rate basis | 2.50% | 2.40% | 3% | ||||||||||||||||||||
Number of caplets | item | 59 | ||||||||||||||||||||||
28-day TIIE | Maximum | |||||||||||||||||||||||
Financial instruments and risk management | |||||||||||||||||||||||
Spread on interest rate basis | 10% | ||||||||||||||||||||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Financial instruments and ris_8
Financial instruments and risk management - Debt Sensitivity Analysis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial instruments and risk management | ||
Basis points | 0.25% | |
Increase in basis point | 100% | 100% |
Decrease in basis point | (100.00%) | (100.00%) |
Increase in results | $ 2,801 | $ 2,709 |
Decrease in results | (2,801) | (2,709) |
Banco Nacional de Comercio Exterior, S.N.C. ("Bancomext") | ||
Financial instruments and risk management | ||
Increase in results | 961 | 1,751 |
Decrease in results | $ (961) | $ (1,751) |
Asset backed trust notes | ||
Financial instruments and risk management | ||
Basis points | 1.75% | 1.75% |
Increase in results | $ 1,320 | $ 867 |
Decrease in results | $ (1,320) | (867) |
Percentage of CAP on TIIE 28 | 10% | |
Banco Sabadell S.A., Institucin de Banca Multiple ("Sabadell") | ||
Financial instruments and risk management | ||
Increase in results | $ 49 | 91 |
Decrease in results | $ (49) | $ (91) |
Banco Santander Mxico, S.A. y Banco Nacional de Comercio Exterior, S.N.C. ("Santander-Bancomext 2022") | ||
Financial instruments and risk management | ||
Basis points | 2.98% | 2.98% |
Increase in results | $ 96 | |
Decrease in results | $ (96) | |
JSA International U.S. Holdings, LLC (PDP JSA) | ||
Financial instruments and risk management | ||
Basis points | 3% | 3% |
Increase in results | $ 88 | |
Decrease in results | $ (88) | |
GY Aviation Lease 1714 Co. Limited (PDP CDB) | ||
Financial instruments and risk management | ||
Basis points | 4.25% | 4.25% |
Increase in results | $ 38 | |
Decrease in results | $ (38) | |
Incline II B Shannon 18 Limited (PDP BBAM) | ||
Financial instruments and risk management | ||
Basis points | 3.90% | 3.90% |
Increase in results | $ 224 | |
Decrease in results | $ (224) | |
Oriental Leasing 6 Company Limited (PDP CMB) | ||
Financial instruments and risk management | ||
Basis points | 2% | 2% |
Increase in results | $ 19 | |
Decrease in results | $ (19) | |
Banco Actinver S.A., Institucin de banca mltiple ("Actinver") | ||
Financial instruments and risk management | ||
Basis points | 2.50% | 2.50% |
Increase in results | $ 6 | |
Decrease in results | $ (6) |
Financial instruments and ris_9
Financial instruments and risk management - Maturity analysis for financial liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | $ 3,230,383 | $ 2,906,389 |
Within one year | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 451,046 | 501,854 |
Between one year and five years | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 2,779,337 | 2,404,535 |
Aircraft, engines, land and buildings leases | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 2,708,723 | 2,412,137 |
Aircraft, engines, land and buildings leases | Within one year | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 335,620 | 283,843 |
Aircraft, engines, land and buildings leases | Between one year and five years | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 2,373,103 | 2,128,294 |
Aircraft and engine lease return obligation | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 249,466 | 188,879 |
Aircraft and engine lease return obligation | Within one year | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 5,012 | 21,949 |
Aircraft and engine lease return obligation | Between one year and five years | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 244,454 | 166,930 |
Pre-delivery payments facilities | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 137,907 | 171,771 |
Pre-delivery payments facilities | Within one year | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 62,209 | 171,771 |
Pre-delivery payments facilities | Between one year and five years | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 75,698 | |
Asset backed trust notes ("CEBUR") | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 116,210 | 133,602 |
Asset backed trust notes ("CEBUR") | Within one year | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 30,128 | 24,291 |
Asset backed trust notes ("CEBUR") | Between one year and five years | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 86,082 | $ 109,311 |
Working Capital Facilities | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | 18,077 | |
Working Capital Facilities | Within one year | ||
Financial instruments and risk management | ||
Contractual principal payments on financial liabilities and derivative financial instruments | $ 18,077 |
Fair value measurements - Carry
Fair value measurements - Carrying amount and fair value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair value measurements | ||
Carrying amount of derivative financial assets | $ 1,585 | $ 1,398 |
Net carrying amount | (270,609) | (303,975) |
Net fair value | (281,283) | (301,478) |
Transfers of assets from level 1 to level 2 | 0 | 0 |
Transfers of assets from level 2 to level 1 | 0 | 0 |
Transfers of liabilities from level 1 to level 2 | 0 | 0 |
Transfers of liabilities from level 2 to level 1 | 0 | 0 |
Financial debt | ||
Fair value measurements | ||
Carrying amount of financial liabilities | (272,194) | (305,373) |
Fair value of financial liabilities | (282,868) | (302,876) |
Interest-bearing loans and borrowings | ||
Fair value measurements | ||
Fair value of financial liabilities | (282,868) | (302,876) |
Derivatives financial instruments | ||
Fair value measurements | ||
Carrying amount of derivative financial assets | 1,585 | 1,398 |
Fair value of derivative financial assets | 1,585 | 1,398 |
Interest rate Cap | ||
Fair value measurements | ||
Carrying amount of derivative financial assets | 1,585 | 1,398 |
Fair value of derivative financial assets | 1,585 | 1,398 |
Level 2 | ||
Fair value measurements | ||
Net fair value | (281,283) | (301,478) |
Level 2 | Interest-bearing loans and borrowings | ||
Fair value measurements | ||
Fair value of financial liabilities | (282,868) | (302,876) |
Level 2 | Interest rate Cap | ||
Fair value measurements | ||
Fair value of derivative financial assets | $ 1,585 | $ 1,398 |
Fair value measurements - Loss
Fair value measurements - Loss gain from financial instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Fair value measurements | |||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | $ (161) | $ (688) | $ (58,261) | ||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | 336 | 957 | [1] | (8,207) | [1] |
Reclassification amount | 109,000 | 109,000 | |||
Fair value | |||||
Fair value measurements | |||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | 336 | 80,033 | (88,031) | ||
Jet fuel Asian call options contracts | Fair value | |||||
Fair value measurements | |||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | 601 | (601) | |||
Jet fuel Zero cost collars | Fair value | |||||
Fair value measurements | |||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | 484 | (7,572) | |||
Interest rate Cap | Fair value | |||||
Fair value measurements | |||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | 336 | (128) | (34) | ||
Non derivative financial instruments | Fair value | |||||
Fair value measurements | |||||
Net (loss) gain on cash flow hedges recognized in consolidated statements of comprehensive income | 79,076 | (79,824) | |||
Fuel cost | Jet fuel Asian call options contracts | |||||
Fair value measurements | |||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (619) | (931) | |||
Fuel cost | Jet fuel Zero cost collars | |||||
Fair value measurements | |||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (38,122) | ||||
Finance cost | Jet fuel Asian call options contracts | |||||
Fair value measurements | |||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (557) | ||||
Finance cost | Jet fuel Zero cost collars | |||||
Fair value measurements | |||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | (18,573) | ||||
Finance cost | Interest rate Cap | |||||
Fair value measurements | |||||
Loss from derivatives financial instruments recognized in consolidated statements of operations | $ (161) | $ (69) | $ (78) | ||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Financial assets and liabilit_3
Financial assets and liabilities - Financial assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | |||
Financial assets | ||||||
Total financial assets | $ 1,585 | $ 1,398 | ||||
Current | [1] | $ 10 | ||||
Non-current | 1,585 | 1,398 | [1] | $ 16 | [1] | |
Interest rate Cap | ||||||
Financial assets | ||||||
Total financial assets | $ 1,585 | $ 1,398 | ||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Financial assets and liabilit_4
Financial assets and liabilities - Short-term and long-term debt (Details) $ in Thousands, $ in Billions | 12 Months Ended | |||||||||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 13, 2021 MXN ($) | Jan. 01, 2021 USD ($) | [1] | Dec. 31, 2020 USD ($) | Dec. 31, 2019 | Jun. 20, 2019 USD ($) | Jun. 20, 2019 MXN ($) | ||
Short-term and long-term debt | ||||||||||
Amortized transaction costs | $ (1,034) | $ (1,526) | ||||||||
Accrued interest and other financial cost | 1,875 | 1,090 | ||||||||
Financial debt without unamortized cost | 311,084 | |||||||||
Financial debt | 273,035 | 304,937 | $ 268,421 | |||||||
Less: Short-term maturities | 112,148 | 196,898 | [1] | $ 78,145 | 78,145 | |||||
Long-term | $ 160,887 | $ 108,039 | [1] | $ 190,276 | $ 190,276 | |||||
Spread on interest rate basis | 0.25% | |||||||||
28-day TIIE. | ||||||||||
Short-term and long-term debt | ||||||||||
Spread on interest rate basis | 2.50% | 2.40% | 3% | |||||||
Not later than one year | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | $ 134,531 | |||||||||
Later Than One Year And Not Later Than Two Years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 107,827 | |||||||||
Between two and three years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 46,173 | |||||||||
Between three and four years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | $ 22,553 | |||||||||
Revolving line of credit | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt excluding accrued interest | $ 171,771 | |||||||||
Spread on interest rate basis | 2.60% | 2.60% | ||||||||
Revolving Line Of Credit With Santander And Bancomext, Maturing On June 8, 2027 | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt excluding accrued interest | $ 38,635 | |||||||||
Financial debt | $ 39,049 | |||||||||
Spread on interest rate basis | 2.98% | 2.98% | ||||||||
Revolving Line Of Credit With Santander And Bancomext, Maturing On June 8, 2027 | Not later than one year | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | $ 12,364 | |||||||||
Revolving Line Of Credit With Santander And Bancomext, Maturing On June 8, 2027 | Later Than One Year And Not Later Than Two Years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 18,030 | |||||||||
Revolving Line Of Credit With Santander And Bancomext, Maturing On June 8, 2027 | Between two and three years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 8,655 | |||||||||
Pre-Delivery Payments Financing With JSA International U.S. Holdings, LLC | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 27,962 | |||||||||
Financial debt | $ 28,431 | |||||||||
Spread on interest rate basis | 3% | 3% | ||||||||
Pre-Delivery Payments Financing With JSA International U.S. Holdings, LLC | Not later than one year | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | $ 25,272 | |||||||||
Pre-Delivery Payments Financing With JSA International U.S. Holdings, LLC | Later Than One Year And Not Later Than Two Years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 3,159 | |||||||||
Pre-Delivery Payments Financing With GY Aviation Lease 1714 Co. Limited | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 15,880 | |||||||||
Financial debt | $ 15,880 | |||||||||
Spread on interest rate basis | 4.25% | 4.25% | ||||||||
Pre-Delivery Payments Financing With GY Aviation Lease 1714 Co. Limited | Later Than One Year And Not Later Than Two Years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | $ 15,880 | |||||||||
Pre-Delivery Payments Financing With Incline II B Shannon 18 Limited | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 48,048 | |||||||||
Financial debt | $ 48,380 | |||||||||
Spread on interest rate basis | 3.90% | 3.90% | ||||||||
Pre-Delivery Payments Financing With Incline II B Shannon 18 Limited | Not later than one year | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | $ 25,788 | |||||||||
Pre-Delivery Payments Financing With Incline II B Shannon 18 Limited | Later Than One Year And Not Later Than Two Years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 22,592 | |||||||||
Pre-Delivery Payments Financing With Oriental Leasing 6 Company Limited | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 7,382 | |||||||||
Financial debt | $ 7,458 | |||||||||
Spread on interest rate basis | 2% | 2% | ||||||||
Pre-Delivery Payments Financing With Oriental Leasing 6 Company Limited | Not later than one year | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | $ 76 | |||||||||
Pre-Delivery Payments Financing With Oriental Leasing 6 Company Limited | Between two and three years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 7,382 | |||||||||
Short-Term Working Capital Facility With Actinver | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 7,747 | |||||||||
Financial debt | $ 7,791 | |||||||||
Spread on interest rate basis | 2.50% | 2.50% | ||||||||
Short-Term Working Capital Facility With Actinver | Not later than one year | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | $ 7,791 | |||||||||
Asset backed trust notes | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 38,737 | $ 60,728 | ||||||||
Financial debt | $ 116,659 | |||||||||
Spread on interest rate basis | 1.75% | 1.75% | ||||||||
Nominal amount of working capital facility (in USD) | $ 77,500 | $ 1.5 | $ 78,500 | $ 1.5 | ||||||
Asset backed trust notes | Not later than one year | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 30,577 | |||||||||
Asset backed trust notes | Later Than One Year And Not Later Than Two Years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 38,738 | |||||||||
Asset backed trust notes | Between two and three years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 25,824 | |||||||||
Asset backed trust notes | Between three and four years | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | 21,520 | |||||||||
Second tranche Asset backed trust notes ("CEBUR"), in Mexican pesos | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | $ 77,473 | $ 72,874 | ||||||||
Spread on interest rate basis | 2% | 2% | ||||||||
Short-term working capital facility with Citibanamex | ||||||||||
Short-term and long-term debt | ||||||||||
Spread on interest rate basis | 2.40% | 2.40% | ||||||||
Short-term working capital facility with Banco Sabadell S.A. | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt excluding accrued interest | $ 10,330 | |||||||||
Financial debt | $ 10,421 | |||||||||
Spread on interest rate basis | 3% | 3% | ||||||||
Short-term working capital facility with Banco Sabadell S.A. | Not later than one year | ||||||||||
Short-term and long-term debt | ||||||||||
Financial debt | $ 10,421 | |||||||||
Maximum | 28-day TIIE. | ||||||||||
Short-term and long-term debt | ||||||||||
Spread on interest rate basis | 10% | |||||||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Financial assets and liabilit_5
Financial assets and liabilities - Aircraft financing and Notes (Details) | 12 Months Ended | |||||||||||||||||||||||||
Oct. 13, 2021 USD ($) item | Jun. 20, 2019 USD ($) item | Dec. 31, 2022 aircraft | Dec. 31, 2021 aircraft | Dec. 31, 2024 USD ($) | Dec. 31, 2024 MXN ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 MXN ($) | Apr. 18, 2023 MXN ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 MXN ($) | Dec. 31, 2022 $ / $ | Dec. 31, 2022 ₡ / $ | Dec. 31, 2022 Q / $ | Dec. 31, 2021 USD ($) | Dec. 31, 2021 MXN ($) | Dec. 31, 2021 $ / $ | Dec. 31, 2021 ₡ / $ | Dec. 31, 2021 Q / $ | Oct. 13, 2021 MXN ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 $ / $ | Dec. 31, 2020 ₡ / $ | Dec. 31, 2020 Q / $ | Dec. 31, 2019 | Jun. 20, 2019 MXN ($) | |
Aircraft financing | ||||||||||||||||||||||||||
Number of aircraft incorporated to fleet | aircraft | 18 | 15 | ||||||||||||||||||||||||
Exchange rate | 18.0638 | 4,810.20 | 19.36 | 594.9700 | 7.8515 | 3,981.16 | 20.58 | 645.900 | 7.7285 | 3,428.26 | 19.9487 | 615.7800 | 7.8095 | |||||||||||||
Maturity of notes | 5 years | |||||||||||||||||||||||||
Basis points | 0.25% | |||||||||||||||||||||||||
Financial liabilities | $ 273,035,000 | $ 304,937,000 | $ 268,421,000 | |||||||||||||||||||||||
Percentage of issuance of interest rates | 10% | |||||||||||||||||||||||||
Financial ratio long term debt adjusted from dividend payable | 6.50% | |||||||||||||||||||||||||
Maximum percentage of profit before taxes, that can be declared and paid as dividends or distributions | 15% | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 0.25% | |||||||||||||||||||||||||
Aircraft leases | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 137,907,000 | |||||||||||||||||||||||||
Revolving Line Of Credit With Santander And Bancomext, Maturing On June 8, 2027 | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 2.98% | 2.98% | ||||||||||||||||||||||||
Financial liabilities | 39,049,000 | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 2.98% | 2.98% | ||||||||||||||||||||||||
Short-term working capital facility with Banco Sabadell S.A. | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 3% | 3% | ||||||||||||||||||||||||
Financial liabilities | 10,421,000 | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 3% | 3% | ||||||||||||||||||||||||
Second tranche Asset backed trust notes ("CEBUR"), in Mexican pesos | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 2% | 2% | ||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 2% | 2% | ||||||||||||||||||||||||
Pre-Delivery Payments Financing With JSA International U.S. Holdings, LLC | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 3% | 3% | ||||||||||||||||||||||||
Financial liabilities | 28,431,000 | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 3% | 3% | ||||||||||||||||||||||||
Pre-Delivery Payments Financing With GY Aviation Lease 1714 Co. Limited | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 4.25% | 4.25% | ||||||||||||||||||||||||
Financial liabilities | 15,880,000 | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 4.25% | 4.25% | ||||||||||||||||||||||||
Pre-Delivery Payments Financing With Incline II B Shannon 18 Limited | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 3.90% | 3.90% | ||||||||||||||||||||||||
Financial liabilities | 48,380,000 | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 3.90% | 3.90% | ||||||||||||||||||||||||
Pre-Delivery Payments Financing With Oriental Leasing 6 Company Limited | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 2% | 2% | ||||||||||||||||||||||||
Financial liabilities | 7,458,000 | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 2% | 2% | ||||||||||||||||||||||||
Revolving line of credit | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 2.60% | 2.60% | ||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 2.60% | 2.60% | ||||||||||||||||||||||||
Short-Term Working Capital Facility With Actinver | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 2.50% | 2.50% | ||||||||||||||||||||||||
Financial liabilities | 7,791,000 | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 2.50% | 2.50% | ||||||||||||||||||||||||
Financial debt | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 274,069,000 | |||||||||||||||||||||||||
Project interest | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 37,015,000 | |||||||||||||||||||||||||
Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Number of notes issued | item | 15,000,000 | 15,000,000 | ||||||||||||||||||||||||
Exchange rate | 1 | 0.1936 | 0.1936 | 0.1936 | 20.80 | 0.1936 | ||||||||||||||||||||
Notes issued | $ 78,500,000 | 77,500,000 | $ 1,500,000,000 | $ 1,500,000,000 | ||||||||||||||||||||||
Authorized amount under the program | $ 144,200,000 | $ 157,100,000 | 155,000,000 | $ 3,000,000,000 | $ 3,000,000,000 | |||||||||||||||||||||
Maturity of notes | 5 years | |||||||||||||||||||||||||
Basis points | 1.75% | 1.75% | ||||||||||||||||||||||||
Financial liabilities | 116,659,000 | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 1.75% | 1.75% | ||||||||||||||||||||||||
Sustainability Linked Bond Principles 2020 | 2022 | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer | 21.54% | |||||||||||||||||||||||||
Sustainability Linked Bond Principles 2020 | 2023 | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer | 24.08% | |||||||||||||||||||||||||
Sustainability Linked Bond Principles 2020 | 2024 | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer | 25.53% | |||||||||||||||||||||||||
Sustainability Linked Bond Principles 2020 | 2030 | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Carbon dioxide emissions measured as grams of CO2 emissions per revenue passenger/kilometer | 35.42% | |||||||||||||||||||||||||
Not later than one year | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 134,531,000 | |||||||||||||||||||||||||
Not later than one year | Revolving Line Of Credit With Santander And Bancomext, Maturing On June 8, 2027 | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 12,364,000 | |||||||||||||||||||||||||
Not later than one year | Short-term working capital facility with Banco Sabadell S.A. | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 10,421,000 | |||||||||||||||||||||||||
Not later than one year | Pre-Delivery Payments Financing With JSA International U.S. Holdings, LLC | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 25,272,000 | |||||||||||||||||||||||||
Not later than one year | Pre-Delivery Payments Financing With Incline II B Shannon 18 Limited | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 25,788,000 | |||||||||||||||||||||||||
Not later than one year | Pre-Delivery Payments Financing With Oriental Leasing 6 Company Limited | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 76,000 | |||||||||||||||||||||||||
Not later than one year | Short-Term Working Capital Facility With Actinver | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 7,791,000 | |||||||||||||||||||||||||
Not later than one year | Financial debt | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 112,289,000 | |||||||||||||||||||||||||
Not later than one year | Project interest | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 22,242,000 | |||||||||||||||||||||||||
Not later than one year | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 30,577,000 | |||||||||||||||||||||||||
Later Than One Year And Not Later Than Two Years | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 107,827,000 | |||||||||||||||||||||||||
Later Than One Year And Not Later Than Two Years | Revolving Line Of Credit With Santander And Bancomext, Maturing On June 8, 2027 | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 18,030,000 | |||||||||||||||||||||||||
Later Than One Year And Not Later Than Two Years | Pre-Delivery Payments Financing With JSA International U.S. Holdings, LLC | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 3,159,000 | |||||||||||||||||||||||||
Later Than One Year And Not Later Than Two Years | Pre-Delivery Payments Financing With GY Aviation Lease 1714 Co. Limited | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 15,880,000 | |||||||||||||||||||||||||
Later Than One Year And Not Later Than Two Years | Pre-Delivery Payments Financing With Incline II B Shannon 18 Limited | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 22,592,000 | |||||||||||||||||||||||||
Later Than One Year And Not Later Than Two Years | Financial debt | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 98,399,000 | |||||||||||||||||||||||||
Later Than One Year And Not Later Than Two Years | Project interest | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 9,428,000 | |||||||||||||||||||||||||
Later Than One Year And Not Later Than Two Years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 38,738,000 | |||||||||||||||||||||||||
Between two and three years | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 46,173,000 | |||||||||||||||||||||||||
Between two and three years | Revolving Line Of Credit With Santander And Bancomext, Maturing On June 8, 2027 | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 8,655,000 | |||||||||||||||||||||||||
Between two and three years | Pre-Delivery Payments Financing With Oriental Leasing 6 Company Limited | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 7,382,000 | |||||||||||||||||||||||||
Between two and three years | Financial debt | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 41,861,000 | |||||||||||||||||||||||||
Between two and three years | Project interest | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 4,312,000 | |||||||||||||||||||||||||
Between two and three years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 25,824,000 | |||||||||||||||||||||||||
Between three and four years | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 22,553,000 | |||||||||||||||||||||||||
Between three and four years | Financial debt | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 21,520,000 | |||||||||||||||||||||||||
Between three and four years | Project interest | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 1,033,000 | |||||||||||||||||||||||||
Between three and four years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 21,520,000 | |||||||||||||||||||||||||
28-day TIIE. | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 2.50% | 2.40% | 3% | |||||||||||||||||||||||
Debt service coverage ratio prior computation period of debt service | 6 months | |||||||||||||||||||||||||
Debt service coverage ratio extended prior computation period of debt service | 6 months | |||||||||||||||||||||||||
Consecutive days for event of retention | 90 days | |||||||||||||||||||||||||
Joint obligor as percentage of EBITDA | 85% | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 2.50% | 2.40% | 3% | |||||||||||||||||||||||
28-day TIIE. | Minimum | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Debt service coverage ratio | 2.5 | |||||||||||||||||||||||||
28-day TIIE. | Maximum | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 10% | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 10% | |||||||||||||||||||||||||
200 Basis Point | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Maturity of notes | 5 years | |||||||||||||||||||||||||
Basis points | 2% | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 2% | |||||||||||||||||||||||||
200 Basis Point | Later Than One Year And Not Later Than Two Years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 4,300,000 | $ 83,333 | ||||||||||||||||||||||||
200 Basis Point | Between two and three years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 25,800,000 | 500,000 | ||||||||||||||||||||||||
200 Basis Point | Between three and four years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 25,800,000 | 500,000 | ||||||||||||||||||||||||
200 Basis Point | Between four and five years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | 21,500,000 | 416,667 | ||||||||||||||||||||||||
175 Basis Point | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Basis points | 1.75% | |||||||||||||||||||||||||
Borrowings, adjustment to interest rate basis | 1.75% | |||||||||||||||||||||||||
175 Basis Point | Later Than One Year And Not Later Than Two Years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | $ 12,900,000 | $ 250,000 | ||||||||||||||||||||||||
175 Basis Point | Between two and three years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | $ 25,800,000 | $ 500,000 | ||||||||||||||||||||||||
175 Basis Point | Between three and four years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | $ 25,800,000 | $ 500,000 | ||||||||||||||||||||||||
175 Basis Point | Between four and five years | Asset backed trust notes | ||||||||||||||||||||||||||
Aircraft financing | ||||||||||||||||||||||||||
Financial liabilities | $ 12,900,000 | $ 250,000 |
Financial assets and liabilit_6
Financial assets and liabilities - Line of credit (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial assets and liabilities | ||
Total available credit lines | $ 859,098 | $ 483,379 |
Available credit lines related to letters of credit | 157,878 | 144,878 |
Available credit lines related to financial debt | 701,220 | 338,501 |
Undrawn credit of financial debt | 390,289 | 9,717 |
Undrawn credit of letters of credit | $ 16,129 | $ 23,159 |
Financial assets and liabilit_7
Financial assets and liabilities - Changes in liabilities arising from financing activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Financial assets and liabilities | |||
Net cash flows, current | $ (152,984) | $ (60,322) | |
Net cash flows, non-current | 111,776 | 99,759 | |
Net cash flows, total | (41,208) | 39,437 | |
Accrued Interest, Current | 761 | 142 | |
Accrued interest | 761 | 142 | |
Foreign exchange movement, current | 739 | 3,794 | |
Foreign exchange movement, non-current | 1,734 | ||
Foreign exchange movement, total | 739 | 5,528 | |
Reclassification and other, current | 65,063 | 179,355 | |
Reclassification and other, non-current | (65,063) | (179,355) | |
Other, Current | 124 | ||
Other, Non current | 442 | 356 | |
Conversion effects, current | 1,547 | (4,216) | |
Conversion effects, non current | 5,693 | (4,731) | |
Conversion effects | 7,240 | (8,947) | |
Other, Total | 566 | 356 | |
Current interest-bearing loans and borrowings, end of the year | 112,148 | 196,898 | [1] |
Non-current interest-bearing loans and borrowings, end of the year | 160,887 | 108,039 | [1] |
Total liabilities from financing activities, end of the year | $ 273,035 | $ 304,937 | |
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Cash, cash equivalents and re_3
Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | [1] | Dec. 31, 2020 | Dec. 31, 2018 | |
Cash, cash equivalents and restricted cash | |||||||
Cash in banks | $ 77,224 | $ 463,666 | |||||
Cash on hand | 425 | 266 | |||||
Short-term investments | 627,331 | 270,028 | |||||
Restricted funds held in trust related to debt service reserves | 6,873 | 7,162 | |||||
Total cash, cash equivalents and restricted cash | $ 711,853 | $ 741,122 | [1] | $ 506,468 | $ 506,468 | $ 423,449 | |
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Related parties - Analysis of b
Related parties - Analysis of balances due from/to related parties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | [1] | ||
Related parties | |||||
Due from related parties | $ 2,155 | $ 4,662 | [1] | $ 3,641 | |
Due to related parties | 14,610 | 10,547 | |||
Frontier Airlines Inc | |||||
Related parties | |||||
Due from related parties | 2,155 | 4,662 | |||
Due to related parties | $ 2 | 2 | |||
Term | 30 days | ||||
Grupo Aeroportuario del Centro Norte | |||||
Related parties | |||||
Due to related parties | $ 13,579 | 9,687 | |||
Term | 30 days | ||||
Chevez, Ruiz, Zamarripa y Ca., S.C | |||||
Related parties | |||||
Due to related parties | $ 815 | 455 | |||
Term | 30 days | ||||
Aeromantenimiento, S.A. | |||||
Related parties | |||||
Due to related parties | $ 403 | ||||
Term | 30 days | ||||
Mijares, Angoitia, Corts y Fuentes, S.C. | |||||
Related parties | |||||
Due to related parties | $ 22 | ||||
Term | 30 days | ||||
A&P International Services, S.A.P.I ("AISG") | |||||
Related parties | |||||
Due to related parties | $ 191 | ||||
MRO Commercial, S.A. | |||||
Related parties | |||||
Due to related parties | $ 1 | ||||
Term | 30 days | ||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Related parties - Transactions
Related parties - Transactions with related parties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related parties | |||
Guarantees received | $ 0 | $ 0 | |
Provision for expected credit losses | 0 | 0 | |
Frontier Airlines Inc | |||
Related parties | |||
Code-share | 5 | 3,547 | $ 7,385 |
Aeromantenimiento, S.A. | |||
Related parties | |||
Aircraft maintenance | 3,690 | 7,964 | 11,556 |
Technical support | 170 | 143 | 187 |
Grupo Aeroportuario del Centro Norte | |||
Related parties | |||
Airport service | 9,792 | 6,607 | 1,486 |
Chevez, Ruiz, Zamarripa y Ca., S.C | |||
Related parties | |||
Professional fees | 923 | 238 | 224 |
Mijares, Angoitia, Corts y Fuentes, S.C. | |||
Related parties | |||
Professional fees | 196 | 214 | 260 |
One Link, S.A. de C.V. | |||
Related parties | |||
Call center fees | 3,634 | ||
Servprot S.A. de C.V. | |||
Related parties | |||
Security service | 207 | $ 175 | $ 161 |
A&P International Services, S.A.P.I ("AISG") | |||
Related parties | |||
Aircraft maintenance | 914 | ||
MRO Commercial, S.A. | |||
Related parties | |||
Aircraft maintenance | $ 11,097 |
Related parties - Other informa
Related parties - Other information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2021 | [1] | |||
Related parties | |||||||
Balances due under the agreement | $ 14,610 | $ 10,547 | |||||
Due from related parties | 2,155 | 4,662 | [1] | $ 3,641 | |||
Aggregate compensation of short and long-term benefits | 283,089 | 239,215 | [2] | $ 163,776 | [2] | ||
(Benefit) expense arising from cash-settled share-based payments transactions | (2,984) | 5,362 | |||||
Expense arising from cash-settled share-based payments transactions | (4,365) | ||||||
Servprot S.A. de C.V. | |||||||
Related parties | |||||||
Security service | $ 207 | 175 | 161 | ||||
Aeromantenimiento, S.A. | |||||||
Related parties | |||||||
Agreement term | 5 years | ||||||
Balances due under the agreement | 403 | ||||||
Aircraft, engine maintenance and technical support | $ 3,860 | 8,107 | 11,743 | ||||
Aircraft maintenance | 3,690 | 7,964 | 11,556 | ||||
One Link, S.A. de C.V. | |||||||
Related parties | |||||||
Expenses under the agreement | 3,634 | ||||||
Call center fees | 3,634 | ||||||
Mijares, Angoitia, Corts y Fuentes | |||||||
Related parties | |||||||
Balances due under the agreement | 22 | ||||||
Expenses under the agreement | 196 | 214 | 260 | ||||
Frontier Airlines Inc | |||||||
Related parties | |||||||
Balances due under the agreement | 2 | 2 | |||||
Due from related parties | 2,155 | 4,662 | |||||
Account payable | 2 | 2 | |||||
Code-share | 5 | 3,547 | 7,385 | ||||
Directors and officers | |||||||
Related parties | |||||||
Share-based payments transactions | 5,074 | 4,410 | 3,519 | ||||
(Benefit) expense arising from cash-settled share-based payments transactions | (4,365) | (2,984) | 5,362 | ||||
Provision for cash bonuses | 7,027 | 7,602 | |||||
Salaries and benefits for directors and officers | 6,893 | 7,602 | 0 | ||||
Board of Directors | |||||||
Related parties | |||||||
Aggregate compensation of short and long-term benefits | 561 | ||||||
Chairman and independent members of the board of directors | |||||||
Related parties | |||||||
Aggregate compensation of short and long-term benefits | 622 | 257 | |||||
Rest of the directors | |||||||
Related parties | |||||||
Aggregate compensation of short and long-term benefits | 177 | 179 | 165 | ||||
Senior managers | |||||||
Related parties | |||||||
Aggregate compensation of short and long-term benefits | 17,630 | 18,829 | 11,913 | ||||
Grupo Aeroportuario del Centro Norte | |||||||
Related parties | |||||||
Balances due under the agreement | 13,579 | 9,687 | |||||
Account payable | 13,579 | 9,687 | |||||
Amount expensed | 9,792 | 6,607 | 1,486 | ||||
A&P International Services, S.A.P.I ("AISG") | |||||||
Related parties | |||||||
Balances due under the agreement | 191 | ||||||
Account payable | 191 | ||||||
Amount expensed | 914 | ||||||
Aircraft maintenance | 914 | ||||||
MRO Commercial, S.A. | |||||||
Related parties | |||||||
Balances due under the agreement | 1 | ||||||
Aircraft maintenance | 11,097 | ||||||
Chevez, Ruiz, Zamarripa y Ca., S.C | |||||||
Related parties | |||||||
Balances due under the agreement | 815 | 455 | |||||
Account payable | 815 | 455 | |||||
Amount expensed | $ 923 | $ 238 | $ 224 | ||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency.[2]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Other accounts receivable, ne_2
Other accounts receivable, net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Other accounts receivable, net | |||
Credit cards | $ 43,942 | $ 36,924 | |
Benefits from suppliers | 11,491 | 516 | |
Affinity credit card | 9,432 | ||
Other accounts receivable | 4,448 | 1,636 | |
Cargo clients | 4,291 | 2,516 | |
Travel agencies and insurance commissions | 3,731 | 1,645 | |
Other points of sales | 1,968 | 6,848 | |
Airport services | 287 | ||
Employees | 68 | 760 | |
Marketing services receivable | 34 | ||
Other current accounts receivable, gross | 79,658 | 50,879 | |
Allowance for expected credit losses | (809) | (615) | $ (1,640) |
Other accounts receivable, net | $ 78,849 | $ 50,264 |
Other accounts receivable, ne_3
Other accounts receivable, net - Aging of accounts receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts receivable aging | |||
Impaired accounts receivable | $ 809 | $ 615 | $ 1,640 |
Not impaired accounts receivable | 78,849 | 50,264 | |
Total accounts receivable | 79,658 | 50,879 | |
0-30 Days | |||
Accounts receivable aging | |||
Impaired accounts receivable | 622 | 502 | |
Not impaired accounts receivable | 68,356 | 47,432 | |
Total accounts receivable | 68,978 | 47,934 | |
31-60 Days | |||
Accounts receivable aging | |||
Not impaired accounts receivable | 1,580 | 1,332 | |
Total accounts receivable | 1,580 | 1,332 | |
61-90 Days | |||
Accounts receivable aging | |||
Not impaired accounts receivable | 4,865 | 410 | |
Total accounts receivable | 4,865 | 410 | |
91-120 Days | |||
Accounts receivable aging | |||
Impaired accounts receivable | 187 | 113 | |
Not impaired accounts receivable | 4,048 | 1,090 | |
Total accounts receivable | $ 4,235 | $ 1,203 |
Other accounts receivable, ne_4
Other accounts receivable, net - Movement in the allowance for doubtful accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Other accounts receivable, net | ||
Balance as of beginning of the year | $ (615) | $ (1,640) |
Write-offs | 1,478 | 1,783 |
Increase in allowance | (1,672) | (795) |
Foreign currency translation effect | 37 | |
Balance as of end of the year | $ (809) | $ (615) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2021 | [1] | ||
Inventories. | ||||||
Spare parts and accessories of flight equipment | $ 15,758 | $ 14,397 | ||||
Total | 15,758 | 14,397 | [1] | $ 13,984 | ||
Consumption of inventories included in maintenance expense | $ 17,825 | $ 15,406 | $ 10,922 | |||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Prepaid expenses and other cu_3
Prepaid expenses and other current assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | [1] | |
Prepaid expenses and other current assets | |||||
Sales commission to travel agencies | $ 9,037 | $ 9,233 | |||
Other prepaid expenses | 8,371 | 10,440 | |||
Advances to suppliers | 6,446 | 8,542 | |||
Prepaid insurance | 5,816 | 4,150 | |||
Flight credits | 3,519 | 6,022 | |||
Total | $ 33,189 | $ 38,387 | [1] | $ 42,631 | |
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Guarantee deposits (Details)
Guarantee deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | [1] | |
Current assets: | |||||
Credit letters deposits | $ 44,609 | $ 54,767 | |||
Aircraft maintenance deposits paid to lessors (Note 1j) | 16,767 | 21,127 | |||
Deposits for rental of flight equipment | 1,583 | 1,687 | |||
Other guarantee deposits | 1,398 | 1,409 | |||
Total current guarantee deposits | 64,357 | 78,990 | [1] | $ 57,245 | |
Non-current assets: | |||||
Aircraft maintenance deposits paid to lessors | 424,347 | 404,237 | |||
Deposits for rental of flight equipment | 56,049 | 50,007 | |||
Other guarantee deposits | 3,482 | 1,128 | |||
Total non-current guarantee deposits | 483,878 | 455,372 | [1] | $ 422,320 | |
Total guarantee deposits | $ 548,235 | $ 534,362 | |||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Rotable spare parts, furnitur_3
Rotable spare parts, furniture and equipment, net - Net carrying value (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2021 | [1] | ||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | $ 478,771 | $ 454,602 | [1] | $ 364,994 | $ 364,994 | |
Capitalized borrowing costs | 7,915 | 7,098 | 17,872 | |||
Disposals of capitalized borrowing costs | 21,591 | 4,155 | 18,701 | |||
Leasehold improvements to flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 205,892 | 127,861 | 87,117 | |||
Pre-delivery payments | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 185,455 | 253,826 | 246,639 | |||
Flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 52,167 | 41,914 | 23,356 | |||
Construction and improvements in process | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 31,900 | 26,522 | 2,684 | |||
Constructions and improvements | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 746 | 1,246 | 1,354 | |||
Office furniture and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 1,094 | 1,252 | 1,590 | |||
Computer equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 112 | 200 | 392 | |||
Workshop machinery and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 642 | 701 | 648 | |||
Communications equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 185 | 223 | 289 | |||
Motorized transport equipment platform | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 250 | 398 | 367 | |||
Electric power equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 235 | 289 | 385 | |||
Service carts on board | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 84 | 114 | 156 | |||
Workshop tools | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 9 | 56 | $ 167 | |||
Gross value | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 765,103 | 661,242 | ||||
Gross value | Leasehold improvements to flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 421,130 | 258,878 | ||||
Gross value | Pre-delivery payments | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 185,455 | 253,826 | ||||
Gross value | Flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 110,959 | 106,575 | ||||
Gross value | Construction and improvements in process | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 31,900 | 26,522 | ||||
Gross value | Constructions and improvements | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 7,564 | 7,457 | ||||
Gross value | Office furniture and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 2,997 | 2,933 | ||||
Gross value | Computer equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 1,409 | 1,400 | ||||
Gross value | Workshop machinery and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 1,131 | 1,101 | ||||
Gross value | Communications equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 582 | 585 | ||||
Gross value | Motorized transport equipment platform | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 565 | 561 | ||||
Gross value | Electric power equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 530 | 535 | ||||
Gross value | Service carts on board | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 452 | 448 | ||||
Gross value | Workshop tools | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | 429 | 421 | ||||
Accumulated depreciation / amortization | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (286,332) | (206,640) | ||||
Accumulated depreciation / amortization | Leasehold improvements to flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (215,238) | (131,017) | ||||
Accumulated depreciation / amortization | Flight equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (58,792) | (64,661) | ||||
Accumulated depreciation / amortization | Constructions and improvements | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (6,818) | (6,211) | ||||
Accumulated depreciation / amortization | Office furniture and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (1,903) | (1,681) | ||||
Accumulated depreciation / amortization | Computer equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (1,297) | (1,200) | ||||
Accumulated depreciation / amortization | Workshop machinery and equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (489) | (400) | ||||
Accumulated depreciation / amortization | Communications equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (397) | (362) | ||||
Accumulated depreciation / amortization | Motorized transport equipment platform | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (315) | (163) | ||||
Accumulated depreciation / amortization | Electric power equipment | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (295) | (246) | ||||
Accumulated depreciation / amortization | Service carts on board | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | (368) | (334) | ||||
Accumulated depreciation / amortization | Workshop tools | ||||||
Rotable spare parts, furniture and equipment, net | ||||||
Rotable spare parts, furniture and equipment, net | $ (420) | $ (365) | ||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Rotable spare parts, furnitur_4
Rotable spare parts, furniture and equipment, net - Reconciliation of changes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | $ 454,602 | [1] | $ 364,994 | ||
Additions | (356,394) | (195,494) | |||
Disposals and transfers | (227,750) | (45,686) | |||
Borrowing costs, net | (13,676) | 2,943 | |||
Other movements | (9) | 7 | |||
Conversion effects | (12,853) | ||||
Depreciation | (90,790) | (50,297) | $ (37,383) | ||
Balance at end of the year | 478,771 | 454,602 | [1] | 364,994 | |
Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 661,242 | ||||
Balance at end of the year | 765,103 | 661,242 | |||
Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (206,640) | ||||
Balance at end of the year | (286,332) | (206,640) | |||
Spare engine leases | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 382 | ||||
Depreciation | (309) | (1,917) | |||
Balance at end of the year | 795 | 382 | |||
Flight equipment | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 41,914 | 23,356 | |||
Additions | (17,091) | (25,503) | |||
Disposals and transfers | (1,656) | (137) | |||
Conversion effects | (1,018) | ||||
Depreciation | (5,182) | (5,790) | |||
Balance at end of the year | 52,167 | 41,914 | 23,356 | ||
Flight equipment | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 106,575 | ||||
Balance at end of the year | 110,959 | 106,575 | |||
Flight equipment | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (64,661) | ||||
Balance at end of the year | (58,792) | (64,661) | |||
Constructions and improvements | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 1,246 | 1,354 | |||
Disposals and transfers | (1) | ||||
Other movements | 107 | 735 | |||
Conversion effects | (42) | ||||
Depreciation | (607) | (800) | |||
Balance at end of the year | 746 | 1,246 | 1,354 | ||
Constructions and improvements | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 7,457 | ||||
Balance at end of the year | 7,564 | 7,457 | |||
Constructions and improvements | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (6,211) | ||||
Balance at end of the year | (6,818) | (6,211) | |||
Computer equipment | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 200 | 392 | |||
Additions | (8) | (72) | |||
Disposals and transfers | (3) | ||||
Other movements | (1) | 26 | |||
Conversion effects | (10) | ||||
Depreciation | (95) | (277) | |||
Balance at end of the year | 112 | 200 | 392 | ||
Computer equipment | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 1,400 | ||||
Balance at end of the year | 1,409 | 1,400 | |||
Computer equipment | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (1,200) | ||||
Balance at end of the year | (1,297) | (1,200) | |||
Office furniture and equipment | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 1,252 | 1,590 | |||
Additions | (9) | (3) | |||
Disposals and transfers | (2) | (171) | |||
Other movements | 67 | 148 | |||
Conversion effects | (44) | ||||
Depreciation | (232) | (274) | |||
Balance at end of the year | 1,094 | 1,252 | 1,590 | ||
Office furniture and equipment | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 2,933 | ||||
Balance at end of the year | 2,997 | 2,933 | |||
Office furniture and equipment | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (1,681) | ||||
Balance at end of the year | (1,903) | (1,681) | |||
Electric power equipment | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 289 | 385 | |||
Additions | (4) | (96) | |||
Disposals and transfers | (123) | ||||
Other movements | (7) | ||||
Conversion effects | (7) | ||||
Depreciation | (51) | (62) | |||
Balance at end of the year | 235 | 289 | 385 | ||
Electric power equipment | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 535 | ||||
Balance at end of the year | 530 | 535 | |||
Electric power equipment | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (246) | ||||
Balance at end of the year | (295) | (246) | |||
Workshop tools | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 56 | 167 | |||
Additions | (8) | (84) | |||
Disposals and transfers | (14) | ||||
Conversion effects | (3) | ||||
Depreciation | (55) | (178) | |||
Balance at end of the year | 9 | 56 | 167 | ||
Workshop tools | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 421 | ||||
Balance at end of the year | 429 | 421 | |||
Workshop tools | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (365) | ||||
Balance at end of the year | (420) | (365) | |||
Motorized transport equipment platform | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 398 | 367 | |||
Additions | (236) | ||||
Disposals and transfers | (250) | ||||
Other movements | 7 | 176 | |||
Conversion effects | (16) | ||||
Depreciation | (155) | (115) | |||
Balance at end of the year | 250 | 398 | 367 | ||
Motorized transport equipment platform | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 561 | ||||
Balance at end of the year | 565 | 561 | |||
Motorized transport equipment platform | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (163) | ||||
Balance at end of the year | (315) | (163) | |||
Communications equipment | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 223 | 289 | |||
Disposals and transfers | (1) | (29) | |||
Other movements | 1 | 21 | |||
Conversion effects | (8) | ||||
Depreciation | (38) | (50) | |||
Balance at end of the year | 185 | 223 | 289 | ||
Communications equipment | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 585 | ||||
Balance at end of the year | 582 | 585 | |||
Communications equipment | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (362) | ||||
Balance at end of the year | (397) | (362) | |||
Workshop machinery and equipment | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 701 | 648 | |||
Additions | (47) | (206) | |||
Disposals and transfers | (43) | ||||
Other movements | 4 | 6 | |||
Conversion effects | (21) | ||||
Depreciation | (110) | (95) | |||
Balance at end of the year | 642 | 701 | 648 | ||
Workshop machinery and equipment | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 1,101 | ||||
Balance at end of the year | 1,131 | 1,101 | |||
Workshop machinery and equipment | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (400) | ||||
Balance at end of the year | (489) | (400) | |||
Service carts on board | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 114 | 156 | |||
Additions | (7) | ||||
Conversion effects | (4) | ||||
Depreciation | (37) | (38) | |||
Balance at end of the year | 84 | 114 | 156 | ||
Service carts on board | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 448 | ||||
Balance at end of the year | 452 | 448 | |||
Service carts on board | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (334) | ||||
Balance at end of the year | (368) | (334) | |||
Allowance for obsolescence [Member] | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 150 | ||||
Disposals and transfers | 148 | ||||
Conversion effects | 2 | ||||
Balance at end of the year | 150 | ||||
Pre-delivery payments | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 253,826 | 246,639 | |||
Additions | (166,571) | (55,749) | |||
Disposals and transfers | (221,253) | (43,678) | |||
Borrowing costs, net | (13,676) | 2,943 | |||
Other movements | (13) | ||||
Conversion effects | (7,827) | ||||
Balance at end of the year | 185,455 | 253,826 | 246,639 | ||
Pre-delivery payments | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 253,826 | ||||
Balance at end of the year | 185,455 | 253,826 | |||
Construction and improvements in process | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 26,522 | 2,684 | |||
Additions | (33,838) | (26,982) | |||
Disposals and transfers | (4,838) | (1,385) | |||
Other movements | (23,622) | (1,318) | |||
Conversion effects | (441) | ||||
Balance at end of the year | 31,900 | 26,522 | 2,684 | ||
Construction and improvements in process | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 26,522 | ||||
Balance at end of the year | 31,900 | 26,522 | |||
Leasehold improvements to flight equipment | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 127,861 | 87,117 | |||
Additions | (138,811) | (86,563) | |||
Other movements | 23,448 | 213 | |||
Conversion effects | (3,414) | ||||
Depreciation | (84,228) | (42,618) | |||
Balance at end of the year | 205,892 | 127,861 | $ 87,117 | ||
Leasehold improvements to flight equipment | Gross value | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | 258,878 | ||||
Balance at end of the year | 421,130 | 258,878 | |||
Leasehold improvements to flight equipment | Accumulated depreciation / amortization | |||||
Rotable spare parts, furniture and equipment, net | |||||
Balance at beginning of the year | (131,017) | ||||
Balance at end of the year | $ (215,238) | $ (131,017) | |||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Rotable spare parts, furnitur_5
Rotable spare parts, furniture and equipment, net - Additional Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||||||
May 12, 2020 engine | Aug. 16, 2013 engine | Oct. 31, 2021 engine | Apr. 30, 2021 engine | Oct. 31, 2020 item | Jul. 31, 2020 item | Nov. 30, 2018 item aircraft | Dec. 31, 2017 aircraft | Nov. 30, 2015 engine | Dec. 31, 2022 USD ($) aircraft | Dec. 31, 2021 USD ($) aircraft | Dec. 31, 2020 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2011 aircraft | Jan. 01, 2021 USD ($) | [1] | ||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Rate used to determine amount of borrowing cost | 5.34% | 2.76% | |||||||||||||||
Depreciation expense | $ 90,790 | $ 50,297 | $ 37,383 | ||||||||||||||
Number of spare engines purchased | engine | 11 | 1 | 3 | ||||||||||||||
Number of aircraft engines to be provided maintenance services | engine | 13 | 2 | 16 | ||||||||||||||
Credit notes received | $ 3,100 | ||||||||||||||||
Accumulated amortization of credit notes | 225 | 241 | 228 | ||||||||||||||
Number of aircraft to be delivered | item | 18 | 80 | 26 | ||||||||||||||
Amounts paid for aircraft and spare engines | $ 347,147 | 186,121 | 157,133 | ||||||||||||||
Total number of aircraft to be delivered | aircraft | 144 | ||||||||||||||||
Gain (loss) on sale and leaseback | $ 21,193 | 9,668 | 32,695 | ||||||||||||||
Term of aircraft delivery agreement | 8 years | ||||||||||||||||
Carrying amount of remaining owned aircraft | $ 478,771 | 454,602 | [1] | 364,994 | $ 364,994 | ||||||||||||
Impairment charges on rotable spare parts, furniture and equipment | $ 0 | 0 | 0 | ||||||||||||||
Not later than one year | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Total number of aircraft to be delivered | aircraft | 5 | ||||||||||||||||
Later Than One Year And Not Later Than Two Years | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Total number of aircraft to be delivered | aircraft | 17 | ||||||||||||||||
Between two and three years | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Total number of aircraft to be delivered | aircraft | 16 | ||||||||||||||||
Between three and four years | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Total number of aircraft to be delivered | aircraft | 27 | ||||||||||||||||
Between four and five years | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Total number of aircraft to be delivered | aircraft | 21 | ||||||||||||||||
Between five and six years | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Total number of aircraft to be delivered | aircraft | 19 | ||||||||||||||||
Between six and seven years | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Total number of aircraft to be delivered | aircraft | 14 | ||||||||||||||||
Between seven and eight years | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Total number of aircraft to be delivered | aircraft | 25 | ||||||||||||||||
Lufthansa Technik AG - December 2016 Agreement | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Credit notes received | $ 5,000 | $ 1,500 | |||||||||||||||
Accumulated amortization of credit notes | $ 452 | $ 258 | 245 | ||||||||||||||
Term of total support agreement | 66 months | ||||||||||||||||
A320 model | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Number of aircraft purchased | aircraft | 80 | 25 | 39 | 44 | |||||||||||||
A320CEO model | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Number of aircraft purchased | aircraft | 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 | aircraft | 46 | 30 | |||||||||||||||
Number of engines purchased | engine | 46 | 30 | |||||||||||||||
Number of spare engines purchased | engine | 6 | 2 | |||||||||||||||
Number of aircraft engines to be provided maintenance services | engine | 10 | ||||||||||||||||
A321NEO model | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Number of aircraft purchased | 34 | 34 | |||||||||||||||
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 | aircraft | 6 | 20 | |||||||||||||||
Pre-delivery payments | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Amounts paid for aircraft and spare engines | $ 166,600 | $ 55,700 | |||||||||||||||
Carrying amount of remaining owned aircraft | 185,455 | 253,826 | $ 246,639 | ||||||||||||||
Spare engine leases | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Depreciation expense | 309 | 1,917 | |||||||||||||||
Carrying amount of remaining owned aircraft | 795 | 382 | |||||||||||||||
Spare engine leases | Pratt and Whitney purchase agreement (FMP) | |||||||||||||||||
Rotable spare parts, furniture and equipment, net | |||||||||||||||||
Amounts paid for aircraft and spare engines | $ 20,120 | $ 19,082 | |||||||||||||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Intangible assets, net (Details
Intangible assets, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Composition and movement of intangible assets | |||||
Beginning balance | [1] | $ 12,632 | |||
Ending balance | 12,725 | $ 12,632 | [1] | ||
Software | |||||
Composition and movement of intangible assets | |||||
Beginning balance | 12,632 | 9,603 | |||
Additions | 6,790 | 10,142 | |||
Disposals | (1) | ||||
Amortization | (6,696) | (6,752) | |||
Exchange differences | (1) | (360) | |||
Ending balance | 12,725 | 12,632 | $ 9,603 | ||
Amortization expense | 6,696 | 6,752 | $ 4,715 | ||
Software | Gross value | |||||
Composition and movement of intangible assets | |||||
Beginning balance | 41,048 | ||||
Ending balance | 47,850 | 41,048 | |||
Software | Accumulated depreciation / amortization | |||||
Composition and movement of intangible assets | |||||
Beginning balance | (28,416) | ||||
Ending balance | $ (35,125) | $ (28,416) | |||
Software | Minimum | |||||
Composition and movement of intangible assets | |||||
Estimated useful lives (in years) | 1 year | ||||
Software | Maximum | |||||
Composition and movement of intangible assets | |||||
Estimated useful lives (in years) | 4 years | ||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Leases - Fleet and spare engine
Leases - Fleet and spare engines (Details) | 1 Months Ended | 12 Months Ended | ||||||||||
May 12, 2020 engine | Aug. 16, 2013 engine | Sep. 30, 2022 aircraft | Feb. 28, 2022 aircraft | Oct. 31, 2021 engine | Mar. 31, 2021 aircraft | Feb. 28, 2021 engine | Nov. 30, 2015 engine | Dec. 31, 2022 aircraft engine | Dec. 31, 2021 engine aircraft | Dec. 31, 2021 aircraft engine | Dec. 31, 2011 aircraft | |
Leases | ||||||||||||
Number of aircraft leased | 116 | 100 | 100 | |||||||||
Number of spare engines leased | engine | 23 | 20 | 20 | |||||||||
Number of aircraft incorporated to fleet | 18 | 15 | ||||||||||
Number of aircraft with lease term extended | 1 | 2 | 5 | 3 | 15 | |||||||
Number of spare engines with lease term extended | 2 | |||||||||||
Number of spare engines purchased | engine | 11 | 1 | 3 | |||||||||
Airbus purchase agreement | ||||||||||||
Leases | ||||||||||||
Number of aircraft purchased | 18 | 15 | ||||||||||
Number of aircraft returned to respective lessors | 2 | |||||||||||
Number of aircrafts purchased directly from lessor | 10 | |||||||||||
Pratt and Whitney purchase agreement (FMP) | ||||||||||||
Leases | ||||||||||||
Number of CEO spare engines incorporated to fleet | 3 | |||||||||||
Number of NEO spare engines incorporated to fleet | engine | 2 | |||||||||||
A319 Model 132 | ||||||||||||
Leases | ||||||||||||
Number of aircraft leased | 3 | 3 | 3 | |||||||||
A319 Model 133 | ||||||||||||
Leases | ||||||||||||
Number of aircraft leased | 2 | 2 | ||||||||||
A320 Model 233 | ||||||||||||
Leases | ||||||||||||
Number of aircraft leased | 39 | 39 | 39 | |||||||||
A320 Model 232 | ||||||||||||
Leases | ||||||||||||
Number of aircraft leased | 1 | 1 | 1 | |||||||||
A320NEO Model 271N | ||||||||||||
Leases | ||||||||||||
Number of aircraft leased | 48 | 39 | 39 | |||||||||
A320NEO Model 271N | Airbus purchase agreement | ||||||||||||
Leases | ||||||||||||
Number of aircraft incorporated to fleet | 6 | |||||||||||
A320NEO Model 271N | Lessor's aircraft order book | ||||||||||||
Leases | ||||||||||||
Number of aircraft incorporated to fleet | 3 | |||||||||||
A321 Model 231 | ||||||||||||
Leases | ||||||||||||
Number of aircraft leased | 10 | 10 | 10 | |||||||||
A321NEO Model 271N | ||||||||||||
Leases | ||||||||||||
Number of aircraft leased | 15 | 6 | 6 | |||||||||
A321NEO Model 271N | Sale and Leaseback Transactions | ||||||||||||
Leases | ||||||||||||
Number of aircraft incorporated to fleet | 7 | |||||||||||
A321NEO Model 271N | Lessor's aircraft order book | ||||||||||||
Leases | ||||||||||||
Number of aircraft incorporated to fleet | 2 | |||||||||||
A320CEO model | ||||||||||||
Leases | ||||||||||||
Number of aircraft purchased | 14 | |||||||||||
Number of spare engines purchased | engine | 1 | |||||||||||
A320CEO model | Airbus purchase agreement | ||||||||||||
Leases | ||||||||||||
Number of aircraft with lease term extended | 2 | 13 | ||||||||||
A320CEO model | Sale and Leaseback Transactions | ||||||||||||
Leases | ||||||||||||
Number of aircraft incorporated to fleet | 5 | |||||||||||
A319CEO Model | Airbus purchase agreement | ||||||||||||
Leases | ||||||||||||
Number of aircraft with lease term extended | 1 | 2 | ||||||||||
Number of aircraft returned to respective lessors | 2 | |||||||||||
A321CEO Model | Airbus purchase agreement | ||||||||||||
Leases | ||||||||||||
Number of aircraft with lease term extended | 2 | |||||||||||
V2500 Model V2524-A5 | ||||||||||||
Leases | ||||||||||||
Number of spare engines leased | engine | 2 | 2 | 2 | |||||||||
V2500 Model V2527M-A5 | ||||||||||||
Leases | ||||||||||||
Number of spare engines leased | engine | 3 | 3 | 3 | |||||||||
V2500 Model V2527E-A5 | ||||||||||||
Leases | ||||||||||||
Number of spare engines leased | engine | 6 | 5 | 5 | |||||||||
V2500 Model V2527-A5 | ||||||||||||
Leases | ||||||||||||
Number of spare engines leased | engine | 6 | 4 | 4 | |||||||||
PW1100 Model PW1127G-JM | ||||||||||||
Leases | ||||||||||||
Number of spare engines leased | engine | 5 | 5 | 5 | |||||||||
PW1100 Model PW1133G-JM engine | ||||||||||||
Leases | ||||||||||||
Number of spare engines leased | engine | 1 | 1 | 1 |
Leases - Carrying amounts of ri
Leases - Carrying amounts of right-of use assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||
Disclosure of quantitative information about right-of-use assets | ||||||
Balance at the beginning | $ 1,917,235 | [1] | $ 1,720,223 | |||
Additions | 553,331 | 454,156 | ||||
Modifications | 30,808 | 69,251 | ||||
Disposals | (273) | |||||
Foreign currency translation effects | (56,771) | |||||
Depreciation on right of use assets | (320,443) | (269,351) | [2] | $ (236,417) | [2] | |
Balance at the end | 2,180,931 | 1,917,235 | [1] | 1,720,223 | ||
Aircraft leases | ||||||
Disclosure of quantitative information about right-of-use assets | ||||||
Balance at the beginning | 1,862,664 | 1,674,620 | ||||
Additions | 521,711 | 437,334 | ||||
Modifications | 25,895 | 60,239 | ||||
Foreign currency translation effects | (56,768) | |||||
Depreciation on right of use assets | (299,517) | (252,761) | ||||
Balance at the end | 2,110,753 | 1,862,664 | 1,674,620 | |||
Spare engine leases | ||||||
Disclosure of quantitative information about right-of-use assets | ||||||
Balance at the beginning | 34,953 | 41,567 | ||||
Additions | 1,023 | 2,928 | ||||
Modifications | (168) | 2,084 | ||||
Depreciation on right of use assets | (11,627) | (11,626) | ||||
Balance at the end | 24,181 | 34,953 | 41,567 | |||
Land and building leases | ||||||
Disclosure of quantitative information about right-of-use assets | ||||||
Balance at the beginning | 19,618 | 4,036 | ||||
Additions | 30,597 | 13,894 | ||||
Modifications | 5,081 | 6,928 | ||||
Disposals | (273) | |||||
Foreign currency translation effects | (3) | |||||
Depreciation on right of use assets | (9,299) | (4,964) | ||||
Balance at the end | $ 45,997 | $ 19,618 | $ 4,036 | |||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency.[2]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Leases - Carrying amounts of le
Leases - Carrying amounts of lease liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2021 | [1] | ||
Leases | ||||||
As at 1 January | $ 2,412,137 | $ 2,212,201 | ||||
Additions | 550,834 | 464,049 | ||||
Modifications | 29,842 | 67,589 | ||||
Disposals | (291) | |||||
Accretion of interest | 165,043 | 127,329 | ||||
Foreign exchange effect | (129) | 72,449 | ||||
Foreign currency translation effects | (72,221) | |||||
Payments | (449,004) | (458,968) | $ (284,363) | |||
As at 31 December | 2,708,723 | 2,412,137 | $ 2,212,201 | |||
Current | 335,620 | 283,843 | [1] | $ 325,038 | ||
Lease liabilities | $ 2,373,103 | $ 2,128,294 | [1] | $ 1,887,163 | ||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Leases - Amounts recognized in
Leases - Amounts recognized in profit and loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Leases | |||||
Depreciation of right-of-use assets | $ (320,443) | $ (269,351) | [1] | $ (236,417) | [1] |
Interest expense on lease liabilities and aircraft and engine lease return obligation | (174,769) | (128,159) | (108,907) | ||
Aircraft and engine variable lease expenses | (124,532) | (83,373) | [1] | (85,957) | [1] |
Total amount recognized in profit or loss | (619,744) | (480,883) | (431,281) | ||
Cash outflow for leases | 449,004 | 458,968 | 284,363 | ||
Changes to lease payments that arose from concessions of lease modifications | 8,880 | ||||
Supplemental Rent | 58,658 | 55,668 | $ 65,986 | ||
Increase in the right-of-use assets from exercise of extension options | $ 30,653 | $ 66,850 | |||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Accrued liabilities - Current a
Accrued liabilities - Current accrued liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | [1] | |
Accrued liabilities | |||||
Fuel and traffic accrued expenses | $ 105,284 | $ 88,389 | |||
Maintenance and aircraft parts accrued expenses | 25,172 | 22,667 | |||
Salaries and benefits | 19,091 | 21,017 | |||
Accrued administrative expenses | 12,517 | 9,564 | |||
Sales, marketing and distribution accrued expenses | 7,636 | 18,772 | |||
Maintenance deposits | 5,933 | 8,267 | |||
Deferred revenue from V Club membership | 4,967 | 3,665 | |||
Information and communication accrued expenses | 2,979 | 1,987 | |||
Supplier services agreement | 2,262 | 1,154 | |||
Others | 408 | 2,233 | |||
Benefits from suppliers | 270 | 378 | |||
Advances from travel agencies | 53 | 3 | |||
Total current accrued liabilities | $ 186,572 | $ 178,096 | [1] | $ 118,117 | |
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Accrued liabilities - Non-curre
Accrued liabilities - Non-current accrued liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | [1] | |
Accrued liabilities | |||||
Supplier services agreement | $ 12,914 | $ 763 | |||
Benefits from suppliers | 441 | ||||
Other | 369 | 271 | |||
Total non-current accrued liabilities | $ 13,283 | $ 1,475 | [1] | $ 3,343 | |
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Other liabilities (Details)
Other liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Other liabilities | ||
Balance at beginning of the year | $ 201,565 | $ 138,801 |
Increase for the year | 94,951 | 83,071 |
Payments | (46,664) | (15,028) |
Conversion effects | (5,279) | |
Balance at end of the year | 249,852 | 201,565 |
Aircraft and engine lease return obligation | ||
Other liabilities | ||
Balance at beginning of the year | 188,879 | 125,546 |
Increase for the year | 94,815 | 70,120 |
Payments | (34,228) | (1,914) |
Conversion effects | (4,873) | |
Balance at end of the year | 249,466 | 188,879 |
Guarantee deposit | ||
Other liabilities | ||
Balance at beginning of the year | 12,532 | |
Payments | (12,327) | |
Conversion effects | (205) | |
Employee profit sharing | ||
Other liabilities | ||
Balance at beginning of the year | 12,686 | 723 |
Increase for the year | 136 | 12,951 |
Payments | (12,436) | (787) |
Conversion effects | (201) | |
Balance at end of the year | $ 386 | $ 12,686 |
Other liabilities - Current and
Other liabilities - Current and non-current maturities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | [1] | ||
Other liabilities. | |||||
Current maturities | $ 5,398 | $ 34,635 | [1] | $ 5,074 | |
Non-current | 244,454 | 166,930 | [1] | $ 133,727 | |
Cancellations, or write off related to liabilities | $ 0 | $ 0 | |||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Employee benefits - Analysis of
Employee benefits - Analysis of net period cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee benefits | |||
Current service cost | $ 6,518 | $ 425 | $ 398 |
Interest cost on benefit obligation | 692 | 127 | 123 |
Net period cost | $ 7,210 | $ 552 | $ 521 |
Employee benefits - Changes in
Employee benefits - Changes in the defined benefit obligation and actuarial assumptions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined benefit obligation and significant assumptions | |||
Defined benefit obligation at beginning of the year | $ 3,968 | $ 2,538 | |
Net period cost charged to profit or loss: | |||
Current service cost | 6,518 | 425 | |
Interest cost on benefit obligation | 692 | 127 | |
Remeasurement losses in other comprehensive income: | |||
Actuarial changes arising from changes in assumptions | (253) | 432 | |
Payments made | (179) | (71) | |
Conversion effect foreign currency | 241 | (67) | |
Others | 0 | 584 | |
Defined benefit obligation at end of the year | $ 10,987 | $ 3,968 | |
Discount rate | 9.21% | 7.84% | 7.04% |
Expected rate of salary increases | 5.50% | 5.50% | 5.50% |
Employee profit-sharing (Note 16) | $ 19,091 | $ 21,017 | |
General Zone | |||
Remeasurement losses in other comprehensive income: | |||
Annual increase in minimum salary | 19% | 19% | |
General Zone | MEXICO | |||
Remeasurement losses in other comprehensive income: | |||
Annual increase in minimum salary | 19% | ||
Border Zone | |||
Remeasurement losses in other comprehensive income: | |||
Annual increase in minimum salary | 4% | 4.50% | 4% |
Border Zone | MEXICO | |||
Remeasurement losses in other comprehensive income: | |||
Annual increase in minimum salary | 4% | ||
Employee profit sharing | |||
Remeasurement losses in other comprehensive income: | |||
Employee profit-sharing (Note 16) | $ 386 | $ 12,686 |
Employee benefits - Sensitivity
Employee benefits - Sensitivity analysis (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Discount rate | |
Disclosure of sensitivity analysis for actuarial assumptions | |
Increase in actuarial assumption | 0.50% |
Decrease in actuarial assumption | 0.50% |
Increase/(decrease) in defined benefit obligation, assuming increase in actuarial assumption | $ 10,431 |
Increase/(decrease) in defined benefit obligation, assuming decrease in actuarial assumption | $ 11,589 |
Statutory minimum wage increase rate | |
Disclosure of sensitivity analysis for actuarial assumptions | |
Increase in actuarial assumption | 0.50% |
Decrease in actuarial assumption | 0.50% |
Increase/(decrease) in defined benefit obligation, assuming increase in actuarial assumption | $ 11,197 |
Increase/(decrease) in defined benefit obligation, assuming decrease in actuarial assumption | $ 10,789 |
Salary increase rate | |
Disclosure of sensitivity analysis for actuarial assumptions | |
Increase in actuarial assumption | 0.50% |
Decrease in actuarial assumption | 0.50% |
Increase/(decrease) in defined benefit obligation, assuming increase in actuarial assumption | $ 11,678 |
Increase/(decrease) in defined benefit obligation, assuming decrease in actuarial assumption | $ 10,380 |
Share-based payments - Share pu
Share-based payments - Share purchase plan (Details) | 1 Months Ended | 12 Months Ended | ||||||||||||||
Nov. 11, 2014 USD ($) $ / $ | Nov. 11, 2014 MXN ($) $ / $ | Nov. 30, 2022 USD ($) | Dec. 31, 2022 EquityInstruments USD ($) shares | Dec. 31, 2021 USD ($) EquityInstruments shares | Dec. 31, 2020 USD ($) EquityInstruments | Apr. 18, 2023 MXN ($) | Dec. 31, 2022 $ / $ | Dec. 31, 2022 ₡ / $ | Dec. 31, 2022 Q / $ | Dec. 31, 2021 $ / $ | Dec. 31, 2021 ₡ / $ | Dec. 31, 2021 Q / $ | Dec. 31, 2020 $ / $ | Dec. 31, 2020 ₡ / $ | Dec. 31, 2020 Q / $ | |
Share purchase plan | ||||||||||||||||
Exchange rate | 4,810.20 | 3,981.16 | 3,428.26 | 18.0638 | 19.36 | 594.9700 | 7.8515 | 20.58 | 645.900 | 7.7285 | 19.9487 | 615.7800 | 7.8095 | |||
Forfeited during the year | (103,712) | (551,732) | ||||||||||||||
Share purchase plan | ||||||||||||||||
Share purchase plan | ||||||||||||||||
Special bonus granted | $ 797,000 | $ 10,831,000 | ||||||||||||||
Exchange rate | $ / $ | 13.58 | 13.58 | ||||||||||||||
Special bonus net of withheld taxes | $ 520,000 | $ 7,059,000 | ||||||||||||||
Cost of extensions to LTIP approved | $ | $ 5,703,000 | $ 5,086,000 | $ 4,618,000 | |||||||||||||
Cost of extensions net of withheld taxes | $ | $ 3,707,000 | $ 3,307,000 | $ 3,003,000 | |||||||||||||
Forfeited during the year | (103,712) | (551,732) | (327,217) | |||||||||||||
Outstanding at end of the year | 6,579,214 | |||||||||||||||
Share purchase plan | Series A shares | ||||||||||||||||
Share purchase plan | ||||||||||||||||
Outstanding at beginning of the year | 4,490,421 | 5,805,311 | ||||||||||||||
Purchased during the year | shares | 4,354,473 | 1,849,417 | ||||||||||||||
Exercised/vested during the year | (2,161,968) | (2,612,575) | ||||||||||||||
Forfeited during the year | (103,712) | (551,732) | ||||||||||||||
Outstanding at end of the year | 6,579,214 | 4,490,421 | 5,805,311 |
Share-based payments - Vesting
Share-based payments - Vesting period of shares granted under share purchase plan (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) EquityInstruments | Dec. 31, 2021 USD ($) EquityInstruments | Dec. 31, 2020 USD ($) EquityInstruments | |
Share-based payments | |||
Compensation expense recorded in the consolidated statement of operations | $ | $ 5,074 | $ 4,410 | $ 3,519 |
Forfeited during the year | 103,712 | 551,732 | |
Share purchase plan | |||
Share-based payments | |||
Shares outstanding | 6,579,214 | ||
Compensation expense recorded in the consolidated statement of operations | $ | $ 5,074 | $ 4,410 | $ 3,519 |
Forfeited during the year | 103,712 | 551,732 | 327,217 |
Share purchase plan | Vesting / Exercisable within one year | |||
Share-based payments | |||
Shares outstanding | 3,084,981 | ||
Share purchase plan | Vesting / Exercisable within two years | |||
Share-based payments | |||
Shares outstanding | 2,042,732 | ||
Share purchase plan | Vesting / Exercisable within three years | |||
Share-based payments | |||
Shares outstanding | 1,451,501 |
Share-based payments - SARs (ca
Share-based payments - SARs (cash settled) (Details) | 12 Months Ended | ||||||||||||||||
Nov. 06, 2014 USD ($) EquityInstruments | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Apr. 18, 2023 MXN ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 $ / $ | Dec. 31, 2022 ₡ / $ | Dec. 31, 2022 Q / $ | Dec. 31, 2021 $ / $ | Dec. 31, 2021 ₡ / $ | Dec. 31, 2021 Q / $ | Dec. 31, 2020 $ / $ | Dec. 31, 2020 ₡ / $ | Dec. 31, 2020 Q / $ | Nov. 06, 2014 MXN ($) | Nov. 06, 2014 $ / $ | Nov. 06, 2014 $ / $ | |
Share-based payments | |||||||||||||||||
Exchange rate | 3,981.16 | 3,428.26 | 18.0638 | 4,810.20 | 19.36 | 594.9700 | 7.8515 | 20.58 | 645.900 | 7.7285 | 19.9487 | 615.7800 | 7.8095 | ||||
Compensation (benefit) recorded in the consolidated statement of operations | $ (2,984,000) | $ 5,362,000 | |||||||||||||||
SARs - cash settled | |||||||||||||||||
Share-based payments | |||||||||||||||||
Granted | EquityInstruments | 4,315,264 | ||||||||||||||||
Vesting period | 3 years | ||||||||||||||||
Total amount granted | $ 796,000 | $ 10,831,000 | |||||||||||||||
Exchange rate | 13.61 | 1 | |||||||||||||||
Compensation (benefit) recorded in the consolidated statement of operations | $ 95,000 |
Share-based payments - MIP I (D
Share-based payments - MIP I (Details) | Dec. 27, 2012 USD ($) $ / $ | Dec. 27, 2012 MXN ($) $ / $ | Dec. 24, 2012 USD ($) $ / $ $ / shares | Dec. 21, 2012 EquityInstruments $ / shares | Apr. 18, 2023 MXN ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 MXN ($) | Dec. 31, 2022 $ / $ | Dec. 31, 2022 ₡ / $ | Dec. 31, 2022 Q / $ | Dec. 31, 2021 USD ($) | Dec. 31, 2021 $ / $ | Dec. 31, 2021 ₡ / $ | Dec. 31, 2021 Q / $ | Dec. 31, 2020 USD ($) | Dec. 31, 2020 $ / $ | Dec. 31, 2020 ₡ / $ | Dec. 31, 2020 Q / $ |
Share-based payments | ||||||||||||||||||
Exchange rate | 18.0638 | 4,810.20 | 19.36 | 594.9700 | 7.8515 | 3,981.16 | 20.58 | 645.900 | 7.7285 | 3,428.26 | 19.9487 | 615.7800 | 7.8095 | |||||
MIP I | ||||||||||||||||||
Share-based payments | ||||||||||||||||||
Exercise price of shares | $ 5.31 | |||||||||||||||||
Amount borrowed by trust | $ 10,305,000 | $ 133,723,000 | ||||||||||||||||
Exchange rate | $ / $ | 12.97 | 12.97 | 12.77 | |||||||||||||||
Maximum term of share options | 10 years | |||||||||||||||||
Total cost of MIP determined | $ 213,000 | $ 2,722,000 | ||||||||||||||||
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% | |||||||||||||||||
Exercise price of shares | $ 5.31 |
Share-based payments - MIP I, a
Share-based payments - MIP I, assumptions (Details) - MIP I $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 24, 2012 MXN ($) Y $ / shares | Dec. 31, 2021 MXN ($) EquityInstruments | Dec. 31, 2021 USD ($) EquityInstruments | Dec. 31, 2020 MXN ($) | |
Share-based payments | ||||
Dividend yield (%) | 0% | |||
Volatility (%) | 37% | |||
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 | 7,653,981 | 7,653,981 | ||
Series A shares | ||||
Share-based payments | ||||
Amount paid to Management Trust corresponding to exercised shares | $ 40,668,000 | $ 1,976 | $ 0 | |
Shares exercised | 7,653,981 | 7,653,981 |
Share-based payments - MIP I, m
Share-based payments - MIP I, movement in share options (Details) - MIP I $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2021 MXN ($) EquityInstruments $ / shares | |
Share-based payments | |
Outstanding at beginning of the year (shares) | EquityInstruments | 7,653,981 |
Exercised during the year (shares) | EquityInstruments | (7,653,981) |
Outstanding at end of the year (shares) | EquityInstruments | |
Outstanding at the beginning of the year (Exercise price) | $ / shares | $ 5.31 |
Exercise during the year (Exercise price) | $ / shares | $ 5.31 |
Outstanding at end of the year (Exercise price) | $ / shares | |
Outstanding at beginning of the year (Total) | $ | $ 40,668 |
Exercised during the year (Total) | $ | $ (40,668) |
Outstanding at end of the year (Total) | $ |
Share-based payments - MIP II (
Share-based payments - MIP II (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) EquityInstruments | Dec. 31, 2021 USD ($) EquityInstruments | Dec. 31, 2020 USD ($) EquityInstruments | |
Share-based payments | |||
Expense arising from equity-settled share-based payments transactions | $ 5,074 | $ 4,410 | $ 3,519 |
MIP II | |||
Share-based payments | |||
Granted | EquityInstruments | 13,536,960 | ||
Vesting period | 5 years | ||
Extension of vesting period | 5 years | ||
Carrying amount of the liability | $ 1,562 | 5,927 | |
Expense arising from equity-settled share-based payments transactions | $ 4,365 | ||
Compensation (benefit) recorded in the consolidated statement of operations | $ (2,984) | $ 5,457 | |
Exercised during the year (shares) | EquityInstruments | 0 | 0 | 0 |
Share-based payments - (Benefit
Share-based payments - (Benefit) expense recognized in retention plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based payments | |||
(Benefit) expense arising from cash-settled share-based payments transactions | $ (2,984) | $ 5,362 | |
Expense arising from cash-settled share-based payments transactions | $ (4,365) | ||
Expense arising from equity-settled share-based payments transactions | 5,074 | 4,410 | 3,519 |
Total expense arising from share-based payments transactions | 709 | $ 1,426 | $ 8,881 |
LTIP - SARs [Member] | |||
Share-based payments | |||
(Benefit) expense arising from cash-settled share-based payments transactions | $ (95) |
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 | Dec. 31, 2022 EquityInstruments $ / shares | Dec. 31, 2021 EquityInstruments $ / shares | Dec. 31, 2020 EquityInstruments $ / shares | |
Share-based payments | ||||
Vesting period | 5 years | 5 years | ||
Exercise price | $ / shares | $ 33.80 | $ 32.23 | $ 9.74 | |
Shares available to be exercised | EquityInstruments | 5,945,417 | 4,589,726 | 5,233,693 |
Equity - Authorized shares and
Equity - Authorized shares and secondary follow-on equity offering (Details) | 12 Months Ended | |||||||
Dec. 20, 2021 shares | Dec. 11, 2020 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) EquityInstruments $ / shares shares | Dec. 31, 2021 USD ($) EquityInstruments $ / shares shares | Dec. 31, 2020 USD ($) | Jan. 01, 2021 USD ($) | [1] | ||
Equity | ||||||||
Par value | $ / shares | $ 0 | $ 0 | ||||||
Number of authorized shares | 1,165,976,677 | 1,165,976,677 | ||||||
Treasury shares | (13,452,393) | (9,904,197) | ||||||
Shares fully subscribed and paid | 1,152,524,284 | 1,156,072,480 | ||||||
Forfeited during the year | EquityInstruments | 103,712 | 551,732 | ||||||
Proceeds from issuance of shares | $ | $ 164,400,000 | $ 164,399,000 | ||||||
Increase in capital stock | $ | $ 164,400,000 | 164,399,000 | ||||||
Legal reserve | $ | $ 17,363,000 | $ 17,363,000 | [1] | $ 17,363,000 | $ 17,363,000 | |||
Legal reserve as a percent of capital stock | 8.50% | 8.50% | ||||||
Withholding tax on dividends distributions (as a percent) | 10% | |||||||
Tax rate for dividends which exceeds the CUFIN and CUFINRE | 42.86% | |||||||
Balance amount | $ | $ 0.1 | $ 0.1 | ||||||
Series A shares | ||||||||
Equity | ||||||||
Number of authorized shares | 1,108,462,804 | 1,108,462,804 | ||||||
Number of shares per CPO | 1 | |||||||
Series B shares | ||||||||
Equity | ||||||||
Number of authorized shares | 57,513,873 | 57,513,873 | ||||||
Conversion of equivalent number of shares | 30,538,000 | |||||||
Fixed Class I | ||||||||
Equity | ||||||||
Number of authorized shares | 24,180 | 24,180 | ||||||
Shares fully subscribed and paid | 24,180 | 24,180 | ||||||
Fixed Class I | Series A shares | ||||||||
Equity | ||||||||
Number of authorized shares | 10,478 | 10,478 | ||||||
Fixed Class I | Series B shares | ||||||||
Equity | ||||||||
Number of authorized shares | 13,702 | 13,702 | ||||||
Variable Class II | ||||||||
Equity | ||||||||
Number of authorized shares | 1,165,952,497 | 1,165,952,497 | ||||||
Treasury shares | (13,452,393) | (9,904,197) | ||||||
Shares fully subscribed and paid | 1,152,500,104 | 1,156,048,300 | ||||||
Variable Class II | Series A shares | ||||||||
Equity | ||||||||
Number of authorized shares | 1,108,452,326 | 1,108,452,326 | ||||||
Variable Class II | Series B shares | ||||||||
Equity | ||||||||
Number of authorized shares | 57,500,171 | 57,500,171 | ||||||
American depositary shares | ||||||||
Equity | ||||||||
Weighted average share price | $ / shares | $ 11.25 | |||||||
Number of CPOs per ADS | 10 | |||||||
Primary follow-on equity offering | ||||||||
Equity | ||||||||
Number of shares offered | 134,000,000 | |||||||
Over-allotment | American depositary shares | ||||||||
Equity | ||||||||
Number of shares issued | 20,100,000 | |||||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Equity - Earnings (loss) per sh
Equity - Earnings (loss) per share (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||||||||
Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2022 $ / shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares | [1] | Dec. 31, 2020 USD ($) $ / shares shares | Dec. 31, 2020 $ / shares | [1] | |||
Equity | ||||||||||
Net income (loss) for the year | $ | $ (80,224) | $ 106,453 | [1] | $ (191,722) | [1] | |||||
Weighted average number of shares outstanding (in thousands): | ||||||||||
Basic | 1,155,030 | 1,152,256 | 1,004,965 | |||||||
Diluted | 1,165,135 | 1,165,612 | 1,021,286 | |||||||
EPS- LPS : | ||||||||||
Basic | (per share) | $ (0.069) | $ (0.069) | $ 0.092 | $ 0.092 | $ (0.191) | $ (0.191) | ||||
Diluted | (per share) | $ (0.069) | $ (0.069) | $ 0.091 | $ 0.091 | $ (0.188) | $ (0.188) | ||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Income tax - Income tax rates (
Income tax - Income tax rates (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income tax | |||
Corporate income tax rate | 30% | 30% | 30% |
Employee wages and benefits tax deductible (as a percent) | 47% | ||
Withholding tax on dividends distributions (as a percent) | 10% | ||
Consolidated basis tax income | $ 53,293 | $ 59,472 | $ 15,140 |
Maximum | |||
Income tax | |||
Employee wages and benefits tax deductible (as a percent) | 53% | ||
Guatemala | |||
Income tax | |||
Corporate income tax rate | 25% | ||
Costa Rica | |||
Income tax | |||
Corporate income tax rate | 30% | ||
Period in which tax losses can be carried forward | 3 years | ||
El Salvador | |||
Income tax | |||
Corporate income tax rate | 30% | ||
Mexico [Member] | |||
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) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Income tax | |||||
Current year income tax expense | $ (15,456) | $ (17,903) | $ (3,978) | ||
Deferred income tax (expense) benefit | 67,595 | (12,670) | 65,709 | ||
Total income tax benefit (expense) | 52,139 | (30,573) | [1] | 61,731 | [1] |
Deferred income tax expense, translation effect | (118) | 90 | |||
Deferred income tax related to items recognized in OCI during the year | |||||
Net (loss) gain cash flow hedges | (80) | (274) | 2,347 | ||
Remeasurement gain of employee benefits | (79) | 138 | 39 | ||
Deferred income tax recognized in OCI | $ (159) | $ (136) | $ 2,386 | ||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Income tax - Reconciliation of
Income tax - Reconciliation of statutory corporate income tax rate to effective tax rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Reconciliation of accounting profit multiplied by applicable tax rates [abstract] | |||||
Statutory income tax rate | $ (39,709) | $ 41,108 | $ (76,036) | ||
Amendment tax return effects and other tax adjustments | 1,242 | 29 | 3,563 | ||
Inflation on furniture, intangible and equipment | (309) | (2,323) | (873) | ||
Inflation of tax losses | (4,335) | (1,971) | (676) | ||
Foreign countries difference with Mexican statutory rate | (9) | 124 | 175 | ||
Annual inflation adjustment | (11,200) | (7,971) | 2,591 | ||
Recorded deferred taxes on tax losses | 7 | (434) | 3,733 | ||
Non-deductible expenses | 7,695 | 2,069 | 12,918 | ||
Difference in Foreign Exchange income (loss) for tax purposes | (5,521) | ||||
Total income tax expense | $ (52,139) | $ 30,573 | [1] | $ (61,731) | [1] |
Statutory income tax rate | 30% | 30% | 30% | ||
Amendment tax return effects and other tax adjustments | (0.94%) | (0.02%) | 1.41% | ||
Inflation on furniture, intangible and equipment | 0.23% | (1.70%) | 0.34% | ||
Inflation of tax losses | 3.28% | (1.44%) | 0.27% | ||
Foreign countries difference with Mexican statutory rate | 0% | 0.10% | (0.07%) | ||
Annual inflation adjustment | 8.46% | (5.82%) | (1.02%) | ||
Recorded deferred taxes on tax losses | 0% | (0.32%) | (1.47%) | ||
Non-deductible expenses | (5.81%) | 1.51% | (5.10%) | ||
Difference in Foreign Exchange income (loss) for tax purposes | 4.17% | ||||
Total effective tax rate | 39.39% | 22.31% | 24.36% | ||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Income tax - Analysis of deferr
Income tax - Analysis of deferred taxes (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2021 | [2] | |||
Analysis of consolidated deferred taxes | |||||||
Net operating gain (loss) | $ (43,689,000) | $ (397,030,000) | [1] | $ 133,518,000 | [1] | ||
Deferred tax assets | 966,420,000 | 741,346,000 | |||||
Deferred tax liabilities | 768,872,000 | 611,265,000 | |||||
Deferred tax liability, net | 197,548,000 | 130,081,000 | 146,816,000 | ||||
Reflected in consolidated statement of financial position | |||||||
Deferred tax assets | 208,010,000 | 141,272,000 | [2] | $ 156,830,000 | |||
Deferred tax liabilities | (10,462,000) | (11,191,000) | [2] | $ (10,014,000) | |||
Deferred tax liability, net | 197,548,000 | 130,081,000 | 146,816,000 | ||||
Reconciliation of deferred tax liability, net | |||||||
Deferred tax (liability) asset, net - beginning of the year | 130,081,000 | 146,816,000 | |||||
Deferred income tax (expense) benefit during the current year recorded on profits | 67,595,000 | (12,787,000) | |||||
Deferred income tax (expense) benefit during the current year recorded in accumulated other comprehensive income (loss) | (159,000) | (136,000) | 2,386,000 | ||||
Deferred income tax (expense) benefit for conversion purposes | 31,000 | (3,812,000) | |||||
Deferred tax (liability) asset, net - end of the year | 197,548,000 | 130,081,000 | 146,816,000 | ||||
Tax effect of the discontinuation of the hedging reserve | 24,000,000 | ||||||
Temporary differences associated with investments in subsidiaries | 7,143 | 7,648 | |||||
Deferred tax assets. | |||||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 224,663,000 | (27,856,000) | |||||
Lease liabilities [member] | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 755,855,000 | 633,033,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 122,856,000 | (7,745,000) | |||||
Unearned transportation revenue | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 58,010,000 | 9,885,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 48,176,000 | (53,134,000) | |||||
Aircraft and engine lease return obligation | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 77,007,000 | 53,056,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 23,951,000 | 15,448,000 | |||||
Tax losses available for offsetting against future taxable income | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 38,387,000 | 4,865,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 33,122,000 | (24,499,000) | |||||
Deferred tax asset on tax losses | 38,387,000 | 4,865,000 | |||||
Intangible | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 29,687,000 | 30,052,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (364,000) | 10,430,000 | |||||
Allowance for doubtful accounts | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 4,854,000 | 6,356,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (1,510,000) | 3,599,000 | |||||
Employee benefit | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 2,486,000 | 294,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 2,104,000 | (391,000) | |||||
Employee profit sharing | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 134,000 | 3,805,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (3,672,000) | 4,076,000 | |||||
Non derivative financial instruments | |||||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 24,360,000 | ||||||
Deferred tax liabilities. | |||||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 157,068,000 | (15,069,000) | |||||
Right of use asset | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax liabilities | 571,521,000 | 465,382,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 106,233,000 | (57,188,000) | |||||
Supplemental rent | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax liabilities | 55,479,000 | 63,351,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (7,872,000) | (29,592,000) | |||||
Rotable spare parts, furniture and equipment, net. | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax liabilities | 120,561,000 | 65,618,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 54,960,000 | 29,015,000 | |||||
Provisions | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax liabilities | 7,345,000 | 2,430,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 4,200,000 | 12,789,000 | |||||
Inventories | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax liabilities | 4,594,000 | 4,256,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 338,000 | 215,000 | |||||
Other prepayments | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax liabilities | 376,000 | 1,431,000 | |||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | (1,034,000) | 675,000 | |||||
Prepaid expenses and other assets | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 8,963,000 | ||||||
Deferred tax liabilities | 8,684,000 | ||||||
Reconciliation of deferred tax liability, net | |||||||
Deferred income tax (expense) benefit during the current year recorded on profits | 243,000 | 29,017,000 | |||||
Financial instruments | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 33,000 | ||||||
Deferred income taxes | 113,000 | ||||||
Guatemala | |||||||
Analysis of consolidated deferred taxes | |||||||
Net operating gain (loss) | 10,000 | 32,000 | 91,000 | ||||
Costa Rica | |||||||
Analysis of consolidated deferred taxes | |||||||
Deferred tax assets | 0 | 0 | |||||
Costa Rica | Tax losses available for offsetting against future taxable income | |||||||
Analysis of consolidated deferred taxes | |||||||
Net operating gain (loss) | (3,869,000) | 5,947,000 | 2,794,000 | ||||
El Salvador | |||||||
Analysis of consolidated deferred taxes | |||||||
Net operating gain (loss) | $ (17,078,000) | $ 2,601,000 | $ 833,000 | ||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency.[2]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Income tax - Tax loss carry-for
Income tax - Tax loss carry-forward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Available tax loss carry-forward | |||
Historical Loss | $ 126,374 | ||
Historical Loss | 127,932 | ||
Inflation adjusted tax loss | 130,352 | ||
Inflation adjusted tax loss | 131,910 | ||
Utilized | 2,395 | ||
Utilized | 3,953 | ||
Total remaining amount | 127,957 | ||
Net remaining amount | $ 127,957 | ||
Statutory income tax rate | 30% | 30% | 30% |
Deferred income tax | $ 966,420 | $ 741,346 | |
Operating loss carry forward | 4,035 | 94,489 | |
Tax balances | |||
Adjusted contributed capital account (CUCA) | 489,080 | ||
CUFIN | 226,885 | ||
Tax proceedings on uncertain tax positions | 31,000 | ||
Tax losses available for offsetting against future taxable income | |||
Available tax loss carry-forward | |||
Historical Loss | $ 110,922 | ||
Statutory income tax rate | 30% | ||
Deferred income tax | $ 38,387 | $ 4,865 | |
Concesionaria | |||
Available tax loss carry-forward | |||
Historical Loss | 110,685 | ||
Inflation adjusted tax loss | 113,861 | ||
Total remaining amount | 113,861 | ||
Vuela, S.A. | |||
Available tax loss carry-forward | |||
Historical Loss | 13,476 | ||
Inflation adjusted tax loss | 13,423 | ||
Utilized | 3,684 | ||
Total remaining amount | 9,739 | ||
Comercializadora Volaris, S.A. de C.V. | |||
Available tax loss carry-forward | |||
Historical Loss | 2,628 | ||
Inflation adjusted tax loss | 3,256 | ||
Utilized | 166 | ||
Total remaining amount | 3,090 | ||
Viajes Vuela | |||
Available tax loss carry-forward | |||
Historical Loss | 1,143 | ||
Inflation adjusted tax loss | 1,370 | ||
Utilized | 103 | ||
Total remaining amount | 1,267 | ||
2019, Expiration 2029 | |||
Available tax loss carry-forward | |||
Historical Loss | 239 | ||
Inflation adjusted tax loss | 304 | ||
Utilized | 166 | ||
Total remaining amount | 138 | ||
2020, Expiration 2023 | |||
Available tax loss carry-forward | |||
Historical Loss | 5,461 | ||
Inflation adjusted tax loss | 5,461 | ||
Utilized | 2,126 | ||
Total remaining amount | 3,335 | ||
2020, Expiration 2030 | |||
Available tax loss carry-forward | |||
Historical Loss | 2,745 | ||
Inflation adjusted tax loss | 3,427 | ||
Utilized | 103 | ||
Total remaining amount | 3,324 | ||
2021, Expiration 2024 | |||
Available tax loss carry-forward | |||
Historical Loss | 6,457 | ||
Inflation adjusted tax loss | 6,404 | ||
Total remaining amount | 6,404 | ||
2021, Expiration 2031 | |||
Available tax loss carry-forward | |||
Historical Loss | 550 | ||
Inflation adjusted tax loss | 651 | ||
Total remaining amount | 651 | ||
2022, Expiration 2032 | |||
Available tax loss carry-forward | |||
Historical Loss | 110,922 | ||
Inflation adjusted tax loss | 114,105 | ||
Total remaining amount | $ 114,105 |
Operating Revenues (Details)
Operating Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||
Revenue recognition | ||||||
Fare revenues | $ 1,661,176 | $ 1,265,980 | [1] | $ 626,909 | [1] | |
Other passenger revenues | 1,078,251 | 866,944 | [1] | 415,997 | [1] | |
Passenger revenues | 2,739,427 | 2,132,924 | [1] | 1,042,906 | [1] | |
Other non-passenger revenue | 92,977 | 76,872 | [1] | 41,841 | [1] | |
Cargo | 14,786 | 11,882 | [1] | 9,647 | [1] | |
Total | 2,847,190 | 2,221,678 | 1,094,394 | |||
Non-derivative financial instruments | [1] | (21,378) | (19,408) | |||
Operating revenues | 2,847,190 | 2,200,300 | [1] | 1,074,986 | [1] | |
Transactions from unearned transportation revenues | ||||||
January 1, | 303,982 | 293,298 | ||||
Deferred | 2,781,914 | 2,154,865 | ||||
Recognized in revenue during the year | (2,739,427) | (2,132,924) | ||||
Foreign currency translation effect | (11,257) | |||||
December 31, | 346,469 | 303,982 | 293,298 | |||
Domestic | ||||||
Revenue recognition | ||||||
Operating revenues | 1,909,744 | 1,661,927 | 800,525 | |||
Domestic | At the flight time | ||||||
Revenue recognition | ||||||
Fare revenues | 1,097,480 | 860,143 | 411,107 | |||
Other passenger revenues | 695,602 | 707,368 | 332,497 | |||
Passenger revenues | 1,793,082 | 1,567,511 | 743,604 | |||
Other non-passenger revenue | 92,088 | 76,306 | 41,520 | |||
Cargo | 13,171 | 11,410 | 9,387 | |||
Total | 1,898,341 | 1,655,227 | 794,511 | |||
Domestic | At the sale | ||||||
Revenue recognition | ||||||
Other passenger revenues | 11,403 | 6,700 | 6,014 | |||
Passenger revenues | 11,403 | 6,700 | 6,014 | |||
Total | 11,403 | 6,700 | 6,014 | |||
International | At the flight time | ||||||
Revenue recognition | ||||||
Fare revenues | 563,696 | 405,837 | 215,802 | |||
Other passenger revenues | 365,243 | 151,261 | 75,865 | |||
Passenger revenues | 928,939 | 557,098 | 291,667 | |||
Other non-passenger revenue | 889 | 566 | 321 | |||
Cargo | 1,615 | 472 | 260 | |||
Total | 931,443 | 558,136 | 292,248 | |||
International | At the sale | ||||||
Revenue recognition | ||||||
Other passenger revenues | 6,003 | 1,615 | 1,621 | |||
Passenger revenues | 6,003 | 1,615 | 1,621 | |||
Total | $ 6,003 | $ 1,615 | $ 1,621 | |||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Other operating income and ex_3
Other operating income and expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Analysis of other operating income | |||||
Gain on sale and leaseback | $ 21,193 | $ 9,668 | $ 32,695 | ||
Loss on sale of rotable spare parts furniture and equipment | (1,645) | (122) | (127) | ||
Other income | 5,518 | 1,212 | 1,051 | ||
Other operating income | 25,066 | 10,758 | [1] | 33,619 | [1] |
Analysis of other operating expenses | |||||
Administrative and operational support expenses | 49,431 | 37,042 | 29,827 | ||
Technology and communications | 25,708 | 21,296 | 17,913 | ||
Others | 15,756 | 92 | 9 | ||
Insurance | 6,574 | 3,753 | 2,561 | ||
Passenger services | 5,116 | 3,675 | 4,103 | ||
Other operating expenses | $ 102,585 | $ 65,858 | [1] | $ 54,413 | [1] |
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Finance income and cost (Detail
Finance income and cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Analysis of finance income | |||||
Interest on cash and equivalents | $ 12,036 | $ 2,872 | $ 4,384 | ||
Interest on asset backed trust notes | 711 | 280 | 301 | ||
Interest on recovery of guarantee deposits | 155 | 379 | 99 | ||
Total finance income | 12,902 | 3,531 | [1] | 4,784 | [1] |
Analysis of finance cost | |||||
Leases financial cost | 174,769 | 128,159 | 108,907 | ||
Interest on asset backed trust notes | 12,049 | 5,672 | 5,448 | ||
Cost of letter credit notes | 4,131 | 3,025 | 3,410 | ||
Other finance costs | 584 | 1,589 | 481 | ||
Interest on debts and borrowings | 533 | 703 | 768 | ||
Bank fees and others | 308 | 226 | 176 | ||
Financial instruments loss | 161 | 19,130 | |||
Total finance costs | 192,535 | 139,374 | [1] | 138,320 | [1] |
Capitalized borrowing costs | |||||
Interest on debts and borrowings | 8,448 | 7,801 | 18,640 | ||
Capitalized interest | (7,915) | (7,098) | (17,872) | ||
Interest on debts and borrowing in the consolidated statements of operations | $ 533 | $ 703 | $ 768 | ||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Components of other comprehen_3
Components of other comprehensive income (loss) - Schedule of analysis of the other comprehensive (loss) income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Balances at the beginning | $ (149,210) | [1] | $ (218,186) | ||
Comprehensive (loss) income of the year | 4,060 | 69,112 | |||
Deferred tax effect | (159) | (136) | $ 2,386 | ||
Net balances at the end | (145,309) | (149,210) | [1] | (218,186) | |
Remeasurements of employee benefits | |||||
Balances at the beginning | (721) | (427) | |||
Comprehensive (loss) income of the year | 253 | (432) | |||
Deferred tax effect | (79) | 138 | |||
Net balances at the end | (547) | (721) | (427) | ||
Derivative and non-derivative financial instruments | |||||
Balances at the beginning | (365) | (80,124) | |||
Comprehensive (loss) income of the year | 336 | 80,033 | |||
Deferred tax effect | (80) | (274) | |||
Net balances at the end | (109) | (365) | (80,124) | ||
Exchange differences on the translation of foreign | |||||
Balances at the beginning | (148,124) | (137,635) | |||
Comprehensive (loss) income of the year | 3,471 | (10,489) | |||
Net balances at the end | $ (144,653) | $ (148,124) | $ (137,635) | ||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Components of other comprehen_4
Components of other comprehensive (loss) income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |||
Derivative financial instruments: | |||||
Net gain (loss) on cash flow hedges | $ 336 | $ 957 | [1] | $ (8,207) | [1] |
Reclassification amount | 109,000 | 109,000 | |||
Option contract | |||||
Derivative financial instruments: | |||||
Gains (losses) on cash flow hedges, before tax | 601 | (601) | |||
Jet fuel Zero cost collars | |||||
Derivative financial instruments: | |||||
Gains (losses) on cash flow hedges, before tax | 484 | (7,572) | |||
Interest rate Cap | |||||
Derivative financial instruments: | |||||
Gains (losses) on cash flow hedges, before tax | 336 | (128) | (34) | ||
Non derivative financial instruments | |||||
Derivative financial instruments: | |||||
Gains (losses) on cash flow hedges, before tax | 79,076 | (79,824) | |||
Derivative and non-derivative financial instruments. | |||||
Derivative financial instruments: | |||||
Gains (losses) on cash flow hedges, before tax | 336 | 957 | (8,207) | ||
Net gain (loss) on cash flow hedges | $ 336 | $ 80,033 | $ (88,031) | ||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |
Commitments and contingencies_2
Commitments and contingencies (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and contingencies | |
2023 | $ 224,629 |
2024 | 275,363 |
2025 | 711,455 |
2026 | 1,410,003 |
2027 and thereafter | 4,204,369 |
Total committed expenditures | $ 6,825,819 |
Commitments and contingencies -
Commitments and contingencies - Sale and lease back commitments (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Oct. 10, 2022 aircraft | May 12, 2020 engine | Dec. 28, 2017 aircraft | Nov. 30, 2021 aircraft | Dec. 31, 2017 aircraft | Dec. 31, 2022 USD ($) aircraft | Dec. 31, 2021 USD ($) aircraft | Dec. 31, 2011 aircraft | Dec. 31, 2020 USD ($) | |
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Estimated proceeds from aircraft sale | $ 1,553,000 | ||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | 1,300,799 | ||||||||
Possible contingencies | $ 7,800 | $ 8,000 | $ 6,000 | ||||||
Airbus purchase agreement | |||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Number of aircraft purchased | aircraft | 18 | 15 | |||||||
A320NEO model | |||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Number of aircraft purchased | aircraft | 46 | 30 | |||||||
A320NEO model | Airbus purchase agreement | |||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Number of aircraft purchased | aircraft | 25 | 80 | 39 | ||||||
A321NEO model | |||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Number of aircraft purchased | 34 | 34 | |||||||
A321NEO model | Airbus purchase agreement | |||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Number of aircraft converted | aircraft | 20 | ||||||||
Not later than one year | |||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Estimated proceeds from aircraft sale | $ 165,500 | ||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | 7,977 | ||||||||
Later Than One Year And Not Later Than Two Years | |||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Estimated proceeds from aircraft sale | 998,000 | ||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | 51,720 | ||||||||
Between two and three years | |||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Estimated proceeds from aircraft sale | 389,500 | ||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | 104,014 | ||||||||
Between three and four years | |||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | 108,400 | ||||||||
Later Than Four Years | |||||||||
Disclosure of maturity analysis of operating lease payments [line items] | |||||||||
Non-cancellable sale and leaseback contracts of aircraft leases | $ 1,028,688 |
Operating segments (Details)
Operating segments (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | ||||
Operating segments | ||||||
Number of geographic segments | segment | 2 | |||||
Total operating revenues | $ 2,847,190 | $ 2,200,300 | [1] | $ 1,074,986 | [1] | |
Non-derivative financial instruments | [1] | (21,378) | (19,408) | |||
Domestic | ||||||
Operating segments | ||||||
Total operating revenues | 1,909,744 | 1,661,927 | 800,525 | |||
United States of America | ||||||
Operating segments | ||||||
Total operating revenues | 758,609 | 509,976 | 271,899 | |||
Central America and South America | ||||||
Operating segments | ||||||
Total operating revenues | 178,837 | $ 49,775 | $ 21,970 | |||
International customers | ||||||
Operating segments | ||||||
Total operating revenues | $ 377,695 | |||||
Percentage of total revenues from external customers | 67% | |||||
[1]The comparative Consolidated financial statements have been re-presented from Mexican peso to U.S. dollar to reflect the Company’s change in presentation currency. |