Controladora Vuela Compañía de Aviación B de C : Volaris Reports Financial Results for the Third Quarter 2022

Volaris Reports Financial Results

for the Third Quarter 2022

Mexico City, Mexico, October 24th, 2022 - Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE: VLRS and BMV: VOLAR) ("Volaris" or "The Company"), the ultra-low-cost airline serving Mexico, the United States, Central and South America, today announces its financial results for the third quarter 20221.

Third Quarter 2022 Highlights2

(All figures are reported in U.S. dollars and compared to 3Q 2021 unless otherwise noted)

Volaris reported double-digit growth in revenue, maintained CASM ex-fuel at industry-leading levels, and finished the quarter with a healthy balance sheet. Volaris will continue to take advantage of its flexible network strategy and stimulate demand through its resilient ULCC model.

• Total operating revenue of $769 million, a 20% increase. Total revenue per available seat mile (TRASM) decreased 2.4% to $8.2 cents.
• Total operating expenses of $734 million, a 52% increase. Total operating expenses per available seat mile (CASM) increased 24% to $7.85 cents, while CASM ex-fuel decreased 0.5% to $4.07 cents. Average economic fuel cost increased 72.2% to $3.96 per gallon.
• Net income of $40 million. Earnings per share of $0.03 and earnings per ADS of $0.30.
• EBITDAR of $175 million, a 33% decrease. EBITDAR margin was 22.8%, a decrease of 18.1 percentage points.
• Cash, cash equivalents and restricted cash position totaled $750 million, representing 28% of the last twelve months' total operating revenue.
• Net debt-to-LTM EBITDAR ratio of 3.4 times.

"We have consistently anticipated strong demand in our visiting friends-and-relatives and leisure markets - markets which show no signs of a slowdown. ASMs grew by 22% for the third quarter compared to 2021 and by 48% compared to 2019. Our strategically planned growth has been both consistent and profitable." said Enrique Beltranena, Chief Executive Officer.

"While typically we see load factor peak in July and reductions towards the end of Summer, in this year our load factors increased every month in the third quarter, from 84.7% in July, to 84.9% in August, and reached an all-time monthly record high of 87.4% in September. Forward bookings are solid, and we expect to maintain a strong load factor for the remainder of the year, while CASM ex-fuel for the third quarter was under control despite inflationary pressures", Mr. Beltranena added.

1. The financial information, unless otherwise indicated, is presented in accordance with the International Financial Reporting Standards (IFRS).
2. As of January 1, 2022, all figures are reported in U.S. dollars.

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Third Quarter 2022 Financial and Operations Highlights3

(All figures are reported in U.S. dollars and compared to 3Q 2021 unless otherwise noted)

	Three months ended
		September 30,
Consolidated Financial Highlights	2022		2021	Var.
Total operating revenue (millions)	769	640	20%
TRASM (cents)	8.2	8.4	(2.4%)
ASMs (million, scheduled & charter)	9,355	7,667	22%
Load Factor (scheduled, RPMs/ASMs)	85.6%	85.4%	0.2 pp
Passengers (thousand, scheduled & charter)	8,125	6,650	22.2%
Fleet (end of period)	113	94	19
Total operating expenses (millions)	734	484	52%
CASM (cents)	7.85	6.33	24%
CASM ex fuel (cents)	4.07	4.09	(0.5%)
Adjusted CASM ex fuel (cents) (1) (2)	3.78	3.96	(4.5%)
Operating income (EBIT) (millions)	35	156	(78%)
% EBIT Margin	4.6%	24.4%	(19.8 pp)
Net income (millions)	40	76	(47%)
% Net income margin	5.2%	11.9%	(6.7 pp)
EBITDAR (millions)	175	262	(33%)
% EBITDAR Margin	22.8%	40.9%	(18.1 pp)
Net debt-to-EBITDAR	3.4x		2.8x	0.6x

*Note: Figures are rounded for convenience purposes. Further detail found in financial & operating indicators.

1. Excludes fuel expense, redelivery expense and sale and lease-back gains.
2. Reconciliation of CASM to Adjusted CASM ex fuel:

	Three months ended
		September 30,
Reconciliation of CASM	2022		2021	Var.
CASM (cents)	7.85	6.33	24%
- Fuel expense, net	3.78	2.24	69%
CASM ex fuel	4.07	4.09	(0.5%)
- Redelivery expenses	0.31	0.16	94%
- Sale and lease back gains	(0.02)	(0.03)	(33%)
Adjusted CASM ex fuel	3.78	3.96	(4.5%)

3 As of January 1, 2022, all figures are reported in U.S. dollars.

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Total operating revenue in the quarter was $769 million, a 20% increase, driven by higher capacity, strong load factors, and seasonality. Moreover, demand has remained strong throughout the quarter with healthy booking curves notwithstanding certain headwinds (high inflation, economic and political uncertainty) occurring in the markets where Volaris operates.

Volaris transported 8.1 million passengers in the quarter, an increase of 22.2%. Domestic and international passengers increased 22.7% and 20.2%, respectively; total capacity, in terms of available seat miles (ASMs), increased 22% to 9.4 billion. Load factor reached 85.6%, 0.2 percentage points higher than the same period in 2021.

TRASM decreased 2.4% to $8.2 cents in the quarter. Average base fare was $56, a decrease of 1.8%. Ancillary revenue per passenger was $39, a 2.5% decrease. Ancillary revenue represented 41% of total operating revenue, the same level as third quarter 2021. Total operating revenue per passenger decreased 2.1% to $95.

Total operating expenses in the quarter were $734 million, a 52% increase, driven by higher fuel costs and major maintenance. The average economic fuel cost increased 72.2% to $3.96 per gallon in the period. CASM totaled $7.85 cents, 24% higher when compared to same period of 2021. CASM ex-fuel decreased 0.5% to $4.07 cents due to Volaris' disciplined cost control and increased utilization per aircraft. Adjusted CASM ex- fuel decreased 4.5% to $3.78 cents.

Comprehensive financing result represented a loss of $44 million in the third quarter of 2022, compared to a loss of $48 million in the same period of 2021. This result was impacted by higher interest rates.

In the third quarter, the average exchange rate was Ps.20.24 per US dollar, a 1.1% and 1.0% depreciation compared to the third quarter 2021 and second quarter of 2022, respectively. At the end of the quarter, the exchange rate stood at Ps.20.31 per US dollar.

Income tax benefit was $49 million, compared to the $32 million expenses posted in the third quarter of 2021.

Net income in the quarter was $40 million, with earnings per share of $0.03 and earnings per ADS of $0.30. In the same period of 2021. In the same period of 2021. Net income was $76 million with earnings per share of $0.06 and earnings per ADS of $0.60.

EBITDAR was $175 million, a decrease of 33%, negatively impacted by higher fuel and landing, take-offs, and navigation expenses. EBITDAR margin was 22.8%, a decrease of 18.1 percentage points.

Balance Sheet, Liquidity and Capital Allocation

As of September 30th, 2022, Volaris required $9 million of cash for the third quarter, closing with $750 million in cash and cash equivalents, representing 28% of the last twelve months total operating revenue. Net cash flow provided by operating activities was $88 million, while cash outflows in investing and financing activities were $51 million and $46 million respectively. Positive net foreign exchange remained unchanged.

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On September 30th, 2022, net debt was $2,151 million, which included $242 million of financial debt, $2,659 million of leasing liabilities, and less cash, cash equivalents and restricted position of $750 million. The net debt-to-LTM EBITDAR ratio was 3.4 times, compared to 2.9 times in the second quarter 2022.

Full Year 2022 Outlook

The Company expects to continue with its growth plans despite the global macroeconomic and geopolitical challenges faced throughout the year, while servicing the robust demand seen within its current network.

Volaris' full year 2022 guidance. Of note, the Company expects:

• ASM growth of 25% compared to 2021.
• Operating revenue in the range of $2.8 to $3.0 billion.
• CASM ex-fuel increase of approximately 1% compared to 2021.
• EBITDAR margin in the low twenties.
• And finally, CAPEX of $145 million.

This outlook assumes a full year average USD/MXN rate between Ps.20.25 to Ps.20.30 and an average economic fuel price between $3.85 to $3.90 per gallon; it also assumes no significant unexpected disruptions related to COVID-19, macroeconomic factors, or other negative impacts on its business. The Company's Full Year 2022 Outlook is based on a number of assumptions, including the foregoing, that are subject to change and may be outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurances that Volaris will achieve these results.

Fleet

During the third quarter, the Company redelivered one A319ceo in September and incorporated one new A320neo to its fleet. As of September 30th, 2022, Volaris' fleet was composed of 113 aircraft (5 A319s, 87 A320s and 21 A321s), of which 51% are New Engine Option (NEO) models. Volaris' fleet had an average of 190 seats per aircraft and an average age of 5.5 years. The Company plans to end 2022 with approximately 116 aircraft.

Investors are urged to carefully read the Company's periodic reports filed with or provided to the Securities and Exchange Commission for additional information regarding the Company.

Investor Relations Contact:

Ricardo Martínez / [e-mail]

Media Contact:

Gabriela Fernández /[e-mail]

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Conference call and webcast details

Date:	Tuesday, October 25th, 2022
Time:	8:00 am Mexico City (CT) / 9:00 am New York (USA) (ET)
United States dial in:	[phone]
Mexico dial in:	[phone]
International dial in:	[phone]
Participant code:	Volaris
Webcast & video presentation:	https://webcastlite.mziq.com/cover.html?webcastId=5a3163ba-
	e4b8-4978-8e6e-99bfd160633b

About Volaris:

*Controladora Vuela Compañía de Aviación, S.A.B. de C.V. ("Volaris" or the "Company") (NYSE: VLRS and BMV: VOLAR), is an ultra-low-cost carrier, with point-to-point operations, serving Mexico, the United States, Central and South America. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. Since the beginning of operations in March 2006, Volaris has increased its routes from 5 to more than 196 and its fleet from 4 to 114 aircraft. Volaris offers more than 500 daily flight segments on routes that connect 43 cities in Mexico and 28 cities in the United States, Central and South America with the youngest fleet in Mexico. Volaris targets passengers who are visiting friends and relatives, cost-conscious business and leisure travelers in Mexico, the United States, Central and South America. Volaris has received the ESR Award for Social Corporate Responsibility for thirteen consecutive years. For more information, please visit: www.volaris.com.

Forward-looking Statements:

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

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