volaris corporate presentation december

Volaris: the leading ultra-low-cost airline

serving Mexico, USA and Central America

December 2015

The information ("Confidential Information") contained in this presentation is confidential and is provided by

Controladora Vuela Compañía de Aviación, S.A.B. de C.V., (d/b/a Volaris, the "Company") confidentially to you solely

for your reference and may not be retransmitted or distributed to any other persons for any purpose whatsoever.

The Confidential Information is subject to change without notice, its accuracy is not guaranteed, it has not been

independently verified and it may not contain all material information concerning the Company. Neither the Company,

nor any of their respective directors makes any representation or warranty (express or implied) regarding, or

assumes any responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any

information or opinions contained herein. None of the Company nor any of their respective directors, officers,

employees, stockholders or affiliates nor any other person accepts any liability (in negligence, or otherwise)

whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in

connection therewith. No reliance may be placed for any purposes whatsoever on the information set forth in this

presentation or on its completeness.

This presentation does not constitute or form part of any offer or invitation for sale or subscription of or solicitation or

invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied

on in connection with any contract or commitment whatsoever. Recipients of this presentation are not to construe the

contents of this presentation as legal, tax or investment advice and should consult their own advisers in this regard.

This presentation contains statements that constitute forward-looking statements which involve risks and

uncertainties. These statements include descriptions regarding the intent, belief or current expectations of the

Company or its officers with respect to the consolidated results of operations and financial condition, and future

events and plans of the Company. These statements can be recognized by the use of words such as "expects,"

"plans," "will," "estimates," "projects," or words of similar meaning. Such forward-looking statements are not

guarantees of future performance and actual results may differ significantly from those in the forward-looking

statements as a result of various factors and assumptions. You are cautioned not to place undue reliance on these

forward looking statements, which are based on the current view of the management of the Company on future

events. The Company does not undertake to revise forward-looking statements to reflect future events or circumstances.

Disclaimer

2

Volaris, the lowest unit cost operator in the

Americas : snapshot at 30,000 feet

Serving 61 destinations throughout Mexico, USA and Central America

Volaris’ destinations

(1) Based on CASM among publicly traded carriers

(2) Converted to USD at an average annual exchange rate

Source: Company data

2008 2014

LTM

Sep

2015

2008-

14

CAGR

Unit cost

(CASM ex-fuel;

cents, USD)(2)

5.5 5.4 5.0 -0.4%

Passenger

demand

(RPMs, bn)

3.2 9.7 10.9 +20.5%

Aircraft

(End of period) 21 50 55 +15.6%

Routes

(End of period) 42 122 139 +19.4%

Passengers

(mm) 3.5 9.8 11.3 +18.7%

Operating

revenue

(bn, MXN)

4.4 14.0 17.0 +21.2%

Adj. EBITDAR

(bn. MXN) 0.7 3.1 5.8 +26.6%

Adj. ROIC

(pre-tax) 11% 14% 21% +3 pp.

(1)

3

Volaris’ flight path for demand stimulation and

continued growth

Capacity

increase

Cost

reduction

“Clean”,

low

base

fares

More

customers

More

ancillaries (“You decide”)

Resilient ULCC

business model

driving high,

profitable growth

4

Volaris’ consistent execution of its ULCC business

model well positioned for growth

Diversified and resilient point-to-point

network

Successful price unbundling

Strong penetration of Mexican air

travel market

Proven ancillary revenue model

Bus to air substitution

Upside in ancillary revenue

Continue geographic diversification

through international growth

Attractive emerging air travel market in

Mexico

Flexible fleet plan and utilization;

capacity management

Sustained profitability with strong

balance sheet Continue cost reductions

Continue route frequency increase

Opportunities Accomplishments

5

Accomplishments

4.9

11.6

8.5 8.3 7.5

6.5 6.3

8.5

5.8 5.6

9.8

2.2

3.9

3.4 2.8

2.9 3.3

2.9

2.7

2.8 2.3

2.7

• Economies of scale

- Dilute fixed costs

- High seat density

• Young and fuel efficient fleet

- Sharklet rollout

- Average age of 4.4 years (4)

- Low fuel burn

• Productive network

- Point-to-point

- No connections complexity

• High aircraft utilization

- On average 12.6 block hours a day

during September YTD 2015

Volaris has a best-in-class unit cost structure

Lowest unit cost in the Americas (1)

CASM and CASM ex-fuel (Sep YTD 2015, USD cents) (2)

(1) Based on CASM among the publicly-traded airlines

(2) Non-USD data converted to USD at an average exchange rate

(3) DCOMPS= Direct Competitors: Average CASM and CASM ex-fuel; US network carriers include: Delta, United, Alaska Airlines and American Airlines

(4) As of September 30, 2015

Source: Company data, airlines public information

In line with best-in-class

ULCCs

Latin American carriers US LCCs US network

carriers (3)

7.1

15.5

11.9 11.2

10.4 9.8

9.2

11.2

8.6 7.9

12.5

Continued cost improvement

potential

Cost structure

7

8.2 7.9 8.7

9.2 9.8

10.3 11.2 11.2

11.9 12.5

15.5

. Spirit Allegiant Copa Gol Interjet Aeromexico Southwest Latam US network carriers

Avianca

Volaris cost structure enables us to lower base

fares and increase ancillaries

Volaris TRASM is below most competitors CASM (1)

TRASM and CASM (Sep YTD 2015, USD cents) (2)

(1) Based on CASM and TRASM among the publicly-traded airlines

(2) Non-USD data converted to USD at an average exchange rate

(3) US network carriers direct competitors include: Delta, United, Alaska Airlines and American Airlines


Overlap:

Volaris’ resilient ULCC

model

8

2

5

%

TR

AS

M

CA

SM

CA

SM

CA

SM

CA

SM

CA

SM

CA

SM

CA

SM

CA

SM

CA

SM

CA

SM

(3)

7 9 11

15 17 21 22

2009 2010 2011 2012 2013 2014 LTM Sep 2015

Non-ticket revenue continue to grow, with

upside potential

(1) Converted using an average annual MXN/USD exchange rate

(2) Mexican legislation does not allow to charge for the first bag


Non-ticket revenue per passenger

Volaris(USD per passenger) (1,2)

Best-in class ULCCs, including first bag fee (2)

(LTM Sep 2015, USD per passenger)

2009 – 2015 CAGR: +24.5%

3.1x

Ancillaries

• Apply revenue management techniques

- Pricing by route, season, day

- Fully dynamic pricing for some products

• Add products

- New products & services

- Enhancements to existing products

• Improve presence

- More touch-points to sell ancillaries

throughout the journey

- Allow customization

• Benefit from network diversification

- More international capacity

Increasing non-ticket revenue allows to

reduce fare further and stimulate

demand

32

49 54

Wizz Allegiant Spirit

9

Network enhancement: connecting the dots and

diversifying further


New routes

Domestic International

Cancun +2 +3

Guadalajara +3 +10

Mexico City +3 +1

Monterrey +3

Other +2 +3

Tijuana +2

Total +15 +17

New stations

USA Mexico C. America

Dallas Durango Guatemala City

Fort Lauderdale Huatulco San Jose, CR

Houston Tapachula

New York Torreon

Portland

Reno

San Juan, PR

In the last twelve months, Volaris diversified its network by opening 32 routes and 13 stations

Volaris’ September LTM new routes

New International

New Domestic

10

…supporting strong capacity growth

New countries

Joining existing airports

Additional frequencies

New airports

7.8%

3.9%

4.6%

0.3%

Total ASM growth

September YTD capacity growth contribution (yoy)

16.6%

Our network is well positioned for diversified growth

=

+

+

+

+

11


Growth opportunities

24 36

18

25 8

12

2010 2011 2012 2013 2014 LTM Sep 2015

Domestic USA Other international

Yoy growth 3.3% 4.0% 8.3% 8.3% 8.3% 10.6%(1)

GDP growth 5.1% 4.0% 3.8% 1.7% 2.1% 1.8%(2)

GDP multiplier 0.6 1.0 2.2 5.0 3.9 5.9

In recent years, volume growth has been robust

despite challenging economic environment

Note

(1) LTM September 2015 vs. LTM September LTM 2014

(2) Banco de México GDP 2015 estimate

Source: DGAC-SCT; INEGI; Banco de México

Mexico passenger market volume has increased since 2010

50 52 57

61 67

72

Passenger volume (millions)

CAGR: 6.4%

13

3.3%

7.2%

10.0%

0%

2%

4%

6%

8%

10%

12%

GDP Passengers RPMs

…and supply has met the strong market demand

Demand Supply (WB + NB + RJ) (1)

2.2x GDP

2.5%

5.1%

7.1%

0%

2%

4%

6%

8%

10%

12%

Aircraft Fleet seats ASMs

2010-2014 Capacity growth (CAGR) 2010-2014 Demand growth (CAGR)

(1) WB= wide body, NB= narrow body and RJ= regional jet

(2) Only domestic market

Source: DGAC, Diio Mi, Banco de México

(2) (2)

14

(1) Minimum stage length of 170 miles

(2) Minimum stage length of 200 miles; CAM stands for Central America; SAM stands for South America

(3) South and northbound leisure routes

(4) Figures calculated as of September 2015

(5) Data from ALTA Yearbook 2014

Source: Company data, SCT-DGAC and DIIO MI Market Intelligence for the Aviation Industry; ALTA

0

10

20

30

40

50

0

25

50

75

100

USA (Leisure) USA (VFR) CAM, SAM, Canada,

Caribbean

Significant untapped opportunities

Domestic – growth potential of approx. 120

routes (4)

International – growth potential of approx.130

routes (4)

(3)

Number of routes (1) Number of routes (2)

Routes served Growth potential

15

In terms of air trips per capita Mexico has plenty potential to grow

2014 air trips per capita(5)

2.05

0.55 0.45 0.42 0.27 0.25 0.21

0.04 0.01

USA Chile Brazil Colombia Peru Mexico Argentina Costa Rica Paraguay

ULCC model

First sell

Trial

Ticket giveaway

#Nomáscamión

Strong conversion

rate

2014

Domestic International

2014

Executive & luxury

First, economy and other

Volaris contributed by stimulating demand from

bus to air substitution

Source: Company data, Secretaría de Comunicaciones y Transportes (SCT), Dec. 2014

Bus switching program Significant upside for air travel

Total air travel trips in

Mexico (mm)

Total bus trips in

Mexico (mm)

2,837

2,706

77 34

33

67

Mass media campaigns

Digital capabilities

Attracting 1st

time flyers

16

Education

Drivers of continued profitable growth

Uniquely positioned to capture growth in underpenetrated Mexican aviation market

Reduce unit costs

Fleet growth

Expand network

Increase total revenues

• Deepen footprint in

markets with high

demand stimulation

• Grow ancillary revenue to

world class ULCC

benchmarks

• 60 additional aircraft to be

delivered

• Up-gauge fleet from

A319 to A320/A321

• Higher seat density

configuration

• Expand network

geographically


• Neo incorporation

- Fuel efficiency

17

• Price, product,

presence

Fleet and financials

18 18 15 12

17 16 13

13

15 20 28 28

0 0 2 8 0 2

10 10 0

0

0 2

FY14 FY15 FY16 FY17

A319 A320 A320 w/sharklets A320 NEO w/sharklets A321 w/sharklets A321 NEO w/sharklets

Fleet plan with flexibility that enables capacity

management

Projected fleet under current contracts (number of aircraft) (1)

(1) Net fleet after additions and returns

(2) Figure calculated as of November 2015

(3) Percentage of year-end fleet with sharklets


Backlog of 63 Aircraft to support growth (2)

Seat growth

% fleet w/Sharklets (3)

18%

39%

18%

59%

19%

66%

56

68 73

50

2016-2018 PDPs fully financed First two A320neo

First two A321ceo

19

34%

25% 23% 23%

19% 18%

14%

0%

10%

20%

30%

40%

Copa Aeromexico Interjet Latam Avianca Gol

Revenue CAGR 2009 - 2014 LTM Sep. 2015 Adj. EBITDAR margin

High growth and solid financial performance

(1) Converted using an average MXN/USD exchange rate for the corresponding period


Revenue (1) Adj. EBITDAR (1)

374

536

714

887

1,018 1,056 1,127

0

400

800

1,200

2009 2010 2011 2012 2013 2014 LTM Sep '15

(US

D m

m)

116 140

100

188 220 232

387

0

150

300

450

2009 2010 2011 2012 2013 2014 LTM Sep '15

(US

D m

m)

23%

17% 16% 14%

7% 6% 6%

0%

10%

20%

30%

Copa Interjet Aeromexico Gol Latam Avianca

20

Strong continued performance during Sep YTD 2015

(1) Converted using an MXN/USD exchange rate of Ps.17.0073

(2) Converted using an MXN/USD exchange rate of Ps.13.4541


Sep YTD 2015 Sep YTD 2014 Yoy growth

Unit cost

(CASM ex-fuel; cents, USD) 4.4(1) 5.2(2) -15.4%

Passenger demand

(RPMs, bn) 8.4 7.2 +21.4%

Aircraft

(End of period) 55 48 +14.6%

Passengers (mm) 8.7 7.2 +21.4%

Operating revenue

(mm, MXN) 13,087 10,078 +29.9%

Adj. EBITDAR

(mm. MXN) 4,606 1,842 >100%

LTM Adj. ROIC (pre-tax) 21% 11% +10 pp.

21

25.9%

31.2%

27.4%

19.6%

14.2% 13.9%

10.2%

Strong balance sheet and liquidity, well funded

for continued growth

• Positive cash flow from operating

activities in the last four quarters.

• Fully financed pre-delivery payments

through 2018 and executed sale-

leasebacks for 2016 deliveries.

• Unrestricted cash of $4.4 billion pesos

(US$ 259 million(2)) as of September 30th

2015.

• Net cash position of $3.0 billion pesos

(US$ 173 million(2)) as of September 30th

2015.

• Adjusted long term net debt to EBITDAR

of 3.3x as of September 2015 LTM.

(1) Includes capital increase of Delta and the issuance of a long term third party loan for. The figure also includes IPO Smiles program proceeds.

(2) Figures converted to USD at September end of the period spot exchange rate $17.0073 for convenience purposes only


LTM liquidity-cash and equivalents as a % of LTM Op. Revenue

22

Appendix

Fuel hedging position

Period Total % hedged Avg. price (gal/USD$) Instrument

4Q15 50% $2.07 Call

1Q16 60% $1.94 Call

2Q16 60% $1.95 Call

3Q16 60% $1.99 Call

4Q16 60% $1.99 Call

1Q17 45% $1.75 Call

2Q17 40% $1.73 Call

3Q17 15% $1.65 Call

24

(1) Full year 2014 and September YTD 2015 figures converted to USD at December end of the period spot exchange rate $14.7180 and $17.0073, respectively, for convenience

purposes only

(2) Audited financial information 2012A – 2014A

(3) Includes debt prepayment of Ps.65 million


Consolidated statements of operations summary

MXN millions unless otherwise stated (2) 2012A 2013A 2014A 2014A (1) September

YTD 2015

September

YTD 2015(1)

% of total

operating

revenues

(USD

millions)

(USD

millions)

Passenger 10,177 11,117 11,303 768 10,201 600 77.9

Non-ticket 1,510 1,885 2,733 186 2,887 170 22.1

Total operating revenues 11,686 13,002 14,037 954 13,087 770 100

Fuel 4,730 5,086 5,364 364 3,563 209 27.2

Aircraft and engines rent expense 1,886 2,187 2,535 172 2,483 146 19.0

Landing, take off and navigation expenses 1,640 1,924 2,066 140 1,884 111 14.4

Salaries and benefits 1,303 1,563 1,577 107 1,364 80 10.4

Sales, marketing and distribution expenses 752 704 817 56 750 44 5.7

Maintenance expenses 499 572 665 45 587 35 4.5

Other operating expense, net 288 347 468 32 333 20 2.5

Depreciation and amortization 211 302 343 23 349 21 2.7

Total operating expenses 11,308 12,685 13,833 940 11,312 665 86.4 6

EBIT 378 317 204 14 1,775 104 13.6

Operating margin (%) 3.2 2.4 1.5 1.5 13.6 13.6

Finance income 14 25 23 2 37 2 0.3

Finance cost (90) (126) (32) (2) (15) (1) (0.1)

Exchange (loss) gain, net (95) 66 449 30 789 46 6.0

Income tax expense (3) (18) (39) (3) (776) (46) (5.9)

Net income 203 265 (3) 605 41 1,810 106 13.8

Net margin (%) 1.7 2.0 4.3 4.3 13.8 13.8

Adjusted EBITDAR 2,475 2,806 3,081 209 4,606 271 35.2

Adj. EBITDAR margin (%) 21.2 21.6 22.0 22.0 35.2 35.2

EPS Basic and Diluted (Pesos) 0.29 0.31 0.60 0.04 1.79 0.11

EPADS Basic and Diluted (Pesos) 2.94 3.10 6.00 0.40 17.89 1.05

25

Consolidated statements of financial position

summary

(1) Full year 2014 and September 2015 figures converted to USD at December end of the period spot exchange rate $14.7180 and $17.0073, respectively, for convenience purposes

only

(2) Net debt = financial debt - cash and cash equivalents

(3) Adjusted debt = (LTM aircraft rent expense x 7) + financial debt

(4) Adjusted net debt = adjusted debt - cash and cash equivalents

(5) Audited financial information 2012A – 2014A


MXN millions unless otherwise stated (5)

2012A 2013A 2014A 2014A (1)

As of

September

30, 2015

As of

September

30, 2015(1)

(USD

millions)

(USD

millions)

Cash and cash equivalents 822 2,451 2,265 154 4,408 259

Current guarantee deposits 238 499 545 37 680 40

Other current assets 755 1,050 879 60 833 49

Total current assets 1,815 4,000 3,689 251 5,921 348

Rotable spare parts, furniture and equipment,

net 1,195 1,341 2,223 151 2,273 134

Non-current guarantee deposits 2,245 2,603 3,541 241 4,680 275

Other non-current assets 447 434 452 31 869 51

Total assets 5,702 8,378 9,905 673 13,743 808

Unearned transportation revenue 1,259 1,393 1,421 97 1,898 112

Short-term financial debt 527 268 823 56 1,145 67

Other short-term liabilities 1,936 2,211 2,524 172 3,745 220

Total short-term liabilities 3,722 3,872 4,768 324 6,789 399

Long-term financial debt 633 294 425 29 309 18

Other long-term liabilities 272 250 242 16 449 26

Total liabilities 4,627 4,415 5,435 369 7,546 444

Total equity 1,075 3,962 4,470 304 6,196 364

Total liabilities and equity 5,702 8,378 9,905 673 13,743 808

Net debt (2) 338 (1,888) (1,017) (69) (2,954) (174)

Adjusted debt (3) 14,360 15,874 18,990 1,290 23,558 1,385

Adjusted net debt (4) 13,538 13,423 16,725 1,136 19,150 1,126

26

Consolidated statements of cash flows summary

(1) Full year 2014 and September YTD 2015 figures converted to USD at December end of the period spot exchange rate $14.7180 and $17.0073, respectively,

for convenience purposes only

(2) Audited financial information 2012A - 2014A.

(3) Includes debt prepayment premium


MXN millions unless otherwise stated (2) 2012A 2013A

September

YTD 2015

September

YTD 2015 (1) 2014A 2014A (1)

(USD

millions)

(USD

millions)

Cash flow from operating activities

Income before income tax 207 283 644 44 2,586 152

Depreciation and amortization 211 302 343 23 349 21

Guarantee deposits (311) (620) (695) (47) (1,086) (64)

Unearned transportation revenue 433 135 27 2 478 28

Changes in working capital and provisions (43) (61) 14 1 (186) (11)

Net cash flows provided by operating activities 497 39 334 23 2,140 126

Cash flow from investing activities

Acquisitions of rotable spare parts, furniture, equipment and

intangible assets (856) (1,161) (1,603) (109) (912) (54)

Pre-delivery payments reimbursements 875 698 396 27 533 31

Proceeds from disposals of rotable spare parts, furniture and

equipment 169 151 22 1 134 9

Net cash flows provided by (used in) investing activities 187 (312) (1,185) (81) (245) (14)

Cash flow from financing activities

Payments of Treasury Shares - - (7) - - -

Net proceeds from initial public offering - 2,578 - - - -

Transaction costs on issue of shares - (38) - - - -

Proceeds from exercised treasury shares - 26 - - - -

Interest paid (119) (65) (23) (2) (30) (2)

Other finance costs (8) - (11) (1) (40) (2)

Payments of financial debt (694) (1,084) (3) (400) (27) (631) (37)

Proceeds from financial debt 550 444 966 66 640 38

Net cash flows (used in) provided by financing activities (272) 1,861 525 36 ( 61) (4)

Increase (decrease) in cash and cash equivalents 413 1,587 (326) (22) 1,833 108

Net foreign exchange differences (32) 41 141 10 309 18

Cash and cash equivalents at beginning of period 441 822 2,451 167 2,265 133

Cash and cash equivalents at end of period 822 2,451 2,265 154 4,408 259

27

Adj. EBITDA and Adj. EBITDAR reconciliation

(1) Full year 2014 and September YTD 2015 figures converted to USD at December end of the period spot exchange rate $14.7180 and $17.0073, respectively, for convenience

purposes only

(2) Audited financial information 2012A - 2014A


MXN millions unless otherwise stated (2) 2012A 2013A 2014A 2014A (1)

September

YTD 2015

September

YTD 2015 (1)

(USD

millions)

(USD

millions)

Net income 203 265 605 41 1,810 106

Plus (minus):

Finance costs 90 126 32 2 15 1

Finance income (14) (25) (23) (2) (37) (2)

(Benefit)/provision for income taxes 3 18 39 3 776 46

Depreciation and amortization 211 302 343 23 349 21

EBITDA 494 685 995 68 2,912 171

Exchange (gain) loss, net 95 (66) (449) (30) (789) (46)

Adjusted EBITDA 589 619 547 37 2,124 125

Aircraft and engine rent expense 1,886 2,187 2,535 172 2,483 146

Adjusted EBITDAR 2,475 2,806 3,081 209 4,606 271

28

volaris corporate presentation december

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