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v3.19.1

Description of the business and summary of significant accounting policies (Tables) | 12 Months Ended
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Dec. 31, 2018
Description of the business and summary of significant accounting policies |
Schedule of companies included in the consolidated financial statements |
|  | Principal |  |  |  | % Equity interest |
Name |  | Activities |  | Country |  | 2018 |  | 2017 |  | 2016 |
Concesionaria |  | Air transportation services for passengers, cargo and mail throughout Mexico and abroad |  | Mexico |  | 100 | % | 100 | % | 100 | %
Volaris Costa Rica |  | 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 | % | — |  | — |
Comercializadora Volaris, S.A. de C.V. |  | Merchandising of services |  | Mexico |  | 100 | % | 100 | % | 100 | %
Servicios Earhart, S.A.* |  | Recruitment and payroll |  | Guatemala |  | 100 | % | 100 | % | 100 | %
Servicios Corporativos Volaris, S.A. de C.V. (“Servicios Corporativos”) |  | Recruitment and payroll |  | Mexico |  | 100 | % | 100 | % | 100 | %
Servicios Administrativos Volaris, S.A. de C.V. (“Servicios Administrativos”) |  | Recruitment and payroll |  | Mexico |  | 100 | % | 100 | % | 100 | %
Comercializadora V Frecuenta, S.A. de C.V. (“Loyalty Program”)** |  | Loyalty Program |  | México |  | 100 | % | — |  | — |
Viajes Vuela, S.A. de C.V. (“Viajes Vuela”)(1) |  | Travel agency |  | Mexico |  | 100 | % | 100 | % | 100 | %
Deutsche Bank México, S.A., Trust 1710 |  | Pre-delivery payments financing (Note 5) |  | Mexico |  | 100 | % | 100 | % | 100 | %
Deutsche Bank México, S.A., Trust 1711 |  | Pre-delivery payments financing (Note 5) |  | Mexico |  | 100 | % | 100 | % | 100 | %
Irrevocable Administrative Trust number F/307750 “Administrative Trust” |  | Share administration trust (Note 17) |  | Mexico |  | 100 | % | 100 | % | 100 | %
Irrevocable Administrative Trust number F/745291 |  | Share administration trust (Note 17) |  | Mexico |  | 100 | % | 100 | % | 100 | %
Irrevocable Administrative Trust number CIB/3081 “Administrative Trust” |  | Share administration trust (Note 17) |  | Mexico |  | 100 | % | — |  | — |
*The Companies have not started operations yet in Guatemala and El Salvador. **The Company has not started operations yet With effect from July 16, 2018, the name of the Company was changed from Operaciones Volaris, S.A. de C.V. to Viajes Vuela, S.A. de C.V.
Schedule of breakdown of revenues |
|  |  | At the flight time |  |  | At the sale |  |  | Total
Revenue recognition as of December 31, 2018 |  | Domestic |  | International |  | Domestic |  | International |  | Revenues
Passenger Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fare Revenues |  | Ps. | 12,336,095 |  | Ps. | 6,151,763 |  | Ps. | — |  | Ps. | — |  | Ps. | 18,487,858
Other Passenger Revenues |  |  | 5,182,572 |  |  | 2,598,375 |  |  | 68,264 |  |  | 43,286 |  |  | 7,892,497
|  |  | 17,518,667 |  |  | 8,750,138 |  |  | 68,264 |  |  | 43,286 |  |  | 26,380,355
Non-Passenger Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other Non-Passenger revenues |  |  | 685,219 |  |  | 12,138 |  |  | — |  |  | — |  |  | 697,357
Cargo |  |  | 221,324 |  |  | 6,114 |  |  | — |  |  | — |  |  | 227,438
Total |  | Ps. | 18,425,210 |  | Ps. | 8,768,390 |  | Ps. | 68,264 |  | Ps. | 43,286 |  | Ps. | 27,305,150
|  |  | At the flight time |  |  | At the sale |  |  | Total
Revenue recognition as of December 31, 2017 (Adjusted) |  | Domestic |  | International |  | Domestic |  | International |  | Revenues
Passenger Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fare Revenues |  | Ps. | 12,284,795 |  | Ps. | 5,506,522 |  | Ps. | — |  | Ps. | — |  | Ps. | 17,791,317
Other Passenger Revenues |  |  | 4,087,664 |  |  | 1,992,696 |  |  | 11,283 |  |  | 6,861 |  |  | 6,098,504
|  |  | 16,372,459 |  |  | 7,499,218 |  |  | 11,283 |  |  | 6,861 |  |  | 23,889,821
Non-Passenger Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other Non-Passenger revenues |  |  | 723,297 |  |  | 4,095 |  |  | — |  |  | — |  |  | 727,392
Cargo |  |  | 165,907 |  |  | 5,066 |  |  | — |  |  | — |  |  | 170,973
Total |  | Ps. | 17,261,663 |  | Ps. | 7,508,379 |  | Ps. | 11,283 |  | Ps. | 6,861 |  | Ps. | 24,788,186
|  |  | At the flight time |  |  | At the sale |  |  | Total
Revenue recognition as of December 31, 2016 (Adjusted) |  | Domestic |  | International |  | Domestic |  | International |  | Revenues
Passenger Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fare Revenues |  | Ps. | 11,701,014 |  | Ps. | 6,089,116 |  | Ps. | — |  | Ps. | — |  | Ps. | 17,790,130
Other Passenger Revenues |  |  | 3,238,826 |  |  | 1,680,626 |  |  | — |  |  | — |  |  | 4,919,452
|  |  | 14,939,840 |  |  | 7,769,742 |  |  | — |  |  | — |  |  | 22,709,582
Non-Passenger Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other Non-Passenger revenues |  |  | 587,270 |  |  | 3,085 |  |  | — |  |  | — |  |  | 590,355
Cargo |  |  | 166,934 |  |  | 4,689 |  |  | — |  |  | — |  |  | 171,623
Total |  | Ps. | 15,694,044 |  | Ps. | 7,777,516 |  | Ps. | — |  | Ps. | — |  | Ps. | 23,471,560
Schedule of transactions from unearned transportation revenues |
|  |  |  |  | 2017 |  | 2016
|  | 2018 |  | Adjusted |  | Adjusted
January 1, |  | Ps. | 2,293,309 |  | Ps. | 2,228,051 |  | Ps. | 1,957,254
Deferred |  |  | 26,254,391 |  |  | 23,714,649 |  |  | 22,778,110
Recognized in revenue during the year |  |  | (26,109,184) |  |  | (23,649,391) |  |  | (22,507,313)
December 31, |  | Ps. | 2,438,516 |  | Ps. | 2,293,309 |  | Ps. | 2,228,051
Schedule of depreciation rates |
|  | Annual
|  | depreciation rate
Aircraft parts and rotable spare parts |  | 8.3-16.7%
Aircraft spare engines |  | 4.0-8.3%
Standardization |  | Remaining contractual lease term
Computer equipment |  | 25%
Communications equipment |  | 10%
Office furniture and equipment |  | 10%
Electric power equipment |  | 10%
Workshop machinery and equipment |  | 10%
Service carts on board |  | 20%
Leasehold improvements to flight equipment |  | The shorter of: (i) remaining contractual lease term, or (ii) the next major maintenance event
Schedule of exchange rates of local currencies translated to functional currencies |
|  |  |  |  |  | Exchange rates of local |  | Exchange rates of local |  | Exchange rates of local
|  |  |  |  |  | currencies translated to |  | currencies translated to |  | currencies translated to
|  |  |  |  |  | functional currencies |  | functional currencies |  | functional currencies
|  |  |  |  |  | Average |  |  |  |  | Average |  |  |  |  | Average |  |  |
|  | Local |  | Functional |  | exchange rate |  | Exchange rate |  | exchange rate |  | Exchange rate |  | exchange rate |  | Exchange rate
Country |  | currency |  | currency |  | for 2018 |  | as of 2018 |  | for 2017 |  | as of 2017 |  | for 2016 |  | as of 2016
Costa Rica |  | Colon |  | U.S. dollar |  | ₵. | 580.8534 |  | ₵. | 609.6100 |  | ₵. | 572.2000 |  | ₵. | 572.5600 |  | ₵. | 564.3332 |  | ₵. | 561.1000
Guatemala |  | Quetzal |  | U.S. dollar |  | Q. | 7.5337 |  | Q. | 7.7440 |  | Q. | 7.3509 |  | Q. | 7.3448 |  | Q. | 7.4931 |  | Q. | 7.5221
Schedule of impact of adoption of IFRS 15 on the consolidated financial statements |
|  | As previously |  |  |  |  | Adjusted
|  | reported as of |  |  |  |  | As of December
|  | December 31, 2017 |  | Adjustment |  | 31, 2017
Short-term liabilities |  |  |  |  |  |  |  |  |
Unearned transportation revenue |  | Ps. | 2,161,636 |  | Ps. | 131,673 |  | Ps. | 2,293,309
Equity |  |  |  |  |  |  |  |  |
Retained earnings |  | Ps. | 5,080,049 |  | Ps. | (131,673) |  | Ps. | 4,948,376
|  | As previously |  |  |  |  | Adjusted
|  | reported as of |  |  |  |  | As of December
|  | December 31, 2016 |  | Adjustment |  | 31, 2016
Short-term liabilities |  |  |  |  |  |  |  |  |
Unearned transportation revenue |  | Ps. | 2,153,567 |  | Ps. | 74,484 |  | Ps. | 2,228,051
Equity |  |  |  |  |  |  |  |  |
Retained earnings |  | Ps. | 5,927,576 |  | Ps. | (74,484) |  | Ps. | 5,853,092
Impact of adoption on the consolidated statements of operations
|  | As previously |  |  |  |  | Adjusted
|  | reported as of |  |  |  |  | As of December
|  | December 31, 2017 |  | Adjustment |  | 31, 2017
Operating revenues |  |  |  |  |  |  |  |  |
Passenger revenues |  |  |  |  |  |  |  |  |
Fare revenues |  | Ps. | 17,791,317 |  | Ps. | — |  | Ps. | 17,791,317
Other passenger revenues |  |  | — |  |  | 6,098,504 |  |  | 6,098,504
|  | Ps. | 17,791,317 |  | Ps. | 6,098,504 |  | Ps. | 23,889,821
Non- passenger revenues |  |  |  |  |  |  |  |  |
Other non-passenger revenues |  | Ps. | 6,883,085 |  | Ps. | (6,155,693) |  | Ps. | 727,392
Cargo |  |  | 170,973 |  |  | — |  |  | 170,973
|  | Ps. | 7,054,058 |  | Ps. | (6,155,693) |  | Ps. | 898,365
|  | Ps. | 24,845,375 |  | Ps. | (57,189) | * | Ps. | 24,788,186
Operating expenses |  | Ps. | 24,826,733 |  |  | — |  | Ps. | 24,826,733
Operating income (loss) |  |  | 18,642 |  |  | (57,189) |  |  | (38,547)
Net loss |  | Ps. | (594,599) |  | Ps. | (57,189) |  | Ps. | (651,788)
|  | As previously |  |  |  |  | Adjusted
|  | reported as of |  |  |  |  | As of December
|  | December 31, 2016 |  | Adjustment |  | 31, 2016
Operating revenues |  |  |  |  |  |  |  |  |
Passenger revenues |  |  |  |  |  |  |  |  |
Fare revenues |  | Ps. | 17,790,130 |  | Ps. | — |  | Ps. | 17,790,130
Other passenger revenues |  |  | — |  |  | 4,919,452 |  |  | 4,919,452
|  | Ps. | 17,790,130 |  | Ps. | 4,919,452 |  | Ps. | 22,709,582
Non- passenger revenues |  |  |  |  |  |  |  |  |
Other non-passenger revenues |  | Ps. | 5,550,698 |  | Ps. | (4,960,343) |  | Ps. | 590,355
Cargo |  |  | 171,623 |  |  | — |  |  | 171,623
|  | Ps. | 5,722,321 |  | Ps. | (4,960,343) |  | Ps. | 761,978
|  | Ps. | 23,512,451 |  | Ps. | (40,891) | * | Ps. | 23,471,560
Operating expenses |  | Ps. | 20,772,760 |  | Ps. | — |  | Ps. | 20,772,760
Operating income (loss) |  |  | 2,739,691 |  |  | (40,891) |  |  | 2,698,800
Net income |  | Ps. | 3,519,489 |  | Ps. | (40,891) |  | Ps. | 3,478,598
Impact on basic and diluted earnings per share (EPS)
|  | As previously |  |  |
|  | reported as of |  |  |
|  | December 31, |  |  |
|  | 2017 |  | As Adjusted
Loss per share |  | Ps. | (0.588) |  | Ps. | (0.644)
|  | As previously |  |  |
|  | reported as of |  |  |
|  | December 31, |  |  |
|  | 2016 |  | As Adjusted
Earnings per share |  | Ps. | 3.478 |  | Ps. | 3.438
* The nature of the adjustments is described as follows:
Schedule of impact of adoption of IFRS 16 (Leases) on the consolidated financial statements |
|  |  |  |  | As of |  | As of
|  | As of January 1, |  | December 31, |  | December 31,
|  | 2017 |  | 2017 |  | 2018
Assets |  |  |  |  |  |  |  |  |
Property, plant and equipment (Right-of-use-assets) |  | Ps. | 23,709,968 |  | Ps. | 25,075,501 |  | Ps. | 31,985,598
Deferred income tax |  |  | 2,699,552 |  |  | 2,231,702 |  |  | 2,271,031
Prepaid expenses |  |  | (266,959) |  |  | — |  |  | —
Liabilities |  |  |  |  |  |  |  |  |
Lease liabilities |  | Ps. | 32,639,927 |  | Ps. | 32,436,015 |  | Ps. | 39,463,811
Equity |  |  |  |  |  |  |  |  |
Retained Earnings |  | Ps. | 6,497,366 |  |  |  |  |  |
The estimated impact on the statements of operations for the years ended December 31, 2017 and 2018:
|  | For the year |  | For the year
|  | ended December |  | ended December
|  | 31, 2017 |  | 31, 2018
Depreciation expense |  | Ps. | 3,522,738 |  | Ps. | 4,123,513
Operating lease expense |  |  | (5,038,920) |  |  | (5,718,657)
Operating income |  |  | (1,516,182) |  |  | (1,595,144)
Financial costs |  |  | 1,381,027 |  |  | 1,682,420
Foreign exchange (gain) loss |  |  | (1,434,290) |  |  | 30,423
Income tax expense (benefit) |  |  | 467,850 |  |  | (39,328)
Net (income) loss |  | Ps. | (1,101,595) |  | Ps. | 78,371

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