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Fair value measurements | 12 Months Ended
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Dec. 31, 2024
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 that 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 is 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 consolidated 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:
Schedule of carrying amounts and fair values of financial instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Carrying amount |  | Fair value
|  | December 31, 2024 |  | December 31, 2023 |  | December 31, 2024 |  | December 31, 2023
Assets |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial Instruments |  | US$ | 702 |  |  | US$ | 1,683 |  |  | US$ | 702 |  |  | US$ | 1,683 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial debt (Interest-bearing loans and borrowings) |  |  | (800,112 | ) |  |  | (649,153 | ) |  |  | (846,456 | ) |  |  | (671,590 | )
Total |  | US$ | (799,410 | ) |  | US$ | (647,470 | ) |  | US$ | (845,754 | ) |  | US$ | (669,907 | )
The following table summarizes the fair value measurements by hierarchy as of December 31, 2024:
|  | Fair value measurement
|  | Quoted prices in active markets Level 1 |  | Significant observable inputs Level 2 |  | Significant unobservable inputs Level 3 |  | Total
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives financial instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Jet Fuel Asian Call Options (1) |  | US$ | — |  |  | US$ | 431 |  |  | US$ | — |  |  | US$ | 431 |
Interest rate Caps |  |  | — |  |  |  | 271 |  |  |  | — |  |  |  | 271 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities for which fair values are disclosed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing loans and borrowings (2) |  |  | — |  |  |  | (846,456 | ) |  |  | — |  |  |  | (846,456 | )
Net |  | US$ | — |  |  | US$ | (845,754 | ) |  | US$ | — |  |  | US$ | (845,754 | )
(1) | Jet fuel forward levels.
(2) | SOFR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt.
There were no transfers between level 1 and level 2 during the period. The following table summarizes the fair value measurements by hierarchy as of December 31, 2023.
|  | Fair value measurement
|  | Quoted prices in active markets Level 1 |  | Significant observable inputs Level 2 |  | Significant unobservable inputs Level 3 |  | Total
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives financial instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate Caps |  | US$ | — |  |  | US$ | 1,683 |  |  | US$ | — |  |  | US$ | 1,683 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities for which fair values are disclosed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing loans and borrowings (1) |  |  | — |  |  |  | (671,590 | ) |  |  | — |  |  |  | (671,590 | )
Net |  | US$ | — |  |  | US$ | (669,907 | ) |  | US$ | — |  |  | US$ | (669,907 | )
(1) | SOFR curve and TIIE Mexican interbank rate. Includes short-term and long-term debt.
There were no transfers between level 1 and level 2 during the period. The following table summarizes the effects from derivatives financial instruments recognized in the consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022:
Schedule of (loss) gain on derivatives recognized in consolidated statements of operations |  |  |  |  |  |  |  |  |  |  |  |  |  |
Instrument |  | Financial statements caption |  | 2024 |  | 2023 |  | 2022
Jet fuel Asian call options contracts |  | Fuel expense |  | US$ | (1,317 | ) |  | US$ | — |  |  | US$ | — |
Interest rate cap |  | Finance cost |  |  | (896 | ) |  |  | (579 | ) |  |  | (161 | )
Total |  |  |  | US$ | (2,213 | ) |  | US$ | (579 | ) |  | US$ | (161 | )
The following table summarizes the net (loss) gain on CFH before taxes recognized in the consolidated statements of comprehensive income for the years ended December 31, 2024, 2023 and 2022: Consolidated statements of other comprehensive (loss) income
Schedule of net (loss) gain on CFH before taxes recognized in the consolidated statements of comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |
Instrument |  | Financial statements caption |  | 2024 |  | 2023 |  | 2022
Jet fuel Asian call options contracts |  | OCI |  | US$ | (307 | ) |  | US$ | — |  |  | US$ | — |
T-Locks |  | OCI |  |  | (117 | ) |  |  | — |  |  |  | — |
Interest rate cap |  | OCI |  |  | 30 |  |  |  | (1,175 | ) |  |  | 336 |
Total |  |  |  | US$ | (394 | ) |  | US$ | (1,175 | ) |  | US$ | 336 |

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