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The Leading Ultra-Low-Cost Airline Serving Mexico and the US

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The Leading Ultra-Low-Cost Airline Serving Mexico and the US The Leading Ultra-Low-Cost Airline Serving Mexico and the US March 2015 Disclaimer 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. 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 or 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. 2 Solid fourth quarter 2014 results confirm reversal of trend Disciplined capacity management: International ASMs grew 14% in 4Q and 17% FY, while Domestic ASMs remained stable for the quarter, supporting yield recovery. Total ASMs grew only 3% during the quarter and 8.5% for the year. Total operating revenues: Increase 24% for the quarter and 8% full year, reaching Ps. 3,958 million and Ps. 14,038 million, respectively. Continuous non-ticket revenue growth: Non-ticket per passenger reached Ps. 313 (US $23 (1) ) and Ps. 279 (US $21 (1) ), for the quarter and full year; an increase of 61% and 31%, respectively. Year end non-ticket revenues represent 19% of Total Revenues. Costs control & strong profitability: CASM ex fuel was Ps. 74.4 cents (US 5.37cents (1) ) during 4Q and Ps. 71.6 (US 5.38 cents (1) ) FY; maintaining lowest unit cost in the Americas. EBITDAR margin of 31% and 22%, an increase of 16.1 p.p. and 0.4 p.p., for the quarter and FY, respectively. Positive cash flow generation, strong balance sheet and good liquidity: Net increase of cash by Ps. 342 million for the quarter; generating 16% of LTM revenues and negative net debt (or positive net cash position) of Ps. 1,017 million. Notes: (1) Converted to USD at an average exchange rate corresponding for the period. 3 Volaris – Mexico’s Ultra-Low-Cost Carrier’s snapshot at 30,000 feet Serving to 57 destinations throughout Mexico and the US Volaris’ destinations 2008 2014 CAGR Portland Unit cost Chicago (Midway/O’Hare) Sacramento (CASM ex-fuel; 5.5 5.4 -0.4% Oakland Denver cents, USD) (1) San Jose Reno Fresno Las Vegas FY14 Int. Pax Passenger Los Angeles Ontario Revenue 28% demand 3.2 9.7 +20.5% San Diego (RPMs, bn) Phoenix Tijuana Mexicali Dallas Ciudad Juárez Aircraft 21 50 +15.6% FY14 Dom. Pax Hermosillo Houston Orlando San Antonio (End of Period) Revenue 72% Chihuahua Ciudad Obregón Monterrey Fort Lauderdale Passengers Los Mochis (2) 3.5 9.8 +18.7% Torreón (mm) La Paz Culiacán Zacatecas Tampico Los Cabos San Luis Potosí Mazatlán León Durango Aguascalientes Mérida Operating revenue Tepic Querétaro Cancún (1) 397 1,056 +17.7% Guadalajara Morelia (mm, USD) Puerto Vallarta Cd. de México/D.F. Colima Toluca Veracruz Puebla Villahermosa Adj. EBITDAR Uruapan 67 232 +23.0% Tuxtla Gutiérrez (1) Acapulco Oaxaca (mm. USD) Tapachula Huatulco Adj. ROIC (pre- Domestic market share (3) 11.0% 13.5% +2.5pp tax) 20.7% 22.7% 23.0% 12.2% Notes: 2008 2012 2013 2014 (1) Converted to USD at an average annual exchange rate (2) Corresponds to the number of booked passengers (3) Based on number of passengers, domestic and international passengers 4 Source: Company data, SCT-DGAC Volaris’ low base fares stimulate demand and drive continuing growth Since its launch, Volaris has stimulated new demand in the Mexican market through an aggressive revenue management strategy that drives lower fares and higher load factors Lower base Stimulation fares of demand Resilient ULCC business model driving high, profitable growth Lower cost More ancillary revenue More capacity 5 Volaris’ ULCC business model is clearly differentiated from legacies, hybrids and other LCC’s Aeromexico Interjet VivaAerobus Volaris CASM FY 2014 U U V V (cents, USD)(1) 13.8 13.1 9.7 (2) 8.8 Low ticket prices FY 2014 U ≈ V V Average Fare (USD) (1) 167 103 45 (2) 87 Non-ticket rev. exc. Cargo FY 2014 U U V V Non -ticket rev. exc. Cargo per pax (USD) (1) 6.7 8.5 23.4 (2) 19.2 Modern & uniform fleet U ≈ U V Average age fleet (years) 8.9 6.4 19.7 4.2 High daily utilization V U U V Block hours per day 11.4 8.8 8.4 12.3 Other/ eg. (No GDS) U ≈ V V Legacy < Hybrid/LCC < ULCC Notes; (1) Converted to USD at an average exchange rate corresponding for the period, $13.2973 Ps. (2) Figures updated as per latest public reports as of September YTD 2014 Source: Company data, data airlines public information, DGAC reports, MI DIIO 6 Volaris has a best-in-class unit cost structure Lowest unit cost in the Americas (1) CASM and CASM ex-fuel (FY 2014, USD cents) (3) 17.4 15.2 14.9 5.5 13.8 13.6 13.1 12.5 5.2 4.5 11.0 4.6 10.5 4.5 5.5 9.7 4.0 9.6 8.8 4.0 4.3 4.2 3.8 3.4 11.9 9.9 10.4 9.2 8.0 8.6 8.5 6.6 6.6 5.4 5.5 5.9 (4) Avianca(4) LatAm Aeromexico Gol(4) Interjet Copa VivaAerobus(4) SouthWest Allegiant Spirit DCOMPS Latin American Carriers US LCCs US Network Denotes fuel Carriers (2) cost per ASM Notes: (1) Based on CASM among the publicly-traded airlines (2) DCOMPS= Direct Competitors: Average CASM and CASM ex-fuel; US network carriers include: Delta, United, Alaska Airlines, American Airlines (3) Non-USD data converted to USD at an average exchange rate corresponding for the period, $13.2973 Ps. (4) Based on CASM among the publicly-traded airlines as of September YTD 2014 7 Source: Company data, Airlines public information Focus on fleet utilization and efficiency drives higher revenue and lower cost: A320 retrofit and A321 arrival (1) High density configuration (5) Load factor Implied passengers Volaris A320 (FY 2014) per aircraft (2) 179 seats per aircraft Aeromexico 737-800 82% 147 160 seats per aircraft Interjet A320 Aeromexico 79% 127 150 seats per aircraft VivaAerobus 737-300 Interjet 72% 109 148 seats per aircraft VivaAerobus (3) 81% 120 High daily utilization Young, fuel efficient fleet Block hours per day (FY 2014) (4) Average age (Yrs, FY 2014) 12.3 11.4 19.7 8.8 8.8 8.4 8.1 10.5 8.9 6.4 4.2 Aeromexico Interjet VivaAerobus Global Global VivaAerobus Mexican Aeromexico Interjet A320 A319 Average Notes: (1) A320 retrofit and factory fit to 179 seats/A321 arrival with 220 seats (2) Implied passengers per aircraft is calculated as available seats per aircraft multiplied by the load factor (3) Figures updated as per latest public reports as of September YTD 2014. (4) Block hours per day calculated as ((Total block hours for the period / Monthly average number of aircraft) / Number of days for the period) (5) Aeromexico, Interjet and VivaAerobus represent domestic competitors of Volaris 8 Source: Company data, airlines public information, DGAC, Airbus, miDiio Bus passenger shift to air travel Significant upside for air travel Air travel time and cost savings Total bus trips Total air travel trips Mexico City – Tijuana (mm) (mm) Travel time (Hrs) Fare (USD) (2,3) 2,781 40.5 145 36.5 hours less 24% cost savings 2,706 110 60 4.0 30 75 30 Bus (1) Air Bus (1) 2013 2013 • Mexico is almost three times the size of the state of Texas Executive & International luxury • The distance between Tijuana and Cancún is similar to the First, economy Domestic distance between New York City and San Francisco and other • 4Q14 bus switching campaign resulted in a great success: Notes: (1) Executive and luxury class - Education an trial plans went viral (2) Fare figures calculated
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