volaris investor day -...

Volaris Investor Day

New York Stock ExchangeSeptember 13, 2017

The information ("Confidential Information") contained in this presentation is confidential and is provided by ControladoraVuela Compañía de Aviación, S.A.B. de C.V., (d/b/a Volaris, the "Company") confidentially to you solely for your reference andmay not be retransmitted or distributed to any other persons for any purpose whatsoever. The Confidential Information issubject to change without notice, its accuracy is not guaranteed, it has not been independently verified and it may not containall material information concerning the Company. Neither the Company, nor any of their respective directors makes anyrepresentation or warranty (express or implied) regarding, or assumes any responsibility or liability for, the accuracy orcompleteness of, or any errors or omissions in, any information or opinions contained herein. None of the Company nor any oftheir respective directors, officers, employees, stockholders or affiliates nor any other person accepts any liability (innegligence, or otherwise) whatsoever for any loss howsoever arising from any use of this presentation or its contents orotherwise arising in connection therewith. No reliance may be placed for any purposes whatsoever on the information setforth 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 orinvitation 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 inconnection with any contract or commitment whatsoever. Recipients of this presentation are not to construe the contents ofthis 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. Thesestatements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respectto the consolidated results of operations and financial condition, and future events and plans of the Company. Thesestatements can be recognized by the use of words such as "expects," "plans," "will," "estimates," "projects," or words of similarmeaning. Such forward-looking statements are not guarantees of future performance and actual results may differsignificantly from those in the forward-looking statements as a result of various factors and assumptions. You are cautionednot to place undue reliance on these forward looking statements, which are based on the current view of the management ofthe Company on future events. The Company does not undertake to revise forward-looking statements to reflect future eventsor circumstances.

Disclaimer

2

09:30 am Enrique Beltranena, CEO

10:00 am Holger Blankenstein, CCO

10:50 am José Luis Suárez, COO

11:10 am Fernando Suárez, CFO

11:30 pm Q&A session

12:00 pm Event concludes

Agenda

Source: VolarisMexico City International Airport (AICM)

Enrique BeltranenaChief Executive Officer

Enrique Beltranena, CEO

Since our last Investor Day in March 2016 we have reached several milestones…

5

Volaris Central America first flight

Volaris entered the Mexican Bolsa IPC-30 Index

First NEO operator in North America

2017 Air Transport World’s value airline of the year

Opening of 30 new routes and 9 new destinations

One of the 15 most on-time airlines worldwide according to OAG(1)

(1) Official Airline Guide

168 routes and 68 destinationsacross 6 countries


Volaris at 30,000 feet: the largest ULCC in Latin America

6

(1) As of LTM August 2017; Source: DGAC(2) As of August 31, 2017(3) As of LTM June 2017

67 aircraft with an average

of 180 seats(2)

16M customers, the largest

ULCC in Latin America(1)

24.8 billion MXN (1.3 billion

USD) of total revenue(3)

30% EBITDAR margin(3)%

4.9 cents of CASM ex-fuel(3),

one of the lowest in the world

3,505

16,088

2008 LTM Aug 17

28

168

2008 Aug 17


The source of our success: a strong business model that produces a consistent and profitable growth

7

Total revenues(Total Operating Revenues – M MXN)

Network(Routes – end of period)

Passengers(Thousands LTM Aug 2017)

6.0x 4.6x

747

7,473

2008 LTM Jun 2017

EBITDAR(LTM EBITDAR – M MXN and EBITDAR margin - %)

%

17%

30%

4,416

24,837

2008 LTM Jun 17

5.6x10.0x

10%

11%

13%

14%

14%

26%

27%

42%

45%

48%

Jet Blue

IndiGo

Gol

Azul

Aeromexico

Volaris

Ryanair

Wizz

Allegiant

Spirit

8.1

7.7

7.1

6.3

5.9

5.7

4.9

4.4

4.0

3.8

Jet Blue

Aeromexico

Gol

Allegiant

IndiGo

Spirit

Volaris

AirAsia

Ryanair

Wizz Air

8%

8%

11%

12%

14%

18%

19%

20%

20%

27%

Aeromexico

Jetblue

Ryanair

Allegiant

Air Asia

Azul

Wizz Air

Volaris

Spirit

IndiGo

67%

69%

74%

75%

80%

80%

81%

83%

85%

87%

Aeromexico

Allegiant

Spirit

Southwest

Wizz Air

Ryanair

IndiGo

Gol

Azul

Volaris

On board passengers CAGR (2012 to 2016) Non-ticket as % of total revenue (LTM June 2017)

On-time performance (July 2017) CASM ex-fuel, US cents (LTM June 2017)

Enrique Beltranena, CEO 8

(1) As of 2016 FYNote: non-USD data converted to USD using an average of period exchange rateSource: Airlines public information and OAG

Volaris among the best-of-breed

4th 4th Lowest CASM ex-fuel in airline industry

13th

13th Most on-time airline of the world

1st 1st Largest ULCC in Latin America

5th 5th Airline in non-ticket revenue(1)

12.812.2

8.8

10.7

Volaris Aeromexico Interjet Viva

180

119

136

180

Volaris Aeromexico Interjet Viva


(1) Passenger market penetration among Mexican carriers (domestic and international)(2) Aeromexico mainline (excludes wide-body fleet) and Aeromexico ConnectNote: Estimated figuresSource: Airlines public information, Airfleets, DGAC and MI-DIIO

Volaris has a strong position to compete in the Mexican market

Mexican airline market

#413%

#321%

27%

#136%

Fleet utilization (LTM June 2017)

Volaris market share (LTM June 2017)(1)

Average seats per aircraft and fleet age (June 2017)

(2)

• Leading ULCC in Mexico and Latin America

• Youngest and most efficient fleet in Mexico

• Highest seat density

• Highest fleet utilization

4.5 years 7.4 years 6.1 years 4.7 years

The first half of 2017 brought some challenges to Volaris

• Geopolitical (US elections, travel bans and warnings, immigration policy, DACA and

NAFTA debates)

• Depreciation of the Mexican Peso

• Increase in jet fuel price

• Slot regime constraints in Mexico City

These factors had an impact mostly on international traffic

18.02 18.05

20.39

18.6

1Q 2016 1Q 2017 2Q 2016 2Q 2017


Volaris 1H 2017 growth was briefly slowed due to geopolitical and macro issues

Foreign exchange rate (USD-MEX)

1.23

1.56

1.821.74

1Q 2016 1Q 2017 2Q 2016 2Q 2017

Average economic fuel price per gallon (USD)

+13% +3% +48% +12%

Lower fleet utilization (hours per day)…

…Resulted in lower ASM growth projections for 2017

Volaris’ flexible network, fleet and operation allow us to quickly respond to market challenges

• No new aircraft deliveries in 1H 2017 and 3 re-deliveries

• Utilization adjustment

• Capacity management− New routes and frequencies

revision− Itinerary adjustment− Domestic vs International growth

mix calibration


Softer demand required us to manage capacity

13.2

12.9

12.5

12.7

2016 2017

1st Quarter 2nd Quarter

Beginning of

the year

Currently

15% to 17%

15%

13% to 14%

2.3%

1.6%

-1.4%

1.8%2.1%

0.8%

2.2% 2.2% 2.1%

Mexico USA Latin America andCaribbean

2017E2016 2018E 2017E2016 2018E 2017E2016 2018E

117 117

118

119

119120

1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017

75

90

105

120

3.0%

3.5%

4.0%

4.5%

1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017

(Une

mp

loym

en

t ra

te %

)

Unemployment rate Consumer confidence (Con

su

me

r co

nfid

en

ce

ind

ex 2

01

0=

10

0)


(1) World Bank Global Economics Prospects June 2017(2) IGAE (Indicador Global de la Actividad Económica)Source: World Bank, INEGI and Banxico

The Mexican economy’s performance and outlook remains resilient

Mexican economic activity index(2) (index 2010=100)

GDP growth (% y-o-y)(1) Unemployment and consumer confidence

6%

10%

5%

13%

7%

5%

1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017

US remittances to Mexico (% y-o-y)

26% 20%

35%

25%

17%

30%

14% 17%

7% 8%

2010 2025E

D/E D+ C C+ AB


(1) Classes are defined by the following monthly family income: AB<MXN $98,500, C+MXN $40,600- $98,499, C MXN $13,500- $40,599, D+ MXN $7,880 $13,499, D MXN $3,130- $7,879 and E <MXN $3,129

Favorable demographics and under-penetrated markets should improve Volaris’ long-term growth

2016 air trips per capita (domestic and international)

In terms of air trips per capita, Mexico has important growth opportunities

Young and growing middle class, ripe for bus switching

Mexican demographic composition by age

10 5 0 5 10

Middle class as a % of total population

+100

Male Female

2030 estimate

Million inhabitants

0-19 years 20-64 years 65+ years

0

20

60

40

80

0

20

60

40

80

+100

More than 50M

potential passengers

+17pp

0.70 to 0.90 0.70 to 0.90

2.55

0.910.66

0.47 0.450.42 0.34 0.19 0.07

United States Chile Colombia Peru Brazil Mexico Argentina Central America Paraguay

(2) Includes Belize, Costa Rica, El Salvador, Guatemala and Honduras Source: DGAC, MI-DIIO, ALTA, World Bank and CAPA Centre for Aviation

(2)

More than 50M potential

passengers


Volaris has several opportunities to grow revenues, reduce costs and deliver financial performance

14

(1) As of LTM June 30, 2017(2) As of June 30, 2017

Maintain industrycost leadership

Solid financialprofile

Revenue initiativesfor growth

$

• Fleet profile− Up-gauge (A320/A321 NEO)− Increase seat density− High utilization− Aircraft ownership

• Direct sales channels and customer service

− Digital apps− Enhance website− Automation and self-service

• Other cost initiatives− Organization effectiveness− Strategic sourcing− Economies of scale

• Network expansion− Volaris Central America− New VFR niche routes− Strategic leisure

destinations− Bus switching

• Revenue growth− Stimulate demand through

low fares− Maximize ancillary revenue− Improve digital channels

• Sustained profitability and value creation

− EBITDAR margin of 30%(1)

− Adj. pre-tax ROIC of 15%(1)

• Strong balance sheet− Unrestricted cash position:

− USD 334 million(2)

− 24% of LTM revenues(2)

− Healthy working capital

• Disciplined financial leverage

Holger BlankensteinChief Commercial Officer

Holger Blankenstein, CCO

Volaris’ business model is well poised to sustain strong growth

16

Solid and Resilient

ULCC business

model driving high and profitable

growth

Ultra low operating

costs

“Clean” low base

faresMore price sensitive

customers

More ancillaries

Capacity increase

+

Holger Blankenstein, CCO 17

Volaris’ growth is based on four key drivers

Strong growth

Stimulate demand through low fares1

Build a diverse and defensible network2

Capitalize on ancillary opportunities3

Exploit digital efforts4


Strong growth






Volaris offers super low base fares to stimulate demand and compete with buses

19

0

4

8

12

16

40

60

80

100

120

2009 2010 2011 2012 2013 2014 2015 2016

Average Fare Transported passengers

Volaris’ passengers

(M)

Volaris’ fares

($ USD)

More passengers fly with Volaris due to low fares… … even lower than buses (1)

(1) Bus fares as of March 2017; USD at an average exchange rate of MXN $20.4 1Q’17(2) Survey made by Briyam in February 2017

Market Buses

Culiacan - Tijuana $49 $67

Guadalajara - Hermosillo $48 $60

Guadalajara - Tijuana $59 $99

Mexico - Tijuana $65 $112

Bajio - Tijuana $65 $90

Cancun - Mexico $49 $59

Durango - Tijuana $62 $102

Guadalajara - Monterrey $37 $50

Mexico - Monterrey $38 $56

8% of our customers are 1st time flyers22% considered the bus before booking on

Volaris(2)

0

1

2

3

4

5

0

50

100

150

200

250

January 2012 June 2017

O&D passengers

(thousands)

Route average fare

(USD)

October 2013

Volaris’ non stop

service begins

0

3

6

9

12

15

0

100

200

300

400

500

January 2012 June 2017

O&D passengers

(thousands)

Route average fare

(USD)

July 2014

Volaris’ non stop

service begins


Volaris’ proven success: domestic and international markets stimulated due to the Volaris Effect

20

Domestic: Ciudad Juarez - Tijuana International: Chihuahua - Denver

Note: O&D stands for Origin & Destination passengers; 12-month rolling sumSource: Airports data based on IATA BSP via MI-DIIO

Average fare Passengers

EXAMPLES

59

114

124 128

257

Volaris Avianca Latam Aeromexico Copa

Volaris’ fares are at least…


We are now bringing the Volaris Effect toCentral America

21

Volaris has the lowest fares in Central America (1) (USD) Volaris is the first ULCC in the region

(1) Network average fares from airlines reports 2Q 2017(2) Subject to market conditions and regulatory approvalsSource: Airlines public information

• We started operations to Central America in 2015, Guatemala in June and then Costa Rica, in September

• In December 2016, we opened a new AOC (Volaris Costa Rica) with our first flight San Jose – Guatemala

• In August 2017, we had 11 routes in Central America covering 5 countries:

Costa RicaEl SalvadorGuatemalaMexicoNicaragua

• Since June 2015, we have carried more than 340K passengers in all Central America

• Future plans: Central America to USA expansion(2)

4x

lower

2x

lower

Brazil(2003)

Brazil(2014)

Mexico(2003)

Mexico(2012)

Mexico(2016)

Bus trips per capta Air trips per capita


(1) UBS analysis related to LATAM transportationSource: UBS

Potential unexplored Mexican bus routes

There is a long way to go to gain share from the buses(1) Volaris’ commercial activities to achieve bus switching

• “Hell vs. Heaven” social media campaign• Special “anti-bus fares”• Geofencing inside bus terminals• “Get rid of the bus” campaign in Central America

ULCC model

Trial

Education

First Sale

Mass media campaigns & digital capabilities

Tickets giveaway #NoMoreBus

Strong conversion rate

Attracting 1st time flyers

Volaris ongoing bus switching programs contribute to the airlines’ penetration and traffic stimulation

Since 2016, over 50M total targeted audience

Airline passenger

CAGR 11.5%

Airline passenger

CAGR 4.8%

Airline passenger

CAGR 10.5%

2.5

0.8

0.6

0.4 0.50.4 0.3

0.20.1

2.5

0.9

0.7

0.5 0.5 0.40.3

0.20.1

0.7 to 0.9 0.7 to 0.9

UnitedStates

Chile Colombia Peru Brazil Mexico Argentina CentralAmerica

Paraguay

2015 2016 Market potential


Low fares will continue to stimulate demand in line with high growth emerging markets

23

(1) Domestic(2) Includes Belize, Costa Rica, El Salvador, Guatemala and Nicaragua

Annual trips per capita (1)

Significant growth opportunities in Mexico and Central America

More than 50Mincremental passengers

(2)

(3) Range based on South American countries above MexicoSource: World Bank


Strong growth






Volaris continues to diversify its network

25

Network enhancement: more frequencies and more routes to new destinations

168 routes serving 68 destinations throughout Mexico, USA and Central America

138 168

Lastinvestor day (1)

August2017

Routes

Stations

59 68

Daily take-offs

271 297

(1) March 15th, 2016(2) Only operated routes

Volaris’ March 2016 to August 2017 new routes (2)

International

DomesticVolaris Costa Rica

Diverse and defensible network


Volaris has a strong and solid network with efficient operations

26

Low frequencies, maximum footprint…

(Frequencies per route per day)

… and more revenue opportunities every day

(Seats offered per day, thousands)

… with a better assetutilization

(Cycles per day)

1.0

0.8

2012 LTM Jun 2017

4.4

4.7

2012 LTM Jun 2017

24.7

51.6

2012 LTM Jun 2017

12.4 12.6

Utilization (hrs./day):

+ =

Exclusive23%

1 competitor23% LCC

21%

2 competitors14%

Hybrid29%

3 or morecompetitors

40%

Legacy50%

Other routes64%

Top 10 routes36%


We have built a defensible network with little concentration and overlap with other carriers

27

(1) Total Volaris- ASMs as of June 2017 LTM(2) Split per route based on competitors’ type(3) Other includes MTY, other Mexican Airports and Central AmericaSource: MI-DIIO

Volaris’ ASM diversification (1)

Focus on exclusive routes and higher costs competitors (2)Low concentration

Expansion beyond mainstream routes

23% of our ASMs are exclusiveStrong presence in

diverse Mexican cities

Diverse geography (3)

Guadalajara33%

Mexico City32%

Tijuana20%

Cancun 5%

Other 10%


We have a proven track record in developingnew markets

28

(1) Routes opened by Volaris without competition in that timeNote: Others stands for business routes

Examples of domestic routes:

• Aguascalientes – Cancun• Guadalajara – Merida• Tijuana – Uruapan

Examples of international routes:

• Guadalajara – Portland• Uruapan – Los Angeles• Chihuahua – Denver

Focusing on connecting visiting friends and families and building leisure markets

Volaris has built untapped niche markets, pioneered 58 routes(1)

69% 57% 48%48%

50%51%

32%36%

34%

33%

32%

16%

18%

17%

17%

16

37

64

103

128

151

2011 2012 2013 2014 2015 2016

VFR Leisure Other

Cumulative new routes by segment (2011 to 2016)

46%63%

65% 61% 59%

75%

54%

38%

25%

39%

41%

16

37

64

103

128

151

2011 2012 2013 2014 2015 2016

Domestic International

Cumulative new routes by market (2011 to 2016)

42%

23%14% 10% 5%

58%

77%86% 90% 95% 98%

Mexico -Domestic

Europe Mexico -USA

CentralAmerica -

USA

USADomestic

CAM intraand SouthAmerica

ULCC Legacy / Hybrid


Volaris has significant untapped opportunities throughout the Americas

29

Sizeable growth opportunity for Volaris

Volaris’ growth opportunities(2)

More than 200 new

routes opportunities

(1) 2017 FY(2) Minimum stage length of 170 miles to 200 miles; figures calculated as of August 2017Note: European ULCC are Ryanair, EasyJet and Wizz Air, US domestic ULCC are Spirit and Frontier; CAM stands for Central America

ULCC penetration (seat share in selected markets)(1)

South

AmericaMore than 75 routes

50 to 75 routes

Less than 50 routes

USA

Canada

Central

America

Mexico Caribbean


Strong growth





150

200

250

300

350

400

450

2Q 20171Q 2012

CAGR2012-2016 = 17%


Increasing non-ticket revenue allows us to reduce fares further and stimulate demand

31

Non-ticket revenues account for 29% of Volaris’ operating revenues(1)

Non-ticket revenue per passenger (MXN, 1Q 2012 to 2Q 2017)

Absolute non-ticket revenue (MXN)

$312M $1,730MGrowth: 5.5x

(1) 2Q 2017

More than 13% increase in non-ticket revenues per passenger comes from new ancillary products

• Non ticket revenue:− 1st bag charge on international flights− Air bundles − Standby tickets for distressed inventory− Express check-in

• Commissioned based revenues:− Standalone hotels, cars, activities,

cruises and transfers− Other insurance (departure protection,

weather insurance, etc.)

• Discount programs:− Discount club as a monthly subscription

option

• Forms of Payment:− Multi-currency processor− Deferred payment plans


More products Dynamic pricing Better presence

Product & Services

32

Incremental non-ticket per passenger by product(2016 to 2017, Index Jan 2016 = 100)

Product results

100.0

0.4

1.4

12.0

113.8

Jan-16 Commisionbased

Forms ofpayments

Non-ticket Aug-17

More captive demand of customers translates into a sustainable competitive advantage



Identified & Anonymous

Registered members

v.clubmembers(discounts

club)

v.passmembers

(subscriptionservice)(1)

Credit card holders

9M visits to

volaris.com per month

3M registered

users

+500k discount

club members

+180K

cardholders

(1) Beta version

Dynamic pricing as a driving force for growth


Pricing on multiple variables: season, route, customer, time before purchase, type of market, time of purchase and type of flight


Baggage contribution per passenger (% vs. 2014) Seats contribution per passenger (% vs. 2014)

100%

114%

125%

132%

2014 2015 2016 2017 YTD

100%

117%

131%

140%

2014 2015 2016 2017 YTD

Note: Excludes the first checked baggage

34

We continue to capitalize on every moment of the customer journey

• Customized offering for individual customer segments• Credit card pre-approval online with immediate use (2018)• Personalized ancillary offering and pricing depending on customer profile

• Continuous re-optimization based on product conversions • Constant A/B testing• Increase conversion on multiple payment services

• Expand commissionable product portfolio on mobile channels (Cross Border Xpress, VIP lounge, parking, cars, etc.)

• Chatbot on Facebook messenger as a new distribution channel• Sell online real estate in emails & web as advertising spaces

Post & returnflight

Post Booking

Counter In FlightResearch & Booking

Gate

Personalization

Optimization

Penetration



35

• Non-ticket revenue:− 1st bag charge on Mexico

domestic flights with “preferential fares”

• Commission revenues:− Increase leisure customers

segments share of wallet− Improve packaging platforms and

offering

• Discount programs − Launch new subscription products

to increase recurrence of specific target segments

Non-ticket benchmark Opportunities (examples)

Moving forward, key ancillary opportunities ahead


Non-ticket revenue as a % of total revenues (LTM Jun 2017)(1)

Ancillary revenue per passenger by airline (USD):

52 121771216211650

36

33 14

(2)

(1) Volaris 1H 2017 includes cargo(2) As of 2016 full yearSource: Airlines public information

48%45%

42%

27% 26%

14% 14% 13%11% 10% 9%

Spir

it

Alle

gia

nt

Wiz

z

Ryana

ir

Vola

ris

Aero

mexic

o

Azul

Gol

Ind

iGo

Je

t B

lue

Sou

thw

est


Strong growth





Data analytics: increasing marketing effectiveness by better predicting customer behaviors

Open Rate: 29-37%

Click Through Rate: 3-6%

New campaign results

Holger Blankenstein, CCOSource: Google Analytics

Open Rate: 27%

Click Through Rate: 2%

Previous benchmark

email campaigns

Use of advanced

segmentation methods

(e.g. Recency Frequency

Monetary Model)

Targeted contentAdvanced analytics

+2-10pp

+1-4pp

Mailing segmentation

Analytics UX (user experience) Web & MobileConversational

commerce

38


User experience improvements in all digital touchpoints has increased conversion rates

Payment

step

Combos

redesign

Before Now

In Jan’17, 65% completed the payment In Aug’17, 70% completed the payment

Old Combos (until Feb’17): MXN $12 per pax New Combos (since Mar’17): MXN $18 per pax

Note: Total funnel conversion (since search of a flight to booking of 8% in Aug’17

+5pp

conversion

+$6 MXN

per pax


commerce

39


What are we looking to improve with this strategy?

• Mobile first designed user experiences are growing mobile sales and servicing

• Increase funnel conversion and ancillary sales per passenger, by redesigning booking flow

• Reduce bounce rate and increase engagement, by redesigning the homepage

Mobile first user experiences to monetize the growing share of mobile visits to our digital touchpoints

Home page Confirmation pageFlights

(preferential fare)

PassengersAdditional services


commerce

40

Mobile first approach has yielded significant results in sales and servicing



commerce

514

856

2016 2017

86%

70%

14%30%

2016 2017

Desktop Mobile

50%

44%

50%

56%

2016 2017

Desktop Mobile

Mobile channels visits Mobile transactions

Mobile channels visits (thousands)

3%

16%

2016 2017

App check-in (% of total)

Mobile check-in available in all airports where we operate

John Volaris Jr.

Note: App only (IOS and Android)

XXXXXX

41

Conversational commerce reduces cost through automated customer interactions

Chat toolsLive web chat

• >400K conversation since launch in February• Sales conversion: 23%-28%

Facebook Messenger chatbot• Advanced Q&A, booking and check-in through an

automated chatbot • In beta. full launch in late September 2017

Intelligent response24/7 Intelligent response

• Automated high quality responses for 70K-80K questions asked by volaris.com customers per month

• Response rate between 83% to 97%

Social media customer serviceConversational tool

• Solve customers issues immediately through social media

• 107K interactions in the first 2 weeks since launch

• 8K were customer issues, 6K were solved immediately

Chatbot in Facebook Messenger

Live web chat



commerce

42

José Luis SuárezChief Operating Officer

99.2%

99.7%

2016 June 2017

+0.5pp

11.8

11.3

2016 1H 2017

-4%

Running an operation focused on efficiency and cost reduction

44

Schedule completion

Fuel burn(Gallons burned per 1,000 ASM)

José Luis Suárez, COO

78%

85%

2016 1H 2017

+7pp

Self check-in

Maintenance reliability

99.4%

99.5%

2016 1H 2017

+0.1pp

87%85%

83%

81% 80% 80%

75%

74%

69%

67%

65%

63%

Vola

ris

Azul

Gol

Ind

iGo

Wiz

z A

ir

Ryana

ir

Sou

thw

est

Spir

it

Alle

gia

nt

Aero

mexic

o

Air A

sia

Je

tblu

e

Volaris’ focus on reliability is reflected in ouron-time performance index

45

Source: OAG flightview

On-time performance – OTP (July 2017)

Volaris is one of the most punctual airlines of the world

• More efficient itinerary design

- Block-time adjustment- Maintenance reschedule

• New approach on supply chain management

- Service level agreement

• Initiatives to ensure the on-time departure of our first flight of the day

Focus on customer satisfaction and reliability


18 15 126

1615

1515

20 2828

28

713

1010 10

5

56

6973

77

2015 2016 2017E 2018E

A319 A320 A320 w/sharkletsA320neo w/sharklets A321 w/sharklets A321neo w/sharklets

168

178181

187

2015 2016 2017E 2018E

46

Note: NEO stands for the Airbus new engine option; CEO stands for the Airbus current engine option(1) Net fleet after additions and returns(2) Source: Airbus

Contractual fleet obligations (number of aircraft)(1)

• A321 up-gauge

- 230 seats (up-gauge)

- ~10% CASM dilution(2)

• A320 NEO

- 6 extra seats per aircraft to 186

- Combined fuel consumption reduction by approx. 15-16% per seat(2)

- 12.3% (or 400 nm) range improvement

Volaris has a strong backlog to support our fleet up-gauge and cost per seat reduction

Average seats per aircraft


Improving our customer delivery and airport ancillary sales

47José Luis Suárez, COO

Source: VolarisVolaris check-in modules – AICM International

Former airport visual standard New airport visual standard

Source: VolarisVolaris new check-in modules – AICM International

New customer service standard

• Redesign airport modules to simulate a bus station

• Changes in the customer service staff

• Focus on mobile check-in and app use

Focus on ancillary sales

• New training approach− More emphasis on product sales during

check-in and boarding steps

• Ancillary vending machine

Our diversified network allows us to work around the infrastructural gaps to grow consistently

48

Note: As of August 2017

Volaris’ focus has been expanding operations beyond Mexico City

Guadalajara: 48 destinations

Tijuana: 32 destinations

Cancun: 20 destinations

• Cross-border express facility• 92 daily operations• Maintenance facilities

• Privileged geographic position for international traffic

• 26 international routes• 94 daily operations

• Main leisure destination

• 48 daily operations • Maintenance base


The new Mexico City Airport will be key in our long-term growth strategy

49

Source: Grupo Aeroportuario de la Ciudad de Mexico

Source: NAICMNew Mexico City Airport Project


New Mexico City Airport (2025) Volaris at Mexico City Airport (2025)

•70 million passengers

•410 thousand operations per year

•3 simultaneous runways

•164 aircraft gates

• Less restrictive slot regime allows for important operations growth

• Access to new markets and direct routes

• Enables significant passenger volume growth

• Maintenance facility improvement

Volaris’ operations are certificated with the most important seals in the airline industry

50

IATA Operational Safety Audit (IOSA) System

IATA Safety Audit for Ground Operations (ISAGO)

ISO 9001:2008 and 14001:2004


Fernando SuárezChief Financial Officer


Thanks for the recognition!

52

Institutional Investor 2017 Latin America Executive Team Awards – Transportation Small-cap

Note: In total, 445 investors and 238 sell-side and buy-side analysts voted across 16 sectors, www.institutionalinvestor.com(1) By sell-side analysts

1st 1stBest CEOEnrique Beltranena

Best Websiteir.volaris.com

2nd 2ndBest CFO(1)

Fernando SuárezBest Analyst Day

3rd 3rdBest IR Team Best IR Program

35%34% 33%

32%30% 30% 29% 29%

25% 24% 24%

20%

Wizz IndiGo Ryanair Air Asia Volaris Spirit Azul Allegiant Jet Blue Aeromexico Southwest Gol

Fernando Suárez, CFO 53

Operating revenues CAGR (2012 to 2016)

Adjusted EBITDAR margin (LTM June 2017)

25%

20% 20% 19%

15%

11%

8% 8% 7%5% 5%

4%

Azul Wizz Air IndiGo Volaris Spirit Allegiant Aeromexico Ryanair Jet Blue Gol Southwest AirAsia

Volaris has demonstrated high revenue growth and financial performance

Non-USD data converted to USD using an average of period exchange rateSource: Airlines public information

We have one of the lowest unit cost in the world, with room to improve

Non-USD data converted to USD using an average of period exchange rateSource: Airlines public information

54

Long-term unit cost advantage

CASM ex-fuel (LTM June 2017, US cents)

Fernando Suárez, CFO

3.8 4.04.4

4.9

5.7 5.96.3

7.17.7

8.1

8.9

9.9

Wizz Air Ryanair AirAsia Volaris Spirit IndiGo Allegiant Gol Aeromexico Jet Blue Southwest Azul

0.8x 2.0x1.8x1.7x1.6x1.4x1.3x0.9x0.8x 1.2x 1.2x

Continued cost reduction opportunities through fleet

up-gauge and ownership

Aeromexico

Equity43%

Other25%

Financial debt 10%

Unearnedtransportation

17%

Acc. payable 4%

PP&E and other35%

Guaranteedeposits

35%

Cash and cashequivalents

30%

Our balance sheet is strong and resilient

55

Asset composition Liabilities and Equity composition


On-balance sheet net cash position of USD 218 M

USD 1,109 M USD 1,109 M

2.8x

5.1x 5.2x 5.3x 5.5x 5.6x 5.7x

8.9x

Copa Aeromexico Volaris Azul Latam Gol Avianca Interjet

24%

15%

12%10%

9%7% 7%

5%

Volaris Aeromexico Latam Copa Gol Avianca Azul Interjet

Adj. net debt/EBITDAR (LTM June 2017)

Liquidity-cash and equivalents as a % of LTM Op. Revenues

Ample liquidity and disciplined leverage, with fleet requirements fully financed

56

Note: Non-USD figures converted to USD at June 2017 end of the period spot exchange rate $17.8973 for convenience purposes onlySource: Airlines public information

Our financial position supports our long-term growth plans

• Fully financed pre-delivery paymentsand committed financing for 2017-19sale-leasebacks

• Expected 2017 net CAPEX (USD 120 Mto USD 140 M):

• PDPs: from USD 60 to 65 million, net ofPDP reimbursements

• Major maintenance: USD 50 to 60million

• Other: from USD 10 to 15 million


USD64%

USD 24%

MXN36%

MXN76%

Assets Liabilities

USD32%

USD andUSD linked

70%

MXN68%

MXN30%

Operating Revenues Operating Expenses

57

USD denominated revenue and costs (LTM June 2017) Balance sheet - foreign exchange position ( June 2017)

Network diversification increases USD revenues


USD collections

41%

USD net monetary asset position of USD 556M

We continue to develop a FX natural hedge position and maintain a net asset-dollarized balance sheet

Fuel price protection provides costcertainty and visibility

58

Note: Asian call optionsFernando Suárez, CFO

58% 58%

50% 50%

45%

35%

3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

$ 1.44 $ 1.40 $ 1.63 $ 1.74 $ 1.78 $ 1.85

Average price per gallon (USD):

% hedged of estimated jet fuel consumption in the quarter

(1) Adjusted to rents

Committed to continue increasing shareholder value

LTM adjusted pre-tax ROIC(1)

Fernando Suárez, COO

Focused on ROIC

14%

22%

20%

15%

2014 2015 2016 LTM Jun 2017

59

Appendix

(1) Full year 2016 figures converted to USD at December end of the period spot exchange rate $20.6640 for convenience purposes only(2) 2Q 2017 figures converted to USD at June end of the period spot exchange rate $17.8973 for convenience purposes only(3) Audited financial information 2014A – 2016A

Apendix

Consolidated statements of operations summary

61

MXN millions unless otherwise stated(3) 2014A 2015A 2016A 2016A(1) 2Q 2017 2Q 2017(2)

% of total operating revenues

(USD millions) (USD millions)

Passenger 11,303 14,130 17,790 861 4,252 238 71.1

Non-ticket 2,733 4,049 5,722 277 1,730 97 28.9

Total operating revenues 14,037 18,180 23,512 1,138 5,982 334 100

Other operating income (22) (193) (497) (24) (10) (1) (0.2)

Fuel 5,364 4,721 5,741 278 1,694 95 28.3

Aircraft and engine rent expenses 2,535 3,525 5,590 271 1,378 77 23.0

Landing, take off and navigation expenses 2,066 2,595 3,272 158 1,006 56 16.8

Salaries and benefits 1,577 1,903 2,420 117 717 40 12.0

Sales, marketing and distribution expenses 817 1,089 1,413 68 387 22 6.5

Maintenance expenses 665 875 1,344 65 362 20 6.1

Other operating expenses 490 698 952 46 271 15 4.5

Depreciation and amortization 343 457 537 26 139 8 2.3

Total operating expenses 13,833 15,669 20,773 1,005 5,943 332 99.36

EBIT 204 2,510 2,740 133 39 2 0.7

Operating margin (%) 1.5 13.8 11.7 11.7 0.6 0.6

Finance income 23 47 103 5 21 1 0.4

Finance cost (32) (22) (35) (2) (22) (1) (0.4)

Exchange gain (loss), net 449 967 2,170 105 (558) (31) (9.3)

Income tax (expense) benefit (39) (1,038) (1,457) (71) - - -

Net income (loss) 605 2,464 3,519 170 (520) (29) (9.3)

Net margin (%) 4.3 13.6 15.0 15.0 8.7 8.7

Adjusted EBITDAR 3,081 6,492 8,866 429 1,556 87 26.0

Adj. EBITDAR margin (%) 22.0 35.7 37.7 37.7 26.0 26.0

EPS Basic and Diluted (Pesos) 0.60 2.43 3.48 0.17 (0.51) (0.03)

EPADS Basic and Diluted (Pesos) 5.98 24.35 34.78 1.68 (5.14) (0.29)

(1) Full year 2016 figures converted to USD at December end of the period spot exchange rate $20.6640 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 2014A – 2016A(6) Certain amounts related to prepaid income tax and guarantee deposits, presented in the consolidated statement of financial position have been reclassified in

2015A, in order to be comparative with the classification between current and non-current assets presented during 2016A(7) 2Q 2017 figures converted to USD at June end of the period spot exchange rate $17.8973 respectively, for convenience purposes only

Apendix

Consolidated statements of financial position summary

62

MXN millions unless otherwise stated(5) 2014A 2015A(6) 2016A 2016A(1) 2Q 2017 2Q 2017(7)


Cash and cash equivalents 2,265 5,157 7,071 342 5,981 334

Current guarantee deposits 545 873 1,167 56 1,097 61

Other current assets 879 1,193 3,313 160 2,826 158

Total current assets 3,689 7,224 11,551 559 9,904 553

Rotable spare parts, furniture and equipment, net 2,223 2,550 2,525 122 3,117 174

Non-current guarantee deposits 3,541 4,693 6,560 317 5,891 329

Other non-current assets 452 765 1,146 55 939 52

Total assets 9,905 15,232 21,782 1,054 19,851 1,109

Unearned transportation revenue 1,421 1,957 2,154 104 3,296 184

Short-term financial debt 823 1,371 1,051 51 1,281 72

Other short-term liabilities 2,524 3,745 4,683 227 4,414 247

Total short-term liabilities 4,768 7,073 7,888 382 8,991 502

Long-term financial debt 425 220 943 46 784 44

Other long-term liabilities 242 1,113 2,157 104 1,479 83

Total liabilities 5,435 8,407 10,988 532 11,253 629

Total equity 4,470 6,825 10,794 522 8,598 480

Total liabilities and equity 9,905 15,232 21,782 1,054 19,851 1,109

Net debt(2) (1,017) (3,566) (5,077) (246) (3,916) (219)

Adjusted debt(3) 18,990 26,268 41,125 1,990 45,146 2,522

Adjusted net debt(4) 16,725 21,111 34,053 1,648 39,165 2,188


Apendix

Consolidated statements of cash flows summary

63



Cash flow from operating activities

Income (loss) before income tax 644 3,502 4,977 241 (520) (29)

Depreciation and amortization 343 457 537 26 139 8

Guarantee deposits (695) (1,165) (1,957) (95) 210 12

Unearned transportation revenue 27 536 196 10 309 17

Changes in working capital and provisions 14 (261) (2,773) (134) (353) (20)

Net cash flows (used in) provided by operating activities 334 3,070 979 47 (215) (12)

Cash flow from investing activities

Acquisitions of rotable spare parts, furniture, equipment and intangible assets

(1,603) (1,456) (2,259) (109) (502) (28)

Pre-delivery payments reimbursements 396 670 1,733 84 - -

Proceeds from disposals of rotable spare parts, furniture and equipment

22 185 498 24 - -

Net cash flows (used in) provided by investing activities (1,185) (601) (28) (1) (502) (28)

Cash flow from financing activities

Treasury shares purchase (7) - (17) (1) - -

Proceeds from exercised stock options - 23 20 1 - -

Interest paid (23) (42) (39) (2) (24) (1)

Other finance costs (11) (40) (138) (7) - -

Payments of financial debt (400) (801) (1,531) (74) (206) (12)

Proceeds from financial debt 966 925 1,716 83 321 18

Net cash flows provided by financing activities 525 65 11 1 91 5

(Decrease) increase in cash and cash equivalents (326) 2,533 962 47 (625) (35)

Net foreign exchange differences 141 359 952 46 (232) (13)

Cash and cash equivalents at beginning of period 2,451 2,265 5,157 250 6,839 382

Cash and cash equivalents at end of period 2,265 5,157 7,071 342 5,981 334


Apendix

Adj. EBITDA and Adj. EBITDAR reconciliation

64



Net income (loss) 605 2,464 3,519 170 (520) (29)

Plus (minus):

Finance costs 32 22 35 2 22 1

Finance income (23) (47) (103) (5) (21) (1)

(Benefit)/provision for income taxes 39 1,038 1,457 71 - -

Depreciation and amortization 343 457 537 26 139 8

EBITDA 995 3,934 5,446 264 (380) (21)

Exchange (gain) loss, net (449) (967) (2,170) (105) 558 31

Adjusted EBITDA 547 2,967 3,276 159 178 10

Aircraft and engine rent expense 2,535 3,525 5,590 271 1,378 77

Adjusted EBITDAR 3,081 6,492 8,866 429 1,556 87

Thank you!

Investor Relations+52 55 52 61 64 [email protected]

ir.volaris.com

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