Glossary

A

AFAC: Mexican Federal Civil Aviation Agency (Agencia Federal de Aviación Civil).

Airbus: Airbus S.A.S.

Ambassador: Volaris’ employee.

Available seat miles or “ASMs”: Number of seats available for passengers multiplied by the number of miles the seats are flown.

Average daily aircraft utilization: Flight hours or block hours, as applicable, divided by number of days in the period divided by average aircraft in the period.

Average economic fuel cost per gallon: Total fuel expense net of hedging effect, divided by the total number of fuel gallons consumed.

Average passenger revenue per booked passenger: Total passenger revenue divided by booked passengers.

Average stage length: The average number of miles flown per passenger flight segment.

B

Block hours: Number of hours during which the aircraft is in revenue service, measured from the time it leaves the gate until the time it arrives to the gate at destination.

Booked passengers: The total number of passengers booked on all flight segments.

C

CASM: Total operating expenses, net divided by ASMs.

CASM ex fuel: Total operating expenses, net excluding fuel expense divided by ASMs.

CBP: U.S.: Customs and Border Protection.

CEO: Current Engine Option.

D

DHS: U.S. Department of Homeland Security.

DOT: U.S. Department of Transportation.

E

EBITDA: Earnings before interest, taxes, depreciation and amortization.

EBITDAR: Earnings before interest, taxes, depreciation, amortization and aircraft engine varible lease expenses.

EPA: U.S. Environmental Protection Agency.

F

FAA: U.S. Federal Aviation Administration.

FCC: U.S. Federal Communications Commission.

Flight hours: Number of hours during which the aircraft is in revenue service, measured from the time it takes off until the time it lands at the destination.

I

IATA: International Air Transport Association.

INEGI: Mexican Institute of Statistics and Geography (Instituto Nacional de Estadística y Geografía).

L

Latin America: Collectively, Mexico, the Caribbean, Central America and South America.

Legacy carrier: An airline that typically offers scheduled flights to major domestic and international routes (directly or through membership in an alliance) and serves numerous smaller cities, operates mainly through a “hub-and-spoke” network route system and has higher cost structures than low-cost carriers due to higher labor costs, flight crew and aircraft scheduling inefficiencies, concentration of operations in higher cost airports and multiple classes of services.

Load factor: RPMs divided by ASMs and expressed as a percentage.

Low-cost carrier: An airline that typically flies direct, point-to-point flights, often serves major markets through secondary, lower cost airports in the same regions as major population centers, provides a single class of service, thereby increasing the number of seats on each flight and avoiding the significant and incremental cost of offering premium-class services, and tends to operate fleets with only one or two aircraft families, in order to maximize the utilization of flight crews across the fleet, improve aircraft scheduling efficiency and flexibility and minimize inventory and aircraft maintenance costs.

N

NEO: New Engine Option.

O

On-time: Flights arriving within 15 minutes of the scheduled arrival time.

P

Passenger flight segments: The total number of passengers flown on all flight segments.

R

RASM: Passenger revenue divided by ASMs.

Revenue passenger miles (RPMs): Number of seats flown by passengers multiplied by the nuember of miles the seats are flown.

S

SCT: Mexican Infrastructure Communications and Transportation Ministry (Secretaría de Infraestructura, Comunicaciones y Transportes).

T

Total operating revenue per ASM (TRASM): Total revenue divided by ASMs.

TSA: U.S. Transportation Security Administration.

U

Ultra-low-cost carrier (ULCC): An airline that belongs to a subset of low-cost carriers, which distinguishes itself by using a business model with an intense focus on low-cost, efficient asset utilization, unbundled revenue sources aside from the base fares with multiple products and services offered for additional fees. In the United States, Frontier, and Spirit Airlines, Inc. define themselves as ULCCs and Volaris and VivaAerobus follow the ULCC model in Mexico.

U.S.-based publicly traded target market competitors: Alaska Air, American, Delta, Frontier, Spirit, JetBlue, Southwest and United.

V

VFR: Passengers who are visiting friends and relatives.