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Volaris

ALTA Safety Summit June 2011

Investment in Safety

Disclaimer

The information ("Confidential Information") contained in this presentation is strictly confidential and is provided by Controladora Vuela Compañía de Aviación, S.A.P.I de C.V., (d/b/a Volaris, the "Company"), 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, 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, and 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 connectiontherewith. No reliance may be placed for any purposes whatsoever on the information set forth in this presentation or on its completeness.

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Flight Plan Aviation Insurance Overview • Selectivity Increases • Exposure change over prior year • Rate change over prior year • Pressures on underwriter's income • Aviation Insurance Market overview • Analysis and 2011 Year to Date • Fleet Size and Fleet Value • Hull Rates and Liability Rates • LATAM Operating Costs and Insurance Costs Key airlines in LATAM The Investment in Safety • Safety Management – Operational System • Predictive. IATA & FAA • Common causes of Accidents in LATAM • World Class Safety Profile 3 . Proactive and Reactive • Global Safety Initiatives – ICAO.

Aviation Insurance Market Cycle 4 Source: JLT .

with an attritional estimate. Premium based on London Lead Prices. 5 Excluding Specific War Related Premium and Claims Source: JLT .Global Aviation Insurance Market Overview Claims figures based on reported losses and reserves.

Global Aviation Insurance Market Overview 6 Source: JLT .

Global Aviation Insurance Market Overview 7 Source: JLT .

Western: Built Jet Hull Losses (per million sectors) Regional Safety Performance: 30 June 2010 8 Source: IATA website .

renewals are treated very differently. The benefits of their increased size is gaining substantial buying power. • Q4 2010 suggested we might be heading back towards a hardening market • A number of factors support this direction. but the renewals so far in 2011 are not supporting this pattern. rates are looking soft A slow start • This is largely driven by increased exposure and the largest renewal of the year by far.Global Aviation Insurance Market Overview 2011 Year to date • As discussed. making it difficult to find a trend amongst a small sample • So far in 2011. the new BA/Iberia merger. • Poor risks will still have difficulty achieving favorable renewals but those larger risks with greater buying power and good loss records may keep the market in check What next? 9 .

depending on fleet types • Fleet Age is a heavy driver for higher rates • Airlines with recent catastrophic events have incremental hits that at the least double their hull premium • When within the same country/region the hull rate % is similar for all carriers. but watch out for governmental surveillance and catastrophic events – they are contagious • The younger the airline the higher the rates: experience and cero events may take you to a better position • Today. 657 aircraft • Hull Premiums depend on: • Average Fleet Value • Average Number of Aircraft • Fleet Age Conclusions: • The higher the fleet value the higher the Charge per Aircraft. underwriters penalize this even more than airlines that have had catastrophic accidents/incidents Source: JLT We all have to be smart about: • Negotiating our fleets • Preserving young fleets • Having good country-region surveillance • Improving our safety record 10 .2010 -11 Hull Rates LATAM Analysis Summary of Hull Rates: • Airlines: I picked the top 7 players in LATAM with a total of approx.

per passenger cost • There is no correlation between Number of Departures vs.2010-11 Liability Rates LATAM Analysis Summary of Liability Rates: • Airlines: I picked the top 7 players in LATAM with a total of approx. Number of Seats Conclusions: • In airlines with no catastrophic events: • There is no correlation between Number of Passengers vs. but watch out for governmental surveillance and catastrophic events – they are contagious • The younger the airline the higher the rates: experience and cero events may take you to a better position We all have to be smart about: •Having good country-region surveillance •Improving our safety record •Changing our mindset: bigger or greater does not mean cheaper •It is always about safety 11 Source: JLT . per passenger cost • Airlines with recent catastrophic events have incremental hits to both Number of Passengers and Number of Departures • When within the same country/region the hull rate % is similar for all carriers. 657 aircraft • Liability Premiums depend on: • Number of Passengers (Int’l) • Number of Departures • Avg.

Proactive and Reactive • Global Safety initiatives – ICAO.Flight Plan Aviation Insurance Overview • Selectivity Increases • Exposure change over prior year • Rate change over prior year • Pressure on underwriter's income • Aviation Insurance Market Overview • Analysis and 2011 Year to Date • Fleet Size and Fleet Value • Hull Rates and Liability Rates • LATAM Operating Costs and Insurance Costs Key airlines in LATAM The Investment in Safety • Safety Management – Operational System • Predictive. IATA & FAA • Common Causes of Accidents in LATAM • World Class Safety Profile 12 .

LATAM Facts LATAM Airlines • Total: 70 airlines • Total with International Operations: 55 airlines • Total IATA: 25 active members • Total ALTA: 26 active members Foreign Airlines Operating in the Region • Total : 35+ Major Airports • IATA-ALTA Airlines + Foreign Airlines operating in: 55 Airports Major Airports • Population in LATAM: 500 Million people 13 Source: JLT .

Proactive and Reactive • Global Safety initiatives – ICAO. IATA & FAA • Common Causes of Accidents in LATAM • World Class Safety Profile 14 .Flight Plan Aviation Insurance Overview • Selectivity Increases • Exposure change over prior year • Rate change over prior year • Pressure on underwriter's income • Aviation Insurance Market Overview • Analysis and 2011 Year to Date • Fleet Size and Fleet Value • Hull Rates and Liability Rates • LATAM Operating Costs and Insurance Costs Key airlines in LATAM The Investment in Safety • Safety Management – Operational System • Predictive.

Investment in Safety Safety Management Operational System = + Principles Framework Design = + Implementation • Predict system´s deficiencies before errors occur • Identify and correct system´s deficiencies by analysis of safety occurrences + Processes Measures 15 .

like management approach to the Safety of Flight Operations Predictive Proactive Reactive 16 . Proactive. Reactive A business.Investment in Safety: Predictive.

ICAO: Safety Program Key Objectives Aerodromes. Air Routes and Ground Aids (AGA) section Flight Safety Information Exchange (FISX) Flight Safety (FLS) Section Integrated Safety Management (ISM) Aviation Medicine (MED) Section Flight Safety and Human Factors RASG-PA 17 Source: ICAO website .

including new aviation technology Developing and carrying out programs to control aircraft noise and other environmental effects of civil aviation Researching and developing the National Airspace System and civil aeronautics Developing and operating a system of air traffic control and navigation for both civil and military aircraft Aviation Safety Action Program 18 Source: FAA website . commercial space transportation Encouraging and developing civil aeronautics.FAA: Safety Initiatives Safety: The Foundation of Everything We Do Regulating civil aviation to promote safety FAA’s major responsibilities: under the broad umbrella of safety and efficiency we have several major roles: Regulating U.S.

leads and serves the airline industry Source: IATA website 19 .IATA: Six-Point Safety Program The IATA Six-Point Safety Program is a comprehensive approach to enhancing operational safety Auditing Safety in Infrastructure Maintenance Safety in Data Management and Analysis Safety Management System Operations IATA represents.

Eight Most Common Causes of Accidents in LATAM Ground Damage Undershooting Control Flight into Terrain Loss of Control In-flight Runway Excursion Gear-up Landing / Gear Collapse In-flight Damage Hard Landing 68% of Hull losses happen in these phases 20 Source: IATA Safety report .

Governmental Investment Needs in LATAM Communications • Radio coverage VHF/HF • Radio communications Infrastructure • Runway markings • Navigation aids • Runway surface ATS • Standard phraseology • Lack of Procedures (PBN/RNAV) • ATC/ACC coordination AIS • NOTAM & AIP publications • Flight Plan filing Other • Runway surface • Radar coverage 21 Source: IATA .

Top of descent Improve our Government Agencies and their capabilities to produce real surveillance Aviation Insurance The investment in Safety Pressure on underwriters' income is coming Key Airlines in LATAM Spend our money in a smart way: on operations and not on insurance 22 .

STEADES: Safety Trend Evaluation Analysis and Data Exchange System. AQD: Aviation Quality Database.World Class Safety Performance Profile Integrated Airline Management System (i-AMS) Use of technology to enhance safety: FOQA. IOSA: International Operational Safety Audit. STEADES Runway Safety Program IOSA Certification Controlled Flight Into Terrain (CFIT) Program Line Operations Safety Audit (LOSA) Foreign Object Damage (FOD) Program Crew Resource Management (CRM) Program Bird Strike Program and ISAGO Program Loss of Control In-flight (LOC) Program 23 Note: FOQA: Flight Operations Quality Assurance. ISAGO: IATA Safety Audit Program for Ground Operations . AQD.

The Volaris Way Above the wing Investment in Safety • A stated commitment to safety is necessary! • The commitment must be supported by appropriate resources: • Technology and Equipment. • Training and Expertise.DGAC compliance • IATA / ALTA initiatives • Industry best practices 24 . • Policies and Systems Below the wing World Class Safety Profile • A stated commitment to a World Class Safety Performance Profile! • The commitment must be supported by appropriate resources: • ICAO safety programs • • FAA .

Thank you! 25 ..