Volaris Investor Day New York Stock Exchange September 13, 2017 - - PowerPoint PPT Presentation

Volaris Investor Day

New York Stock Exchange September 13, 2017

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• therwise arising in connection therewith. No reliance may be placed for any purposes whatsoever on the information set

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• r 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: Volaris Mexico City International Airport (AICM)

Enrique Beltranena

Chief 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 destinations across 6 countries

Enrique Beltranena, CEO

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

• f 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),

• ne of the lowest in the world

3,505

16,088

2008 LTM Aug 17 28

168

2008 Aug 17

Enrique Beltranena, CEO

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 5.6x 10.0x

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 FY Note: non-USD data converted to USD using an average of period exchange rate Source: 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

12.8

12.2 8.8 10.7

Volaris Aeromexico Interjet Viva

180

119 136 180

Volaris Aeromexico Interjet Viva

Enrique Beltranena, CEO

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

Volaris has a strong position to compete in the Mexican market

Mexican airline market

#4 13% #3 21%

27%

#1 36%

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

Enrique Beltranena, CEO

10

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

Foreign exchange rate (USD-MEX)

1.23 1.56

1.82 1.74

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

• peration 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

Enrique Beltranena, CEO

11

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 and Caribbean 2017E 2016 2018E 2017E 2016 2018E 2017E 2016 2018E 117 117 118 119 119 120 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 (Unemployment rate %) Unemployment rate Consumer confidence (Consumer confidence index 2010=100)

Enrique Beltranena, CEO

12 (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

Enrique Beltranena, CEO

13 (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 5 10

Middle class as a % of total population

+100 Male Female 2030 estimate Million inhabitants 0-19 years 20-64 years 65+ years 20 60 40 80 20 60 40 80 +100

More than 50M potential passengers

+17pp

0.70 to 0.90 0.70 to 0.90

2.55 0.91 0.66 0.47 0.45 0.42 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

Enrique Beltranena, CEO

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 industry cost leadership Solid financial profile Revenue initiatives for 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 Blankenstein

Chief 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

• perating

costs “Clean” low base fares More 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 fares

1

Build a diverse and defensible network

2

Capitalize on ancillary opportunities

3

Exploit digital efforts

4

Holger Blankenstein, CCO

18

Strong growth

Stimulate demand through low fares

1

Build a diverse and defensible network

2

Capitalize on ancillary opportunities

3

Exploit digital efforts

4

Holger Blankenstein, CCO

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

19

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 flyers 22% considered the bus before booking on Volaris(2)

1 2 3 4 5 50 100 150 200 250 January 2012 June 2017 O&D passengers (thousands) Route average fare (USD)

October 2013 Volaris’ non stop service begins

3 6 9 12 15 100 200 300 400 500 January 2012 June 2017 O&D passengers (thousands) Route average fare (USD)

July 2014 Volaris’ non stop service begins

Holger Blankenstein, CCO

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 sum Source: 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…

Holger Blankenstein, CCO

We are now bringing the Volaris Effect to Central 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 approvals Source: 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 Rica El Salvador Guatemala Mexico Nicaragua

• 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

Holger Blankenstein, CCO

22 (1) UBS analysis related to LATAM transportation Source: 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 0.5 0.4 0.3 0.2 0.1 2.5 0.9 0.7 0.5 0.5 0.4 0.3 0.2 0.1

0.7 to 0.9 0.7 to 0.9 United States Chile Colombia Peru Brazil Mexico Argentina Central America Paraguay 2015 2016 Market potential

Holger Blankenstein, CCO

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 50M incremental passengers

(2)

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

Holger Blankenstein, CCO

24

Strong growth

Stimulate demand through low fares

1

Build a diverse and defensible network

2

Capitalize on ancillary opportunities

3

Exploit digital efforts

4

Holger Blankenstein, CCO

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

Last investor day (1) August 2017

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 Domestic Volaris Costa Rica

Diverse and defensible network

Holger Blankenstein, CCO

Volaris has a strong and solid network with efficient operations

26

Low frequencies, maximum footprint…

(Frequencies per route per day)

… and more revenue

• pportunities every day

(Seats offered per day, thousands)

… with a better asset utilization

(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):

+ =

Exclusive 23% 1 competitor 23% LCC 21% 2 competitors 14% Hybrid 29% 3 or more competitors 40% Legacy 50% Other routes 64% Top 10 routes 36%

Holger Blankenstein, CCO

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 America Source: 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 exclusive Strong presence in diverse Mexican cities

Diverse geography (3) Guadalajara 33% Mexico City 32% Tijuana 20% Cancun 5% Other 10%

Holger Blankenstein, CCO

We have a proven track record in developing new markets

28 (1) Routes opened by Volaris without competition in that time Note: 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 Central America - USA USA Domestic CAM intra and South America ULCC Legacy / Hybrid Holger Blankenstein, CCO

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 2017 Note: 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 America

More than 75 routes 50 to 75 routes Less than 50 routes

USA Canada Central America Mexico Caribbean

Holger Blankenstein, CCO

30

Strong growth

Stimulate demand through low fares

1

Build a diverse and defensible network

2

Capitalize on ancillary opportunities

3

Exploit digital efforts

4

150 200 250 300 350 400 450

2Q 2017 1Q 2012

CAGR 2012-2016 = 17%

Holger Blankenstein, CCO

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 $1,730M Growth: 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

• ption
• Forms of Payment:

− Multi-currency processor − Deferred payment plans

Holger Blankenstein, CCO

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 Commision based Forms of payments Non-ticket Aug-17

More captive demand of customers translates into a sustainable competitive advantage

Holger Blankenstein, CCO

33

More products Dynamic pricing Better presence

Identified & Anonymous Registered members v.club members

(discounts club)

v.pass members

(subscription service)(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

Holger Blankenstein, CCO

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

More products Dynamic pricing Better presence

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 & return flight Post Booking Counter In Flight Research & Booking Gate

Personalization Optimization Penetration

Holger Blankenstein, CCO

More products Dynamic pricing Better presence

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

• ffering
• Discount programs

− Launch new subscription products to increase recurrence of specific target segments Non-ticket benchmark Opportunities (examples)

Moving forward, key ancillary opportunities ahead

Holger Blankenstein, CCO

Non-ticket revenue as a % of total revenues (LTM Jun 2017)(1) Ancillary revenue per passenger by airline (USD):

52 12 17 7 12 16

21

16 50

36

33 14

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

48% 45% 42% 27% 26% 14% 14% 13% 11% 10% 9% Spirit Allegiant Wizz Ryanair Volaris Aeromexico Azul Gol IndiGo Jet Blue Southwest

Holger Blankenstein, CCO

37

Strong growth

Stimulate demand through low fares

1

Build a diverse and defensible network

2

Capitalize on ancillary opportunities

3

Exploit digital efforts

4

Data analytics: increasing marketing effectiveness by better predicting customer behaviors

Open Rate: 29-37% Click Through Rate: 3-6%

New campaign results

Holger Blankenstein, CCO

Source: 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 content Advanced analytics

+2-10pp +1-4pp

Mailing segmentation Analytics UX (user experience) Web & Mobile Conversational commerce

38

Holger Blankenstein, CCO

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

Analytics UX (user experience) Web & Mobile Conversational commerce

39

Holger Blankenstein, CCO

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 page Flights (preferential fare) Passengers Additional services

Analytics UX (user experience) Web & Mobile Conversational commerce

40

Mobile first approach has yielded significant results in sales and servicing

Holger Blankenstein, CCO

Analytics UX (user experience) Web & Mobile Conversational 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 tools

Live 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 response

24/7 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 service

Conversational 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

Holger Blankenstein, CCO

Analytics UX (user experience) Web & Mobile Conversational commerce

42

José Luis Suárez

Chief 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% Volaris Azul Gol IndiGo Wizz Air Ryanair Southwest Spirit Allegiant Aeromexico Air Asia Jetblue

Volaris’ focus on reliability is reflected in our

• n-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

José Luis Suárez, COO

18 15 12 6 16 15 15 15 20 28 28 28 7 13 10 10 10 5

56 69 73 77

2015 2016 2017E 2018E

A319 A320 A320 w/sharklets A320neo w/sharklets A321 w/sharklets A321neo w/sharklets

168 178 181 187 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

José Luis Suárez, COO

Improving our customer delivery and airport ancillary sales

47

José Luis Suárez, COO

Source: Volaris Volaris check-in modules – AICM International

Former airport visual standard New airport visual standard

Source: Volaris Volaris 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

José Luis Suárez, COO

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

49 Source: Grupo Aeroportuario de la Ciudad de Mexico

Source: NAICM New Mexico City Airport Project

José Luis Suárez, COO

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

José Luis Suárez, COO

Fernando Suárez

Chief Financial Officer

Enrique Beltranena, CEO

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 1st

Best CEO

Enrique Beltranena

Best Website

ir.volaris.com

2nd 2nd

Best CFO

(1)

Fernando Suárez

Best Analyst Day

3rd 3rd

Best 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 rate Source: 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 rate Source: Airlines public information 54

Long-term unit cost advantage

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

Fernando Suárez, CFO

3.8 4.0 4.4

4.9

5.7 5.9 6.3 7.1 7.7 8.1 8.9 9.9

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

0.8x 2.0x 1.8x 1.7x 1.6x 1.4x 1.3x 0.9x 0.8x 1.2x 1.2x

Continued cost reduction

• pportunities through fleet

up-gauge and ownership

Aeromexico

Equity 43% Other 25% Financial debt 10% Unearned transportation 17%

• Acc. payable 4%

PP&E and other 35% Guarantee deposits 35% Cash and cash equivalents 30%

Our balance sheet is strong and resilient

55

Asset composition Liabilities and Equity composition

Fernando Suárez, CFO

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 only Source: Airlines public information

Our financial position supports our long-term growth plans

• Fully financed pre-delivery payments

and committed financing for 2017-19 sale-leasebacks

• Expected 2017 net CAPEX (USD 120 M

to USD 140 M):

• PDPs: from USD 60 to 65 million, net of

PDP reimbursements

• Major maintenance: USD 50 to 60

million

• Other: from USD 10 to 15 million

Fernando Suárez, CFO

USD 64% USD 24%

MXN 36% MXN 76%

Assets Liabilities USD 32% USD and USD linked 70%

MXN 68% MXN 30%

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

Fernando Suárez, CFO

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 cost certainty and visibility

58 Note: Asian call options

Fernando 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

• perating

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 99.3

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)

(USD millions) (USD millions)

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

(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 cash flows summary

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

(USD millions) (USD millions)

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

(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

• Adj. EBITDA and Adj. EBITDAR reconciliation

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

(USD millions) (USD millions)

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 44 ir@volaris.com ir.volaris.com