United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-K

[X]  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the fiscal year ended December 31, 2004.

[ ]  Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
     Exchange   Act   of   1934   for   the   Transition   Period   From ____
     to ____.


                           Commission file number 000-21642
                                  ATA Holdings Corp.

                 (Exact name of registrant as specified in its charter)
                     Indiana                               35-1617970
 ----------------------------------------         -----------------------------
      (State or other jurisdiction of                   (I.R.S.  Employer
       incorporation or organization)                    Identification No.)

       7337 West Washington Street
             Indianapolis, Indiana                          46231
------------------------------------             ------------------------------
  (Address of principal executive offices)                (Zip Code)

                                 (317) 282-4000

              (Registrant's telephone number, including area code)

  Securities registered pursuant to Section 12(b) of the Act:

         None

  Securities registered pursuant to Section 12(g) of the Act:

         Title of each class
         Common Stock, Without Par Value
         -------------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such shorter  periods that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No ______

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [ X ]

The aggregate  market value of shares of the  registrant's  Common Stock held by
non-affiliates  of the  registrant  (based on closing  price of shares of Common
Stock on the NASDAQ  National Market on June 30, 2004) was  approximately  $19.0
million.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practical date.

Common Stock,  Without Par Value - 11,824,287 shares  outstanding as of February
28, 2005.

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K into which the document is incorporated:  (1) any annual report
to  security  holders;  (2) any  proxy  or  information  statement;  and (3) any
prospectus  filed  pursuant  to Rule 424(b) or (c) under the  Securities  Act of
1933.
None

<PAGE>

                                TABLE OF CONTENTS
                         FORM 10-K ANNUAL REPORT - 2004
                       ATA HOLDINGS CORP. AND SUBSIDIARIES

                                                                        Page #
PART I
         Item 1.
                     Business.................................................3
         Item 2.     Properties..............................................12
         Item 3.     Legal
                     Proceedings.............................................14
         Item 4.     Submission of Matters to a Vote of Security
                     Holders.................................................15
PART II
         Item 5.     Market for the Registrant's Common Stock and Related Stock
                     Matters and Issuer  Purchase of Securities..............16
         Item 6.     Selected Consolidated Financial
                     Data....................................................17
         Item 7.     Management's Discussion and Analysis of Financial Condition
                     and Results of Operations...............................18
         Item 7A.    Quantitative and Qualitative Disclosures About Market
                     Risk....................................................47
         Item 8.     Financial Statements and Supplementary Data.............49
         Item 9.     Changes in and Disagreements with Accountants on Accounting
                     and Financial Disclosure................................78
         Item 9A.    Controls and
                     Procedures..............................................78
         Item 9B.    Other
                     Information.............................................79
PART III
         Item 10.    Directors and Officers of the Registrant................80
         Item 11.    Executive Compensation..................................83
         Item 12.    Security Ownership of Certain Beneficial Owners ........86
         Item 13.    Certain Relationships and Related Transactions..........87
         Item 14.    Principal Accountant Fees and Services..................89
PART IV
         Item 15.  Exhibits and Financial Statement Schedules................90

                                       2
<PAGE>

PART I

Item 1.   Business

Company Overview

ATA Holdings Corp. (the "Company") owns ATA Airlines,  Inc. ("ATA"), a major air
carrier in the United States.  The Company provides  low-cost  scheduled airline
services   and   operates   one  of  the   largest   (based  on  2004   revenue)
military/commercial  air transport charter  businesses in the United States. The
Company was  incorporated in Indiana in 1984. As discussed in more detail below,
on  October  26,  2004  (the  "Petition  Date"),  the  Company  and seven of its
subsidiaries,  including  ATA  (collectively  the  "Debtors"),  filed  voluntary
petitions for relief (the "Filing") under Chapter 11 of the U.S. Bankruptcy Code
in the  U.S.  Bankruptcy  Court  for  the  Southern  District  of  Indiana  (the
"Bankruptcy Court").

Since the Filing,  the Company has been  revising its business  plans to provide
the basis for a plan of reorganization to be proposed in the Chapter 11 cases of
the Debtors.  Key objectives  incorporated in the revised business plans,  which
are  continuing  to be refined and  changed in  response  to market  conditions,
include:

o    focusing on scheduled service from the  Chicago-Midway  Airport to maximize
     the  benefit  of  the  recently  established   codesharing  agreement  with
     Southwest Airlines Co. ("Southwest");

o    maintaining and possibly expanding scheduled service to Hawaii,  which also
     benefits from the codesharing agreement;

o    maintaining  ATA's  position as a leading  provider  of military  passenger
     charter services;

o    "regauging"  and reducing ATA's fleet of aircraft by at least  one-third to
     improve efficiencies;

o    reducing operating costs, including management and other employee expenses;
     and

o    rejecting burdensome contracts to reduce associated costs.

The Company and ATA have taken a number of actions  necessary  to achieve  these
objectives,  develop a viable plan of reorganization and emerge from the Chapter
11 cases. These actions include:

o    assigning  ATA's  leasehold  interest in six gates and a hangar facility at
     Chicago-Midway to Southwest for $40.0 million;

o    establishing a codesharing  agreement with Southwest for air transportation
     service to and from Chicago-Midway and other airports;

o    obtaining from Southwest $47.0 million in  debtor-in-possession  financing,
     as well as a term financing commitment in the same amount to refinance this
     debtor-in-possession   financing   upon   confirmation   of   a   plan   of
     reorganization acceptable to Southwest;

o    significantly  reducing  scheduled service from  Indianapolis,  Indiana,  a
     market  which  has   experienced   severe  and  on-going  price  and  route
     competition;

                                       3
<PAGE>

o    reaching agreements with ATA's aircraft and aircraft engine lessors for the
     rejection of leases and return of non-economic aircraft and engines;

o    changing executive  management,  including appointing a new Chief Executive
     Officer for ATA;

o    temporarily  amending  collective  bargaining  agreements  with the  unions
     representing the flight attendants and cockpit crews to achieve significant
     cost  savings,   and  continuing   negotiations  to  obtain  extension  and
     enhancement of these savings; and

o    obtaining  an extension  of the  exclusive  period in which the Debtors may
     file a plan of reorganization until May 24, 2005.

As a result,  the  discussion  of the business and  financial  activities of the
Company and its  subsidiaries for 2004 and earlier periods in this report do not
reflect the current  business and  financial  activities  of the Company and its
subsidiaries  or those that would be expected upon emergence of the Debtors from
the Chapter 11 cases.

The following  table  summarizes the Company's  revenue  sources for the periods
indicated:

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                 2004             2003           2002            2001           2000
                                             ------------   ------------   -----------       -----------   ----------
                                                                         (Dollars in Millions)
<S>                                          <C>            <C>            <C>               <C>           <C>
Scheduled Service                            $    1,099.9   $    1,085.4   $     886.6       $     820.7   $    753.3
                                             ------------   ------------   -----------       -----------   ----------

Military Charter                                    326.9          296.9         177.9             167.5        188.6
Commercial Charter                                   32.0           69.3         131.3             192.2        246.7
                                             ------------   ------------   -----------       -----------   ----------
     Total Charter                                  358.9          366.2         309.2             359.7        435.3
                                             ------------   ------------   -----------       -----------   ----------
Other                                                73.8           66.9          81.6              95.1        103.0
                                             ------------   ------------   -----------       -----------   ----------
     Total                                   $    1,532.6   $    1,518.5   $   1,277.4       $   1,275.5   $  1,291.6
                                             ============   ============   ===========       ===========   ==========

Percentage of Consolidated Revenues:
   Scheduled Service                                 71.8%          71.5%         69.4%             64.3%        58.3%
   Military Charter                                  21.3%          19.6%         13.9%             13.1%        14.6%
   Commercial Charter                                 2.1%           4.6%         10.3%             15.1%        19.1%
</TABLE>

Scheduled Service
ATA provides  scheduled airline services to major metropolitan
markets,   primarily  from  the  Chicago-Midway  Airport  and  the  Indianapolis
International  Airport.  ATA also provides scheduled service to Hawaii and other
exotic leisure destinations. In addition, beginning February 4, 2005, ATA offers
its  customers  additional  destinations  in the  United  States  through  a new
codeshare agreement with Southwest.  ATA announced  significant route reductions
from Indianapolis  International Airport in early 2005, most of which reductions
of service are  effective as of April 11, 2005,  in response to the  competitive
pricing environment at that airport.

Approximately 64.8% of the Company's scheduled service capacity was generated by
flights either originating or terminating at Chicago-Midway in 2004, as compared
to 67.1% in 2003. The Hawaiian  market  generated  approximately  14.9% of total
scheduled service capacity in 2004, as compared to 12.9% in 2003.  Another 14.7%
of total scheduled service capacity was generated in the Indianapolis  market in
2004, as compared to 13.3% in 2003.

                                       4
<PAGE>

Included in ATA's jet scheduled service are bulk-seat sales agreements with tour
operators.  Under these arrangements,  a tour operator purchases a large portion
of the seats on an aircraft and assumes responsibility for distribution of those
seats.  Under  bulk-seat  sales  arrangements,   ATA  is  obligated  to  provide
transportation to the tour operators' customers even in the event of non-payment
to  ATA  by  tour   operators.   To  reduce  its  credit  exposure  under  these
arrangements,  ATA requires a letter of credit or prepayment of a portion of the
contract price.

Military/Government Charter Service
ATA has provided  passenger airline services to the U.S. military since 1983 and
is currently one of the largest  commercial airline providers of these services.
The Company believes that,  because these operations are generally less seasonal
than scheduled service and the military contract provides full reimbursement for
actual fuel expenses, they have a stabilizing impact on ATA's operating margins.
The U.S.  Government awards one-year contracts for its military charter business
and  pre-negotiates  contract  prices for each type of  aircraft  that a carrier
makes available. Each contract year extends from October 1 through September 30.
ATA  primarily  uses its  fleet of four  Lockheed  L-1011-500  aircraft  and one
Lockheed L-1011-100  aircraft to support this military business.  These aircraft
have a range and seating configuration  preferred by the military. ATA also uses
several Boeing 757 aircraft in its military charter services.  In the event that
ATA retires the L1011-500  fleet,  it will need to obtain  suitable  replacement
aircraft to fully satisfy the  requirements  of the military.  The allocation of
U.S. military air transportation  contracts is based upon the number and type of
aircraft a carrier makes available for use to the military, among other factors.

ATA is subject to biennial  inspections  by the U.S.  Department of Defense as a
condition of retaining its eligibility to perform military charter flights.  The
last such inspection was successfully completed in November 2003.

Commercial Charter Service
ATA provides  commercial  passenger charter airline services,  primarily through
U.S. tour operators.  Under these contracts for seat sales,  fuel cost increases
over the agreed upon target  price in the contract are passed on the to the tour
operator.  Other  scheduled  carriers  compete  with  ATA's  commercial  charter
operations  by  wholesaling  discounted  seats  on  scheduled  flights  to  tour
operators,  promoting  packaged  tours  to  travel  agents  for  sale to  retail
customers and selling discounted, airfare-only products to the public.

Commercial charter revenue has declined  significantly since 2000, primarily due
to the retirement of certain  Lockheed  L-1011 and Boeing 727-200  aircraft that
ATA had traditionally  used in commercial  charter flying.  ATA's Boeing 737-800
and  757-300   aircraft  are  economically   disadvantaged   when  used  in  the
lower-utilization  charter business due to their higher fixed-ownership cost. In
addition,  decreases in general airline fare levels throughout the United States
since 2000 have reduced the opportunity to profitably operate commercial charter
flights.

The Chapter 11 Filing

Chapter 11  Reorganization.  On the Petition  Date,  each of the Debtors filed a
voluntary  petition for relief under Chapter 11 of the U.S.  Bankruptcy  Code in
the Bankruptcy Court.

The   Debtors   continue   to   operate   their    respective    businesses   as
"debtors-in-possession"  under the  jurisdiction of the Bankruptcy  Court and in
accordance  with the applicable  provisions of the Bankruptcy  Code, the Federal
Rules  of  the  Bankruptcy   Procedure  and  applicable   court  orders.   As  a
debtor-in-possession,  each of the Debtors is authorized under the provisions of
Chapter 11 to continue to operate as an ongoing business,  but may not engage in
transactions outside the ordinary course of business without prior approval from
the Bankruptcy  Court.  On October 29, 2004,  the  Bankruptcy  Court granted the
Debtors  certain  first day motions for various  reliefs  designed to  stabilize
operations and maintain  relationships  with customers,  vendors,  employees and

                                       5
<PAGE>

others.  The first day motions  granted  authority to the  Debtors,  among other
things, to (a) pay pre-petition and post-petition  employee wages,  salaries and
benefits and other employee obligations;  (b) honor customer programs, including
the frequent  flyer program and ticketing  program;  and (c) honor  pre-petition
obligations related to interline, clearinghouse, and other similar agreements.

On October 29, 2004 the Bankruptcy  Court entered an interim order which permits
ATA to use  the  unrestricted  cash,  eligible  accounts  receivable  and  other
collateral  pledged  to secure  ATA's  secured  term loan (the "ATSB  Loan"),  a
significant   portion  of  which  is  guaranteed   by  the  Air   Transportation
Stabilization Board (the "ATSB"). The interim order has the effect of giving the
ATSB Loan lenders a replacement  lien on unrestricted  cash and all other assets
of the  Debtors to secure  diminution  of  pre-petition  cash  collateral.  This
interim order has been extended for successive short periods,  currently through
April 7, 2005, and requires  compliance by the Debtors with certain terms,  such
as the  maintenance of minimum cash collateral  balances and periodic  reporting
requirements.  Further  extensions cannot be assured,  and a failure to maintain
the right to use cash collateral would be material and adverse to the ability of
the Debtors to reorganize under Chapter 11 of the U. S. Bankruptcy Code.

As required by the  Bankruptcy  Code, the United States Trustee has appointed an
official  committee of  unsecured  creditors  (the  "Official  Committee").  The
Official Committee and its legal representatives have a right to be heard on all
matters that come before the  Bankruptcy  Court in each of the  Debtor's  cases.
There can be no assurance that the Official  Committee will support the Debtors'
positions  in the  reorganization  cases  or any  plan of  reorganization,  once
proposed, and disagreements between the Debtors and the Official Committee could
protract the reorganization  cases, could negatively impact the Debtors' ability
to operate during the Chapter 11 cases,  and could delay or prevent the Debtors'
emergence from Chapter 11.

The Filing triggered defaults on substantially all debt and lease obligations of
the Debtors. Subject to certain exceptions under the Bankruptcy Code, the Filing
automatically   enjoined,  or  stayed,  the  continuation  of  any  judicial  or
administrative  proceedings  or  other  actions  against  the  Debtors  or their
property to recover on,  collect or secure a claim arising prior to the Petition
Date. For example,  creditor  actions to obtain  possession of property from the
Debtors,  or to create,  perfect or enforce any lien against the property of the
Debtors,  or to collect on or otherwise exercise rights or remedies with respect
to a pre-petition  claim,  are enjoined  unless and until the  Bankruptcy  Court
lifts the automatic stay or the Bankruptcy Code otherwise provides.

Notwithstanding the above general discussion of the automatic stay, the Debtors'
right to  retain  and  operate  certain  aircraft,  aircraft  engines  and other
equipment  defined in  section  1110 of the  Bankruptcy  Code that are leased or
subject to a security  interest or  conditional  sale contract are  specifically
governed by section  1110 of the  Bankruptcy  Code.  That section  provides,  in
relevant  part,  that unless the  Debtors,  prior to 60 days after the  Petition
Date, agree to perform all obligations under the lease,  security agreement,  or
conditional sale contract and cure all defaults  thereunder (other than defaults
constituting  a breach of  provisions  relating  to the filing of the Chapter 11
cases,  the Debtors'  insolvency  or other  financial  condition of the Debtors)
within the time  specified  in section  1110,  the right of the lessor,  secured
party or conditional  vendor to take  possession of such equipment in compliance
with the  provisions  of the lease,  security  agreement,  or  conditional  sale
contract  and to enforce any of its other  rights or remedies  under such lease,
security  agreement,  or  conditional  sale contract is not limited or otherwise
affected by the automatic stay, by any other  provision of the Bankruptcy  Code,
or by any power of the Bankruptcy Court.

The section 1110  deadline for the Debtors was December 26, 2004. As of December
31,  2004,  the Company  operated 82 aircraft,  including 76 aircraft  that were
financed with  operating  leases.  As of March 25, 2005,  with regards to the 76
leased  aircraft,  the Company has  returned  22 of these  aircraft  and related

                                       6
<PAGE>

engines to the lessor. The Company expects to return 28 additional  aircraft and
related  engines to the lessor  between March 31, 2005 and January 25, 2006. The
Company has  renegotiated  long-term  rates on 10 aircraft and related  engines.
Finally,  the Company has elected to cure  existing  defaults  and is paying the
contract rates  required  under the Bankruptcy  Code with respect to 16 aircraft
and related  engines.  The Company  expects  these changes in fleet to result in
additional  changes to amounts  reported in the December 31, 2004 balance  sheet
associated with the aircraft,  including prepaid aircraft rent, and to result in
additional significant aircraft rejection charges in 2005.

Under section 365 of the  Bankruptcy  Code,  the Debtors may assume,  assume and
assign, or reject certain executory  contracts and unexpired leases,  including,
without  limitation,  leases of real  property,  aircraft and aircraft  engines,
subject to the approval of the  Bankruptcy  Court and certain other  conditions.
Generally,  the rejection of an executory lease or unexpired lease is treated as
a  pre-petition  breach of the lease or  contract in  question  and,  subject to
certain exceptions,  relieves the Debtors of performing future obligations under
such lease or  contract  but  entitles  the lessor or contract  counterparty  to
pre-petition  general unsecured claims for damages caused by such deemed breach.
The  lessor or  contract  counterparty  may file a claim  against  the  relevant
Debtor's  estate for such damages.  The  assumption of an executory  contract or
unexpired lease generally  requires a cure of most existing  defaults under such
executory  contract or unexpired  lease.  The Company  expects that  liabilities
subject to  compromise  will  arise in the  future as a result of damage  claims
resulting from the rejection of certain executory contracts and unexpired leases
by the Debtors.  However,  the Company  expects that the  assumption  of certain
executory  contracts and  unexpired  leases may convert  liabilities  subject to
compromise to liabilities not subject to compromise.

The Debtors have  undertaken  to notify all known or potential  creditors of the
Chapter 11 cases for purposes of identifying and  quantifying  all  pre-petition
claims.  Subject to certain exceptions under the Bankruptcy Code, the Chapter 11
filings  automatically stayed the continuation of any judicial or administrative
proceedings  or other actions  against the Debtors or their  property to recover
on,  collect or secure a claim arising  prior to October 26, 2004.  The deadline
for filing by creditors of proofs of claim with the Bankruptcy Court was January
24, 2005, with a limited exception for governmental  entities,  which have until
April 24,  2005.  A proof of claim  arising  from the  rejection of an executory
contract  or lease must be filed no later than  thirty  days from the  effective
date of the authorized rejection.

The  Bankruptcy  Court  extended the period  during  which the Debtors'  have an
exclusive right to file a plan of reorganization until May 24, 2005. There is no
assurance  that  these  exclusivity  periods  will be  further  extended  by the
Bankruptcy Court. If a Debtor's exclusivity period lapses, any party in interest
may file a plan of reorganization for that Debtor. In addition to being voted on
by holders of impaired  claims and equity  interests,  a plan of  reorganization
must satisfy  certain  requirements of the Bankruptcy Code and must be approved,
or confirmed,  by the Bankruptcy Court in order to become effective.  A plan has
been accepted by holders of claims  against and equity  interests in a Debtor if
(1) at least  one-half  in number  and  two-thirds  in  dollar  amount of claims
actually  voting in each impaired  class of claims have voted to accept the plan
and (2) at least  two-thirds in amount of equity  interests  actually  voting in
each impaired  class of equity  interests  have voted to accept the plan.  Under
certain  circumstances  set forth in the  provisions  of section  1129(b) of the
Bankruptcy  Code, the Bankruptcy  Court may confirm a plan even if such plan has
not been  accepted by all  impaired  classes of claims and equity  interests.  A
class of claims or equity interests that does not receive or retain any property
under the plan on account of such claims or interests is deemed to have voted to
reject the plan. The precise requirements and evidentiary showing for confirming
a plan,  notwithstanding its rejection by one or more impaired classes of claims
or equity interests,  depends upon a number of factors, including the status and
seniority  of the  claims or equity  interests  in the  rejecting  class,  i.e.,
secured claims or unsecured claims,  subordinated or senior claims, preferred or
common stock.

Although the Debtors expect to develop  reorganization  plans for emergence from
Chapter 11 in 2005, there can be no assurance that a reorganization plan will be
proposed by the Debtors or confirmed by the Bankruptcy  Court,  or that any such
plan will be  consummated.  The Debtors have incurred and will continue to incur

                                       7
<PAGE>

significant costs associated with their respective  reorganizations.  The amount
of  these  costs,  which  are  being  expensed  as  incurred,  are  expected  to
significantly affect their financial results.

The  ultimate  recovery,  if any, to holders of common stock of the Company will
not be  determined  until  confirmation  of a plan  of  reorganization  for  the
Company.  The plan of  reorganization  could  result in holders of common  stock
receiving  no  distribution  on account of their  interest  in the  Company  and
cancellation  of  the  outstanding   shares.   The  Southwest   commitments  for
post-reorganization  financing, equity investment in the Company and codesharing
require  that all  outstanding  equity of the Company be  cancelled  without any
distributions to the holders of such equity.

DIP Financing Arrangements.  On November 17, 2004, ATA obtained $15.5 million in
debtor-in-possession financing from the Indiana Transportation Finance Authority
("ITFA").  ATA sold to the ITFA property consisting primarily of aircraft parts,
free and clear of any liens.  The ITFA leased the  property to the  Indianapolis
Airport  Authority,  which in turn subleased the property to ATA. ATA terminated
this  financing,  repurchased  the  assets,  and  paid  interest  to the ITFA on
December 30, 2004.

On   December   23,   2004,   ATA  and   Southwest   entered   into  a   Secured
Debtor-in-Possession  Credit and Security  Agreement (the "DIP  Facility")  that
provides up to $40.0 million in cash to the Company,  plus a letter of credit in
the approximate amount of $7.0 million to secure two pre-petition loans obtained
by ATA from the City of Chicago for the  construction of a jet bridge  extension
(the "Chicago LOC").  The Company  received $40.0 million under the DIP Facility
on December 23, 2004. A closing fee of 2.5%, or $1.0  million,  was treated as a
principal advance under the DIP Facility.

The base interest rate, paid monthly, on amounts borrowed under the DIP Facility
is the greater of (a) 8.0% per annum,  or (b) the  three-month  LIBOR rate, plus
5.0% per annum. Southwest will also receive an unused commitment fee of 1.0% per
annum, paid monthly,  for any amounts not drawn pursuant to the DIP Facility and
a guaranty fee of 3.0% per annum, paid monthly,  for any amounts  guaranteed but
not drawn under the Chicago LOC.  During the term of the agreement,  the Company
is subject to certain financial covenants.  ATA has obtained amendments to these
financial  covenants  for the months of January and February  2005.  There is no
assurance  ATA will be able to comply with these  financial  covenants in March,
2005, or thereafter, or that Southwest will agree to further amendments to these
covenants or to waive ATA's  non-compliance.  The DIP facility is  guaranteed by
the Company and its other  subsidiaries.  The DIP Facility will terminate on the
earlier of (1) the effective date of a plan of  reorganization  or (2) September
30, 2005, unless otherwise extended.

Asset Sale. On December 23, 2004, the Company and Southwest  executed and closed
a substantial  portion of the transactions  contemplated by an Asset Acquisition
Agreement (the "Asset  Acquisition  Agreement") by which ATA agreed to assign to
Southwest ATA's leasehold  interest in six specified gates and a hangar facility
at  Chicago-Midway  airport and  related  assets for $40.0  million,  subject to
certain adjustments.  The Asset Acquisition Agreement was entered into after the
completion  of an  auction  process  supervised  by the  Bankruptcy  Court.  ATA
received $34.0 million of proceeds from the assignment of its leasehold interest
in six specified  gates and related  assets on December 23, 2004.  Almost all of
the funds were recorded as deferred gain on the Company's balance sheet and will
be amortized over ATA's remaining  lease term of eight years at  Chicago-Midway.
As of December 31, 2004, the assignment of the leasehold  interest in the hangar
facility  and related  assets had not been  executed  and  closed,  and the $6.0
million had not been  received.  It is expected to be received in the first half
of 2005  concurrently  with a delayed closing of the hanger lease  assignment to
Southwest.

The  completion  of the  closing  under the  Asset  Acquisition  Agreement  with
Southwest  triggered  a  requirement  for ATA to pay  AirTran  Airways,  Inc.  a
termination fee of $3.25 million related to an earlier agreement with respect to
assets at Chicago Midway Airport.

                                       8
<PAGE>

For  further  information  on  the  Filing  and  Southwest   transactions,   see
"Management's  Discussion  and Analysis of Financial  Conditions  and Results of
Operations - Liquidity Outlook."

Flight Operations and Aircraft Maintenance

Worldwide  flight  operations are planned and controlled by the Company's Flight
Operations group based in Indianapolis,  Indiana,  which is staffed on a 24-hour
basis, seven days a week.  Logistical support necessary for extended  operations
away from ATA's fixed  bases is  coordinated  through its global  communications
network. ATA has the ability to dispatch  maintenance and operational  personnel
and equipment as necessary to support flight operations around the world.

ATA's  Maintenance  and  Engineering  Center  is  located  at  the  Indianapolis
International  Airport. This facility is an FAA-certificated  repair station and
has the  capability  to perform  routine and  non-routine  maintenance  on ATA's
aircraft.  ATA also has a maintenance facility at Chicago-Midway  Airport, which
is used to provide line  maintenance for the Boeing 757-200,  Boeing 757-300 and
Boeing  737-800  fleets.  On  December  23,  2004,  the ATA agreed to assign its
leasehold  rights to this hangar  facility and related assets to Southwest.  The
transaction  is expected to close in the first half of 2005, at which time it is
anticipated  that ATA will  sublease  a bay of the  hangar,  or  another  hanger
controlled  by  Southwest,  from  Southwest.  ATA has entered into hourly engine
maintenance  agreements  on  these  fleets,  and  the  counterparties  to  these
agreements perform the major overhauls and maintenance on these engines. ATA has
approximately 750 employees supporting its aircraft  maintenance  operations and
currently  maintains  14  permanent   maintenance   facilities,   including  its
Indianapolis and Chicago facilities.

Fuel Price Risk Management

Prices and availability of aviation fuel are subject to political,  economic and
market factors that are generally outside of the Company's  control.  Prices may
be effected by many factors including:  the impact of political  instability and
crude oil  production;  unexpected  changes  in the  availability  of  petroleum
products due to disruptions at distribution  systems or refineries;  unpredicted
increases  in demand due to weather or the pace of  economic  growth;  inventory
levels of crude oil and other petroleum products;  and the relative  fluctuation
between the U.S. dollar and other major currencies.

Although many air carriers enter into fixed price swaps,  collar  structures and
other derivative contracts to reduce the exposure to changes in fuel prices, the
Company's  financial  position has prevented ATA from hedging fuel prices in the
past two years.

ATA had fuel reimbursement  clauses and guarantees that applied to approximately
27.4%, 29.0%, and 29.4%,  respectively,  of consolidated  revenues in 2004, 2003
and 2002.

Insurance

The Company  carries  types and amounts of  insurance  customary  in the airline
industry, including coverage for public liability, passenger liability, property
damage,  aircraft  loss or damage,  baggage  and cargo  liability  and  workers'
compensation.

The U.S.  Government  has issued  supplemental  war-risk  coverage  to U.S.  air
carriers, including ATA, as a result of the reduction in coverage offered by the
commercial market after the September 11 terrorist attacks,  which will continue
through  August 31,  2005.  It is  anticipated  that after  August 31,  2005,  a
commercial product for war-risk coverage will become available,  but ATA expects
that it may incur significant additional costs for this coverage.

                                       9
<PAGE>

Employees

As of December 31,  2004,  the Company had  approximately  6,900  full-time  and
part-time  employees,   approximately  2,700  of  whom  were  represented  under
collective  bargaining  agreements.  On January 26, 2005, ATA announced plans to
significantly reduce service out of Indianapolis. By April 11, 2005, ATA expects
to have reduced the number of non-stop  destinations out of Indianapolis from 19
to four. On February 7, 2005, the Company announced plans to sell or discontinue
the Chicago Express Airlines  ("Chicago  Express") business unit, which employed
approximately 600 people as of the date of the announcement. In the absence of a
successful  sale or a decision by the Company to extend  operations  beyond that
date,  Chicago Express's  operations will cease on March 28, 2005. These actions
will significantly reduce the number of people the Company employs.

ATA's flight  attendants are represented by the Association of Flight Attendants
("AFA").  The current AFA  collective  bargaining  agreement  became  subject to
amendment in October  2004.  ATA  concluded an amendment to the AFA agreement on
October 15, 2004. Under the amended AFA agreement, cabin crewmembers will reduce
their base hourly pay rate effective October 15, 2004 by 10% through October 15,
2006,  resulting in savings of  approximately  $11.6  million over the same time
period. On October 15, 2006, ATA has agreed to return to non-amendable  rates of
pay for flight attendants who were employed on April 11, 2004.

ATA's cockpit crews are represented by the Air Line Pilots Association ("ALPA").
The  current  ALPA  collective  bargaining  agreement  will  become  subject  to
amendment  in June  2006.  During  the third  quarter  of 2004,  ATA  reached an
agreement  to  amend  its  contract  with its  cockpit  crewmembers.  Under  the
amendment,   crewmembers  agreed  to  forego  contractual  rate  increases  that
otherwise would have become  effective July 1, 2004 and July 1, 2005,  resulting
in  savings  of  approximately   $26.0  million.   The  amendments  include  new
contractual increases effective July 1, 2006 and July 1, 2007. Also, in February
2005, ATA signed a letter of agreement for the time period from January 31, 2005
through May 31, 2005.  Under the period of the letter of agreement,  the cockpit
crewmembers  agreed  to an  approximate  20% pay  reduction,  certain  work rule
changes and a 50% reduction in  contributions  to the Crewmember  Money Purchase
Plan. ATA expects the letter of agreement to reduce costs approximately by $12.0
million over the duration of the agreement.

ATA's flight dispatchers are represented by the Transport Workers Union ("TWU").
The current TWU collective  bargaining  agreement became subject to amendment in
August  2004.  ATA's  ramp  service  agents  elected  to be  represented  by the
International  Association of Machinists  ("IAM") in February 2001. On September
10, 2004, the ramp workers ratified a first collective bargaining agreement with
ATA. In February 2002, ATA's aircraft mechanics elected to be represented by the
Aircraft Mechanics Fraternal Association  ("AMFA").  ATA began negotiations with
the AMFA in  October  2002,  but no  collective  bargaining  agreement  has been
finalized.

While ATA believes that relations with its employees  remain good, any prolonged
dispute with employees or work stoppages, whether or not represented by a union,
could have a  material  adverse  impact on the  Company's  financial  condition,
results of operations or cash flows.

Regulation

The  Company is subject to a wide range of  governmental  regulation,  including
that of the  Department  of  Transportation  ("DOT")  and the  Federal  Aviation
Administration ("FAA").

The DOT principally regulates economic matters affecting air service,  including
air  carrier  certification  and  fitness;   insurance;   leasing  arrangements;
allocation of route rights and  authorization of proposed  scheduled and charter
operations;   allocation  of  landing  slots  and  departing   slots;   consumer
protection;  and  competitive  practices.  The FAA  primarily  regulates  flight

                                       10
<PAGE>

operations,  especially  matters affecting air safety,  including  airworthiness
requirements for each type of aircraft and crew certification.  The FAA requires
each carrier to obtain an operating  certificate  and operations  specifications
authorizing the carrier to fly to specific airports using specified equipment.

The  Aviation and  Transportation  Security Act  ("Aviation  Security  Act") was
signed into law in 2001,  creating the  Transportation  Security  Administration
("TSA") within the DOT and requiring substantially all aspects of civil aviation
passenger security and screening to be placed under federal control in 2002. The
cost of the  provisions  set forth in the Aviation  Security  Act are  partially
funded by a security fee of $2.50 per passenger  enplanement,  limited to $5 per
one-way trip and $10 per round-trip. The Aviation Security Act is also funded by
a separate security  infrastructure fee assessed to each air carrier. The amount
of the air carrier assessment is payable monthly and is equal to the amount each
air carrier spent on aviation security in 2000.

Several aspects of airline  operations are subject to regulation or oversight by
federal  agencies  other than the DOT and FAA. The United States Postal  Service
has jurisdiction over certain aspects of the  transportation of mail and related
services  provided by the Company's  subsidiary,  ATA Cargo, Inc. ("ATA Cargo").
Employee  relations in the air transportation  industry are generally  regulated
under the Railway Labor Act, which vests in the National Mediation Board certain
regulatory  powers with respect to disputes between airlines and employee unions
arising under collective  bargaining  agreements.  The Company is subject to the
jurisdiction of the Federal Communications  Commission regarding the utilization
of its  radio  facilities.  In  addition,  the  Immigration  and  Naturalization
Service,  the U.S. Customs Service,  and the Animal and Plant Health  Inspection
Service of the Department of Agriculture  have  jurisdiction  over inspection of
the Company's aircraft,  passengers and cargo to ensure the Company's compliance
with U.S.  immigration,  customs and import laws. Also, while ATA's aircraft are
in  foreign  countries,  they  must  comply  with the  requirements  of  similar
authorities  in those  countries.  The Commerce  Department  also  regulates the
export and re-export of the Company's U.S.-manufactured aircraft and equipment.

In addition to various federal regulations, local governments and authorities in
certain markets have adopted  regulations  governing various aspects of aircraft
operations,  including noise abatement,  curfews and use of airport  facilities.
Many U.S. airports have adopted a Passenger  Facility Charge of up to $4.50 that
is collected from each passenger  departing from the airport and remitted by the
Company to the applicable airport authority.

Based upon  bilateral  aviation  agreements  between the U.S. and other nations,
and, in the absence of such agreements,  comity and reciprocity principles, ATA,
as a charter  carrier,  is generally  not  restricted as to the frequency of its
flights  to and  from  most  foreign  destinations.  However,  these  agreements
generally  restrict  the  Company to the  carriage  of  passengers  and cargo on
flights  which either  originate in the U.S. and  terminate in a single  foreign
nation,  or which originate in a single foreign nation and terminate in the U.S.
The civil  aeronautics  authorities  in the relevant  countries  must  generally
specifically  approve proposals for any additional charter service.  Approval of
such requests is typically based on considerations of comity and reciprocity and
cannot be guaranteed.

The Company  believes it is in  compliance  with all  requirements  necessary to
maintain in good standing its operating  authorities  granted by the DOT and its
air carrier-operating certificates issued by the FAA. A modification, suspension
or revocation of any of the Company's DOT or FAA  authorizations or certificates
could have a material  adverse  effect upon the Company's  financial  condition,
results of operations or cash flows.

Competition

The  scheduled  airline  industry  is highly  competitive.  Airlines  compete to
varying degrees with other air carriers and with other forms of  transportation.

                                       11
<PAGE>

ATA competes with major airlines and low-cost  competitors.  Northwest  Airlines
has steadily increased operations at Indianapolis International Airport over the
past  year.  In the  past  two  years,  the  Company's  profitability  has  been
significantly  eroded by competitive  pricing and route  pressures,  unfavorable
economic trends, and rising fuel and salary costs. These factors,  combined with
the  front-loaded  aircraft  leases  entered into by ATA prior to the  terrorist
attacks of September 11, 2001,  left the Company with limited cash  resources to
weather the adverse  conditions  that have  affected  the industry in the recent
past.

Environmental Matters

The Company's operations are subject to comprehensive federal,  state, and local
laws  and   regulations   relating  to  pollution  and  the  protection  of  the
environment,   including  those  governing  aircraft  noise,  the  discharge  of
pollutants  into the air and water,  the  management  and  disposal of hazardous
substances  and  wastes,  and the  cleanup of  contaminated  sites.  Some of the
Company's  operations  require  environmental  permits and  controls,  and these
permits  are  subject  to  modification,   renewal  and  revocation  by  issuing
authorities.  Although the Company  believes it is in compliance in all material
respects with applicable environmental laws, the Company could incur substantial
costs,  including  cleanup  costs,  fines,  civil  or  criminal  penalties,   or
third-party  property damage or personal injury claims as a result of violations
of,  or  liabilities  under,   environmental  laws  or  noncompliance  with  the
environmental  permits required for the Company's operations.  In addition,  the
adoption of new or more  stringent  requirements  could increase the cost of the
Company's  operations,  require significant capital  expenditures,  or result in
material restrictions on the Company's operations.

At the Company's  aircraft  maintenance  facilities and the airports the Company
serves, materials are used such as aircraft deicing fluids, fuel, oils and other
materials that are regulated as hazardous  under  federal,  state or local laws.
The  Company is  required  to  maintain  programs  to protect  the safety of the
employees  who use these  materials  and to manage  and  dispose  of any  wastes
generated by the use of these materials in compliance with applicable  laws. The
Environmental  Protection  Agency  regulates  operations,  including air carrier
operations,  which affect the quality of air in the United  States,  such as the
regulation of the discharge of aircraft  emissions exhaust into the environment.
The Company  believes it has made all necessary  modifications  to its operating
fleet  to meet  fuel-venting  requirements  and  smoke-emissions  standards.  In
addition,  noise generated by aircraft is subject to regulation by the FAA under
the Airport Noise and Capacity Act of 1990 and its implementing regulations.  As
a result,  the  Company  has been and may  continue to be required to reduce its
hours of operation at particular airports,  to install noise abatement equipment
on its aircraft or to change operational  procedures during takeoff and landing.
At the present time, the Company  believes ATA's and Chicago  Express's  airline
equipment and scheduled flights are in material  compliance with these and other
local noise  abatement  requirements,  and the Company does not believe any such
restrictions  will have a material  adverse  effect on the  Company's  financial
condition, results of operations or cash flows.

Available Information

A copy of this annual  report on Form 10-K,  as well as other annual  reports on
Form  10-K,  quarterly  reports on Form  10-Q,  current  reports on Form 8-K and
amendments  to those  reports  are  accessible  free of charge on the  Company's
website  (www.ata.com) in the "Investor Relations" section as soon as reasonably
practicable after such report has been filed with or furnished to the Securities
and Exchange Commission.

                                       12
<PAGE>

Item 2. Properties

Aircraft Fleet

At December 31, 2004, ATA and Chicago  Express were certified to operate a fleet
of 82 aircraft. The following table summarizes the ownership  characteristics of
each aircraft type as of the end of 2004.

<TABLE>
<CAPTION>

                      Owned(Encumbered-  Operating-Lease  Operating-Lease
                       Pledged on Debt)  (Fixed Buy-out)   (No Buy-out)   Total

<S>                       <C>              <C>              <C>              <C>
Lockheed L-1011-100       -                 -                1                1

Lockheed L-1011-500       4                 -                -                4

Boeing 737-800            -                18               15               33

Boeing 757-200            -                14                1               15

Boeing 757-300            -                12                -               12

SAAB 340B                 2                15                -               17
                 --------------------------------------------------------------

           TOTAL          6                59               17               82
                 ==============================================================

</TABLE>

The Debtors' right to retain and operate certain aircraft,  aircraft engines and
other  equipment  defined in section 1110 of the Bankruptcy Code that are leased
or subject to a security  interest or conditional sale contract are specifically
governed by section  1110 of the  Bankruptcy  Code.  That section  provides,  in
relevant  part,  that unless the  Debtors,  prior to 60 days after the  Petition
Date, agree to perform all obligations under the lease,  security agreement,  or
conditional sale contract and cure all defaults  thereunder (other than defaults
constituting  a breach of  provisions  relating  to the filing of the Chapter 11
cases,  the Debtors'  insolvency  or other  financial  condition of the Debtors)
within the time  specified  in section  1110,  the right of the lessor,  secured
party or conditional  vendor to take  possession of such equipment in compliance
with the  provisions  of the lease,  security  agreement,  or  conditional  sale
contract  and to enforce any of its other  rights or remedies  under such lease,
security  agreement,  or  conditional  sale contract is not limited or otherwise
affected by the automatic stay, by any other  provision of the Bankruptcy  Code,
or by any power of the Bankruptcy Court.

The section 1110  deadline for the Debtors was December 26, 2004. As of December
31,  2004,  the Company  operated 82 aircraft,  including 76 aircraft  that were
financed with  operating  leases.  As of March 25, 2005,  with regards to the 76
leased  aircraft,  the Company has  returned  22 of these  aircraft  and related
engines to the lessor. The Company expects to return 28 additional  aircraft and
related  engines to the lessor  between March 31, 2005 and January 25, 2006. The
Company has  renegotiated  long-term  rates on 10 aircraft and related  engines.
Finally,  the Company has elected to cure  existing  defaults  and is paying the
contract rates  required  under the Bankruptcy  Code with respect to 16 aircraft
and related  engines.  The Company  expects  these changes in fleet to result in
additional  changes to amounts  reported in the December 31, 2004 balance  sheet
associated with the aircraft,  including prepaid aircraft rent, and to result in
additional significant aircraft rejection charges in 2005.

ATA is in the process of "regauging" its fleet to meet with its evolving revised
business plan. Prior to the Filing,  ATA's fleet consisted of 65 jet aircraft of
five  types.  ATA  expects to reduce the  overall  size of the fleet by at least
one-third  by rejecting  non-economic  leases and  obtaining  new leases of more
appropriately sized aircraft on more favorable economic terms.

                                       13
<PAGE>

Ground Properties

ATA leases  three  adjacent  office  buildings  in  Indianapolis  consisting  of
approximately  136,000  square  feet,  under  leases that expire in 2010.  These
buildings are located approximately one mile from the Indianapolis International
Airport  terminal  and  are  used  as  principal  business  offices  and for the
Indianapolis reservations center.

ATA's   Maintenance  and  Operations  Center  is  located  at  the  Indianapolis
International  Airport. This  150,000-square-foot  facility was designed to meet
the base maintenance  needs of ATA's  operations,  as well as to provide support
services  for  other  maintenance   locations.   In  addition,  ATA  utilizes  a
120,000-square-foot office building,  immediately adjacent to ATA's Indianapolis
Maintenance  and  Engineering  Center,  which is occupied by its Maintenance and
Engineering office staff along with a flight operations center.

ATA leases Hangar No. 2 at  Chicago-Midway  Airport.  On December 23, 2004,  ATA
agreed  to  assign  its  leasehold  rights in  Hangar  No. 2 to  Southwest.  The
transaction  is expected to close in the first half of 2005, at which time it is
anticipated  that ATA will  sublease  a bay of the  hangar,  or  another  hanger
controlled by Southwest,  from Southwest.  This property is used to perform line
maintenance on ATA's narrow-body  fleets. ATA also leases an  18,700-square-foot
reservation facility located near Chicago's O'Hare Airport.

ATA  routinely  leases  various  properties  at  airports  for use by  passenger
service, flight operations and maintenance staffs.

Item 3.    Legal Proceedings

On the Petition Date, the Company and seven of its subsidiaries  filed voluntary
petitions  for  reorganization  under  Charter  11 of  the  Bankruptcy  Code  in
Bankruptcy  Court. As  debtors-in-possession,  the Debtors are authorized  under
Chapter 11 to continue to operate as an ongoing business,  but may not engage in
transaction  outside the ordinary course of business  without the prior approval
of the  Bankruptcy  Court.  As of  the  Petition  Date,  virtually  all  pending
litigation is stayed,  and absent  further  order of the  Bankruptcy  Court,  no
party,  subject to certain  exceptions,  may take any action,  again  subject to
certain  exceptions,  to recover on pre-petition  claims against the Debtors. In
addition,  the Debtors may reject pre-petition executory contracts and unexpired
lease  obligations and parties affected by these rejections may file claims with
the Bankruptcy Court. At this time, it is not possible to predict the outcome of
the Chapter 11 process or its effect on the Company's  business.

David M. Wing, the Company's former Executive Vice President and Chief Financial
Officer,  filed a complaint  against ATA with the United  States  Department  of
Labor (the "DOL").  The complaint  resulted from a  disagreement  concerning the
circumstances  under which Mr. Wing left his  employment  with the Company on or
about  June 24,  2004.  In order to  settle  the  dispute,  ATA  entered  into a
Settlement  Agreement on October 18, 2004 with Mr.  Wing,  pursuant to which Mr.
Wing executed an  employment  contract with the Company and Mr. Wing resumed his
former duties at his previous level of  compensation.  The  employment  contract
required  the  Company to pay Mr.  Wing a sign up bonus of  $157,500.  Mr.  Wing
subsequently  resigned on December  21,  2004.  On November  15,  2004,  the DOL
dismissed the complaint.

Various  claims,  contractual  disputes and lawsuits  against the Company  arise
periodically  involving  complaints  which are  routine  and  incidental  to the
Company's business. The majority of these lawsuits are covered by insurance. The
Company's  management  does not expect  that the  outcome of its  current  legal
proceedings,  individually or collectively,  will have a material adverse effect
on the Company's  financial  condition,  results of operations or cash flows. To
the  knowledge  of  management,  there are also no  material  proceedings  under
federal or state environmental laws, nor are there any environmental proceedings
brought by a governmental  authority  involving  potential monetary sanctions in
excess of $100,000.

                                       14
<PAGE>


Item 4.     Submission of Matters to a Vote of Security Holders

No matter was submitted to a vote of security  holders  during the quarter ended
December 31, 2004.

                                       15
<PAGE>

PART II

Item 5.    Market for the Registrant's Common Stock, Related Stock Matters and
           Issuer Purchase of Securities

Until  November 5, 2004,  the  Company's  common  stock was quoted on the NASDAQ
National Market  ("NASDAQ")  under the symbol "ATAH."  Following the Filing,  on
November 8, 2004,  the  Company's  common  stock  began  trading on the over the
counter market under the symbol  "ATAHQ.PK." As of December 31, 2004, there were
approximately  305  shareholders  of record.  The Company  cannot assure that an
active trading market for the common stock will exist in the future.
<TABLE>
<CAPTION>
                                   Market Prices of Common Stock
                                   Year Ended December 31, 2004
                                     (Amounts in dollars)

                   First Quarter       Second Quarter        Third Quarter       Fourth Quarter

<S>                    <C>                  <C>                  <C>                  <C>
High                   13.31                8.89                 6.00                 3.33

Low                     7.66                5.13                 1.89                 0.16

Close                   8.35                5.25                 2.44                 1.40
</TABLE>
<TABLE>
<CAPTION>
                                   Market Prices of Common Stock
                                   Year Ended December 31, 2003
                                     (Amounts in dollars)

                   First Quarter       Second Quarter        Third Quarter       Fourth Quarter

<S>                     <C>                 <C>                 <C>                  <C>
High                    5.98                7.79                10.95                10.45

Low                     3.42                3.45                 6.07                 6.37

Close                   3.75                7.36                 7.00                 9.65
</TABLE>

No  dividends  have been  paid on the  Company's  common  stock  since  becoming
publicly held.

The  value of the  Company's  common  stock is highly  speculative.  Any plan of
reorganization for the Company could result in holders of common stock receiving
no distribution on account of their interests as shareholders  and  cancellation
of  the  outstanding   common  stock.  The   arrangements   with  Southwest  for
post-reorganization financing, equity injection and codesharing require that all
outstanding  pre-petition  equity  of  the  Company  be  cancelled  without  any
distributions  under  the  plan to the  holders  of  that  equity.  The  Company
presently  intends  to  seek  confirmation  of a plan  of  reorganization  which
satisfies the  requirements  of Southwest  respecting  the  cancellation  of the
existing equity of the Company.  Accordingly,  the Company urges that caution be
exercised  with  respect to any  existing or future  investments  in the Company
common stock.

The Company does not expect to hold an annual meeting of  shareholders  prior to
the confirmation of a plan of reorganization.

The  Company has issued and sold 300 shares of Series B  convertible  redeemable
preferred  stock,  without  par value  ("Series  B  Preferred"),  at a price and
liquidation  amount of $100,000  per share and the  Company  issued and sold 500
shares of Series A  redeemable  preferred  stock,  without par value  ("Series A
Preferred"),  at a price and  liquidation  amount of  $100,000  per  share.  The
issuance  and  sale of the  Series A and  Series B  Preferred  was  exempt  from
registration  requirements  under  Section 4(2) of the  Securities  Act of 1933,
which applies to private offerings of securities. Any plan of reorganization for
the Company could result in the holders of the Series B Preferred and the Series
A Preferred  receiving no  distribution on account of their interests as holders
of this preferred stock, and cancellation of the Series B Preferred and Series A

                                       16
<PAGE>

Preferred   which  is   outstanding.   The   arrangements   with  Southwest  for
post-reorganization financing, equity injection and codesharing require that all
outstanding  Series B Preferred and Series A Preferred be cancelled  without any
distributions under the plan to the holders of such preferred stock.  Subject to
certain  exceptions  under the Bankruptcy Code, the Filing provides an automatic
stay against the continuation of any judicial or  administrative  proceedings or
other actions  against the Debtors or their  property to recover on,  collect or
secure a claim  arising prior to the Petition  Date until the  Bankruptcy  Court
lifts the stay.

See Item 12 for Equity Compensation Plan information.


Item 6.   Selected Consolidated Financial Data

The selected  consolidated  financial  data in this table have been derived from
the consolidated  financial statements of the Company for the respective periods
presented.  The  data  should  be  read in  conjunction  with  the  consolidated
financial statements and related notes appearing elsewhere herein.

<TABLE>
<CAPTION>
                                                          Five-Year Summary
                                                       Year Ended December 31,


(Dollars in thousands, except per share data)                   2004             2003           2002          2001          2000
--------------------------------------------------------------------------------------------------------------------------------

Statement of Operations Data:

<S>                                                        <C>             <C>            <C>           <C>           <C>
Operating revenues                                         $   1,532,571   $  1,518,533   $  1,277,370  $  1,275,484  $  1,291,553
Operating expenses (1)                                         1,632,734      1,440,992      1,437,407     1,367,354     1,288,983
Operating income (loss) (1)                                     (100,163)        77,541       (160,037)      (91,870)        2,570
Reorganization expenses (2)                                     (638,479)             -              -             -             -
Income (loss) before taxes                                      (815,729)        21,745       (194,214)     (116,067)      (19,931)
Net income (loss) available to common shareholders (3)          (816,854)        15,792       (174,984)      (81,885)      (15,699)
Net income (loss) per share - basic                               (69.09)          1.34         (14.94)        (7.14)        (1.31)
Net income (loss) per share - diluted                             (69.09)          1.27         (14.94)        (7.14)        (1.31)

Balance Sheet Data (at end of period):
Property and equipment, net                                $     182,759   $    253,482   $    265,627  $    314,943  $    522,119
Total assets                                                     651,065        869,987        848,136     1,002,962     1,032,430
Total debt                                                        41,000        494,696        509,428       497,592       457,949
Liabilities Subject to Compromise (5)                          1,249,676              -              -             -             -
Mandatorily Redeemable preferred stock (4)                             -         56,330         52,110        50,000        50,000
Convertible redeemable preferred stock, subject to compromise     30,000         32,907         30,375        30,000        30,000
Shareholders' equity (deficit)                                  (920,556)      (104,007)      (120,009)       44,132       124,654

Selected Consolidated Operating Statistics (Unaudited):
Revenue passengers carried (thousands)                            11,653.4       11,226.9       10,046.7       8,635.2       8,006.1
Revenue passenger miles (millions)                                14,678.5       14,358.7       12,384.2      11,675.7      11,816.8
Available seat miles (millions)                                   21,242.0       21,125.9       17,600.0      16,187.7      16,390.1
Passenger load factor                                                69.1%          68.0%          70.4%         72.1%         72.1%
</TABLE>

(1)  Operating  results for the years ended  December  31,  2004,  2003 and 2002
     include the following items:

                                       17
<PAGE>

<TABLE>
<CAPTION>
                                            2004          2003           2002
                                      -----------------------------------------

<S>                                   <C>          <C>            <C>
Aircraft impairments and retirements  $   (7,887)  $    (5,288)   $     (66,787)
U.S. Government grants                         -        37,156          (16,221)
Goodwill impairments                           -             -           (6,893)
                                      -----------------------------------------
Total - income (loss)                 $   (7,887)  $    31,868    $     (89,901)
                                      ==========================================
</TABLE>

(2)  The accompanying  consolidated  financial statements,  for the period ended
     December 31, 2004,  of the Company have been  prepared in  accordance  with
     American  Institute of Certified Public  Accountants  Statement of Position
     90-7,   Financial  Reporting  by  Entities  in  Reorganization   under  the
     Bankruptcy   Code  ("SOP  90-7)  and  on  a  going-concern   basis,   which
     contemplates   continuity  of   operations,   realization   of  assets  and
     satisfaction   of   liabilities   in  the  ordinary   course  of  business.
     Reorganization  expenses  identify those costs that are not in the ordinary
     course  of  business  and  include   aircraft  lease   rejection   charges,
     impairments  and  professional  fees  related to the Filing.  See "Notes to
     Consolidated Financial Statements - Note 1 - The Company and the Chapter 11
     Filing" for more information.

(3)  Preferred stock dividends of $1.1 million,  $4.6 million,  and $5.7 million
     were  recorded  in 2004,  2003 and  2002,  respectively.  No  common  stock
     dividends were paid in any period presented.

(4)  Mandatorily  redeemable preferred stock of $50.0 million was outstanding as
     of December 31, 2004 and was classified on the balance sheet as a liability
     subject to compromise.

(5)  Liabilities  subject  to  Compromise  refers  to  liabilities  that will be
     accounted for under a plan of  reorganization,  including  claims  incurred
     prior to the Petition  Date.  These amounts  result from known or potential
     claims to be resolved through the Chapter 11 process and such claims remain
     subject  to  future  adjustments.  See  "Notes  to  Consolidated  Financial
     Statements  -  Note  5  -  Liabilities  Subject  to  Compromise"  for  more
     information.

Item 7.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations

Overview

On October 26, 2004, the Company,  and seven of its  subsidiaries  including ATA
and Chicago  Express,  filed voluntary  petitions for relief under Chapter 11 of
the U.S.  Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District
of Indiana.  In connection with the Filing,  the Debtors are developing plans of
reorganization  to address their respective debts and other  obligations,  lower
operating costs and restructure operations. See "Notes to Consolidated Financial
Statements - Note 1 - The Company and the Chapter 11 Filing."

The Company,  through its principal  subsidiary ATA, provides  scheduled airline
services to leisure,  business,  and other  value-oriented  travelers,  and is a
leading provider of charter services to the U.S. military. The Company,  through
its principal  subsidiary,  ATA, has been  operating for 33 years and is a major
U.S. airline.

For the year ended December 31, 2004, the Company  recorded an operating loss of
$100.2 million,  as compared to an operating income of $77.5 million in the same
period of 2003. For the year ended December 31, 2004, the Company had a net loss
available to common  shareholders of $816.9 million, as compared to a net income
available  to common  shareholders  of $15.8  million  in 2003.  The net  income
recorded in 2003 includes $37.2 million received in U.S. Government funds, which
was recorded as a reduction in operating expenses. The net loss in 2004 includes
$638.5 million of expenses related to the Company's reorganization in Chapter 11
and a non-cash  charge of $27.3  related to the  Company's  bond exchange in the
first quarter of 2004.

                                       18
<PAGE>

Consolidated  revenue per available  seat mile ("RASM")  increased to 7.21 cents
for the year  ended  December  31,  2004,  as  compared  to 7.19  cents in 2003.
However,  the Company's  scheduled service RASM decreased to 6.30 cents in 2004,
from 6.49 cents in 2003, due to increased  industry  capacity in the markets the
Company serves and competitive  pricing by several  airlines.  Consolidated cost
per  available  seat mile  ("CASM")  increased  to 7.68 cents for the year ended
December 31, 2004, as compared to 6.82 cents in 2003. The 2003 CASM reflects the
benefit from the receipt of $37.2  million,  or 0.18 cents,  in U.S.  Government
funds  received  in the  second  quarter  of 2003.  The 2004 CASM was  adversely
impacted  by a 30.6%  increase in the price of fuel,  as  compared  to 2003.  In
addition,  the Company  experienced higher maintenance costs in 2004 as a result
of contractual  rate increases in the hourly engine  maintenance  agreements for
the Company's jets.

Critical Accounting Policies

"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  discusses  the Company's  consolidated  financial  statements.  The
preparation of these financial  statements requires management to make judgments
and estimates that affect the reported amounts of assets, liabilities,  revenues
and expenses, and the disclosures of contingent assets and liabilities.  Certain
significant  accounting  policies  used  in the  preparation  of  the  financial
statements  require   management  to  make  difficult,   subjective  or  complex
judgments,  and are considered critical accounting policies by the Company.  The
Company has identified the following areas as critical accounting policies.

Revenue Recognition. Revenue derived from ticket sales is recognized at the time
service is  provided.  Passenger  ticket  sales are  initially  recorded  as air
traffic  liability.  Tickets that are sold but not flown on the scheduled travel
date can be exchanged and reused for another flight,  up to a year from the date
of sale, or can be refunded if the ticket is sold under a refundable  tariff.  A
small  percentage of tickets (or  partially  used tickets)  expire  unused.  The
majority of the Company's  tickets sold are  nonrefundable in cash, which is the
primary source of forfeited  tickets.  The Company  records  estimates of earned
revenue in the period  tickets are  originally  sold,  for a percentage of those
sales which are  expected to expire  unused over the period of ticket  validity.
These  estimates  are based upon  historical  experience  over many years,  with
particular  emphasis  given to expiration  experience in more recent years.  The
Company has consistently applied this accounting method to estimate revenue from
future unused and expired tickets.

Revenue accruals for expired and unused tickets are routinely compared to actual
expired and unused  ticket  experience to validate the accuracy of the Company's
estimates with respect to forfeited tickets.  Accrual adjustments resulting from
these comparisons have not been material to the Company's  consolidated revenue.
If, however, customer behavior changes from historical patterns in the manner in
which tickets are purchased and used, it is possible that the Company's  revenue
accruals for unused and expired tickets may require material future  adjustments
in order to account for those changes in customer behavior.

Impairments of Long-Lived Assets. Effective January 1, 2002, the Company adopted
Financial  Accounting Standards Board ("FASB") Statement of Financial Accounting
Standards  No. 144,  Accounting  for the  Impairment  or Disposal of  Long-Lived
Assets ("FAS 144"),  which superseded FAS 121,  Accounting for the Impairment of
Long-Lived  Assets and for Long-Lived  Assets to Be Disposed of ("FAS 121"). The
Company  continues to account for aircraft and related assets that were impaired
prior to  January  1,  2002,  and  classified  as held for sale,  including  the
investment in BATA Leasing,  LLC ("BATA") under the provisions of FAS 121, which
is required by FAS 144. Both FAS 144 and FAS 121 require that,  whenever  events
and  circumstances  indicate that the Company may not be able to recover the net
book value of its productive  assets,  the  undiscounted  estimated  future cash
flows from the  expected  use of those assets must be compared to their net book
value to determine if impairment is indicated.  FAS 144 and FAS 121 require that

                                       19
<PAGE>

assets deemed  impaired be written down to their  estimated fair value through a
charge to earnings.  FAS 144 and FAS 121 state that fair values may be estimated
using discounted cash flow analysis or quoted market prices, together with other
available information.

The Company had been performing impairment reviews in accordance with FAS 121 on
the Boeing 727-200 fleet since the end of 2000, and the fleet  initially  became
impaired  under FAS 121  subsequent  to the  terrorist  attacks of September 11,
2001. In accordance  with FAS 121 and FAS 144, the Company  continues to monitor
the current value of these previously impaired assets. The Company has used both
discounted cash flows and quoted market prices to estimate the fair value of the
Boeing 727-200 fleet.

Beginning in 2002, the Company has performed impairment analyses on the Lockheed
L-1011-500 fleet and related assets in accordance with FAS 144 based on a common
fleet  retirement  date of December  2010. In the fourth quarter of 2004, due to
the Company's  financial  position,  cash  constraints  and related  limitations
imposed by the Chapter 11 initiated in the fourth  quarter of 2004,  the Company
determined  the likelihood of expending the funds to perform heavy checks on the
airframes  when they become due in 2005 through 2007 is remote.  Therefore,  the
Company changed its retirement  assumptions in its impairment analysis performed
in the fourth quarter of 2004 and determined  that this fleet was impaired.  The
Company used  discounted  cash flow  analysis to estimate the fair value of this
fleet.

The  application  of FAS 144 and FAS 121 requires  the  exercise of  significant
judgment and the  preparation of numerous  significant  estimates.  Although the
Company  believes  that its  estimates  with  regard  to future  cash  flows are
reasonable and based upon all available  information,  they require  substantial
judgments  and are based upon material  assumptions  about future  events.  Such
estimates are significant in determining the amount of the impairment  charge to
be recorded,  if any, which could have been materially different under different
sets of assumptions and estimates.

Goodwill  Accounting.  Effective  January  1, 2002,  the  Company  adopted  FASB
Statement of Financial  Accounting  Standards No. 142 ("FAS 142"),  Goodwill and
Other Intangible  Assets,  under which goodwill and intangible  assets deemed to
have indefinite lives will no longer be amortized, but will be subject to annual
impairment  reviews.  A FAS 142 impairment  review involves a two-step  process.
Step one compares the fair value of a reporting unit (determined  through market
quotes or the present  value of  estimated  future cash flows) with its carrying
amount  (assets less  liabilities,  including  goodwill).  If the estimated fair
value exceeds the carrying amount,  goodwill of the reporting unit is considered
not  impaired,  and step two of the  impairment  test is not  necessary.  If the
carrying amount of a reporting unit exceeds its estimated fair value, the second
step of the  goodwill  impairment  test is then  performed,  which  compares the
implied fair value of the reporting  unit's  goodwill  (determined in accordance
with  purchase  accounting)  with the carrying  amount of the  reporting  unit's
goodwill.  If the carrying amount of the reporting  unit's goodwill  exceeds the
implied fair value of the  goodwill,  an  impairment  loss is  recognized  in an
amount equal to that excess.  If an impairment loss is recognized,  the adjusted
carrying  amount of the  goodwill  becomes the new  accounting  basis for future
impairment tests.

FAS 142 requires companies to perform annual goodwill  impairment  reviews.  The
annual  impairment tests are required to be completed in the same fiscal quarter
each year. The Company  performed its annual tests in the fourth quarter of both
2003 and 2004. As of January 1, 2003, the Company's  goodwill related to the ATA
Leisure Corp.  ("ATALC") brands outsourced to Mark Travel  Corporation  ("MTC"),
Chicago Express and ATA Cargo.  The Company  determined that all of the goodwill
related to the MTC reporting unit was impaired in 2004, mainly due to changes in
its route structure and operations.  The goodwill related to Chicago Express and
ATA Cargo  remained  unimpaired as of December 31, 2004 and 2003.  See "Notes to
Consolidated  Financial  Statements - Note 19 -  Subsequent  Events" for further
information on Chicago Express.

All of the Company's fair value estimates  involved highly subjective  judgments
on the part of  management,  including the amounts of cash flows to be received,
their  estimated  duration and perceived risk as reflected in selected  discount
rates.  In some  cases,  cash  flows  were  estimated  without  the  benefit  of
historical data, although historical data was used where available. Although the
Company  believes  its  estimates  and  judgments  to be  reasonable,  different
assumptions and judgments might have resulted in additional impairment charges.

                                       20
<PAGE>

Aircraft Lease Rejection Charges. During the period each of the Debtors operates
under  Chapter 11  Bankruptcy  protection,  such Debtor has the right to assume,
assume and assign, or reject certain  executory  contracts and unexpired leases,
including,  without limitation,  leases of real property,  aircraft and aircraft
engines,  subject to the  approval of the  Bankruptcy  Court and  certain  other
conditions. Generally, the rejection of an executory lease or unexpired lease is
treated as a  pre-petition  breach of the lease or  contract  in  question  and,
subject to certain  exceptions,  relieves the rejecting Debtor of performing its
future  obligations  under such lease or  contract  but  entitles  the lessor or
contract  counterparty  to a pre-petition  general  unsecured  claim for damages
caused by such deemed  breach.  The lessor or contract  counterparty  may file a
claim  against the Debtor's  estate for such  damages.  The aircraft  leases and
aircraft  engine  leases  rejection  charges  are  non-cash  charges  which  are
comprised of the Company's  estimate of claims  resulting  from the rejection or
return of the aircraft and engines as part of the bankruptcy process.  They also
include the  write-off of assets and  liabilities  related to aircraft  that the
Company has  rejected,  committed to return dates with the lessor or intended to
reject as part of the  Company's  business  plan as of December  31,  2004.  The
amount  includes  the  Company's  estimate  of  claims,  which  are  based  upon
provisions  contained in the original leases among other things,  resulting from
the rejection or return of the aircraft as part of the bankruptcy  process.  The
estimate  that the Company  recorded is subject to material  adjustments  as the
Debtors proceed through the bankruptcy process.

                                       21
<PAGE>

Results of Operations in Cents Per ASM

The following table sets forth, for the periods  indicated,  operating  revenues
and expenses expressed as cents per available seat mile.

<TABLE>
<CAPTION>
                                                                        Cents per ASM
                                                                   Year Ended December 31,
                                                       ----------------------------------------------

                                                          2004              2003              2002
                                                       ----------        ----------        ----------
<S>                                                    <C>               <C>               <C>
Consolidated operating revenues                           7.21              7.19              7.26

Consolidated operating expenses:
    Salaries, wages and benefits                          1.99              1.89              2.02
    Fuel and oil                                          1.73              1.31              1.17
    Aircraft rentals                                      1.14              1.07              1.08
    Handling, landing and navigation fees                 0.56              0.54              0.63
    Aircraft maintenance, materials and repairs           0.35              0.22              0.30
    Crew and other employee travel                        0.27              0.30              0.31
    Depreciation and amortization                         0.24              0.27              0.44
    Other selling expenses                                0.24              0.24              0.25
    Passenger service                                     0.20              0.19              0.22
    Advertising                                           0.16              0.18              0.23
    Facilities and other rentals                          0.13              0.11              0.13
    Commissions                                           0.12              0.11              0.13
    Insurance                                             0.12              0.14              0.19
    Ground package cost                                   0.06              0.06              0.16
    Aircraft impairments and retirements                  0.04              0.03              0.38
    Goodwill impairment                                     -                 -               0.04
    U.S. Government grants                                  -              (0.18)             0.09
    Other                                                 0.33              0.34              0.40
                                                       ----------        ----------        ----------
Total consolidated operating expenses                     7.68              6.82              8.17
                                                       ----------        ----------        ----------
Consolidated operating income (loss)                     (0.47)             0.37             (0.91)
                                                       ==========        ==========        ==========
ASMs (in thousands)                                    21,242,000        21,125,905        17,599,968

</TABLE>

                                       22
<PAGE>

Year Ended December 31, 2004, Versus Year Ended December 31, 2003

Consolidated Flight Operations and Financial Data

The following table sets forth, for the periods indicated, certain key operating
and financial data for the consolidated  flight operations of the Company.  Data
shown for "Jet"  operations  include  the  consolidated  operations  of Lockheed
L-1011, Boeing 737-800, Boeing 757-200 and Boeing 757-300 aircraft in all of the
Company's   business  units.  Data  shown  for  "SAAB"  operations  include  the
operations  of SAAB  340B  propeller  aircraft  by  Chicago  Express  as the ATA
Connection.

<TABLE>
<CAPTION>
                                          Twelve Months Ended December 31,

                                   -----------------------------------------------------------
                                       2004           2003         Inc (Dec)       % Inc (Dec)
                                   -----------------------------------------------------------
<S>                                 <C>            <C>            <C>               <C>
Departures Jet                          84,768         79,790         4,978           6.24
Departures SAAB                         53,096         52,071         1,025           1.97
                                    ----------     ----------     ----------        -------
   Total Departures                    137,864        131,861         6,003           4.55
                                    ----------     ----------     ----------        -------

Block Hours Jet                        257,959        246,951        11,008           4.46
Block Hours SAAB                        51,310         51,256            54           0.11
                                    ----------     ----------     ----------        -------
    Total Block Hours                  309,269        298,207        11,062           3.71
                                    ----------     ----------     ----------        -------

RPMs Jet (000s)                     14,489,926     14,166,987       322,939           2.28
RPMs SAAB (000s)                       188,549        191,712        (3,163)         (1.65)
                                    ----------     ----------     ----------        -------
    Total RPMs (000s) (a)           14,678,475     14,358,699       319,776           2.23
                                    ----------     ----------     ----------        -------
ASMs Jet (000s)                     20,939,030     20,815,681       123,349           0.59
ASMs SAAB (000s)                       302,970        310,224        (7,254)         (2.34)
                                    ----------     ----------     ----------         ------
    Total ASMs (000s) (b)           21,242,000     21,125,905       116,095           0.55
                                    ----------     ----------     ----------        -------
Load Factor Jet                        69.20          68.06          1.14             1.67
Load Factor SAAB                       62.23          61.80          0.43             0.70
                                    ----------     ----------     ----------         ------
    Total Load Factor (c)              69.10          67.97          1.13             1.66
                                    ----------     ----------     ----------        -------
Passengers Enplaned Jet             10,547,275     10,138,487       408,788           4.03
Passengers Enplaned SAAB             1,106,110      1,088,388        17,722           1.63
                                    ----------     ----------     ----------         ------
     Total Passengers Enplaned (d)  11,653,385     11,226,875       426,510           3.80
                                    ----------     ----------     ----------        -------
Revenue $ (000s)                     1,532,571      1,518,533       14,038            0.92
RASM in cents (e)                       7.21           7.19          0.02             0.28
CASM in cents (f)                       7.68           6.82          0.86            12.61
Yield in cents (g)                     10.44          10.58         (0.14)           (1.32)

Average Aircraft in Service
Lockheed  L-1011                        5.67           7.63         (1.96)          (25.69)
Boeing 737-800                         32.63          30.68          1.95             6.36
Boeing 757-200                         15.21          15.17          0.04             0.26
Boeing 757-300                         12.00          10.94          1.06             9.69
SAAB 340B                              16.10          16.10            -                -

Average Block Hours Flown per day

Lockheed  L-1011                        8.52           7.73          0.79            10.22
Boeing 737-800                         10.85          10.60          0.25             2.36
Boeing 757-200                         11.66          11.55          0.11             0.95
Boeing 757-300                         10.60          10.98         (0.38)           (3.46)
SAAB 340B                               8.73           8.72          0.01             0.11

</TABLE>
See footnotes (a) through (g) on page 24.

                                       23
<PAGE>

(a)  Revenue  passenger  miles (RPMs)  represent the number of seats occupied by
     revenue passengers multiplied by the number of miles those seats are flown.
     RPMs are an industry  measure of the total seat  capacity  actually sold by
     the Company.

(b)  Available  seat miles (ASMs)  represent  the number of seats  available for
     sale to revenue  passengers  multiplied  by the number of miles those seats
     are flown.  ASMs are an industry measure of the total seat capacity offered
     for sale by the Company, whether sold or not.

(c)  Passenger load factor is the  percentage  derived by dividing RPMs by ASMs.
     Passenger  load factor is relevant to the  evaluation of scheduled  service
     because  incremental  passengers  normally provide  incremental revenue and
     profitability when seats are sold  individually.  In the case of commercial
     charter  and  military/government  charter,  load  factor is less  relevant
     because an entire  aircraft  is sold by the Company  instead of  individual
     seats.  Since both costs and revenues are largely  fixed for these types of
     charter  flights,  changes in load factor have less impact on business unit
     profitability. Consolidated load factors and scheduled service load factors
     for  the  Company  are  shown  in  the  appropriate   tables  for  industry
     comparability,  but load  factors for  individual  charter  businesses  are
     omitted from applicable tables.

(d)  Passengers enplaned are the number of revenue passengers who occupied seats
     on the Company's  flights.  This measure is also referred to as "passengers
     boarded."

(e)  Revenue per ASM (expressed in cents) is total operating  revenue divided by
     total ASMs.  This measure is also  referred to as "RASM." RASM measures the
     Company's unit revenue using total available seat capacity.  In the case of
     scheduled service,  RASM is a measure of the combined impact of load factor
     and yield (see (g) for the definition of yield).

(f)  Cost per ASM  (expressed in cents) is total  operating  expense  divided by
     total ASMs.  This measure is also  referred to as "CASM." CASM measures the
     Company's unit cost using total available seat capacity.

(g)  Revenue per RPM (expressed in cents) is total operating  revenue divided by
     total RPMs.  This measure is also referred to as "yield." Yield is relevant
     to the  evaluation of scheduled  service  because yield is a measure of the
     average price paid by customers purchasing  individual seats. Yield is less
     relevant  to  the  commercial  charter  and   military/government   charter
     businesses  because the entire  aircraft is sold at one time for one price.
     Consolidated   yields  and  scheduled  service  yields  are  shown  in  the
     appropriate  tables for industry  comparability,  but yields for individual
     charter businesses are omitted from applicable tables.

Operating Revenues

Total operating  revenues in 2004 increased 0.9% to $1.533 billion,  as compared
to $1.519 billion in 2003. This increase was due to a $14.5 million  increase in
scheduled  service  revenue,  a $30.0  million  increase in  military/government
charter revenues and a $6.6 million increase in other revenues, partially offset
by a $37.3 million decrease in commercial charter revenues.

The following table sets forth, for the periods indicated, certain key operating
and financial data for the scheduled  service,  military/government  charter and
commercial charter operations of the Company.

                                       24
<PAGE>



<TABLE>
<CAPTION>
                                                          Twelve Months Ended December 31,
                                          _____________________________________________________________
                                              2004             2003         Inc (Dec)       % Inc (Dec)
                                          _____________________________________________________________
<S>                                       <C>               <C>              <C>              <C>
Scheduled Service
   Departures                                130,338           122,628          7,710           6.29
   Block Hours                               276,287           258,021         18,266           7.08
   RPMs (000s)  (a)                       12,728,760        12,079,272        649,488           5.38
   ASMs  (000s)  (b)                      17,450,098        16,735,500        714,598           4.27
   Load Factor  (c)                            72.94             72.18           0.76           1.05
   Passengers Enplaned (d)                11,190,961        10,464,348        726,613           6.94
   Revenue $ (000s)                        1,099,944         1,085,420         14,524           1.34
   RASM in cents  (e)                           6.30              6.49          (0.19)         (2.93)
   Yield in cents  (g)                          8.64              8.99          (0.35)         (3.89)
   Revenue per segment $  (h)                  98.29            103.73          (5.44)         (5.24)

Military/Government Charter
   Departures                                  5,993             5,721            272           4.75
   Block Hours                                27,844            27,689            155           0.56
   ASMs  (000s)  (b)                       3,379,282         3,426,275        (46,993)         (1.37)
   Revenue $ (000s)                          326,897           296,893         30,004          10.11
   RASM in cents  (e)                           9.67              8.67           1.00          11.53
   RASM excluding fuel escalation  (j)          9.25              8.56           0.69           8.06

Commercial Charter
   Departures                                  1,373             3,473         (2,100)        (60.47)
   Block Hours                                 4,676            12,368         (7,692)        (62.19)
   ASMs  (000s)  (b)                         376,265           949,375       (573,110)        (60.37)
   Revenue $ (000s)                           31,973            69,314        (37,341)        (53.87)
   RASM in cents  (e)                           8.50              7.30           1.20          16.44
   RASM excluding fuel escalation  (i)          8.36              6.97           1.39          19.94

Percentage of Consolidated Revenues:
   Scheduled Service                            71.8%             71.5%           0.3%          0.42
   Military Charter                             21.3%             19.6%           1.7%          8.67
   Commercial Charter                            2.1%              4.6%         (2.5)%       (54.35)


</TABLE>

See footnotes (a) through (g) on page 24.

(h)  Revenue per segment flown is determined by dividing total scheduled service
     revenues  by the number of  passengers  boarded.  Revenue  per segment is a
     broad measure of the average price  obtained for all flight  segments flown
     by passengers in the Company's scheduled service route network.

(i)  Commercial charter contracts  generally provide that the tour operator will
     reimburse the Company for certain fuel cost increases,  which, when earned,
     are accounted for as additional revenue. A RASM calculation,  excluding the
     impact of fuel  reimbursements,  is provided as a separate  measure of unit
     revenue changes.

(j)  Military/government reimbursements to the Company are calculated based upon
     a "cost plus"  formula,  including  an assumed  average fuel price for each
     contract  year.  If actual  fuel  prices  differ  from the  contract  rate,
     revenues are adjusted up or down to neutralize  the impact of the change to
     the Company. A separate RASM calculation is provided,  excluding the impact
     of the fuel price adjustments.

Scheduled Service Revenues. Scheduled service revenues in 2004 increased 1.4% to
$1.100  billion  from $1.085  billion in 2003.  For the year ended  December 31,
2004,  unit  revenues  decreased  2.9% and  yields  decreased  3.9% on 4.3% more
capacity,  as compared to the year ended  December  31, 2003.  During 2004,  ATA

                                       25
<PAGE>

experienced   significant  pressure  from  a  competitive  pricing  environment,
including extraordinary discounting by several airlines in many of the scheduled
service  markets ATA  serves.  The primary  reason for the  competitive  pricing
environment has been the industry's added capacity,  which  especially  impacted
ATA's  transcontinental  and other east-west markets in early 2004. As a result,
ATA  cancelled  some of its east-west  routes  beginning in March and April 2004
while continuing to review its other scheduled  service  markets.  ATA announced
additional  route  changes  in late  2004  and  early  2005 in  response  to the
competitive pricing  environment,  which include a significant  reduction in the
number of flights serving the Indianapolis market.

Military/Government   Charter  Revenues.   Military/government  charter  revenue
increased  10.1% to $326.9  million in 2004 from  $296.9  million  in 2003.  The
increase in revenue in 2004, as compared to 2003,  was mainly due to an increase
in fuel escalation  revenues earned from contractual fuel price guarantees and a
change in the mix of aircraft  flying,  as narrow  body  aircraft  replaced  the
retired wide body aircraft.

Commercial  Charter  Revenues.  Commercial  charter revenues  decreased 53.8% to
$32.0 million in 2004 from $69.3 million in 2003. The majority of the decline in
commercial  charter  revenues  continues  to reflect the  retirement  of certain
Lockheed L-1011 aircraft that ATA has traditionally  used in commercial  charter
flying.  Since  aircraft  utilization  is  typically  much lower for  commercial
charter,  as compared to scheduled service flying,  ATA's replacement  fleets of
new Boeing 737-800 and Boeing 757-300  aircraft are  economically  disadvantaged
when used in the charter business because of their higher fixed-ownership cost.

Ground Package  Revenues.  The Company earns ground package revenues through the
sale of hotel,  car rental and cruise  accommodations  in  conjunction  with the
Company's  air  transportation  product.  Currently,  the Company  markets these
ground packages through its subsidiary, Ambassadair Travel Club ("Ambassadair").
In 2004,  ground package  revenues  increased 1.4% to $14.9 million,  from $14.7
million in 2003.

Other  Revenues.  Other revenues are comprised of the  consolidated  revenues of
certain affiliated companies,  together with miscellaneous categories of revenue
associated   with  operations  of  the  Company,   such  as   cancellation   and
miscellaneous service fees and cargo revenue.  Other revenues increased 12.6% to
$58.8 million in 2004 from $52.2 million in 2003.

Operating Expenses

Salaries,  Wages and Benefits.  Salaries, wages and benefits include the cost of
salaries and wages paid to the Company's employees,  together with the Company's
cost of employee benefits and  payroll-related  local,  state and federal taxes.
Salaries,  wages and benefits  expense  increased 5.7% to $422.4 million in 2004
from $399.6 million in 2003.

The increase in salaries,  wages and benefits in 2004,  as compared to 2003,  is
partially  due to the Company  incurring  higher costs for employee  medical and
workers'  compensation  benefits.  In addition,  the Company employed additional
crewmembers  and other  operational  employees  in 2004 to handle its  increased
scheduled  service  capacity,  as compared to 2003. Also, on July 1, 2003, ATA's
cockpit crewmembers received contractual rate increases.

During the third quarter of 2004, ATA reached an agreement to amend its contract
with  its  cockpit  crewmembers  represented  by  ALPA.  Under  the  amendments,
crewmembers  agreed to forego  contractual  rate increases that otherwise  would
have  become  effective  July 1, 2004 and July 1, 2005  resulting  in savings of
approximately  $26.0 million.  The amendments include new contractual  increases
effective  July 1, 2006 and July 1, 2007.  Also, in February  2005, ATA signed a
letter of  agreement  for the time period from  January 31, 2005 through May 31,
2005. Under the agreement during this period, the cockpit  crewmembers agreed to
an approximate 20% pay reduction,  certain work rule changes and a 50% reduction
in  contributions  to the Cockpit Member  Pension Plan. The Company  expects the
agreement to reduce costs  approximately  $12.0 million over the duration of the
agreement.

                                       26
<PAGE>

ATA  also  concluded  an  amendment  to its  agreement  with  cabin  crewmembers
represented  by AFA on October 15, 2004.  Under terms of the amended  agreement,
cabin  crewmembers will reduce their base hourly pay rate effective  October 15,
2004 by 10% through  October 15,  2006,  resulting  in savings of  approximately
$11.5  million  over the same time period.  On October 15,  2006,  non-amendable
rates of pay return to the rates in force on April 11, 2004.

Fuel and Oil. Fuel and oil expense increased 33.4% to $368.3 million in 2004, as
compared to $276.1 million in 2003.  During 2004, the average cost per gallon of
jet fuel consumed increased by 30.6% compared to 2003,  resulting in an increase
in fuel and oil expense of  approximately  $84.6 million  between those periods.
The Company also benefits from fuel reimbursement  clauses and guarantees in its
bulk scheduled service,  commercial charter and  military/government  contracts,
but the benefit of these  price  guarantees  is  accounted  for as revenue  when
realized.

Aircraft Rentals.  The Company's operating leases require periodic cash payments
that vary in amount and  frequency.  Many of the  Company's  aircraft  operating
leases were originally  structured to require very  significant cash payments in
the early years of the lease in order to obtain  more  overall  favorable  lease
rates.  The Company  accounts  for  aircraft  rentals  expense in equal  monthly
amounts over the life of each  operating  lease  because  straight-line  expense
recognition  is most  representative  of the time pattern from which  benefit is
derived from use of the aircraft.  Although the Company restructured many of its
operating  leases in January 2004,  the amount of the cash payments in excess of
the aircraft rent expense in these early years  generated a significant  prepaid
aircraft rent amount on the Company's balance sheet. Aircraft rentals expense in
2004  increased  7.1% to $242.6  million  from  $226.6  million  in 2003.  These
increases were mainly attributable to the delivery of two leased Boeing 737-800s
and three leased Boeing 757-300s between mid-2003 and December 2004.

Handling,  Landing and  Navigation  Fees.  Handling and landing fees include the
costs  incurred by the Company at airports to land and service its  aircraft and
to handle  passenger  check-in,  security,  cargo and baggage  where the Company
elects to use third-party contract services in lieu of its own employees.  Where
the Company uses its own employees to perform  ground  handling  functions,  the
resulting cost appears within salaries,  wages and benefits. Air navigation fees
are incurred when the Company's aircraft fly through certain foreign airspace.

Handling,  landing and  navigation  fees  increased by 5.4% to $120.0 million in
2004,  as compared to $113.8  million in 2003.  This  increase was due to a 4.6%
increase in system-wide jet departures,  as compared to 2003,  which resulted in
an increase  in handling  and landing  fees of $9.3  million.  The Company  also
incurred an increase in security  costs of $3.3 million in 2004,  as compared to
2003,  partially  due to the temporary  suspension of the aviation  security fee
during part of 2003. The Company  experienced a decrease in the cost of handling
per departure due to negotiation of favorable terms in new contracts,  resulting
in decreased expenditures of $7.3 million in 2004, as compared to 2003.

Aircraft  Maintenance,  Materials and Repairs. This expense includes the cost of
expendable  aircraft  spare parts,  repairs to repairable  and rotable  aircraft
components,  contract labor for maintenance activities and other non-capitalized
direct costs related to fleet maintenance,  including spare engine leases, parts
loan and exchange fees, and related  shipping  costs. It also includes the costs
incurred under hourly engine maintenance agreements the Company has entered into
on its  Boeing  737-800,  Boeing  757-200,  Boeing  757-300  and SAAB 340B power
plants.  These agreements provide for the Company to pay monthly fees based on a
specified rate per engine flight hour in exchange for major engine overhauls and
maintenance. Aircraft maintenance, materials and repairs expense increased 64.1%
to $75.0 million in 2004, as compared to $45.7 million in 2003, primarily due to
contractual rate increases in the jet aircraft hourly maintenance agreements.

Crew and Other Employee Travel.  Crew and other employee travel is primarily the
cost of air  transportation,  hotels and per diem  reimbursements to cockpit and
cabin  crewmembers  incurred to position  crews away from their bases to operate
Company flights throughout the world. The cost of crew and other employee travel
decreased  10.3% to $57.5 million in 2004, as compared to $64.1 million in 2003.

                                       27
<PAGE>

The Company was able to realize a reduction  in crew and other  employee  travel
expense in 2004, as compared to 2003, due to  efficiencies  gained from flying a
significant amount of military flights on similar routings.  Also, the number of
incremental new aircraft in 2003 resulted in training costs for crew,  cabin and
other  personnel,  which was not repeated in 2004 due to fewer deliveries of new
aircraft.  In  addition,  the Company  realized a reduction in per diem costs in
2004,  as compared to 2003, as a result of contract  amendments  entered into in
2004 with the cockpit and cabin crewmembers.

Depreciation and Amortization.  Depreciation and amortization  expense decreased
8.3% to $52.0 million in 2004,  as compared to $56.7 million in 2003,  primarily
due to the retirement of five L-1011-50 and 100 aircraft from revenue service in
2003 and 2004 collectively.  These retirements  resulted in $5.7 million less in
depreciation in 2004, as compared to 2003.

Other  Selling  Expenses.  Other  selling  expenses are  comprised  primarily of
booking fees paid to computer reservation systems ("CRS"),  credit card discount
expenses  incurred when selling to customers  using credit cards for payment and
toll-free  telephone  services  provided  to  customers  who contact the Company
directly to book  reservations.  Other selling expenses  increased 2.4% to $51.4
million  in 2004,  as  compared  to $50.2  million  in  2003,  primarily  due to
increased   credit  card  and  CRS  fees  associated  with  scheduled   services
passengers.

Passenger Service.  Passenger service expense includes the onboard costs of meal
and non-alcoholic  beverage  catering,  the cost of alcoholic  beverages and the
cost of onboard entertainment programs, together with certain costs incurred for
mishandled  baggage  and  passengers  inconvenienced  due to  flight  delays  or
cancellations.  For  2004  and  2003,  catering  represented  84.0%  and  82.4%,
respectively, of total passenger service expense.

The total cost of passenger  service increased 4.6% to $42.9 million in 2004, as
compared to $41.0  million in 2003,  primarily  due to an increase in  scheduled
service  passengers  enplaned,  and the increase in  military/government  flying
between years, as that flying requires a more expensive catering product.

Advertising.  Advertising  expense  decreased 11.6% to $33.5 million in 2004, as
compared  to $37.9  million  in  2003.  The  Company  incurs  advertising  costs
primarily to support single-seat  scheduled service sales. The decrease in costs
between  years is primarily due to the Company  reducing its  marketing  efforts
after its Chapter 11 filing.

Facilities and Other Rentals.  Facilities and other rentals  include the cost of
all ground  facilities  that are leased by the  Company  such as airport  space,
regional  sales offices and general  offices.  The cost of facilities  and other
rentals  increased  12.0% to $27.1 million in 2004, as compared to $24.2 million
in 2003.  The Company  experienced  cost  increases at certain  locations due to
increased frequency to those destinations and normal contractual rate increases.

Commissions.  The Company incurs commission expense in association with the sale
by travel agents of single seats on scheduled service. In addition,  the Company
incurs  commissions to secure some  commercial and  military/government  charter
business.  Commissions  expense  increased  17.0% to $26.2  million in 2004,  as
compared to $22.4 million in 2003.

The  Company  experienced  an increase  of $5.5  million in  military/government
commissions in 2004, as compared to 2003, due to both increased revenues in 2004
and the  deactivation  of the Civil Reserve Air Fleet  ("CRAF") in June 2003, as
certain  of the  CRAF  flights  flown  in 2003  were  exempt  from  commissions.
Substantially  all  military  flights in 2004 were  commissionable.  The Company
experienced a decrease in scheduled service commissions of $1.7 million in 2004,
as compared to 2003, due to the increasing  share of  non-commissionable  ticket
purchases  made on the  Company's  own  website,  as  compared  to the  share of
commissionable sales made through travel agents.

Insurance. Insurance expense represents the Company's cost of hull and liability
insurance  and the costs of  general  insurance  policies  held by the  Company,
including workers' compensation insurance premiums and claims handling fees. The
total cost of insurance decreased 18.5% to $24.6 million in 2004, as compared to
$30.2  million  in  2003.  The  decrease  is  mainly  attributable  to the  U.S.
Government  providing increased war-risk coverage in 2004, which was provided at

                                       28
<PAGE>

higher rates by the commercial  insurance  markets in 2003. The U.S.  Government
currently plans to provide this insurance through August 2005, at which time the
Company may experience a rate increase with a commercial provider.

Ground  Package  Cost.  Ground  package cost is incurred by the Company  through
hotels,  car rental  companies,  cruise  lines and  similar  vendors who provide
ground and cruise accommodations to Ambassadair  customers.  Ground package cost
increased  3.3% to $12.5  million in 2004,  as compared to $12.1 million in 2003
consistent with ground package revenue.

Aircraft  Impairments and Retirements.  The Company began performing  impairment
reviews on its 727-200 fleet in 2000 and the fleet became impaired under FAS 121
in 2001, subsequent to the terrorist attacks of September 11. In accordance with
FAS 121,  the  Company  continues  to  monitor  current  fair  market  values of
previously  impaired  assets.  In 2004, the Company recorded an additional asset
impairment charge of $7.9 million against its remaining net book value of Boeing
727-200  aircraft  (recorded  as an  investment  in the BATA joint  venture) and
related  assets,  as compared  to $5.3  million  recorded  in 2003.  The current
estimate of this  fleet's  fair market  value is based on  discounted  cash flow
analysis.  The carrying amount of  approximately  $685,000  related to assets of
this fleet is  classified  as long-term  assets held for sale and appears in the
deposits  and  other  assets  line  of  the  accompanying   balance  sheet.  See
"Reorganization Expenses" for discussion of the L1011-500 impairments.

U.S  Government  Grants.  In 2003,  the U.S.  Government  enacted the  Emergency
Wartime  Supplemental   Appropriations  Act  ("Supplemental  Act"),  which  made
available  $2.3  billion in  reimbursement  to U.S.  air  carriers  for expenses
incurred and revenue foregone related to enhanced aviation  security  subsequent
to the September 11, 2001 terrorist attacks.  Pursuant to this legislation,  the
Company  received  $37.2  million in cash in May 2003,  which was  recorded as a
credit to operating expenses. The Company does not expect to receive any further
material  compensatory funds from the U.S. Government,  and did not receive such
reimbursements in 2004.

Other  Operating  Expenses.  Other  operating  expenses  decreased 4.6% to $69.0
million in 2004, as compared to $72.3 million in 2003,  attributable  to various
changes  in other  expenses  comprising  this  line  item,  none of  which  were
individually significant.

Interest  Income  and  Expense.  Interest  expense  in 2004  decreased  to $51.1
million,  as compared to $56.3  million in 2003.  In  accordance  with SOP 90-7,
following  its Chapter 11 filing,  the Company did not record  interest  expense
with respect to unsecured debt or secured debt in which the collateral  value is
less than the principal amount of the debt.

Loss on  Extinguishment  of Debt.  On January 30,  2004,  the Company  completed
exchange  offers  and  issued  Senior  Notes due 2009  ("2009  Notes")  and cash
consideration for certain of its $175 million 10 1/2% Senior Notes due August in
2004 ("2004 Notes") and issued Senior Notes due 2010 ("2010 Notes" and, together
with the 2009 Notes, "New Notes") and cash consideration for certain of its $125
million 9 5/8% Senior  Notes due in December  2005 ("2005  Notes" and,  together
with the 2004 Notes,  "Existing Notes").  The Company accepted $260.3 million of
Existing  Notes  tendered  for  exchange,  issuing  $163.1  million in aggregate
principal  amount of 2009 Notes and delivering  $7.8 million in cash in exchange
for $155.3 million in aggregate  principal  amount of 2004 Notes  tendered,  and
issuing  $110.2  million  in  aggregate  principal  amount  of  2010  Notes  and
delivering  $5.2  million in cash in exchange  for $105.0  million in  aggregate
principal of 2005 Notes. As a result of this transaction, the Company recorded a
non-operating loss on extinguishment of debt of $27.3 million in accordance with
FASB  Emerging  Issues  Task Force  Issue No.  96-19,  Debtor's  Accounting  for
Modification of Exchange of Debt Terms ("EITF  96-19").  The loss mainly relates
to the accounting for the $13 million cash  consideration paid at closing of the
exchange  offers  and the $13  million of  incremental  notes  issued  during he
exchange offers.

Reorganization  Expenses.  In accordance with SOP 90-7, the Company's  revenues,
expenses (including professional fees), realized gains and losses, and provision

                                       29
<PAGE>

for  losses  that  can  be  directly  associated  with  the  reorganization  and
restructuring of the business are reported separately as reorganization items in
the consolidated statement of operations.

For the year ended  December 31, 2004,  the Company had recognized the following
reorganization   expenses  in  the  consolidated  statement  of  operations  (in
thousands):

<TABLE>

<S>                                                           <C>


Aircraft lease rejection charges                              $      568,317
Aircraft impairment                                                   44,499
Professional fees                                                      8,747
Goodwill impairment                                                    6,399
Other                                                                 10,517
                                                              --------------
                                                              $      638,479
                                                              ==============
</TABLE>


The aircraft  leases and aircraft engine leases  rejection  charges are non-cash
charges which are comprised of the Company's  estimate of claims  resulting from
the  rejection or return of the  aircraft and engines as part of the  bankruptcy
process.  They also include the write-off of assets and  liabilities  related to
aircraft  leases and  aircraft  engine  leases that the  Company  has  rejected,
committed  to return  dates with the lessor or intended to reject as part of the
Company's  business plan as of December 31, 2004.  The estimate that the Company
recorded is subject to material  adjustments as the Debtors  proceed through the
bankruptcy process.

The aircraft  impairment  charge relates to the Company's  L1011-500  fleet.  In
2003,  the Company began  evaluating  this fleet and related parts and inventory
for impairment under FAS 144 assuming a common fleet retirement date of December
2010  and the  fleet  remained  unimpaired  through  2003.  In 2004,  given  the
Company's financial  position,  cash constraints and related limitations imposed
by the Chapter 11 filing  initiated in the fourth  quarter of 2004,  the Company
determined  the likelihood of expending the funds to perform heavy checks on the
airframes  when  they  become  due in late  2005  through  mid  2007 is  remote.
Therefore,  the Company  evaluated the fleet and related parts and inventory for
impairment  assuming  the  aircraft  would be  retired at the date of their next
required airframe heavy check. This evaluation  indicated that the aircraft were
impaired and the Company recorded a related  impairment  charge of $44.5 million
in the fourth  quarter of 2004.  The Company  estimates this fleet's fair market
value using discounted cash flow analysis.  In accordance with SOP 90-7, because
the 2004 impairment charge was directly related to the Company's  reorganization
under  Chapter 11, the charge was  recorded as a  reorganization  expense on the
Company's  statement  of  operations.  The  carrying  amount of these  assets is
classified  as assets held for use and  appears in the  property  and  equipment
section of the accompanying consolidated balance sheets, as the Company is still
flying these aircraft.  The assets are being  depreciated in accordance with the
planned fleet retirement schedule.

The goodwill  impairment  charge  relates to the Company's  MTC product.  In the
fourth quarter of 2004, the Company  determined  that due to route structure and
operational  changes related to the Company's  reorganization  under Chapter 11,
the fair market value of this  reporting  unit,  based on  discounted  cash flow
analysis, had declined.

Income Tax Expense.  No income tax benefit was recorded applicable to the $816.0
million pre tax loss in 2004 as a full  valuation  allowance was  established by
the Company.  In 2003, the Company  recorded income tax expense of $1.3 million,
representing  an estimate of the income  taxes to be paid,  applicable  to $21.7
million in pre-tax income.

                                       30
<PAGE>

As of December 31, 2004, the Company has incurred a three-year  cumulative loss.
Because of this cumulative loss and the presumption under GAAP that net deferred
tax assets should be fully reserved if it is more likely than not that they will
not be realized through  carrybacks or other strategies,  the Company recorded a
full valuation allowance against its net deferred tax asset.

Year Ended December 31, 2003, Versus Year Ended December 31, 2002

Consolidated Flight Operations and Financial Data

The following table sets forth, for the periods indicated, certain key operating
and financial data for the consolidated  flight operations of the Company.  Data
shown for "Jet"  operations  include  the  consolidated  operations  of Lockheed
L-1011,  Boeing  727-200,  Boeing  737-800,  Boeing  757-200 and Boeing  757-300
aircraft  in all  of  the  Company's  business  units.  Data  shown  for  "SAAB"
operations  include the  operations of SAAB 340B  propeller  aircraft by Chicago
Express as the ATA Connection.

                                       31
<PAGE>

<TABLE>
<CAPTION>
                                                       Twelve Months Ended December 31,
                                   -----------------------------------------------------------
                                      2003           2002          Inc (Dec)       % Inc (Dec)
                                   -----------------------------------------------------------
<S>                                <C>            <C>             <C>                <C>
Departures Jet                         79,790         66,903         12,887           19.26
Departures SAAB                        52,071         42,105          9,966           23.67
                                   ----------     ----------      ---------           -----
Total Departures                      131,861        109,008         22,853           20.96
                                   ----------     ----------      ---------           -----
Block Hours Jet                       246,951        199,290         47,661           23.92
Block Hours SAAB                       51,256         40,008         11,248           28.11
                                   ----------     ----------      ---------           -----
 Total Block Hours                    298,207        239,298         58,909           24.62
                                   ----------     ----------      ---------           -----
RPMs Jet (000s)                    14,166,987     12,231,661      1,935,326           15.82
RPMs SAAB (000s)                      191,712        152,576         39,136           25.65
                                   ----------     ----------      ---------           -----
   Total RPMs (000s) (a)           14,358,699     12,384,237      1,974,462           15.94
                                   ----------     ----------      ---------           -----

ASMs Jet (000s)                    20,815,681     17,362,835      3,452,846           19.89
ASMs SAAB (000s)                      310,224        237,133         73,091           30.82
                                   ----------     ----------      ---------           -----
    Total ASMs (000s) (b)          21,125,905     17,599,968      3,525,937           20.03
                                   ----------     ----------      ---------           -----

Load Factor Jet                         68.06          70.45         (2.39)           (3.39)
Load Factor SAAB                        61.80          64.34         (2.54)           (3.95)
                                   ----------     ----------      ---------           -----
   Total Load Factor (c)                67.97          70.37         (2.40)           (3.41)
                                   ----------     ----------      ---------           -----

Passengers Enplaned Jet            10,138,487      9,139,770        998,717           10.93
Passengers Enplaned SAAB            1,088,388        906,909        181,479           20.01
                                   ----------     ----------      ---------           -----
   Total Passengers Enplaned (d)   11,226,875     10,046,679      1,180,196           11.75
                                   ----------     ----------      ---------           -----

Revenue $ (000s)                    1,518,533      1,277,370        241,163           18.88
RASM in cents (e)                        7.19           7.26         (0.07)           (0.96)
CASM in cents (f)                        6.82           8.17         (1.35)          (16.52)
Yield in cents (g)                      10.58          10.31          0.27             2.62

Average Aircraft in Service
  Lockheed  L-1011                       7.63          10.54         (2.91)          (27.61)
  Boeing 737-800                        30.68          22.37          8.31            37.15
  Boeing 757-200                        15.17          15.96         (0.79)           (4.95)
  Boeing 757-300                        10.94           7.96          2.98            37.44
  SAAB 340B                             16.10          13.33          2.77            20.78

Average Block Hours Flown per day
  Lockheed  L-1011                       7.73           5.86          1.87            31.91
  Boeing 737-800                        10.60           9.84          0.76             7.72
  Boeing 757-200                        11.55          10.73          0.82             7.64
  Boeing 757-300                        10.98           9.82          1.16            11.81
  SAAB 340B                              8.72           8.22          0.50             6.08

</TABLE>

See footnotes (a) through (g) on page 24.

Operating Revenues

Total operating revenues in 2003 increased 19.0% to $1.519 billion,  as compared
to $1.277 billion in 2002. This increase was due to a $198.8 million increase in
scheduled  service  revenue,  a $119.0 million  increase in  military/government
charter revenues and a $6.4 million increase in other revenues, partially offset
by a $62.0 million  decrease in commercial  charter revenues and a $21.0 million
decrease in ground package revenues.

The following table sets forth, for the periods indicated, certain key operating
and financial data for the scheduled  service,  military/government  charter and


                                       32
<PAGE>

commercial charter operations of the Company.

<TABLE>
<CAPTION>
                                          ----------------------------------------------------------------------------------
                                                         Twelve Months Ended December 31,
                                          ----------------------------------------------------------------------------------

                                             2003                      2002               Inc (Dec)             % Inc (Dec)
<S>                                        <C>                     <C>                    <C>                     <C>
Scheduled Service
    Departures                                122,628                  98,877                23,751                 24.02
    Block Hours                               258,021                 201,077                56,944                 28.32
    RPMs (000s)  (a)                       12,079,272               9,911,884             2,167,388                 21.87
    ASMs  (000s)  (b)                      16,735,500              13,608,326             3,127,174                 22.98
    Load Factor  (c)                            72.18                   72.84                (0.66)                 (0.91)
    Passengers Enplaned (d)                10,464,348               8,859,044             1,605,304                 18.12
    Revenue $ (000s)                        1,085,420                 886,579               198,841                 22.43
    RASM in cents  (e)                           6.49                    6.51                (0.02)                 (0.31)
    Yield in cents  (g)                          8.99                    8.94                 0.05                   0.56
    Revenue per segment $  (h)                 103.73                  100.08                 3.65                   3.65

Military/Government Charter
    Departures                                  5,721                   3,650                 2,071                 56.74
    Block Hours                                27,689                  15,975                11,714                 73.33
    ASMs  (000s)  (b)                       3,426,275               2,103,874             1,322,401                 62.86
    Revenue $ (000s)                          296,893                 177,901               118,992                 66.89
    RASM in cents  (e)                           8.67                    8.46                  0.21                  2.48
    RASM excluding fuel escalation  (i)          8.56                    8.48                  0.08                  0.94

Commercial Charter
    Departures                                  3,473                   6,459               (2,986)               (46.23)
    Block Hours                                12,368                  22,159               (9,791)               (44.19)
    ASMs  (000s)  (b)                         949,375               1,875,885             (926,510)               (49.39)
    Revenue $ (000s)                           69,314                 131,341              (62,027)               (47.23)
    RASM in cents  (e)                           7.30                    7.00                  0.30                  4.29
    RASM excluding fuel escalation  (j)          6.97                    6.89                  0.08                  1.16

Percentage of Consolidated Revenues:
    Scheduled Service                           71.5%                   69.4%                  2.1%                  3.03
    Military Charter                            19.6%                   13.9%                  5.7%                 41.01
    Commercial Charter                           4.6%                   10.3%                (5.7)%                (55.34)


</TABLE>

See footnotes (a) through (j) on pages 24 - 25.

Scheduled Service  Revenues.  Scheduled service revenues in 2003 increased 22.4%
to $1.085 billion from $886.6  million in 2002.  This increase was due primarily
to increases in scheduled  service  capacity and a small increase in revenue per
segment flown.

Approximately 67.1% of the Company's scheduled service capacity was generated by
flights either originating or terminating at Chicago-Midway in 2003, as compared
to 71.2% in 2002. The Hawaiian  market  generated  approximately  12.9% of total
scheduled service capacity in 2003, as compared to 13.7% in 2002.  Another 13.3%
of total scheduled service capacity was generated in the Indianapolis  market in
2003, as compared to 10.5% in 2002.

Although  the  scheduled  service  RASM for the  entire  year 2003 was down only
slightly as compared to 2002, the Company noted significant fluctuations in unit
revenue  performance  during  the  course of 2003.  Unit  revenues  in the first
quarter of 2003 were down almost 8%, as  compared to the first  quarter of 2002.
The Company believes that first quarter 2003 traffic was significantly  affected

                                       33
<PAGE>

by the elevated risk of terrorist attack noted before the beginning of Operation
Iraqi  Freedom in February  2003,  and by the war  itself,  which began in March
2003.  Unit revenues in the second  quarter of 2003 were down slightly more than
2%, as compared to the second  quarter of 2002,  which the Company  believes was
affected by the speedy end of the Iraqi  invasion and by seasonal  spring travel
demand.  In the third quarter of 2003,  unit revenues were almost 7% higher than
in the third quarter of 2002, which the Company believes reflected a very strong
summer travel season rebound from the first half of 2003. However, in the fourth
quarter  of 2003 unit  revenues  were only  slightly  higher  than in the fourth
quarter of 2002, and the Company noted in particular a decline in year-over-year
RASM performance in November and December of 2003.

Military/Government   Charter  Revenues.   Military/government  charter  revenue
increased  66.9% to $296.9  million in 2003 from  $177.9  million  in 2002.  The
increase in  military/government  charter revenues in 2003 was mainly due to the
activation  of CRAF in  February  2003,  which  required  ATA to pledge up to 13
aircraft to military/government  charter use to support Operation Iraqi Freedom.
The CRAF program  allowed the Company to increase its Lockheed  L-1011  aircraft
utilization  (number of  productive  hours of flying per aircraft per day) to an
average of 7.7 daily hours in 2003, as compared to 5.9 daily hours in 2002.  The
increased  utilization  allowed the  Company to operate its  military/government
charter  service more  efficiently  between  periods.  Although the CRAF program
ended on June 18, 2003, the Company still  experienced a high volume of military
flying,  recording  only 19.2% less  revenue  for the  second  half of 2003,  as
compared to the first half 2003.

Commercial  Charter  Revenues.  Commercial  charter revenues  decreased 47.2% to
$69.3 million in 2003 from $131.3  million in 2002.  The majority of the decline
in commercial  charter  revenues  continues to reflect the retirement of certain
Lockheed L-1011 and Boeing 727-200  aircraft in prior years that the Company had
traditionally used in commercial charter flying.  Since aircraft  utilization is
typically much lower for commercial  charter,  as compared to scheduled  service
flying,  the  Company's  replacement  fleets of new  Boeing  737-800  and Boeing
757-300  aircraft  are  economically  disadvantaged  when  used  in the  charter
business because of their higher fixed-ownership cost. In addition, decreases in
general airline fare levels throughout the United States since 2000 have reduced
the opportunity to operate commercial charter flights profitably.  Consequently,
the Company  expects its commercial  charter  revenues to continue to decline as
the fleet supporting this business continues to be retired.

Ground Package  Revenues.  In 2003,  ground package revenues  decreased 58.9% to
$14.7 million, from $35.7 million in 2002. This decline was due primarily to the
Company's  July 1, 2002,  outsourcing of the management and marketing of its ATA
Vacations and Travel Charter International brands to MTC. Under that outsourcing
agreement, MTC directly sells ground arrangements to customers who also purchase
charter or scheduled  service air  transportation  from the Company.  Therefore,
ground package sales (and related  ground package costs) are no longer  recorded
by the Company for ATA Vacations and Travel Charter International.

The net fee earned by the  Company on these sales  through  the MTC  outsourcing
agreement has been recorded in other revenues since the third quarter of 2002.

Other  Revenues.  Other revenues  increased  13.7% to $52.2 million in 2003 from
$45.9 million in 2002 primarily due to increases in cargo revenue.

Operating Expenses

Salaries,  Wages and Benefits.  Salaries,  wages and benefits expense  increased
12.5% to $399.6 million in 2003 from $355.2 million in 2002.

The increase in salaries,  wages and benefits  between years primarily  reflects
the impact of the Company's amended collective  bargaining  agreement (which was
ratified  in  July  2002)  with  the  Company's  cockpit  crewmembers,  who  are

                                       34
<PAGE>

represented by ALPA. Initial cockpit  crewmember  contract salary rate increases
became  effective July 1, 2002, and cockpit  crewmembers  received an additional
salary rate increase in July 2003 per this contract.  Additionally,  the amended
contract  provides  for  expanded   defined-contribution  benefits  for  cockpit
crewmembers  effective  January 1, 2003, which resulted in additional  salaries,
wages and benefits  expense between periods.  In addition,  the Company incurred
higher salary costs as a result of employing  additional  crewmembers  and other
operations  employees  to handle its  increased  capacity in 2003 as compared to
2002. The Company also incurred  increasing  costs in 2003 for employee  medical
and workers' compensation benefits.

Fuel and Oil. Fuel and oil expense increased 33.6% to $276.1 million in 2003, as
compared to $206.6 million in 2002.  During 2003, the average cost per gallon of
jet fuel consumed increased by 15.9% compared to 2002,  resulting in an increase
in fuel and oil expense of  approximately  $37.7 million  between those periods.
Although  jet block hours  increased  23.9% in 2003,  as  compared to 2002,  the
Company only consumed 17.5% more gallons of fuel due to the continuing impact of
the Company replacing its aging, less-fuel-efficient Boeing 727-200 and Lockheed
L-1011  aircraft  with new Boeing  737-800  and  Boeing  757-300  aircraft.  The
increase in gallons consumed  resulted in an increase in fuel and oil expense of
approximately $34.9 million in 2003, as compared to 2002.

Aircraft  Rentals.  Aircraft  rentals  expense in 2003 increased 19.2% to $226.6
million from $190.1 million in 2002. These increases were mainly attributable to
the delivery of seven leased Boeing  737-800s,  three leased Boeing 757-300s and
one leased 757-200 aircraft between late 2002 and December 2003.

Handling,  Landing and Navigation  Fees.  Handling,  landing and navigation fees
increased by 3.0% to $113.8  million in 2003,  as compared to $110.5  million in
2002.  This increase was due to a 21.0% increase in system-wide  jet departures,
as compared to 2002,  which resulted in an increase in handling and landing fees
of $17.4 million. The Company also incurred $5.0 million more in navigation fees
in  2003,   as  compared  to  2002,   due  to  the  increase  in   international
military/government  flying  between  periods.  The  increase  was  offset  by a
decrease in the cost of handling per  departure due to the  negotiation  of more
favorable  terms in new  contracts,  resulting in $15.7  million less expense in
2003, as compared to 2002. The Company also operated relatively fewer flights to
higher-cost  international  destinations  in 2003 than in the prior  year.  This
expense was also favorably  affected by the temporary  suspension of the payment
of the aviation security infrastructure fee by the Company from June 1, 2003, to
September 30, 2003,  pursuant to the Supplemental Act, which resulted in savings
of $1.4 million in 2003.

Aircraft Maintenance, Materials and Repairs. Aircraft maintenance, materials and
repairs  expense  decreased 12.6% to $45.7 million in 2003, as compared to $52.3
million in 2002.  The  decrease was mainly  attributable  to the  retirement  by
mid-2002 of the  Company's  entire Boeing  727-200  fleet and the  retirement of
certain  Lockheed  L-1011  aircraft,  all of which were replaced with new Boeing
737-800 and 757-300 aircraft.

Crew and  Other  Employee  Travel.  The cost of crew and other  employee  travel
increased  17.0% to $64.1 million in 2003, as compared to $54.8 million in 2002,
primarily  due to the increase in  military/government  flying.  Since  military
flights often  operate to and from points remote from the Company's  crew bases,
the Company incurs significant travel expenses on other airlines for positioning
of those crews.

Depreciation and Amortization.  Depreciation and amortization  expense decreased
26.1% to $56.7  million  in 2003,  as  compared  to $76.7  million  in  2002.The
decrease in depreciation and amortization  expense is mainly attributable to the
L-1011-50 and 100 fleet. The Company retired four of these aircraft from revenue
service in 2002 and four more from revenue  service in 2003.  In  addition,  the
Company  recorded a reduction in the  carrying  value of the  L-1011-50  and 100
aircraft and related  assets in the fourth  quarter of 2002, in accordance  with
FAS  144.  Due  to the  reduced-cost  basis  of the  remaining  assets  and  the
retirements  in 2002 and  2003,  the  Company  recorded  $13.8  million  less in
depreciation  and  amortization  in 2003,  as compared to 2002.  The decrease in
depreciation and amortization is also due to fluctuations  associated with other
fleet owned  airframes and owned engines,  along with  fluctuations  in expenses
related  to  other  property  and  equipment,  none of  which  are  individually
significant.

                                       35
<PAGE>

Other Selling Expenses.  Other selling expenses increased 14.4% to $50.2 million
in 2003, as compared to $43.9 million in 2002. The Company experienced increases
in all areas of other selling expenses due to the increase in scheduled  service
passengers enplaned in 2003 as compared to 2002.

Passenger  Service.  For 2003 and 2002,  catering  represented  82.4% and 82.1%,
respectively,  of total passenger  service expense.  The total cost of passenger
service increased 7.0% to $41.0 million in 2003, as compared to $38.3 million in
2002. The increase was mainly attributable to an increase in military/government
flying which  requires a  significantly  more  expensive  catering  product than
scheduled service.

Advertising.  Advertising  expense  decreased  5.3% to $37.9 million in 2003, as
compared  to $40.0  million  in  2002.  The  Company  incurs  advertising  costs
primarily to support single-seat  scheduled service sales. The relative decrease
in 2003 is primarily  attributable  to more sales  promotions  in 2002 to regain
customers  after the September 11, 2001,  terrorist  attacks.  In addition,  the
Company  placed its creative  advertising  contract with a new agency in 2003 on
more economical terms than the prior contract.

Facilities and Other Rentals. The cost of facilities and other rentals increased
7.1% to $24.2 million in 2003, as compared to $22.6 million in 2002.  The growth
in  facilities  costs is due to added  airport  locations in 2003 to support new
scheduled service destinations and expanded services at existing locations.

Commissions.  Commissions  expense  decreased  3.9% to $22.4 million in 2003, as
compared to $23.3 million in 2002. Scheduled service commissions  decreased $5.8
million  between years mainly due to the  elimination of standard  travel agency
commissions  for sales made after March 21, 2002 and the  continued  increase of
ticket  purchases  made on the  Company's  own  website at the expense of travel
agent sales.  The Company  continues to pay special  travel  agency  commissions
targeted to specific  markets and periods of the year. In addition,  the Company
experienced a decrease in  commission  expense for ATALC of  approximately  $3.4
million in 2003, as compared to 2002,  which is consistent  with the decrease in
related  revenue.  These  decreases  were  partially  offset by an  increase  in
commission expense of $7.9 million in 2003, as compared to 2002, attributable to
growth in military revenue.

Insurance. The total cost of insurance decreased 11.2% to $30.2 million in 2003,
as compared to $34.0 million in 2002. The decrease is mainly attributable to the
U.S. Government providing increased war-risk coverage in 2003. This coverage was
provided at higher rates by the commercial insurance markets in 2002.

Ground Package Cost.  Ground  package cost  decreased  56.6% to $12.1 million in
2003, as compared to $27.9 million in 2002,  approximately  proportional  to the
decrease in ground package revenues.  See "Ground Package Revenues" above for an
explanation  of the decline in both ground  package  sales and related costs for
the period.

Aircraft  Impairments and Retirements.  Aircraft impairment and retirement costs
decreased  92.1% to $5.3 million in 2003,  as compared to $66.8 million in 2002.
The  following   tables  summarize  the  Company's   aircraft   impairments  and
retirements expense in 2003 and 2002:

                                       36
<PAGE>

<TABLE>
<CAPTION>

                                                        2003           2002
                                                     --------       ----------
                                                          (in thousands)

<S>                                                  <C>            <C>
Boeing 727-200 impairment charge                     $  5,288       $   35,871
Lockheed L-1011-50 and 100 impairment charge                -            7,638
Lockheed L-1011-50 retirement                               -            9,029
Lockheed L-1011-500 retirement                              -           14,249

                                                     --------       ----------
Aircraft impairments and retirements                 $  5,288       $   66,787
                                                     ========       ==========

</TABLE>

Goodwill Impairment.  The Company began annual goodwill impairment reviews under
FAS 142 in 2002.  In  accordance  with FAS 142, the Company  determined  that no
goodwill impairment had occurred in 2003.

U.S.  Government Grants. The Supplemental Act made $2.3 billion in reimbursement
available  to U.S. air  carriers  for  expenses  incurred  and revenue  foregone
related to enhanced aviation security subsequent to September 11, 2001. Pursuant
to this  legislation,  the Company  received  $37.2 million in cash in May 2003,
which was recorded as a credit to operating expenses.

After the terrorist attacks of September 11, 2001, the Air Transportation Safety
and System Stabilization Act ("Act") was passed, which provided for, among other
things,  up to $5.0  billion in  compensation  to U.S.  carriers  for direct and
incremental losses resulting from the September 11, 2001, terrorist attacks. The
Company had recorded $66.3 million in U.S.  Government grant  compensation as of
December  31,  2001,  based on  guidance  available  from the DOT at the time of
identifying those expenses it deemed reimbursable.  As of December 31, 2001, the
Company had received $44.5 million in cash under the Act and had a receivable of
$21.8 million for the remaining  amount.  Throughout 2002, the Company discussed
the  reimbursement  with the DOT,  and,  as a result of those  discussions,  the
Company recorded a reserve of approximately $15.2 million against its receivable
in the second quarter of 2002. The Company subsequently finalized its discussion
with  the  DOT in the  first  quarter  of  2003  and  received  the  final  cash
compensation of $6.2 million under the Act.

Interest  Income  and  Expense.  Interest  expense  in 2003  increased  to $56.3
million,  as  compared to $35.7  million in 2002.  The  Company  recorded  $12.1
million in interest expense in 2003 related to the secured term loan acquired in
November  2002.  In  accordance  with FASB  Statement  of  Financial  Accounting
Standards  No.  150,   Accounting  for  Certain   Financial   Instruments   with
Characteristics  of  Both  Liabilities  and  Equity  ("FAS  150"),  the  Company
reclassified  its Series A Preferred  as a liability  on the  Company's  balance
sheet  beginning  July  1,  2003,  and the  related  dividends  of $2.1  million
recognized thereafter were recorded as interest expense.

Income Tax Expense.  The Company  recorded $1.3 million in income tax expense in
2003 applicable to $21.7 million in pre-tax  income,  while in 2002, the Company
recorded  income tax benefit of $25.0 million  applicable  to $194.2  million in
pre-tax loss. The effective tax rates  applicable to 2003 and 2002 were 6.0% and
12.8%, respectively.

As of December 31, 2003, the Company had incurred a three-year  cumulative loss.
Because of this cumulative loss and the presumption under GAAP that net deferred
tax assets should be fully reserved if it is more likely than not that they will
not be realized through  carrybacks or other strategies,  the Company recorded a
full valuation allowance against its net deferred tax asset of $33.5 million.

The Company  utilized a portion of its net operating  loss  carryovers to offset
taxable  income in 2003.  As a result,  in 2003 the  Company  paid $0.4  million
alternative  minimum tax and recorded  this as a current tax  expense,  together
with $0.9 million in state and local income taxes.

                                       37
<PAGE>

Liquidity and Capital Resources

The Company ended 2004 with unrestricted cash of $139.7 million and a restricted
cash  balance of $38.6  million of which $6.2 million is  classified  as prepaid
expenses and other current  assets,  primarily  securing  letters of credit.  In
addition, $60.1 million of cash on advance ticket sales had been withheld by the
Company's bank card processors and was recorded as a receivable on the Company's
balance sheet as of December 31, 2004.  The Company had $4.9 million in aircraft
pre-delivery  deposits at the end of 2004.  The Company had no revolving  credit
facility and had no funds available through other unused financing  options.  As
of  February  28,  2005,  the  Company's  unrestricted  cash  balance was $104.6
million.

On October 26,  2004,  the Company  filed a voluntary  petition for relief under
Chapter 11 of the U.S.  Bankruptcy Code.  Based on current  projections and with
the  cash  resources  currently  available  to the  Company,  including  the DIP
Facility,  the Company  believes  that it has  sufficient  liquidity to continue
operations and develop a plan of reorganization into the fourth quarter of 2005.
However,  no assurance can be given as to the Company's ability to continue as a
going  concern,  both during and after the  Chapter 11 cases,  which will depend
upon,  among other things:  the  development of a plan of  reorganization  for a
restructured  company  which  generates  sufficient  cash from  operations  on a
sustained basis and secures  additional  equity;  the  confirmation of a plan or
plans of  reorganization  under the Bankruptcy Code; the obtaining of sufficient
aircraft and aircraft engine  financing (by leases or loans) to fund acquisition
or leasing of  aircraft  and  aircraft  engines  needed to support  planned  air
transportation  services;  and the  availability  of  adequate  and  appropriate
emergence financing.  The accompanying audited consolidated financial statements
do not include any adjustments that might result should the Company be unable to
continue as a going concern.  A plan of  reorganization  could materially change
the  amounts  currently   disclosed  in  the  audited   consolidated   financial
statements.

The potential for continuing  adverse  publicity  associated with the Filing and
the resulting  uncertainty  regarding the Company's  future prospects may hinder
the Company's ongoing business  operations and its ability to operate,  fund and
execute its business  plan by impairing  relations  with  existing and potential
customers;  negatively  impacting  the  ability of the  Company  to attract  and
maintain key employees;  limiting the Company's  ability to obtain trade credit;
and  impairing  present  and  future  relationships  with  vendors  and  service
providers.  See "Liquidity  Outlook" section below for further details regarding
the Filing.

Statement of Cash Flow Overview

In 2004, net cash used in operating activities was $26.2 million, as compared to
net cash provided by operating  activities in 2003 of $93.8 million and net cash
used in  operating  activities  of $59.0  million  in 2002.  The  change in cash
provided by or used in  operating  activities  between  2004 and 2003  primarily
resulted from a decrease in 2004 earnings and  unfavorable  changes in operating
assets and  liabilities.  In addition,  in 2003, the Company received $37.2 from
the U.S. Government pertaining to the Supplemental Act.

In 2004, due to the Filing,  net cash provided by reorganization  activities was
$66.2  million.  On December 22, 2004 the Company  received  $40.0  million from
Southwest  under the DIP Facility.  On November 17, 2004,  the Company  received
$15.0 million,  net of legal costs, of  debtor-in-possession  financing from the
IFTA.  This amount was repaid in full upon the  completion  of the Southwest DIP
Facility.  The Company also received $34.0 million  related to the assignment of
its  leasehold  interest in six  specified  gates and related  assets at Chicago
Midway Airport on December 22, 2004.  Other items include the payment of a $3.25
million  breakup  fee to  AirTran  and  payments  of  $5.5  million  to  various
professionals and advisors related to the Filing.

Net cash provided by investing  activities  was $0.5 million in 2004,  while net
cash used in investing  activities  was $98.7  million and net cash  provided by
investing  activities  was  $88.9  million,  respectively,  in the  years  ended


                                       38
<PAGE>

December  31, 2003 and 2002.  Such  amounts  included a decrease in  non-current
prepaid  aircraft  rent of $34.0  million in 2004, as compared to an increase of
$75.3 million and $12.3 million in 2003 and 2002,  respectively,  reflecting the
effects of the lease  restructuring  in January 2004 as compared to  significant
cash  rents  paid in 2003 and 2002 for prior  aircraft  deliveries.  In 2003 and
2002,  respectively,  the Company had $16.6  million,  and $149.5 million of net
aircraft  pre-delivery  deposits returned upon delivery of the related aircraft.
There were no deposits  returned in 2004.  In addition,  the Company had capital
expenditures  totaling $26.7  million,  $42.5 million and $59.3 million in 2004,
2003, and 2002, respectively. The declining trend in capital expenditures is due
primarily to the replacement of older aircraft with new aircraft,  which require
less  maintenance-related  capital  spending than the aging fleets they replaced
and the phase-in of hourly engine maintenance agreements.

Net cash used in financing  activities was $62.0 million in 2004, while net cash
used in financing activities was $34.6 million, and $14.2 million, for the years
ended  December 31, 2003 and 2002,  respectively.  In all years,  borrowings and
repayments on short-term and long-term debt impacted cash used in or provided by
financing activities. In 2004, the Company made net repayments of $63.3 million.
In 2003, and 2002, respectively, the Company made net repayments of $8.4 million
and $109.9  million  on  pre-delivery  deposit  facilities  related to  deposits
returned on aircraft deliveries net of borrowings. In 2002, the Company obtained
a $168.0  million loan, a portion of which was  guaranteed by the ATSB. In 2002,
the Company borrowed and repaid $192.5 million in temporary debt,  respectively,
related to the purchase of certain Boeing  737-800 and Boeing 757-300  aircraft.
Upon completion of the exchange offers on January 30, 2004, the Company paid all
accrued  preferred  dividends  in  arrears  totaling  $9.2  million in the first
quarter of 2004.  In 2004,  the Company  reduced  restricted  cash $11.0 million
primarily due to the  cancellation  of a surety bond relating to the DOT charter
obligations.  In  contrast,  the  Company  provided  $17.9 and $30.4  million to
collateralize  additional letters of credit which was recorded as an increase in
restricted cash in 2003 and 2002, respectively.

Liquidity Outlook

Chapter 11  Reorganization.  On the Petition  Date,  each of the Debtors filed a
voluntary  petition for relief under Chapter 11 of the U.S.  Bankruptcy  Code in
the Bankruptcy Court.

The   Debtors   continue   to   operate   their    respective    businesses   as
"debtors-in-possession"  under the  jurisdiction of the Bankruptcy  Court and in
accordance  with the applicable  provisions of the Bankruptcy  Code, the Federal
Rules  of  the  Bankruptcy   Procedure  and  applicable   court  orders.   As  a
debtor-in-possession,  each of the Debtors is authorized under the provisions of
Chapter 11 to continue to operate as an ongoing business,  but may not engage in
transactions outside the ordinary course of business without prior approval from
the Bankruptcy  Court.  On October 29, 2004,  the  Bankruptcy  Court granted the
Debtors  certain  first day motions for various  reliefs  designed to  stabilize
operations and maintain  relationships  with customers,  vendors,  employees and
others.  The first day motions  granted  authority to the  Debtors,  among other
things, to (a) pay pre-petition and post-petition  employee wages,  salaries and
benefits and other employee obligations;  (b) honor customer programs, including
the frequent  flyer program and ticketing  program;  and (c) honor  pre-petition
obligations related to interline, clearinghouse, and other similar agreements.

On October 29, 2004 the Bankruptcy  Court entered an interim order which permits
ATA to use  the  unrestricted  cash,  eligible  accounts  receivable  and  other
collateral pledged to secure ATA's ATSB Loan, a significant  portion of which is
guaranteed by the ATSB. The interim order has the effect of giving the ATSB Loan
lenders a  replacement  lien on  unrestricted  cash and all other  assets of the
Debtors to secure diminution of pre-petition cash collateral. This interim order
has been extended for successive short periods, currently through April 7, 2005,
and  requires  compliance  by  the  Debtors  with  certain  terms,  such  as the
maintenance  of  minimum  cash  collateral   balances  and  periodic   reporting
requirements.  Further  extensions cannot be assured,  and a failure to maintain
the right to use cash collateral would be material and adverse to the ability of
the Debtors to reorganize under Chapter 11 of the U. S. Bankruptcy Code.

As required by the  Bankruptcy  Code, the United States Trustee has appointed an
official committee of unsecured creditors.  The Official Committee and its legal
representatives  have a right to be heard on all  matters  that come  before the
Bankruptcy  Court in each of the Debtor's cases.  There can be no assurance that


                                       39
<PAGE>

the Official Committee will support the Debtors' positions in the reorganization
cases or any plan of reorganization,  once proposed,  and disagreements  between
the Debtors and the Official Committee could protract the reorganization  cases,
could  negatively  impact the Debtors'  ability to operate during the Chapter 11
cases, and could delay or prevent the Debtors' emergence from Chapter 11.

The Filing triggered defaults on substantially all debt and lease obligations of
the Debtors. Subject to certain exceptions under the Bankruptcy Code, the Filing
automatically   enjoined,  or  stayed,  the  continuation  of  any  judicial  or
administrative  proceedings  or  other  actions  against  the  Debtors  or their
property to recover on,  collect or secure a claim arising prior to the Petition
Date. For example,  creditor  actions to obtain  possession of property from the
Debtors,  or to create,  perfect or enforce any lien against the property of the
Debtors,  or to collect on or otherwise exercise rights or remedies with respect
to a pre-petition  claim,  are enjoined  unless and until the  Bankruptcy  Court
lifts the automatic stay or the Bankruptcy Code otherwise provides.

Notwithstanding the above general discussion of the automatic stay, the Debtors'
right to  retain  and  operate  certain  aircraft,  aircraft  engines  and other
equipment  defined in  section  1110 of the  Bankruptcy  Code that are leased or
subject to a security  interest or  conditional  sale contract are  specifically
governed by section  1110 of the  Bankruptcy  Code.  That section  provides,  in
relevant  part,  that unless the  Debtors,  prior to 60 days after the  Petition
Date, agree to perform all obligations under the lease,  security agreement,  or
conditional sale contract and cure all defaults  thereunder (other than defaults
constituting  a breach of  provisions  relating  to the filing of the Chapter 11
cases,  the Debtors'  insolvency  or other  financial  condition of the Debtors)
within the time  specified  in section  1110,  the right of the lessor,  secured
party or conditional  vendor to take  possession of such equipment in compliance
with the  provisions  of the lease,  security  agreement,  or  conditional  sale
contract  and to enforce any of its other  rights or remedies  under such lease,
security  agreement,  or  conditional  sale contract is not limited or otherwise
affected by the automatic stay, by any other  provision of the Bankruptcy  Code,
or by any power of the Bankruptcy Court.

The section 1110  deadline for the Debtors was December 26, 2004. As of December
31,  2004,  the Company  operated 82 aircraft,  including 76 aircraft  that were
financed with  operating  leases.  As of March 25, 2005,  with regards to the 76
leased  aircraft,  the Company has  returned  22 of these  aircraft  and related
engines to the lessor. The Company expects to return 28 additional  aircraft and
related  engines to the lessor  between March 31, 2005 and January 25, 2006. The
Company has  renegotiated  long-term  rates on 10 aircraft and related  engines.
Finally,  the Company has elected to cure  existing  defaults  and is paying the
contract rates  required  under the Bankruptcy  Code with respect to 16 aircraft
and related  engines.  The Company  expects  these changes in fleet to result in
additional  changes to amounts  reported in the December 31, 2004 balance  sheet
associated with the aircraft,  including prepaid aircraft rent, and to result in
additional significant aircraft rejection charges in 2005.

Under section 365 of the  Bankruptcy  Code,  the Debtors may assume,  assume and
assign, or reject certain executory  contracts and unexpired leases,  including,
without  limitation,  leases of real  property,  aircraft and aircraft  engines,
subject to the approval of the  Bankruptcy  Court and certain other  conditions.
Generally,  the rejection of an executory lease or unexpired lease is treated as
a  pre-petition  breach of the lease or  contract in  question  and,  subject to
certain exceptions,  relieves the Debtors of performing future obligations under
such lease or  contract  but  entitles  the lessor or contract  counterparty  to
pre-petition  general unsecured claims for damages caused by such deemed breach.
The  lessor or  contract  counterparty  may file a claim  against  the  relevant
Debtor's  estate for such damages.  The  assumption of an executory  contract or
unexpired lease generally  requires a cure of most existing  defaults under such
executory  contract or unexpired  lease.  The Company  expects that  liabilities
subject to  compromise  will  arise in the  future as a result of damage  claims
resulting from the rejection of certain executory contracts and unexpired leases
by the Debtors.  However,  the Company  expects that the  assumption  of certain
executory  contracts and  unexpired  leases may convert  liabilities  subject to
compromise to liabilities not subject to compromise.

The Debtors have  undertaken  to notify all known or potential  creditors of the
Chapter 11 cases for purposes of identifying and  quantifying  all  pre-petition
claims.  Subject to certain exceptions under the Bankruptcy Code, the Chapter 11


                                       40
<PAGE>

filings  automatically stayed the continuation of any judicial or administrative
proceedings  or other actions  against the Debtors or their  property to recover
on,  collect or secure a claim arising  prior to October 26, 2004.  The deadline
for filing by creditors of proofs of claim with the Bankruptcy Court was January
24, 2005, with a limited exception for governmental  entities,  which have until
April 24,  2005.  A proof of claim  arising  from the  rejection of an executory
contract  or lease must be filed no later than  thirty  days from the  effective
date of the authorized rejection.

The  Bankruptcy  Court  extended the period  during  which the Debtors'  have an
exclusive right to file a plan of reorganization until May 24, 2005. There is no
assurance  that  these  exclusivity  periods  will be  further  extended  by the
Bankruptcy Court. If a Debtor's exclusivity period lapses, any party in interest
may file a plan of reorganization for that Debtor. In addition to being voted on
by holders of impaired  claims and equity  interests,  a plan of  reorganization
must satisfy  certain  requirements of the Bankruptcy Code and must be approved,
or confirmed,  by the Bankruptcy Court in order to become effective.  A plan has
been accepted by holders of claims  against and equity  interests in a Debtor if
(1) at least  one-half  in number  and  two-thirds  in  dollar  amount of claims
actually  voting in each impaired  class of claims have voted to accept the plan
and (2) at least  two-thirds in amount of equity  interests  actually  voting in
each impaired  class of equity  interests  have voted to accept the plan.  Under
certain  circumstances  set forth in the  provisions  of section  1129(b) of the
Bankruptcy  Code, the Bankruptcy  Court may confirm a plan even if such plan has
not been  accepted by all  impaired  classes of claims and equity  interests.  A
class of claims or equity interests that does not receive or retain any property
under the plan on account of such claims or interests is deemed to have voted to
reject the plan. The precise requirements and evidentiary showing for confirming
a plan,  notwithstanding its rejection by one or more impaired classes of claims
or equity interests,  depends upon a number of factors, including the status and
seniority  of the  claims or equity  interests  in the  rejecting  class,  i.e.,
secured claims or unsecured claims,  subordinated or senior claims, preferred or
common stock.

Although the Debtors expect to develop  reorganization  plans for emergence from
Chapter 11 in 2005, there can be no assurance that a reorganization plan will be
proposed by the Debtors or confirmed by the Bankruptcy  Court,  or that any such
plan will be  consummated.  The Debtors have incurred and will continue to incur
significant costs associated with their respective  reorganizations.  The amount
of  these  costs,  which  are  being  expensed  as  incurred,  are  expected  to
significantly affect their financial results.

The  ultimate  recovery,  if any, to holders of common stock of the Company will
not be  determined  until  confirmation  of a plan  of  reorganization  for  the
Company.  The plan of  reorganization  could  result in holders of common  stock
receiving  no  distribution  on account of their  interest  in the  Company  and
cancellation  of  the  outstanding   shares.   The  Southwest   commitments  for
post-reorganization  financing, equity investment in the Company and codesharing
require  that all  outstanding  equity of the Company be  cancelled  without any
distributions to the holders of such equity.

DIP Financing Arrangements.  On November 17, 2004, ATA obtained $15.5 million in
debtor-in-possession  financing  from the  ITFA.  ATA sold to the ITFA  property
consisting  primarily of aircraft parts,  free and clear of any liens.  The ITFA
leased  the  property  to the  Indianapolis  Airport  Authority,  which  in turn
subleased the property to ATA. ATA terminated  this  financing,  repurchased the
assets, and paid interest to the ITFA on December 30, 2004.

On December  23,  2004,  ATA and  Southwest  entered  into a DIP  Facility  that
provides up to $40.0 million in cash to the Company,  plus a letter of credit in
the approximate amount of $7.0 million to secure two pre-petition loans obtained
by ATA from the City of Chicago for the construction of a jet bridge  extension.
The Company  received $40.0 million under the DIP Facility on December 23, 2004.
A closing fee of 2.5%, or $1.0 million, was treated as a principal advance under
the DIP Facility.

The base interest rate, paid monthly, on amounts borrowed under the DIP Facility
is the greater of (a) 8.0% per annum,  or (b) the  three-month  LIBOR rate, plus
5.0% per annum. Southwest will also receive an unused commitment fee of 1.0% per


                                       41
<PAGE>

annum, paid monthly,  for any amounts not drawn pursuant to the DIP Facility and
a guaranty fee of 3.0% per annum paid monthly,  for any amounts  guaranteed  but
not drawn under the Chicago LOC.  During the term of the agreement,  the Company
is subject to certain financial covenants.  ATA has obtained amendments to these
financial  covenants  for the months of January and February  2005.  There is no
assurance  ATA will be able to comply with these  financial  covenants in March,
2005, or thereafter, or that Southwest will agree to further amendments to these
covenants or to waive ATA's  non-compliance.  The DIP facility is  guaranteed by
the Company and its other  subsidiaries.  The DIP Facility will terminate on the
earlier of (1) the effective date of a plan of  reorganization  or (2) September
30, 2005, unless otherwise extended.

Asset Sale. On December 23, 2004, the Company and Southwest  executed and closed
a substantial  portion of the transactions  contemplated by an Asset Acquisition
Agreement by which ATA agreed to assign to Southwest ATA's leasehold interest in
six specified gates and a hangar facility at Chicago-Midway  airport and related
assets for $40.0 million, subject to certain adjustments.  The Asset Acquisition
Agreement was entered into after the completion of an auction process supervised
by the  Bankruptcy  Court.  ATA  received  $34.0  million of  proceeds  from the
assignment of its leasehold  interest in six specified  gates and related assets
on December 23, 2004.  Almost all of the funds were recorded as deferred gain on
the Company's  balance sheet and will be amortized  over ATA's  remaining  lease
term of eight years at  Chicago-Midway.  As of December 31, 2004, the assignment
of the leasehold interest in the hangar facility and related assets had not been
executed and closed, and the $6.0 million had not been received.  It is expected
to be received in the first half of 2005  concurrently with a delayed closing of
the hanger lease assignment to Southwest.

The  completion  of the  closing  under the  Asset  Acquisition  Agreement  with
Southwest  triggered  a  requirement  for ATA to pay  AirTran  Airways,  Inc.  a
termination fee of $3.25 million related to an earlier agreement with respect to
assets at Chicago Midway Airport.

Exit Facility and Equity Purchase.  On December 23, 2004, Southwest committed to
provide an exit facility (the "Exit Facility") to the reorganized  Company ("New
ATA")  of $47  million  upon  the  effective  date of a plan  of  reorganization
approved by Southwest. The Exit Facility, under which a reorganized ATA would be
the borrower,  will provide for (a) long-term financing, at a base interest rate
of 9.5% per annum, paid semi-annually, consisting of one or more five-year notes
to refinance up to $40.0 million  under the DIP Facility,  and (b) a replacement
letter of credit  (the  "Replacement  Chicago  LOC") for up to $7.0  million  to
secure loan  obligations  to the City of Chicago now secured by the Chicago LOC.
The Exit Facility is to be guaranteed by the Debtors and all other  subsidiaries
of the New ATA.

A  closing  fee of 2.5% of the  Exit  Facility  is  payable  by the  Company  to
Southwest.  Southwest  will also  receive an unused  commitment  fee of 1.0% per
annum, paid monthly, for any amounts not drawn pursuant to the Exit Facility and
a guaranty fee of 3.0%, per annum, paid monthly, for any amounts secured but not
drawn under the Replacement Chicago LOC.

In addition, upon the effective date of a plan of reorganization,  Southwest has
committed to purchase,  through an  additional  cash  investment of $30 million,
non-voting  senior  convertible  preferred equity of the New ATA (the "Preferred
Equity").  The  Preferred  Equity  will be  convertible  into 27.5% of the fully
diluted economic ownership interest of the New ATA, subject to pro rata dilution
for management interests.  The Preferred Equity will (a) have voting rights only
upon certain  events of default,  (b) be senior to the common equity of New ATA,
and (c) be  convertible  into common equity of New ATA, at  Southwest's  option,
upon  Southwest's  sale or transfer of the Preferred  Equity to a third party or
certain other  specified  major  liquidity  events.  In addition,  the Preferred
Equity will earn dividends at the rate of 4.0% per annum and have certain rights
to require  registration  for resale under the securities laws. If not converted
within 10 years  after the  effective  date of the plan of  reorganization,  the
Preferred Equity shall, at Southwest's option, either convert into common equity
of New ATA or be redeemed.

Codeshare  Agreement.  On December 23, 2004,  Southwest and ATA entered into the
Southwest-ATA Codeshare Agreement,  related to air transportation service to and

                                       42
<PAGE>

from  Chicago-Midway  and  additional  airports.  Under a codeshare  arrangement
between two air carriers,  the  codesharing air carriers have permission to book
and sell tickets on each other's  flights.  ATA is the only domestic air carrier
with which  Southwest,  perhaps the  strongest  U.S.  airline  presently,  has a
codesharing agreement.  Under this arrangement both carriers have expanded their
flight offerings to customers  without the significant  investment  required for
new  flights.  Each  airline  receives a share of the ticket  price for affected
flights.  The initial term of the Codeshare Agreement is one year, which will be
automatically  extended seven additional years once a plan of  reorganization in
the Company's  Chapter 11 case,  which is acceptable to Southwest,  is confirmed
and becomes  effective.  ATA and Southwest began servicing the codeshare flights
on February 4, 2005.

Restructuring of Fixed  Obligations.  On January 30, 2004, the Company completed
exchange offers and issued 2009 Notes and cash  consideration for certain of its
2004 Notes and issued 2010 Notes and cash  consideration for certain of its 2005
Notes. In completing the exchange offers, the Company accepted $260.3 million of
Existing  Notes  tendered  for  exchange,  issuing  $163.1  million in aggregate
principal  amount of 2009 Notes and delivering  $7.8 million in cash in exchange
for $155.3 million in aggregate  principal  amount of 2004 Notes  tendered,  and
issuing  $110.2  million  in  aggregate  principal  amount  of  2010  Notes  and
delivering  $5.2  million in cash in exchange  for $105.0  million in  aggregate
principal  amount of 2005  Notes.  In addition  to the New Notes  issued,  $19.7
million in  aggregate  principal  amount of the 2004 Notes and $20.0  million in
aggregate  principal  amount of the 2005 Notes  remained  outstanding  after the
completion of the exchange  offers.  The remaining 2004 Notes were  subsequently
paid on August 1, 2004. In connection with the exchange offers, the Company also
obtained the consent of the holders of the Existing  Notes to amend or eliminate
certain of the restrictive operating covenants and certain default provisions of
the indentures  governing the Existing Notes. In accordance with EITF 96-19, the
Company recorded a non-operating loss on extinguishment of debt of $27.3 million
in the first quarter of 2004.  The loss is primarily  related to the  accounting
for the $13 million cash  consideration  paid at closing of the exchange  offers
and the $13 million of incremental  notes issued during the exchange offers.  In
accordance with EITF 96-19, the New Notes are recorded in the Company's  balance
sheet  at  fair  value  at  the  date  of the  exchange  offers,  which  closely
approximated  their face  value.  As a result of the  Filing,  the Company is in
default under the terms of the agreements of its unsecured senior notes. Subject
to  certain  exceptions  under the  Bankruptcy  Code,  the  Filing  provides  an
automatic  stay  against the  continuation  of any  judicial  or  administrative
proceedings  or other actions  against the Debtors or their  property to recover
on,  collect  or secure a claim  arising  prior to the  Petition  Date until the
Bankruptcy Court lifts the stay.

On January 30, 2004,  ATA also  completed  the  amendments  of certain  aircraft
operating  leases  with  its  three  major  lessors,   Boeing  Capital  Services
Corporation  ("BCSC"),  General Electric Capital Aviation Services ("GECAS") and
International Lease Finance Corporation ("ILFC").  The original terms of many of
these aircraft  operating leases were determined  before September 11, 2001, and
many were structured to require significant cash payments in the first few years
of each lease in order to reduce  the total  rental  cost over the entire  lease
terms.  The effect of the lease  amendments was to delay the payment of portions
of the amounts due under those operating leases, primarily between September 30,
2003 and March 31, 2005, and to extend the leases generally for two years.  Most
of the payments  delayed during this time period are to be subsequently  paid at
various times throughout the remaining life of the leases. ATA received a refund
of $29.8  million on January 30, 2004 related to payments made in 2003 under the
original terms of certain  retroactively amended leases. The amendments resulted
in  approximately  $69.6 million in lower cash payments during 2004, under these
operating  leases,  as compared  to payments  that would have been due under the
original lease terms.

Debt and Operating  Lease Cash Payment  Obligations.  The Company is required to
make cash payments in the future on debt obligations and operating  leases.  The
Company  is  obligated  on a number of  long-term  operating  leases,  which are
considered  financing  and not  recorded  on the balance  sheet under GAAP.  The
Company  does  not  guarantee  the  debt  of  any  other  party  which  is not a
subsidiary.  The  following  table  summarizes  the Company's  contractual  debt
principal payments and operating lease obligations and their currently scheduled
impact on  liquidity  and cash flows.  This  information  does not include  cash
payments for amounts classified as liabilities subject to compromise.

                                       43
<PAGE>

<TABLE>
<CAPTION>
                                                                 Cash Payments Currently Scheduled (2)
                                                                 -------------------------------------


                                                                                                           2008-           After
                                           Total            2005           2006            2007            2009            2009
                                    ------------        ------------   ------------    ------------    ------------   -------------
                                                                            (in thousands)
<S>                                 <C>                   <C>            <C>             <C>           <C>            <C>

Current and long-term debt (1)      $      41,000         $   41,000     $       -       $      -      $        -     $          -

Lease obligations (2)                   2,132,556            158,121        167,962        185,656         354,886        1,265,931

Total contractual cash obligations   ------------        ------------   ------------    ------------    ------------   ------------
                                    $   2,173,556         $  199,121     $  167,962      $ 185,656    $    354,886    $   1,265,931
                                     ============        ============   ============    ============    ============   ============

</TABLE>

(1) Represents repayment of DIP Facility to Southwest.

(2) The  Company  leases  aircraft  and  aircraft  engines,  ground  facilities,
including terminal space and maintenance  facilities,  and ground equipment.  As
allowed under Section 365 of the Bankruptcy Code, the Company may assume, assume
and  assign,  or  reject  certain  executory  contracts  and  unexpired  leases,
including leases of real property, aircraft and aircraft engines, subject to the
approval of the Bankruptcy Court and certain other conditions. Consequently, the
Company  anticipates  that its liabilities  pertaining to these leases,  and the
amounts related thereto as discussed  below,  will change  significantly  as the
Company progresses through reorganization.

Aircraft and Fleet  Transactions.  ATA has a purchase  agreement with the Boeing
Company  ("Boeing") to purchase seven new Boeing  737-800s,  which are currently
scheduled for delivery  between July 2007 and December 2007.  These aircraft are
powered by General Electric CFM56-7B27 engines. The manufacturer's list price is
$52.4 million for each 737-800, subject to escalation.  ATA's purchase price for
each aircraft is subject to various discounts.  According to a 2004 amendment to
the  purchase  agreement  with Boeing,  if the Company  does not have  permanent
financing  for  these  aircraft  suitable  to ATA,  and does  not have  suitable
pre-delivery  deposit  financing,  and if Boeing does not elect to provide  such
financing  suitable to ATA, these deliveries can be delayed for one year periods
annually through December 31, 2010. Aircraft  pre-delivery deposits are required
for these  aircraft,  and ATA has  historically  funded these  deposits for past
aircraft  deliveries  using  operating  cash and  pre-delivery  deposit  finance
facilities.  ATA can  provide  no  assurance  that  it  will  be able to  secure
pre-delivery  deposit finance  facilities or permanent  financing for any future
aircraft  purchases.  As of December 31, 2004, ATA had $4.9 million in long-term
pre-delivery  deposits  outstanding  for future aircraft  deliveries  which were
funded with operating cash. Upon delivery of the aircraft, pre-delivery deposits
funded with operating cash would be returned to ATA.

ATA also has an agreement to purchase  four spare  engines  CFM56-7B27  engines,
which are currently scheduled for delivery between 2005 and 2008.

ATSB  Financing.  In November  2002,  ATA obtained the $168.0 million ATSB Loan.
Interest is payable  monthly at LIBOR plus a margin.  Guarantee  fees of 5.6% of
the outstanding  guaranteed principal balance in 2004, escalating to 9.5% of the
outstanding  guaranteed  principal  balance in 2005  through  2008,  are payable
quarterly.

The ATSB Loan is subject to certain restrictive  covenants and is collateralized
primarily  by  a  substantial   portion  of  ATA's  unrestricted  cash,  certain
receivables,  certain aircraft,  spare engines, and rotable parts. The aircraft,
spare engines and parts consist of two Lockheed  L-1011-500  aircraft,  two SAAB
340B  aircraft,  21 Rolls Royce RB211 spare engines and Boeing  757-200,  Boeing
757-300 and Boeing 737-800  rotables,  which had a combined  carrying  amount of
approximately $33.0 million as of December 31, 2004.

As a  result  of  the  Filing,  ATA  is in  default  and  subject  to  immediate


                                       44
<PAGE>

acceleration  of all  balances  under the ATSB  Loan,  as well as its  unsecured
senior notes and certain other debt instruments.  Subject to certain  exceptions
under the  Bankruptcy  Code,  the Filing  provides an automatic stay against the
continuation  of any judicial or  administrative  proceedings  or other  actions
against the Debtors or their  property to recover on,  collect or secure a claim
arising prior to the Petition Date until the Bankruptcy Court lifts the stay.

Notwithstanding the above general discussion of the automatic stay, the Debtors'
right to  retain  and  operate  certain  aircraft,  aircraft  engines  and other
equipment  and spare parts defined in section 1110 of the  Bankruptcy  Code that
are leased or subject to a security  interest or  conditional  sale contract are
specifically governed by section 1110 of the Bankruptcy Code. Further, creditors
holding  security  interests or liens in property of the Debtors may be entitled
to adequate protection for the continued use or consumption of their collateral.
The Debtors  have  entered  into  stipulations  which have been  approved by the
Bankruptcy Court providing such adequate  protection to the ATSB Lenders.  These
stipulations  are  for  a  stated  period  of  time,  and  include   performance
requirements which the Company is to achieve as a condition of the continued use
of the ATSB Loan  collateral.  Expiration of the  stipulations by the passage of
time or a  termination  thereof  by  reason  of a breach  of  these  performance
requirements,  without the Debtors obtaining an extension or a new authorization
from the  Bankruptcy  Court for use of the  collateral,  could  very  materially
impair the ability of the Company to continue  operations.  Please  refer to the
discussion of the Chapter 11 filing and the  requirements of section 1110 of the
Bankruptcy Code in "Liquidity  Outlook - Chapter 11  Reorganization"  for a more
detailed discussion of the rights of creditors.

Card  Agreements.  The Company  accepts  charges to most major  credit and debit
cards  ("cards") as payment from its customers.  Approximately  90% of scheduled
service and vacation  package sales are purchased using these cards. The Company
maintains an agreement  with a bank for the processing and collection of charges
for Visa and  Mastercard as well as  agreements  with  American  Express  Travel
Related  Services  Company,  Inc for the American Express Card and Discover Card
Services,  Inc. for the Discover Card  (collectively  referred to as the "Credit
Card  Providers").  Under these  agreements,  a sale is normally  charged to the
purchaser's card account and is paid to the Company in cash within a few days or
weeks of the date of purchase,  although  the Company may provide the  purchased
transportation days, weeks or months later.

According to the agreements, the Credit Card Providers can retain cash collected
by them on processed card charges as a deposit.  If the Company fails to perform
pre-paid  services  which are purchased by a charge to a card, the purchaser may
be  entitled  to  obtain a refund  which,  if not  paid by the  Company,  is the
obligation  of the Credit Card  Providers.  The deposit  secures this  potential
obligation of the Credit Card  Providers to make such  refunds.  The Credit Card
Providers  have  exercised  their  rights to  withhold  distributions  and as of
December 31, 2004 had retained  $60.1 million of the Company's  unflown sales as
compared to $57.5 million at December 31, 2003.

ATA Credit Card. On March 31, 2004,  ATA entered into  agreements  with a credit
card issuer and Visa to introduce a consumer  credit card ("the  Card")  bearing
redemption  benefits  on ATA.  Holders  of the Card  accumulate  points  through
purchases on the Card,  which will allow them to earn free travel on the airline
once certain point  thresholds are attained.  ATA launched the Card in the third
quarter of 2004. ATA earns revenue from the credit card issuer as  consideration
for issuing the Card with ATA's logo, providing free transportation, and certain
cooperative advertising activities.  Upon signing the agreement,  ATA received a
prepayment for future revenue to be earned from the issuer,  almost all of which
remained  unearned  by  ATA,  as of  December  31,  2004.  Restructuring  of the
Company's  operations  may entitle the credit card issuers to a repayment of the
unearned portion of the prepayment amount.

Surety  Bonds.  The Company has  historically  provided  surety bonds to airport
authorities  and selected other parties,  to secure the Company's  obligation to
these parties. As of December 31, 2004, the Company's restricted cash pledged to
secure its letter of credit for all surety bonds  totaled  $31.4  million and is
classified as non-current restricted cash on the Company's balance sheet.

The DOT  requires  the  Company to provide a surety  bond or an escrow to secure
potential  refund claims of charter  customers who have made  prepayments to the

                                       45
<PAGE>

Company for future  transportation.  On December 15, 2003, upon  cancellation of
the DOT charter  obligation surety bond by the issuer,  the Company entered into
an escrow  arrangement  which requires the Company to place advance receipts for
certain charter flights into escrow until the flight  operates.  Once the flight
occurs the  Company  is paid from the  escrow  account  those  advance  deposits
specific to that completed flight. As of December 31, 2004, the Company has $6.3
million in advance charter receipts  deposited in escrow,  which was included in
prepaid  expenses and other current assets on the Company's  balance sheet as of
that  date.  The  surety  bond of  $12.9  million  relating  to the DOT  charter
obligations  was released in the first quarter of 2004, and the restricted  cash
securing the letter of credit was returned to the Company.

                                       46
<PAGE>

Forward-Looking Information and Risk Factors

Information contained within "Management's  Discussion and Analysis of Financial
Condition  and Results of  Operations"  and  elsewhere  in this report  includes
forward-looking   information   which  can  be  identified  by   forward-looking
terminology   such  as   "believes,"   "expects,"   "may,"   "will,"   "should,"
"anticipates,"  or the  negative  thereof,  or other  variations  in  comparable
terminology. Such forward-looking information is based upon management's current
knowledge of factors affecting the Company's  business.  The differences between
expected  outcomes  and  actual  results  can be  material,  depending  upon the
circumstances. Where the Company expresses an expectation or belief as to future
results  in any  forward-looking  information,  such  expectation  or  belief is
expressed in good faith and is believed to have a reasonable  basis. The Company
can provide no assurance that the statement of expectation or belief will result
or will be achieved or accomplished.

Such forward-looking  statements involve known and unknown risks,  uncertainties
and other factors that may cause actual results to be materially different. Such
factors include, but are not limited to, the following:

o    the ability to develop and execute a revised  business plan for  profitable
     operations,  including  restructuring  flight  schedules,  maintaining  the
     support of employees and regauging the fleet of aircraft;
o    the  ability  to  develop,  prosecute,  confirm  and  consummate  a plan of
     reorganization with respect to the Chapter 11 cases;
o    risks associated with third parties seeking and obtaining  Bankruptcy Court
     approval to terminate  or shorten the  exclusivity  period,  to propose and
     confirm  one or more  plans of  reorganization,  for the  appointment  of a
     Chapter 11  trustee  or to convert  one or more of the cases to a Chapter 7
     case;
o    the ability to obtain and  maintain  normal  terms with vendors and service
     providers;
o    the ability to maintain contracts that are critical to its operations;
o    the potential adverse effects of the Chapter 11 reorganization on liquidity
     or results of operations;
o    the ability to attract and retain customers;
o    demand for transportation in markets in which the Company operates;
o    economic conditions;
o    the effects of any hostilities or act of war;
o    salary costs;
o    aviation fuel costs;
o    competitive pressures on pricing (particularly from low-cost competitors);
o    weather conditions;
o    government legislation and regulation; and
o    other  risks and  uncertainties  listed  from time to time in  reports  the
     Company periodically files with the Securities and Exchange Commission.

The Company is under no obligation to update,  and will not undertake to update,
its   forward-looking   statements  to  reflect  future  events  or  changes  in
circumstances.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

The Company is subject to certain market risks,  including  commodity price risk
resulting  from aircraft  fuel price  fluctuations  and interest rate risk.  The
adverse effects of potential  changes in these market risks are discussed below.
The sensitivity analyses presented do not consider the effects that such adverse
changes may have on overall economic activity,  nor do they consider  additional
actions  management might take to mitigate the adverse impact of such changes on
the  Company.  See  the  notes  to  consolidated   financial  statements  for  a
description of the Company's  accounting  policies and other information related
to these financial instruments.

Aircraft Fuel Prices.  The Company's  results of  operations  are  significantly
impacted by changes in the price of aircraft  fuel.  During 2004,  aircraft fuel


                                       47
<PAGE>

accounted  for  approximately  22.5% of the  Company's  operating  expenses,  as
compared to 19.2% in 2003. The Company obtains fuel price fluctuation protection
from escalation clauses in certain commercial charter, military charter and bulk
scheduled service. During 2002, the Company entered into fuel hedge contracts to
reduce the volatility of fuel prices,  using heating oil swap agreements.  Using
these  contracts,  the Company  hedged  approximately  12% of its total  gallons
consumed  in  2002.  During  2003  and  2004,  the  Company  had no  fuel  hedge
agreements.

Market risk is  estimated  as a  hypothetical  10%  increase in the December 31,
2004,  cost per gallon of fuel.  Based on projected  2005 fuel usage,  excluding
anticipated protection from escalation clauses, such a change would result in an
increase in aircraft fuel expense of approximately $24.0 million. As of December
31, 2003, that risk was $26.5 million.

Interest Rates. The Company's results of operations are affected by fluctuations
in market interest rates. As of December 31, 2004, the majority of the Company's
variable-rate  debt was comprised of approximately  $41 million of variable-rate
debt through the DIP  financing.  As of December  31, 2003,  the majority of the
Company's  variable-rate  debt was comprised of approximately  $161.0 million of
variable-rate  debt  through  the  secured  term loan.  This debt is reported in
liabilities  subject to  compromise  at December  31,  2004.  If interest  rates
average 100 basis points more on variable-rate debt in 2005, as compared to 2004
average rates,  the Company's  interest  expense would increase by approximately
$0.4 million. In comparison, if interest rates averaged 100 basis points more on
variable-rate  debt in 2004,  as compared to 2003 average  rates,  the Company's
interest expense would have increased by approximately $1.6 million.

The Company  earns  interest  income from  investing  excess cash in  short-term
investments.  If average  short-term  interest rates decreased by one percent in
2005, as compared to 2004 rates,  the Company's  interest income from short-term
investments  would decrease by  approximately  $0.7. In comparison,  the Company
estimated that if average short-term interest rates decreased to zero percent as
compared to 2003 average rates,  the Company's  interest  income from short-term
investments  would have decreased by  approximately  $1.4 million as of December
31, 2004.

All  estimated  changes  in  interest  income  and  expense  are  determined  by
considering  the  impact  of  hypothetical  changes  in  interest  rates  on the
Company's debt and cash balances at December 31, 2004 and 2003.

                                       48
<PAGE>

Item 8.        Financial Statements and Supplementary Data


             Report of Independent Registered Public Accounting Firm


Board of Directors and Shareholders

We have audited the  accompanying  consolidated  balance  sheets of ATA Holdings
Corp. and Subsidiaries (Debtor and Debtors-In-Possession as of October 26, 2004)
as of December 31, 2004 and 2003,  and the related  consolidated  statements  of
operations,  preferred stock (subject to compromise),  and shareholders'  equity
(deficit),  and cash  flows  for each of the  three  years in the  period  ended
December 31, 2004.  Our audits also  included the financial  statement  schedule
listed in the Index at Item 15(a).  These financial  statements and schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  We were not engaged to perform an
audit of the Company's  internal  control over  financial  reporting.  Our audit
included  consideration of internal control over financial  reporting as a basis
for designing audit  procedures that are appropriate in the  circumstances,  but
not for the  purpose  of  expressing  an  opinion  on the  effectiveness  of the
Company's internal control over financial reporting.  Accordingly, we express no
such  opinion.  An audit also  includes  examining,  on a test  basis,  evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of ATA Holdings Corp.
and Subsidiaries  (Debtor and  Debtors-In-Possession  as of October 26, 2004) at
December 31, 2004 and 2003, and the consolidated results of their operations and
their cash flows for each of the three years in the period  ended  December  31,
2004, in conformity with U.S. generally accepted accounting principles. Also, in
our opinion,  the related  financial  statement  schedule,  when  considered  in
relation to the basic financial statements taken as a whole,  presents fairly in
all material respects the information set forth therein.

As discussed in Note 1, the Company filed for reorganization under Chapter 11 of
the United States Bankruptcy Code. The accompanying  financial statements do not
purport  to  reflect  or  provide  for  the   consequences   of  the  bankruptcy
proceedings. In particular, such financial statements do not purport to show (a)
as  to  assets,   their  realizable  value  on  a  liquidation  basis  or  their
availability  to satisfy  liabilities;  (b) as to prepetition  liabilities,  all
amounts  that may be  allowed  for  claims or  contingencies,  or the status and
priority thereof; (c) as to stockholder accounts, the effect of any changes that
may be made in the capitalization of the Company;  or (d) as to operations,  the
effect of any changes that may be made in its business.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As discussed in Note 1, as a result of
the bankruptcy  filing,  realization of assets and  satisfaction of liabilities,
without  substantial  adjustments  and/or  changes in ownership,  are subject to
uncertainty and raise  substantial doubt about the Company's ability to continue
as a going concern. Management's plan concerning these matters is also discussed
in Note 1. The 2004 financial  statements do not include  adjustments that might
result from the outcome of this uncertainty.

                                                               Ernst & Young LLP
Indianapolis, Indiana
February 11, 2005, except for the seventh paragraph in Note 1
and last paragraph in Note 19, as to which the date is
March 25, 2005

                                       49
<PAGE>

<TABLE>
<CAPTION>
                                                 ATA HOLDINGS CORP. AND SUBSIDIARIES
                                      (Debtor and Debtors-in-Possession as of October 26, 2004)
                                                     CONSOLIDATED BALANCE SHEETS
                                                       (Dollars in thousands)

                                                                                December 31,              December 31,
                                                                                   2004                      2003
                                                                                ----------                 ----------
                      ASSETS
<S>                                                                             <C>                        <C>
Current assets:
          Cash and cash equivalents                                             $  139,652                 $  160,644
     Receivables, net of allowance for doubtful accounts
     (2004 - $2,608; 2003 - $1,388).                                               118,807                    118,745
     Inventories, net                                                               43,802                     47,604
     Prepaid expenses and other current assets                                      39,160                     21,406
                                                                                ----------                 ----------
Total current assets                                                               341,421                    348,399

Property and equipment:
     Flight equipment                                                              198,888                    324,697
     Facilities and ground equipment                                               147,420                    142,032
                                                                                ----------                 ----------
                                                                                   346,308                    466,729
     Accumulated depreciation                                                     (163,549)                  (213,247)
                                                                                ----------                 ----------
                                                                                   182,759                    253,482

Restricted cash                                                                     32,355                     48,301
Goodwill                                                                             8,488                     14,887
Prepaid aircraft rent                                                               52,031                    144,088
Investment in BATA                                                                   6,930                     14,672
Deposits and other assets                                                           27,081                     46,158
                                                                                ----------                 ----------
Total assets                                                                    $  651,065                 $  869,987
                                                                                ==========                 ==========
                      LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:

    Current maturities of long-term debt                                        $        -                 $   51,645
    Short-term debt                                                                 41,000                          -
    Accounts payable                                                                 7,563                     25,327
    Air traffic liabilities                                                         89,887                    102,831
    Accrued expenses                                                               122,031                    154,689
                                                                                ----------                 ----------
Total current liabilities                                                          260,481                    334,492


Long-term debt, less current maturities                                                  -                    443,051
Deferred gains from sale and leaseback of aircraft                                       -                     55,392
Other deferred items                                                                31,464                     51,822
Redeemable preferred stock; authorized and issued 500 shares                             -                     56,330
                                                                                ----------                 ----------
Total long-term liabilities                                                         31,464                    606,595

Liabilities subject to compromise                                                1,249,676                          -

Commitments and contingencies

Convertible redeemable preferred stock; authorized and issued 300 shares,
subject to compromise                                                               30,000                     32,907

Shareholders' deficit:

    Preferred stock; authorized 9,999,200 shares; none issued                            -                          -
    Common stock, without par value; authorized 30,000,000 shares;
       issued 13,535,304- 2004; 13,502,593 - 2003                                   66,013                     65,711
    Treasury stock; 1,711,440 shares - 2004; 1,711,440 shares - 2003               (24,778)                   (24,778)
    Additional paid-in capital                                                      18,166                     18,163
    Accumulated deficit                                                           (979,957)                  (163,103)
                                                                                ----------                 ----------
Total shareholders' deficit                                                       (920,556)                  (104,007)
                                                                                ----------                 ----------
Total liabilities and shareholders' deficit                                     $  651,065                 $  869,987
                                                                                ==========                 ==========

See accompanying notes.
</TABLE>

                                       50
<PAGE>

<TABLE>
<CAPTION>
                                                 ATA HOLDINGS CORP. AND SUBSIDIARIES
                                      (Debtor and Debtors-in-Possession as of October 26, 2004)
                                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                            (Dollars in thousands, except per share data)

                                                                              Year Ended December 31,
                                                                    2004                2003               2002
                                                               -----------          ------------      -----------
<S>                                                            <C>                  <C>               <C>
Operating revenues:

   Scheduled service                                           $ 1,099,944          $ 1,085,420       $   886,579
   Charter                                                         358,870              366,207           309,242
   Ground package                                                   14,921               14,682            35,687
   Other                                                            58,836               52,224            45,862
                                                               -----------          ------------      -----------
Total operating revenues                                         1,532,571            1,518,533         1,277,370
                                                               -----------          ------------      -----------
Operating expenses:
  Salaries, wages and benefits                                     422,430              399,622           355,201
  Fuel and oil                                                     368,273              276,057           206,574
  Aircraft rentals                                                 242,602              226,559           190,148
  Handling, landing and navigation fees                            119,963              113,781           110,528
  Aircraft maintenance, materials and repairs                       74,992               45,741            52,254
  Crew and other employee travel                                    57,466               64,055            54,774
  Depreciation and amortization                                     52,013               56,729            76,727
  Other selling expenses                                            51,352               50,150            43,934
  Passenger service                                                 42,861               41,000            38,345
  Advertising                                                       33,533               37,932            40,028
  Facilities and other rentals                                      27,072               24,162            22,624
  Commissions                                                       26,156               22,445            23,326
  Insurance                                                         24,617               30,214            33,981
  Ground package cost                                               12,496               12,089            27,882
  Aircraft impairments and retirements                               7,887                5,288            66,787
  Goodwill impairment                                                    -                    -             6,893
  U.S. Government grants                                                 -              (37,156)           16,221
  Other                                                             69,021               72,324            71,180
                                                               -----------          ------------      -----------
Total operating expenses                                         1,632,734            1,440,992         1,437,407
                                                               -----------          ------------      -----------
Operating income (loss)                                           (100,163)              77,541          (160,037)

Other income (expense):
  Reorganization expenses                                         (638,479)                   -                 -
  Interest income                                                    2,283                2,878             2,829
  Loss on extinguishment of debt                                   (27,314)                   -                 -
  Interest expense                                                 (51,145)             (56,324)          (35,746)
  Other                                                               (911)              (2,350)           (1,260)
                                                               -----------          ------------      -----------
Other expense                                                     (715,566)             (55,796)          (34,177)
                                                               -----------          ------------      -----------
Income (loss) before income taxes                                 (815,729)              21,745          (194,214)
Income taxes (credits)                                                   -                1,311           (24,950)
                                                               -----------          ------------      -----------
Net income (loss)                                                 (815,729)              20,434          (169,264)

Preferred stock dividends                                           (1,125)              (4,642)           (5,720)
                                                               -----------          ------------      -----------
Income (loss) available to common shareholders                 $  (816,854)         $    15,792      $   (174,984)
                                                               ===========          ============      ===========

Basic earnings per common share:
Average shares outstanding                                      11,823,769           11,773,713        11,711,906
Net income (loss) per common share                             $    (69.09)         $      1.34      $     (14.94)
                                                               ===========          ============      ===========

Diluted earnings per common share:
Average shares outstanding                                      11,823,769            14,468,836       11,711,906
Net income (loss) per common share                             $    (69.09)         $       1.27      $    (14.94)
                                                               ===========          ============      ===========

See accompanying notes.
</TABLE>

                                       51
<PAGE>

<TABLE>
<CAPTION>
                                                 ATA HOLDINGS CORP. AND SUBSIDIARIES
                                      (Debtor and Debtors-in-Possession as of October 26, 2004)
                              CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED STOCK, SUBJECT TO COMPROMISE ,
                                                 AND SHAREHOLDERS' EQUITY (DEFICIT)
                                                       (Dollars in thousands)

<S>                               <C>             <C>       <C>         <C>          <C>            <C>            <C>
                                    Redeemable
                                    Preferred                           Additional         Other      Retained           Total
                                  Stock, subject   Common   Treasury    Paid-in      Comprehensive    Earnings       Shareholders'
                                  to compromise    Stock     Stock      Capital         Income       (Deficit)     Equity (Deficit)
                                  _____________   ________  __________  ___________  __________     _____________   _______________
Balance as of December 31, 2001   $     80,000    $ 61,964  $ (24,768)  $  11,534    $    (687)     $    (3,911)   $        44,132
                                  =============   ========  ==========  ===========  ==========     =============   ===============

Net loss                                    -           -          -            -            -         (169,264)          (169,264)

Net gain on derivative
instruments, net of tax                     -           -          -            -           687               -                687
                                                                                     __________     _____________  ________________
Total comprehensive loss                    -           -          -            -           687         (169,264)         (168,577)
                                                                                     __________     _____________  ________________
Preferred dividends paid                    -           -          -            -            -           (3,235)            (3,235)

Restricted stock grants                     -           13       (10)           4            -                -                  7

Payment of liability with stock             -        2,445         -         (295)           -                -              2,150

Stock options exercised                     -          868         -         (419)           -                -                449

Warrants issued with ATSB loan              -           -          -        7,424            -                -              7,424

Disqualifying disposition of stock          -           -          -          126            -                -                126

Accrued preferred stock dividends        2,485          -          -            -            -           (2,485)            (2,485)
                                  _____________   ________  __________  ___________  __________     _____________  ________________
Balance as of December 31, 2002   $     82,485    $ 65,290  $ (24,778)  $   18,374   $       -      $  (178,895)   $      (120,009)
                                  =============   ========  ==========  ===========  ==========     =============  ================

Net income                                  -          -          -             -            -           20,434             20,434


Stock options exercised                     -         421         -         (211)            -                -                210

Reclassification to long-term
debt                                   (54,220)
Accrued preferred stock
dividends                                4,642         -          -             -            -           (4,642)            (4,642)
                                  _____________   ________  __________  ___________  __________     _____________  ________________
Balance as of December 31, 2003   $     32,907    $ 65,711  $ (24,778)  $   18,163   $       -      $  (163,103)   $      (104,007)
                                  =============   ========  ==========  ===========  ==========     =============  ================

Net loss                                    -          -           -            -            -         (815,729)          (815,729)

Stock options exercised                     -         302          -            3            -               -                 305

Preferred stock dividends               (2,907)        -           -            -            -           (1,125)            (1,125)
                                  _____________   ________  __________   ___________ __________     _____________  ________________
Balance as of December 31, 2004   $     30,000    $ 66,013  $ (24,778)  $   18,166   $       -     $  (979,957)   $       (920,556)
                                  =============   ========  ==========  ============ ==========     =============  ================
 See accompanying notes.

</TABLE>

                                       52
<PAGE>

<TABLE>
<CAPTION>
                                        ATA HOLDINGS CORP. AND SUBSIDIARIES
                             (Debtor and Debtors-in-Possession as of October 26, 2004)
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              (Dollars in thousands)


                                                                             Year Ended December 31,
                                                                       2004              2003             2002
                                                                 ---------------------------------------------------
<S>                                                              <C>                 <C>               <C>
Operating activities:
Net income (loss) before reorganization expenses                 $ (177,250)         $  20,434         $  (169,264)
Adjustments to reconcile net income (loss before
reorganization expenses to net cash provided by
(used in) operating activities:
   Depreciation and amortization                                     52,013             56,729              76,727
   Loss on extinguishment of debt                                    27,314                 -                   -
   Aircraft impairments and retirements                               7,887              5,288              66,787
   Goodwill impairments                                                  -                  -                6,893
   Deferred income tax credit                                            -                  -               (8,697)
   Other non-cash items                                              23,697             31,686              39,817
Changes in operating assets and liabilities:
   U.S. Government grant receivable                                      -               6,158              16,221
   Other receivables                                                    (62)           (38,526)            (27,552)
   Inventories                                                       (5,322)                38              (7,411)
   Prepaid expenses and other current assets                         (8,348)            17,808             (24,701)
   Accounts payable                                                   5,811              1,639              (3,260)
   Air traffic liabilities                                          (12,944)             8,138              (6,265)
   Liabilities subject to compromise                                (14,126)                -                   -
   Accrued expenses                                                  55,130            (15,613)            (18,309)
   Other deferred items                                              20,000                 -                   -
                                                                 ---------------     --------------    -------------
   Net cash provided by (used in) operating activities              (26,200)            93,779             (59,014)
                                                                 ---------------     --------------    -------------
Reorganization activities:
Reorganization expenses, net                                       (638,479)                -                   -
Impairment losses, reported as reorganization items                  55,301                 -                   -
Prepaid expenses and other current assets                            (4,395)                -                   -
Liabilities subject to compromise                                   507,311                 -                   -
Accrued expenses                                                      6,710                 -                   -
Other non-cash items                                                  6,657                 -                   -
Proceeds from Debtor-in-Possession financing                         56,500                 -                   -
Payments on Debtor-in-Possession financing                          (15,500)                -                   -
Proceeds from sales of property and equipment                        34,000                 -                   -
Noncurrent prepaid aircraft rent                                     58,089                 -                   -
                                                                 ---------------     --------------    -------------
   Net cash provided by reorganization activities                    66,194                 -                   -
                                                                 ---------------     --------------    -------------

Investing activities:
Aircraft pre-delivery deposits                                            -             16,582             149,510
Capital expenditures                                                (26,660)           (42,534)            (59,346)
Noncurrent prepaid aircraft rent                                     33,968            (75,260)            (12,304)
Investment in BATA                                                       -                  -               18,632
(Additions) reductions to other assets                               (7,339)             2,206              (7,985)
Proceeds from sales of property and equipment                           562                312                 424
                                                                 ---------------     --------------    -------------
  Net cash provided by (used in) investing activities                   531            (98,694)             88,931
                                                                 ---------------     --------------    -------------

Financing activities:
Preferred stock dividends                                            (9,987)                -               (3,235)
Proceeds from sale/leaseback transactions                                -                  -                2,253
Proceeds from short-term debt                                            -                  -               56,858
Payments on short-term debt                                              -              (8,384)           (167,839)
Proceeds from long-term debt                                          1,500              5,729             363,040
Payments on long-term debt and exchange offers                      (64,813)           (14,215)           (235,352)
(Increase) decrease in other restricted cash                         10,978            (17,941)            (30,360)
Proceeds from stock option exercises                                    305                210                 449
Purchase of treasury stock                                               -                  -                  (10)
                                                                 ---------------     --------------    -------------
   Net cash (used in) financing activities                          (62,017)           (34,601)            (14,196)
                                                                 ---------------     --------------    -------------
Increase (decrease) in cash and cash equivalents                    (21,492)           (39,516)             15,721
Cash and cash equivalents, beginning of year                        160,644            200,160             184,439
                                                                 ---------------     --------------    -------------
Cash and cash equivalents, end of year                           $  139,152          $ 160,644         $   200,160
                                                                 ===============     ==============    =============

See accompanying notes.
</TABLE>

                                       53
<PAGE>

<TABLE>
<CAPTION>
                                        ATA HOLDINGS CORP. AND SUBSIDIARIES
                             (Debtor and Debtors-in-Possession as of October 26, 2004)
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              (Dollars in thousands)

                                                                                Year Ended December 31,

                                                                          2004            2003            2002
                                                                   __________________________________________________
<S>                                                                <C>              <C>                <C>
Supplemental disclosures:
Cash payments for:
   Interest                                                        $    42,575      $    47,088        $     42,102
   Income taxes (refunds), net                                     $   (6,502)      $   (10,992)       $      1,572
Financing and investing activities not affecting cash:
   Accrued capitalized interest                                    $       491      $       343        $    (10,487)
   Notes payable                                                   $         -      $         -        $      2,427
   Issuance of warrants                                            $         -      $         -        $      7,424
   Accrued preferred stock dividends                               $       375      $     4,642        $      2,485

See accompanying notes.

                                       54
<PAGE>

</TABLE>

Notes to Consolidated Financial Statements

1.  The Company and the Chapter 11 Filing

Chapter 11  Reorganization.  On October  26,  2004 (the  "Petition  Date"),  ATA
Holdings Corp.  (the  "Company"),  and seven of its  subsidiaries  including ATA
Airlines,  Inc. ("ATA") and Chicago Express Airlines,  Inc. ("Chicago  Express")
(collectively,  the  "Debtors"),  filed a  voluntary  petition  for relief  (the
"Filing") under Chapter 11 of the U.S.  Bankruptcy  Code in the U.S.  Bankruptcy
Court for the Southern District of Indiana (the "Bankruptcy Court").

The   Debtors    continue   to   operate    their    respective    business   as
"debtors-in-possession"  under the  jurisdiction of the Bankruptcy  Court and in
accordance  with the applicable  provisions of the Bankruptcy  Code, the Federal
Rules   of   Bankruptcy   Procedure   and   applicable   court   orders.   As  a
debtor-in-possession,  each of the Debtors is authorized under the provisions of
Chapter 11 to continue to operate as an ongoing business,  but may not engage in
transactions outside the ordinary course of business without prior approval from
the Bankruptcy  Court.  On October 29, 2004,  the  Bankruptcy  Court granted the
Debtors  certain  first day motions for various  reliefs  designed to  stabilize
operations and maintain  relationships  with customers,  vendors,  employees and
others.  The first day motions  granted  authority to the  Debtors,  among other
things, to (a) pay pre-petition and post-petition  employee wages,  salaries and
benefits and other employee obligations;  (b) honor customer programs, including
the frequent  flyer program and ticketing  program;  and (c) honor  pre-petition
obligations related to interline, clearinghouse, and other similar agreements.

On October 29, 2004 the Bankruptcy  Court entered an interim order which permits
ATA to use  the  unrestricted  cash,  eligible  accounts  receivable  and  other
collateral  pledged  to secure  ATA's  secured  term loan (the "ATSB  Loan"),  a
significant   portion  of  which  is  guaranteed   by  the  Air   Transportation
Stabilization Board (the "ATSB"). The interim order has the effect of giving the
ATSB Loan lenders a replacement  lien on unrestricted  cash and all other assets
of the  Debtors to secure  diminution  of  pre-petition  cash  collateral.  This
interim order has been extended for successive short periods,  currently through
April 7, 2005, and requires  compliance by the Debtors with certain terms,  such
as the  maintenance of minimum cash collateral  balances and periodic  reporting
requirements.  Further  extensions cannot be assured,  and a failure to maintain
the right to use cash collateral would be material and adverse to the ability of
the Debtors to reorganize under Chapter 11 of the U. S. Bankruptcy Code.

As required by the  Bankruptcy  Code, the United States Trustee has appointed an
official  committee of  unsecured  creditors  (the  "Official  Committee").  The
Official Committee and its legal representatives have a right to be heard on all
matters that come before the  Bankruptcy  Court in each of the  Debtor's  cases.
There can be no assurance that the Official  Committee will support the Debtors'
positions  in the  reorganization  cases  or any  plan of  reorganization,  once
proposed, and disagreements between the Debtors and the Official Committee could
protract the reorganization  cases, could negatively impact the Debtors' ability
to operate during the Chapter 11 cases,  and could delay or prevent the Debtors'
emergence from Chapter 11.

The Filing triggered defaults on substantially all debt and lease obligations of
the Debtors. Subject to certain exceptions under the Bankruptcy Code, the Filing
automatically   enjoined,  or  stayed,  the  continuation  of  any  judicial  or
administrative  proceedings  or  other  actions  against  the  Debtors  or their
property to recover on,  collect or secure a claim arising prior to the Petition
Date. For example,  creditor  actions to obtain  possession of property from the
Debtors,  or to create,  perfect or enforce any lien against the property of the
Debtors,  or to collect on or otherwise exercise rights or remedies with respect
to a pre-petition  claim,  are enjoined  unless and until the  Bankruptcy  Court
lifts the automatic stay or the Bankruptcy Code otherwise provides.

Notwithstanding the above general discussion of the automatic stay, the Debtors'
right to  retain  and  operate  certain  aircraft,  aircraft  engines  and other
equipment  defined in  section  1110 of the  Bankruptcy  Code that are leased or
subject to a security  interest or  conditional  sale contract are  specifically

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<PAGE>

governed by section  1110 of the  Bankruptcy  Code.  That section  provides,  in
relevant  part,  that unless the  Debtors,  prior to 60 days after the  Petition
Date, agree to perform all obligations under the lease,  security agreement,  or
conditional sale contract and cure all defaults  thereunder (other than defaults
constituting  a breach of  provisions  relating  to the filing of the Chapter 11
cases,  the Debtors'  insolvency  or other  financial  condition of the Debtors)
within the time  specified  in section  1110,  the right of the lessor,  secured
party or conditional  vendor to take  possession of such equipment in compliance
with the  provisions  of the lease,  security  agreement,  or  conditional  sale
contract  and to enforce any of its other  rights or remedies  under such lease,
security  agreement,  or  conditional  sale contract is not limited or otherwise
affected by the automatic stay, by any other  provision of the Bankruptcy  Code,
or by any power of the Bankruptcy Court.

The section 1110  deadline for the Debtors was December 26, 2004. As of December
31,  2004,  the Company  operated 82 aircraft,  including 76 aircraft  that were
financed with  operating  leases.  As of March 25, 2005,  with regards to the 76
leased  aircraft,  the Company has  returned  22 of these  aircraft  and related
engines to the lessor. The Company expects to return 28 additional  aircraft and
related  engines to the lessor  between March 31, 2005 and January 25, 2006. The
Company has  renegotiated  long-term  rates on 10 aircraft and related  engines.
Finally,  the Company has elected to cure  existing  defaults  and is paying the
contract rates  required  under the Bankruptcy  Code with respect to 16 aircraft
and related  engines.  The Company  expects  these changes in fleet to result in
additional  changes to amounts  reported in the December 31, 2004 balance  sheet
associated with the aircraft,  including prepaid aircraft rent, and to result in
additional significant aircraft rejection charges in 2005.

Under section 365 of the  Bankruptcy  Code,  the Debtors may assume,  assume and
assign, or reject certain executory  contracts and unexpired leases,  including,
without  limitation,  leases of real  property,  aircraft and aircraft  engines,
subject to the approval of the  Bankruptcy  Court and certain other  conditions.
Generally,  the rejection of an executory lease or unexpired lease is treated as
a  pre-petition  breach of the lease or  contract in  question  and,  subject to
certain exceptions,  relieves the Debtors of performing future obligations under
such lease or  contract  but  entitles  the lessor or contract  counterparty  to
pre-petition  general  unsecured claim for damages caused by such deemed breach.
The  lessor or  contract  counterparty  may file a claim  against  the  relevant
Debtor's  estate for such damages.  The  assumption of an executory  contract or
unexpired lease generally  requires a cure of most existing  defaults under such
executory  contract or unexpired  lease.  The Company  expects that  liabilities
subject to  compromise  will  arise in the  future as a result of damage  claims
resulting from the rejection of certain executory contracts and unexpired leases
by the Debtors.  However,  the Company  expects that the  assumption  of certain
executory  contracts and  unexpired  leases may convert  liabilities  subject to
compromise to liabilities not subject to compromise.

The Debtors have  undertaken  to notify all known or potential  creditors of the
Chapter 11 cases for purposes of identifying and  quantifying  all  pre-petition
claims.  Subject to certain exceptions under the Bankruptcy Code, the Chapter 11
filings  automatically stayed the continuation of any judicial or administrative
proceedings  or other actions  against the Debtors or their  property to recover
on,  collect or secure a claim arising  prior to October 26, 2004.  The deadline
for filing by creditors of proofs of claim with the Bankruptcy Court was January
24, 2005, with a limited exception for governmental  entities,  which have until
April  24,  2005.  A proof of claim  arising  from the  rejection  of  executory
contracts  and  expired  leases must be filed no later than thirty days from the
effective date of the authorized rejection.

The  Bankruptcy  court  extended the period  during  which the Debtors'  have an
exclusive right to file a plan of reorganization until May 24, 2005. There is no
assurance  that  these  exclusivity  periods  will be  further  extended  by the
Bankruptcy Court. If a Debtor's exclusivity period lapses, any party in interest
may file a plan of reorganization for that Debtor. In addition to being voted on
by holders of impaired  claims and equity  interests,  a plan of  reorganization
must satisfy  certain  requirements of the Bankruptcy Code and must be approved,
or confirmed,  by the Bankruptcy Court in order to become effective.  A plan has
been accepted by holders of claims  against and equity  interests in a Debtor if
(1) at least  one-half  in number  and  two-thirds  in  dollar  amount of claims
actually  voting in each impaired  class of claims have voted to accept the plan
and (2) at least  two-thirds in amount of equity  interests  actually  voting in
each impaired  class of equity  interests  have voted to accept the plan.  Under
certain  circumstances  set forth in the  provisions  of section  1129(b) of the

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<PAGE>

Bankruptcy  Code, the Bankruptcy  Court may confirm a plan even if such plan has
not been  accepted by all  impaired  classes of claims and equity  interests.  A
class of claims or equity interests that does not receive or retain any property
under the plan on account of such claims or interests is deemed to have voted to
reject the plan. The precise requirements and evidentiary showing for confirming
a plan,  notwithstanding its rejection by one or more impaired classes of claims
or equity interests,  depends upon a number of factors, including the status and
seniority  of the  claims or equity  interests  in the  rejecting  class,  i.e.,
secured claims or unsecured claims,  subordinated or senior claims, preferred or
common stock.

Although the Debtors expect to develop  reorganization  plans for emergence from
Chapter 11 in 2005, there can be no assurance that any reorganization  plan will
be proposed by the Debtors or confirmed  by the  Bankruptcy  Court,  or that any
such plan will be  consummated.  The Debtors have  incurred and will continue to
incur  significant costs associated with their respective  reorganizations.  The
amount of these costs,  which are being  expensed as  incurred,  are expected to
significantly affect their financial results.

The  ultimate  recovery,  if any, to holders of common stock of the Company will
not be  determined  until  confirmation  of a plan  of  reorganization  for  the
Company.  The plan of  reorganization  could  result in holders of common  stock
receiving  no  distribution  on account of their  interest  in the  Company  and
cancellation of the outstanding shares. The Southwest Airlines Co. ("Southwest")
commitments for post-reorganization  financing, equity investment in the Company
and codesharing  require that all outstanding equity of the Company be cancelled
without any distributions to the holders of such equity.

Financial  Statement  Presentation.   The  accompanying  consolidated  financial
statements,  for the year ended  December  31,  2004,  of the Company  have been
prepared in accordance with American  Institute of Certified Public  Accountants
Statement of Position 90-7,  Financial  Reporting by Entities in  Reorganization
under the  Bankruptcy  Code ("SOP  90-7") and on a  going-concern  basis,  which
contemplates continuity of operations, realization of assets and satisfaction of
liabilities in the ordinary course of business.

SOP 90-7,  which is  applicable to companies in Chapter 11,  generally  does not
require  filers to change the manner in which  their  financial  statements  are
prepared.  However,  it does require that the financial  statements  for periods
subsequent  to the filing of Chapter 11 petition  distinguish  transactions  and
events that are directly  associated  with the  reorganization  from the ongoing
operations  of  the  business.   Generally,  the  Company's  revenues,  expenses
(including  professional  fees),  realized  gains and losses,  and provision for
losses that can be directly associated with the reorganization and restructuring
of the  business  must be reported  separately  as  reorganization  items in the
consolidated  statement  of  operations.  The  consolidated  balance  sheet must
distinguish   pre-petition   liabilities   subject  to  compromise   from  those
pre-petition   liabilities   that  are  not  subject  to  compromise   and  from
post-petition   liabilities.   Liabilities   that   may  be   affected   by  the
reorganization plan must be reported at the amounts expected to be allowed, even
if they may be settled for different amounts.

For the year ended  December 31, 2004,  the Company had recognized the following
reorganization   expenses  in  the  consolidated  statement  of  operations  (in
thousands):

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<PAGE>

<TABLE>
<CAPTION>
<S>                                      <C>
Aircraft lease rejection charges         $      568,317
Aircraft impairment                              44,499
Professional fees                                 8,747
Goodwill impairment                               6,399
Other                                            10,517
                                         --------------
                                         $      638,479
                                         ==============
</TABLE>


The aircraft  leases and aircraft engine leases  rejection  charges are non-cash
charges which are comprised of the Company's  estimate of claims  resulting from
the  rejection or return of the  aircraft and engines as part of the  bankruptcy
process.  They also include the write-off of assets and  liabilities  related to
aircraft  leases and  aircraft  engine  leases that the  Company  has  rejected,
committed  to return  dates with the lessor or intended to reject as part of the
Company's  business plan as of December 31, 2004.  The estimate that the Company
recorded is subject to material  adjustments as the Debtors  proceed through the
bankruptcy process.

For  information  on the aircraft and goodwill  impairment,  see "Note 15- Fleet
Impairment" and "Note 16 - Goodwill."

The  disposition  of assets and  liquidation or settlement of liabilities in the
Chapter 11 cases are subject to  significant  uncertainty.  While  operating  as
debtors-in-possession under the protection of Chapter 11 of the Bankruptcy Code,
and subject to the  Bankruptcy  Court  approval or otherwise as permitted in the
normal course of business,  the Debtors may sell or otherwise  dispose of assets
and liquidate or settle  liabilities  for amounts other than those  reflected in
the consolidated  financial statements.  Further, a plan of reorganization could
materially change the amounts and classifications reported in these consolidated
financial  statements,  which  do not  give  effect  to any  adjustments  to the
carrying value or amounts of  liabilities  that might result as a consequence of
confirmation of a plan of reorganization.

Pursuant to the  Bankruptcy  code,  the Debtors  have filed  schedules  with the
Bankruptcy  Court setting forth the assets and  liabilities of the Debtors as of
the  Petition  Date.  Differences  between  amounts  recorded by the Debtors and
claims  filed by  creditors  will be  investigated  and  resolved as part of the
Chapter 11 cases.  The deadline for filing  proofs of claim with the  Bankruptcy
Court was January 24, 2005, with a limited exception for governmental  entities,
which have until April 24, 2005 to file proofs of claim.  The  ultimate  numbers
and allowed amounts of such claims are not presently known.

DIP Financing  Arrangements.  On November 17, 2004,  ATA obtained $15 million in
debtor-in-possession financing from the Indiana Transportation Finance Authority
("ITFA").  ATA sold to the ITFA property consisting primarily of aircraft parts,
free and clear of any liens.  The ITFA leased the  property to the  Indianapolis
Airport  Authority,  which in turn subleased the property to ATA. ATA terminated
this  financing,  repurchased  the  assets,  and  paid  interest  to the ITFA on
December 30, 2004.

On   December   23,   2004,   ATA  and   Southwest   entered   into  a   Secured
Debtor-in-Possession  Credit and Security  Agreement (the "DIP  Facility")  that
provides up to $40.0 million in cash to the Company,  plus a letter of credit in
the approximate  amount of $7 million to secure two pre-petition  loans obtained
by ATA from the City of Chicago for the  construction of a jet bridge  extension
(the "Chicago LOC").  The Company  received $40.0 million under the DIP Facility
on December 23, 2004. A closing fee of 2.5%, or $1.0  million,  was treated as a
principal advance under the DIP Facility.

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<PAGE>

The base interest rate, paid monthly, on amounts borrowed under the DIP Facility
is the greater of (a) 8.0% per annum,  or (b) the  three-month  LIBOR rate, plus
5.0% per annum,  paid monthly.  Southwest will also receive an unused commitment
fee of 1.0% per annum,  paid monthly,  for any amounts not drawn pursuant to the
DIP  Facility  and a guaranty  fee of 3.0%,  per annum,  paid  monthly,  for any
amounts  guaranteed but not drawn under the Chicago LOC.  During the term of the
agreement,  the  Company  is subject to  certain  financial  covenants.  ATA has
obtained  amendments to these financial  covenants for the months of January and
February  2005.  There is no  assurance  ATA will be able to comply  with  these
financial covenants in March, 2005, or thereafter,  or that Southwest will agree
to further amendments to these covenants or to waive ATA's  non-compliance.  The
DIP facility is  guaranteed by the Company and its other  subsidiaries.  The DIP
Facility will  terminate on the earlier of (1) the  effective  date of a plan of
reorganization or (2) September 30, 2005, unless otherwise extended.

Asset Sale. On December 23, 2004, the Company and Southwest  executed and closed
a substantial  portion of the transactions  contemplated by an Asset Acquisition
Agreement (the "Asset  Acquisition  Agreement") by which ATA agreed to assign to
Southwest ATA's leasehold  interest in six specified gates and a hangar facility
at  Chicago-Midway  airport and  related  assets for $40.0  million,  subject to
certain adjustments.  The Asset Acquisition Agreement was entered into after the
completion  of an  auction  process  supervised  by the  Bankruptcy  Court.  ATA
received $34.0 million of proceeds from the assignment of its leasehold interest
in six specified  gates and related  assets on December 23, 2004.  Almost all of
the funds were recorded as deferred gain on the Company's balance sheet and will
be amortized over ATA's remaining  lease term of eight years at  Chicago-Midway.
As of December 31, 2004, the assignment of the leasehold  interest in the hangar
facility  and related  assets had not been  executed  and  closed,  and the $6.0
million had not been  received.  It is expected to be received in the first half
of 2005  concurrently  with a delayed closing of the hanger lease  assignment to
Southwest.

The  completion  of the  closing  under the  Asset  Acquisition  Agreement  with
Southwest  triggered  a  requirement  for ATA to pay  AirTran  Airways,  Inc.  a
termination fee of $3.25 million, which is recorded in reorganization expense in
the consolidated  statement of operations,  related to an earlier agreement with
respect to assets at Chicago-Midway Airport.

Exit Facility and Equity Purchase.  On December 23, 2004, Southwest committed to
provide an exit loan facility (the "Exit  Facility") to the reorganized  Company
("New ATA") of $47 million upon the effective  date of a plan of  reorganization
approved by Southwest. The Exit Facility, under which a reorganized ATA would be
the borrower,  will provide for (a) a long-term  financing,  at a based interest
rate of 9.5% per annum, paid semi-annually,  consisting of one or more five-year
notes to  refinance  up to  $40.0  million  under  the DIP  Facility,  and (b) a
replacement  letter of credit  (the  "Replacement  Chicago  LOC") for up to $7.0
million to secure  loan  obligations  to the City of Chicago  now secured by the
Chicago LOC. The Exit  Facility is to be guaranteed by the Debtors and all other
subsidiaries  of the New ATA.  As of  December  31,  2004,  no amounts  had been
received under the Exit Facility.

A  closing  fee of 2.5% of the  Exit  Facility  is  payable  by the  Company  to
Southwest.  Southwest  will also  receive an unused  commitment  fee of 1.0% per
annum, paid monthly, for any amounts not drawn pursuant to the Exit Facility and
a guaranty fee of 3.0%, per annum, paid monthly, for any amounts secured but not
drawn under the Replacement Chicago LOC.

In addition, upon the effective date of a plan of reorganization,  Southwest has
committed to purchase,  through an  additional  cash  investment of $30 million,
non-voting  senior  convertible  preferred equity of the New ATA (the "Preferred
Equity").  The  Preferred  Equity  will be  convertible  into 27.5% of the fully
diluted economic ownership interest of the New ATA, subject to pro rata dilution
for management interests.  The Preferred Equity will (a) have voting rights only
upon certain  events of default,  (b) be senior to the common equity of New ATA,
and (c) be  convertible  into common equity of New ATA, at  Southwest's  option,
upon  Southwest's  sale or transfer of the Preferred  Equity to a third party or
certain other  specified  major  liquidity  events.  In addition,  the Preferred
Equity will earn dividends at the rate of 4.0% per annum and have certain rights

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<PAGE>

to require  registration  for resale under the securities laws. If not converted
within 10 years  after the  effective  date of the plan of  reorganization,  the
Preferred Equity shall, at Southwest's option, either convert into common equity
of New ATA or be redeemed.

Codeshare  Agreement.  On December 23, 2004,  Southwest and ATA entered into the
Southwest-ATA  Codeshare Agreement (the "Codeshare  Agreement"),  related to air
transportation service to and from Chicago-Midway and additional airports. Under
a codeshare  arrangement between two air carriers,  the codesharing air carriers
have  permission  to book and sell tickets on each other's  flights.  ATA is the
only  domestic  air carrier with which  Southwest,  perhaps the  strongest  U.S.
airline  presently,  has a codesharing  agreement.  Under this  arrangement both
carriers  have  expanded  their  flight  offerings  to  customers   without  the
significant  investment required for new flights.  Each airline receives a share
of the ticket price for  affected  flights.  The initial  term of the  Codeshare
Agreement is one year,  which will be  automatically  extended seven  additional
years once a plan of  reorganization  in the Company's Chapter 11 case, which is
acceptable to Southwest,  is confirmed and becomes effective.  ATA and Southwest
began servicing the codeshare flights on February 4, 2005.

2.  Significant Accounting Policies

Basis of Presentation and Business Description

The consolidated  financial  statements include the accounts of the Company, and
its  wholly  owned  subsidiaries.  All  significant  intercompany  accounts  and
transactions  have been  eliminated.  The Company  operates  principally  in one
business  segment  through ATA, its  principal  subsidiary,  which  accounts for
approximately   90%   of   the   Company's   operating   revenues.   ATA   is  a
U.S.-certificated  air carrier providing domestic and international  charter and
scheduled passenger air services. Refer to "Note 1 - the Company and the Chapter
11 Filing" for financial statement presentation related to the Filing.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Cash Equivalents

Cash  equivalents  are  carried  at cost,  which  approximates  market,  and are
primarily  comprised  of money  market funds and  investments  in U.S.  Treasury
repurchase agreements.  For additional information,  see "Note 3 - Cash and Cash
Equivalents."

Inventories

Inventories consist primarily of expendable aircraft spare parts, fuel and other
supplies.  Aircraft parts  inventories  are stated at cost and are reduced by an
allowance for obsolescence. The obsolescence allowance is provided by amortizing
the cost of the aircraft parts  inventory,  net of an estimated  residual value,
over the  related  fleet's  estimated  useful  service  life.  The  obsolescence
allowance  at December  31, 2004 and 2003 was $17.3  million and $21.2  million,
respectively. Inventories are charged to expense when consumed.

Investment in BATA Leasing, LLC

The Company has a limited liability  agreement with Boeing Capital Corporation -
Equipment Leasing Corporation  forming BATA Leasing LLC ("BATA"),  a 50/50 joint
venture.  Because the Company does not control BATA, the Company's investment is
accounted for under the equity method of  accounting.  BATA is  remarketing  the

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<PAGE>

Company's fleet of Boeing 727-200 aircraft in cargo configurations.  In exchange
for supplying  the aircraft,  the Company has and expects to continue to receive
both cash and its share of the  income or loss,  after  satisfaction  of certain
loan  obligations  by BATA,  of BATA.  As of December 31, 2004,  the Company had
transferred 23 of its fleet of Boeing  727-200  aircraft to BATA, and expects to
transfer no more aircraft in the future.

Prepaid Aircraft Rent

The  Company's  operating  leases  require  periodic  cash payments that vary in
amount and  frequency.  Many of the  Company's  aircraft  operating  leases were
originally structured to require very significant cash in the early years of the
lease in order to  obtain  more  overall  favorable  lease  rates.  The  Company
accounts for aircraft  rentals expense in equal monthly amounts over the term of
each  operating  lease  because   straight-line   expense  recognition  is  most
representative  of the time pattern from which  benefit from use of the aircraft
is  derived.  The amount of the cash  payments  in excess of the  aircraft  rent
expense in these  early years  generated a  significant  prepaid  aircraft  rent
amount on the Company's balance sheet.

Revenue Recognition

Revenues are recognized when air  transportation or other services are provided.
Customer flight deposits and unused  passenger  tickets sold are included in air
traffic  liability.  As is customary  within the industry,  the Company performs
periodic evaluations of this estimated liability, and any resulting adjustments,
which can be  significant,  are  included in the results of  operations  for the
periods in which the evaluations are completed.

In addition,  the Company has a travel awards  program that allows  customers to
earn  points for travel on ATA.  As points  accumulate  to certain  levels,  the
passenger  can redeem them for free travel.  The Company had a liability of $1.4
million and $0.7 million at December 31, 2004 and 2003, respectively, related to
free travel earned by the travel award customers, but not yet redeemed.

Passenger Traffic Commissions

Passenger traffic  commissions are recognized as expense when the transportation
is  provided  and the related  revenue is  recognized.  The amount of  passenger
traffic  commissions  paid in  advance  and not yet  recognized  as  expense  is
included  in  prepaid  expenses  and other  current  assets in the  accompanying
consolidated balance sheets.

Property and Equipment

Property and equipment,  including owned aircraft,  are recorded at cost and are
depreciated to residual values over their  estimated  useful service lives using
the straight-line  method.  Leasehold  improvements and rotable parts related to
the Company's  aircraft are depreciated  over the period of benefit or the terms
of the related  leases,  whichever is less.  The  Company's  other  property and
equipment  is  generally  depreciated  over lives of three to seven  years.  The
estimated  useful  service  lives of the  Company's  property and  equipment are
subject  to  changes  as  the   Company   progresses   through  its  Chapter  11
reorganization.

Aircraft Lease Return Conditions

The  Company  finances  substantially  all  of its of  aircraft  through  leases
accounted  for as  operating  leases.  Many of  these  leases  require  that the
airframes and engines be in a specified  maintenance condition upon their return
to the lessor at the end of the lease. If these return conditions are not met by
the Company, the leases generally require financial  compensation to the lessor.
When an operating  lease is within five years of its initial  termination  date,
the Company accrues ratably over that five years, if estimable,  the total costs
that will be incurred by the Company to render the aircraft in a suitable return
condition per the contract.

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<PAGE>

Airframe and Engine Overhauls

The Company has entered into engine  manufacturers'  maintenance  agreements for
engines that power the Boeing 737-800,  Boeing 757-200,  Boeing 757-300 and SAAB
340B  fleets,  which  provide  for the  Company to pay a monthly  fee per engine
flight hour in exchange for major overhaul and maintenance of those engines. The
Company  expenses the cost per flight hour under these  agreements  as incurred.
The cost of engine overhauls for remaining fleet types, and the cost of airframe
overhauls  for all fleet types other than the SAAB 340B,  are  capitalized  when
performed  and amortized  over  estimated  useful lives based upon usage,  or to
earlier fleet or aircraft  retirement dates, for both owned and leased aircraft.
This  accounting  treatment was also applied to Boeing 757-200 engine  overhauls
completed prior to October 2001, the effective date of the engine manufacturers'
maintenance  agreement for this fleet. Airframe overhauls for SAAB 340B aircraft
are expensed as incurred.

Restricted Cash

Restricted  cash  primarily  consists  of  deposits  held to secure  outstanding
stand-by letters of credit currently provided by the Company. While the existing
letters of credit  mature within the next 12 months,  management  believes it is
likely  that the  letters  of credit  will be  renewed  and has  classified  the
restricted cash as a long-term asset on the consolidated balance sheets.

Goodwill

The  Company  annually  tests for  impairment  of goodwill  in  accordance  with
Financial  Accounting Standards Board ("FASB") Statement of Financial Accounting
Standards No. 142,  "Goodwill and Other Intangible Assets" ("FAS 142). See "Note
16 - Goodwill."

Advertising

The Company expenses advertising costs in the period incurred.

Stock Based Compensation

The Company  adopted the  disclosure  provisions of FASB  Statement of Financial
Accounting  Standards No. 123,  Accounting for  Stock-Based  Compensation  ("FAS
123"),  with respect to its stock options.  As permitted by FAS 123, the Company
has elected to continue to account for  employee  stock  options  following  the
intrinsic value method of Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees ("APB 25"), and related interpretations. Under APB
25,  because the exercise  price of the Company's  employee stock options equals
the market price of the underlying  stock on the date of grant,  no compensation
expense is recognized.

There were no options  granted by the  Company in the years ended  December  31,
2004,  2003 and 2002.  Pro forma net income  (loss) and per share amounts do not
differ significantly from historical amounts presented.

3. Cash and Cash Equivalents

Cash and cash equivalents consist of the following:


                                                December 31,
                                                2004             2003
                                            ---------------------------
                                                   (in thousands)
Cash and money market funds                 $   131,478    $   158,100
Treasury repurchase agreements                    8,174          2,544
                                            ---------------------------
                                            $   139,652    $   160,644
                                            ===========================

                                       62
<PAGE>

4. Accrued Expenses

Accrued expenses consist of the following:
<TABLE>
<CAPTION>
                                                                                        December 31,
                                                                                    2004           2003
                                                                                _________________________
                                                                                        (in thousands)
<S>                                                                             <C>           <C>
Accrued salaries                                                                $    12,630   $    12,990
Accrued vacation pay                                                                 19,697        19,899
Other accrued expenses (individually less than 5% of total current liabilities)      89,704        21,800
                                                                                -----------    ----------
                                                                                $   122,031    $  154,689
                                                                                ===========    ==========
</TABLE>

5.  Liabilities Subject to Compromise

Liabilities  subject to compromise  refers to liabilities that will be accounted
for  under a plan of  reorganization,  including  claims  incurred  prior to the
Petition  Date.  These  amounts  result  from  known or  potential  claims to be
resolved through the Chapter 11 process and such claims remain subject to future
adjustments. Adjustments may result from negotiations, actions of the Bankruptcy
Court,  rejection of executory contracts and unexpired leases, the determination
as to the value of any  collateral  securing  claims,  proofs of claims or other
events. To date, such adjustments,  as reflected in reorganization expense, have
been  material  and the  Company  anticipates  that future  adjustments  will be
material as well.  Settlement of these amounts will be  established  through the
plan of reorganization.

At  December  31,  2004,  the  Company  has  liabilities  subject to  compromise
consisting of the following:

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                                      2004
                                                                                 (in thousands)
                                                                                ---------------
<S>                                                                             <C>
Aicraft-related accruals and deferred gains                                     $      640,788
Long-term debt, including accrued interest, net of unamoritized issuance costs         456,334
Mandatorily redeemable preferred stock                                                  50,000
Accounts payable                                                                        32,136
Other accrued expenses and liabilities                                                  70,418
                                                                                --------------
                                                                                $    1,249,676
                                                                                ==============
</TABLE>

6.  Debt

As of December 31, 2004, the Company's  long-term debt consisted only of the DIP
Facility, which is described more fully in "Note 1 - The Company and the Chapter
11 Filing." All of the DIP Facility is  classified as current as of December 31,
2004.

All of the Company's pre-petition debt is in default due to the Chapter 11
filing.  In  general,   the  Company  is  not  permitted  to  make  payments  on
pre-petition  debt  including  interest  while  in  Chapter  11 and  the  stated
contractual terms are all pre-petition.  The Company's  pre-petition debt, which
is included in  liabilities  subject to  compromise  as of  December  31,  2004,
consisted of the following:

                                       63
<PAGE>

<TABLE>
<CAPTION>

                                                                              December 31,

                                                                              2004                 2003
                                                                           ----------           ----------
                                                                                 (in thousands)
<S>                                                                         <C>                 <C>

Partially guaranteed term loan from ATSB, variable rate of LIBOR plus a     $ 139,900           $  161,000
margin, averaging 2.5% in 2004 and 2.2% in 2003, payable in varying
installments through November 2008

Unamortized discount on partially guaranteed term loan                         (3,655)              (5,350)

Unsecured Senior Notes, fixed rate of 10.5%, partially refinanced in
2004, repaid in August, 2004.                                                       -              175,000

Unsecured Senior Notes, fixed rate of 9.625%, partially refinanced in
2004, payable in December, 2005.                                               20,005              125,000

Unsecured Senior Notes, fixed rate of 13.0% through July 31, 2006 and
14.0% thereafter, payable in February 2009                                    163,064                    -

Unsecured Senior Notes, fixed rate of 12.125% through June 14, 2006 and
13.125% thereafter, payable in June 2010                                      110,233                    -

Secured note payable to institutional lender, variable rate of LIBOR
plus 2.0%, averaging 3.7% in 2004 and 3.5% in 2003, payable in varying
installments through October 2005                                               4,700                5,975

Secured note payable to institutional lender, variable rate of LIBOR
plus 2.0%, averaging 3.7% in 2003 and 3.5% in 2003, payable in varying
installments through March 2005                                                 3,708                4,983

Mortgage note payable to institutional lender, fixed rate of 8.75%,
payable in varying installments through June 2014                               7,637                8,322

Mortgage note payable to institutional lender, fixed rate of 8.30%,
payable in varying installments through June 2014                               5,671                6,260

City of Chicago variable rate (averaging 1.3% in 2004 and 1.7% in 2003)
special facility revenue bonds, paid in November 2004                               -                6,000

City of Chicago construction financing agreement, rate averaging 5.75%,
payable monthly                                                                 6,978                5,673

Other                                                                           1,266                1,833
                                                                           ----------           ----------
                                                                              459,507              494,696

Less current maturities and short-term debt                                         -               51,645
                                                                           ----------           ----------
                                                                           $  459,507           $  443,051
                                                                           ==========           ==========

</TABLE>

The Company has a partially  guaranteed secured term loan, a significant portion
of which is guaranteed by the ATSB (the "ATSB Loan").  The original terms of the
ATSB loan  provided  interest  payable  monthly at LIBOR plus a margin.  It also
provided  for  guarantee  fees  payable  quarterly  at 5.75% of the  outstanding
guaranteed  principal  balance in 2004,  escalating  to 9.5% of the  outstanding
guaranteed  principal  balance in 2005 through 2008. The ATSB Loan is subject to
certain  restrictive  covenants  and  is  collateralized  primarily  by  certain
receivables,  aircraft,  spare engines, and rotable parts. The receivables had a
carrying  amount of  approximately  $37.6  million as of December 31, 2004.  The
aircraft,  spare engines and parts consist of two Lockheed L-1011-500  aircraft,
two Saab 340B aircraft,  21 Rolls-Royce  RB211 spare engines and Boeing 757-200,
Boeing 757-300 and Boeing 737-800 rotable parts,  which had a combined  carrying
amount of  approximately  $33.0 million as of December 31, 2004. In  conjunction

                                       64
<PAGE>

with  obtaining  the ATSB  Loan,  the  Company  issued a warrant  to the ATSB to
purchase up to 1,478,059 shares of its common stock, and additional  warrants to
other loan participants to purchase up to 194,089 shares of its common stock, in
each case at an exercise price of $3.53 per share over a term of ten years.  The
Company allocated $7.4 million to the total value of warrants issued,  accounted
for as a discount on the loan. The  amortization of the discount  resulted in an
increase in the effective  rate of interest on the secured term loan,  which was
3.6% as of December 31, 2004 and 3.4% as of December 31, 2003.

The Company had outstanding  $175.0 million  principal amount of 10.5% unsecured
senior  notes,  $100.0  million of which were sold in 1997 and $75.0  million of
which were sold in 1999.  Under the original  terms,  interest on these notes is
payable on  February 1 and August 1 of each year.  In  completing  the  exchange
offers on January 30,  2004,  the Company  issued  $163.1  million in  aggregate
principal  amount of 2009 Notes and  delivered  $7.8 million in cash in exchange
for $155.3 million in aggregate  principal  amount of 2004 Notes  tendered.  The
2009 Notes mature February 1, 2009, with a payment of $7.8 million due on August
1, 2005,  bearing  interest  at 13%  through  July 31,  2006 and 14%  thereafter
through  maturity.  The $19.7  million  principal  amount of the original  notes
remained  outstanding  after the exchange and was paid according to the original
terms in August 2004.

The Company  also had  outstanding  $125.0  million  principal  amount of 9.625%
unsecured  senior notes.  Under the original  terms,  interest on these notes is
payable on June 15 and  December 15 of each year.  In  completing  the  exchange
offers on January 30,  2004,  the Company  issued  $110.2  million in  aggregate
principal  amount of 2010 Notes and  delivered  $5.2 million in cash in exchange
for $105.0 million in aggregate principal amount of the 2005 Notes tendered. The
2010 Notes mature June 15, 2010,  with a payment of $5.3 million due on June 15,
2005,  bearing  interest at 12 1/8% through June 14, 2006 and 13 1/8% thereafter
through  maturity.  The $20.0  million  principal  amount of the original  notes
remained  outstanding  after the exchange  and is due  according to the original
terms in December 2005.

In  accordance  with  FASB  emerging  Issues  Task  Force  No.  96-19,  Debtor's
Accounting  for  Modification  or Exchange  of Debt Terms  ("EITF  96-19"),  the
Company recorded a non-operating loss on extinguishment of debt of $27.3 million
in the first quarter of 2004,  related to the exchange of notes described above.
The  loss is  primarily  related  to the  accounting  for the $13  million  cash
consideration paid at closing on the exchange and the $13 million of incremental
notes issued.

The  Company  has   outstanding   two  variable  rate  five-year   notes,   each
collateralized by one Lockheed  L-1011-500  aircraft.  The loans have a combined
balance of $8.4 million and the related aircraft have a combined carrying amount
of $6.8 million as of December 31, 2004.

The Company has  outstanding  a 14-year loan at 8.75%,  secured by a mortgage on
its Maintenance and Operations Center at the Indianapolis International Airport.
The loan has a balance of $7.6 million and the maintenance facility building has
a carrying amount of $7.4 million as of December 31, 2004.

The Company has outstanding a 15-year loan at 8.30% secured by a mortgage on the
Maintenance  and Operations  Center.  The loan has a balance of $5.7 million and
the  operations  center  building  has a carrying  amount of $7.7  million as of
December 31, 2004.

The  Company  has  outstanding  a note  payable to the City of Chicago for funds
borrowed to finance  construction  costs for a gate extension at Midway Airport.
As of December 31, 2004,  the loan has a balance of  approximately  $7.0 million
and is secured by a letter of credit issued for the account of Southwest.

Interest  capitalized in connection with long-term asset purchase agreements and
construction  projects was $0.5 million,  $2.8 million and $7.8 million in 2004,
2003 and 2002,  respectively.  The capitalized  interest  includes $0.6 million,

                                       65
<PAGE>

$1.9 million and $1.4 million in 2004, 2003 and 2002, respectively,  of interest
paid to Boeing  upon  delivery  of certain  Boeing  737-800  and Boeing  757-300
aircraft in lieu of the Company  making  additional  pre-delivery  deposits,  as
allowed by the purchase  agreement.  In conjunction with the Filing, the Company
no longer capitalizes interest on these pre-delivery deposits in accordance with
SOP 90-7.

7.  Lease Commitments

The Company leases aircraft and aircraft engines,  ground facilities,  including
terminal space and  maintenance  facilities,  and ground  equipment.  As allowed
under Section 365 of the  Bankruptcy  Code,  the Company may assume,  assume and
assign,  or reject certain executory  contracts and unexpired leases,  including
leases of real property,  aircraft and aircraft engines, subject to the approval
of the Bankruptcy Court and certain other conditions.  Consequently, the Company
anticipates  that its  liabilities  pertaining to these leases,  and the amounts
related thereto as discussed  below,  will change  significantly  as the Company
progresses through its reorganization.

At December 31, 2004,  scheduled  future minimum lease payments under  operating
leases having initial  non-cancelable  lease terms of more than one year were as
follows:

<TABLE>
<CAPTION>



                                                Facilities
                            Flight              and Ground
                          Equipment              Equipment             Total
                    ------------------------------------------------------------
                                               (in thousands)
<S>                 <C>                       <C>                  <C>
2005                $       144,554           $    13,567          $     158,121

2006                        155,476                12,486                167,962

2007                        173,222                12,434                185,656

2008                        171,425                10,193                181,618

2009                        165,113                 8,155                173,268

Thereafter                1,243,935                21,996              1,265,931
                    ---------------           -----------          -------------
                    $     2,053,725           $    78,831          $   2,132,556
                    ===============           ===========          =============
</TABLE>

The Company's aircraft operating leases require periodic cash payments that vary
in amount and frequency.  The Company  accounts for aircraft  rentals expense in
equal  monthly   amounts  over  the  life  of  each   operating   lease  because
straight-line  expense  recognition is most  representative  of the time pattern
from which benefit from use of the aircraft is derived. Certain of the Company's
aircraft operating leases were originally structured to require very significant
cash in the early years of the lease in order to obtain more  overall  favorable
lease  rates.  The amount of the cash  payments in excess of the  aircraft  rent
expense in these early years has created a prepaid  aircraft  rent amount on the
Company's balance sheet. The portion of the prepaid aircraft rent schedule to be
realized in the next twelve  months is recorded as  short-term  prepaid  expense
while the remainder is recorded as long-term  prepaid aircraft rent.  Certain of
the Company's  aircraft  operating leases require more significant cash payments
later in the lease term resulting in an accrued  liability for aircraft rents on
the Company's balance sheet. The portion of the accrued  liability  scheduled to
be paid in the next twelve  months is recorded as short- term  accrued  expenses
while the remainder is recorded as long-term  deferred  items as of December 31,
2003.  However,  as of December 31, 2004, the entire liability has been recorded
as a liability subject to compromise.

The table below  summarizes the prepaid and accrued  aircraft rents for 2004 and
2003 that result from  straight-line  expense  recognition as reported under the
following  captions  on the  Company's  balance  sheet.  The  amounts  are as of
December  31,  2004,  and relate to  aircraft  for which the Company had not yet
committed to accept the lease or reject the lease and return the  aircraft.  The

                                       66
<PAGE>

amounts do not give any effect to the potential  future impact of the Filing and
the plan of reorganization, including the possible rejection or restructuring of
the related leases. These events could have a material impact on the amounts and
classifications listed below.

<TABLE>
<CAPTION>


                                                                        2004                  2003
                                                                   -------------          -------------
                                                                           (In thousands)

<S>                                                                <C>                    <C>
Assets:

Prepaid expenses and other current assets (short-term)             $       7,350          $       3,879
Prepaid aircraft rent (long-term)                                         52,031                144,088
                                                                   -------------          -------------
Total prepaid aircraft rent                                        $      59,381          $     147,967
                                                                   =============          =============
Liabilities:

Accrued expenses (short-term)                                      $          -           $      11,529
Other deferred items (long-term)                                              -                  27,976
Liabilities subject to compromise                                        21,931                      -
                                                                   -------------          -------------

Total accrued aircraft rent                                        $      21,931          $      39,505
                                                                   =============          =============


</TABLE>

                                       67
<PAGE>

8. Income Taxes

The provision for income tax expense (credit) consisted of the following:


<TABLE>
<CAPTION>
                                                                   December 31,

                                                     2004             2003              2002
                                               __________________________________________________
                                                                   (In thousands)
 <S>                                             <C>               <C>                <C>
Federal:
    Current                                    $      -            $       418       $  (15,743)
    Deferred                                          -                      -           (6,888)
                                               ----------         --------------     -----------
                                                      -                    418          (22,631)
State:
    Current                                           -                    893              306
    Deferred                                          -                      -           (2,625)
                                               ----------           ------------     -----------
                                                      -                    893           (2,319)
                                               ----------           ------------     -----------
Income tax expense (credit)                    $      -            $      1,311      $  (24,950)
                                               ==========          =============     ===========
</TABLE>

The income tax expense  (credit)  differed from the amount  obtained by applying
the  statutory  federal  income tax rate to income (loss) before income taxes as
follows:

<TABLE>
<CAPTION>



                                                                           December 31,
                                                             2004              2003                2002
                                                    _____________________________________________________
                                                                          (In thousands)
<S>                                                 <C>                   <C>                <C>

Federal income tax (credit) at statutory rate       $     (285,590)       $      7,611       $    (67,975)

State income tax (credit) net of federal benefit           (18,197)                580             (4,108)

Non-deductible expenses                                      5,881               3,031              2,393

Valuation allowance                                        297,857              (9,871)            43,324

Other, net                                                      49                 (40)             1,416
                                                    --------------        ------------       ------------
Income tax expense (credit)                         $          -          $      1,311       $    (24,950)
                                                    ==============        ============       ============

</TABLE>

Deferred income taxes arise from temporary  differences between the tax basis of
assets and liabilities and their reported  amounts in the financial  statements.
Deferred tax liability and asset components are as follows:

                                       68
<PAGE>

<TABLE>
<CAPTION>
                                                                                        December 31,
                                                                                   2004                   2003
                                                                           --------------------------------------
                                                                                       (In thousands)
<S>                                                                        <C>                       <C>
Deferred tax liabilities:

     Property and equipment                                                $    11,975               $    22,325
                                                                           -----------               -----------
     Deferred tax                                                               11,975                    22,325
                                                                           -----------               -----------
Deferred tax assets:

     Aircraft rejection charges                                                215,256                        -

     Tax benefit of net operating loss carryforwards                            81,397                    29,554

     Deferred gain on sale of Chicago-Midway gates                              12,607                        -

     Vacation pay accrual                                                        7,343                     7,418

     Deferred rent expense                                                       7,327                     7,549

     Alternative minimum tax and other tax credit carryforwards                  1,628                     1,689

     Other deductible temporary differences                                     16,849                     9,568
                                                                           -----------               -----------
     Deferred tax assets                                                       342,407                    55,778
                                                                           -----------               -----------
Valuation allowance                                                           (330,432)                  (33,453)
                                                                           -----------               -----------


     Net deferred tax asset                                                $      -                  $        -
                                                                           ===========               ===========

</TABLE>

Because of the  cumulative  losses  incurred by the  Company,  the  deferred tax
assets have been fully reserved. The Company recorded a full valuation allowance
against its net deferred  asset of $330.4 million at December 31, 2004 and $33.5
million at December 31, 2003.

As of December 31, 2004, the Company had a $218.1 million  federal net operating
loss  carryforward  expiring  starting in 2022.  As  discussed  in Note 1 - "The
Company and the Chapter 11 Filing", the Company filed for bankruptcy  protection
on October 26, 2004. As a result, the long-term utilization of the net operating
loss  carryforwards are expected to be substantially  reduced or even eliminated
by  liabilities   and   obligations   affected  by  the   reorganization   plan.
Additionally,  the Company may have a change in ownership  upon  emergence  from
bankruptcy, in which case the U.S. Tax Code would substantially limit the annual
usage of any remaining net operating loss carryforwards.

9.  Retirement Plan

The Company has a defined  contribution  401(k)  savings plan which provides for
participation  by  substantially  all the Company's  employees  immediately upon
hire.  The Company has elected to  contribute  an amount equal to 60.0% in 2004,
2003, and 2002, of the amount  contributed  by each  participant up to the first
six percent of eligible compensation. Company matching contributions expensed in
2004,  2003  and  2002  were  $7.3  million,  $6.8  million  and  $5.2  million,
respectively. The Company deferred its scheduled contributions between April and
December 2004 to employees not covered under a collective  bargaining  agreement
and expects to make the contribution in early 2005.

Effective January 1, 2003, the Company  implemented a defined  contribution plan
for cockpit  crewmember  employees that will be fully funded by the Company.  In
the 2004 and 2003 plan years, the Company contributed between 4.5% and 7.5%, and
4.0% and 6.5%,  respectively,  of each cockpit  crewmember's  eligible earnings,
depending  on years of service with the Company.  The  contribution  percentages
increase  in future  plan years,  escalating  to between  5.5% and 12.0% of each
cockpit  crewmember's  eligible  earnings in 2006. New cockpit  crewmembers  are

                                       69
<PAGE>

eligible for the plan immediately upon hire. Contributions vest after five years
of service.  The  contribution  expense for this plan in 2004 and 2003 were $7.3
million and $6.1 million,  respectively.  In February 2005, the Company  entered
into a letter  agreement  with its cockpit  crewmember's  in which,  among other
things,  the cockpit  crewmember's  agreed to a 50%  reduction in the  Company's
contributions to the plan between January 31, 2005 and May 31, 2005.

10. Stock Option Plans

The  Company's  1993  Incentive  Stock  Plan  for Key  Employees  ("1993  Plan")
authorizes the grant of options for up to 900,000 shares of the Company's common
stock.  The Company's 1996 Incentive Stock Plan for Key Employees  ("1996 Plan")
authorizes  the grant of options  for up to  3,000,000  shares of the  Company's
common stock.  The Company's 2000 Incentive Stock Plan for Key Employees  ("2000
Plan")  authorizes  the  grant of  options  for up to  3,000,000  shares  of the
Company's  common  stock.  Options  granted  have  five- to  10-year  terms  and
generally  vest and become fully  exercisable  over  specified  periods of up to
three years of continued employment.

A summary of common stock option changes follows:
<TABLE>
<CAPTION>


                                                        Number             Weighted-Average
                                                        of Shares            Exercise Price
                                                       -------------        -----------------
<S>                                                    <C>                  <C>
Outstanding at December 31, 2001                          2,714,049                   14.14
                                                       -------------        -----------------
    Granted                                                       -                      -
    Exercised                                               (54,261)                   8.27
    Canceled                                               (272,013)                  19.13
                                                       -------------        -----------------
Outstanding at December 31, 2002                          2,387,775         $         13.71
                                                       =============        =================
    Granted                                                       -                      -
    Exercised                                               (26,400)                   8.01
    Canceled                                               (592,676)                  14.88
                                                       -------------        -----------------

Outstanding at December 31, 2003                          1,768,699         $         13.40
                                                       =============        =================
     Granted                                                      -                      -
     Exercised                                              (32,711)                   9.12
     Canceled                                              (521,545)                  10.53
                                                       -------------        -----------------

Outstanding at December 31, 2004                          1,214,443         $         14.75
                                                       =============        =================

Options exercisable at December 31, 2002                  2,329,076         $         13.69
                                                       =============        =================
Options exercisable at December 31, 2003                  1,761,033         $         13.40
                                                       =============        =================
Options exercisable at December 31, 2004                  1,214,443         $         14.75
                                                       =============        =================

</TABLE>

Options  outstanding at December 31, 2004,  expire from January 2005 to November
2011. A total of 3,567,009  shares are reserved for future grants as of December
31, 2004,  under the 1993, 1996 and 2000 Plans.  The following table  summarizes
information concerning outstanding and exercisable options at December 31, 2004:

                                       70
<PAGE>

<TABLE>
<CAPTION>

Range of Exercise Prices                                  $6 - $8             $9 - $14           $15 - $19          $20 - $27
                                                      _______________________________________________________________________
<S>                                                   <C>                  <C>               <C>              <C>

Options outstanding:
 Weighted-Average Remaining Contractual Life                 3.17                 2.69                4.97              3.99

 Weighted-Average Exercise Price                      $      7.92          $      9.68       $       15.63     $       26.20
 Number                                                    83,000              585,543             257,350           288,550
Options exercisable:
  Weighted-Average Exercise Price                     $      7.92          $      9.68       $       15.63     $       26.20
  Number                                                   83,000              585,543             257,350           288,550

</TABLE>

Any plan of  reorganization  for the Company  could  result in holders of common
stock  receiving no  distribution  on account of their interests as shareholders
and cancellation of the outstanding  common stock and options.  The arrangements
with  Southwest  for   post-reorganization   financing,   equity  injection  and
codesharing  require that all outstanding  pre-petition equity of the Company be
cancelled without any distributions under the plan to holders of that equity.

As of December 31, 2004, the Company had 6,671,631  common stock shares reserved
for  issuance  in relation  to its  outstanding  stock  options,  warrants,  and
convertible  redeemable  preferred  stock.  See "Note 11 - Redeemable  Preferred
Stock" for additional information.

11.  Redeemable Preferred Stock

The  Company  has  outstanding  300  shares of Series B  convertible  redeemable
preferred  stock,  without  par  value  ("Series  B  Preferred"),  at a price of
$100,000  per share.  The Series B  Preferred  is to be  redeemed  no later than
September  20,  2015.  The  purchaser  of the Series B Preferred  is entitled to
cumulative  quarterly  dividends  at an annual  rate of 5.0% on the  liquidation
amount  ($100,000  per share) of the  Series B  Preferred.  The  annual  rate is
subject to an increase to 8.44% on the liquidation  amount  ($100,000 per share)
if the Company  fails to pay any quarterly  dividend  within ten days of the due
date.  Once dividends in arrears have been paid in full, the rate returns to the
original  annual rate of 5.0%.  The Series B  Preferred  is  classified  between
liabilities and equity on the Company's  accompanying  balance sheets because it
is convertible  into the Company's  common stock.  The dividends  related to the
Series B  Preferred  are  recorded  below net  income  or loss on the  Company's
statements of operations.

The Company also has  outstanding  500 shares of Series A  redeemable  preferred
stock,  without par value  ("Series A  Preferred"),  at a price of $100,000  per
share.  The  purchaser  of the Series A  Preferred  is  entitled  to  cumulative
semiannual  dividends  at an  annual  rate of  8.44% on the  liquidation  amount
($100,000  per  share) of the Series A  Preferred.  The  Series A  Preferred  is
optionally  redeemable by the Company under certain conditions,  but the Company
must  redeem the  Series A  Preferred  in equal  semiannual  payments  beginning
December 28, 2010,  and ending  December 28, 2015.  As of July 1, 2003,  per the
provisions  of  FASB  Statement  of  Financial  Accounting  Standards  No.  150,
Accounting  for  Certain  Financial  Instruments  with  Characteristics  of both
Liabilities  and Equity ("FAS 150"),  the Series A Preferred was classified as a
liability on the Company's balance sheet as of December 31, 2003,  because it is
mandatorily  redeemable and not convertible.  However,  as of December 31, 2004,
the Series A Preferred has been recorded as a liability subject to compromise on
the Company's balance sheet. The dividends related to the Series A Preferred are
recorded as interest expense on the Company's statements of operations.

On January 30, 2004,  the Company paid accrued  preferred  dividends in arrears,
including interest, totaling $9.7 million on the Series A Preferred and Series B
Preferred due to elimination of a covenant restriction. The Company did not pay,
but  accrued as a  liability  subject  to  compromise,  the  Series B  Preferred
dividends  due  September  15,  2004.  Subject to certain  exceptions  under the

                                       71
<PAGE>

Bankruptcy  Code, the Filing provides an automatic stay against the continuation
of any  judicial or  administrative  proceedings  or other  actions  against the
Debtors or their property to recover on, collect or secure a claim arising prior
to the Petition Date until the Bankruptcy Court lifts the stay. In addition,  as
a result of the Filing, the Company did not accrue or pay the Series A Preferred
or Series B Preferred dividends due December 15, 2004.

12.   Earnings per Share

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>

                                                                    2004                   2003                  2002
                                                             __________________________________________________________________
<S>                                                          <C>                    <C>                    <C>
Numerator:
   Net income (loss)                                         $    (815,729,000)     $      20,434,000      $      (169,264,000)
   Preferred stock dividends                                        (1,125,000)            (4,642,000)              (5,720,000)
                                                             ------------------     ------------------     --------------------
Numerator:
   Income (loss) available to common shareholders -
   numerator for basic earnings per share
                                                                  (816,854,000)            15,792,000             (174,984,000)
                                                             ------------------     ------------------     --------------------
   Effect of dilutive securities:

     Convertible redeemable preferred stock dividend                       -                2,532,000                       -
                                                             ------------------     ------------------     --------------------
   Numerator for diluted earnings per share                  $    (816,854,000)     $      18,324,000      $     (174,984,000)
                                                             ==================     ==================     ====================
Denominator:
   Denominator for basic earnings per share - adjusted
   weighted average shares                                          11,823,769             11,773,713              11,711,906
                                                             ==================     ==================     ====================
   Effect of dilutive securities:
     Employee stock options                                                  -                    119                       -
      Warrants                                                               -                780,518                       -
      Convertible redeemable preferred stock                                 -              1,914,486                       -
                                                             ------------------     ------------------     --------------------
      Dilutive potential securities                                          -              2,695,123                       -
   Denominator for diluted earnings per share - adjusted
   weighted average shares                                          11,823,769             14,468,836              11,711,906
                                                             ==================     ==================     ====================
Basic income (loss) per share                                $           (69.09)    $            1.34         $        (14.94)
                                                             ==================     ==================     ====================
Diluted income (loss) per share                              $           (69.09)    $            1.27         $        (14.94)
                                                             ==================     ==================     ====================

</TABLE>

In accordance  with FASB  Statement of Financial  Accounting  Standards No. 128,
"Earnings Per Share," 1,914,486 common stock equivalent shares,  upon conversion
of convertible  redeemable  preferred stock in 2004 and 2002, have been excluded
from the computation of diluted earnings per share because their effect would be
antidilutive.  In addition,  the impact of 11 and 553,025 employee stock options
in 2004 and 2002,  respectively,  was not included in the computation of diluted
earnings per share because their effect would be antidilutive. In 2004 and 2002,
the impact of 556,097 and 1,002,112 incremental shares from the assumed exercise
of  warrants  issued  in  conjunction  with the  guaranteed  term  loan were not
included in the  computation of diluted  earnings per share because their effect
would be antidilutive.

                                       72
<PAGE>

13.  Commitments and Contingencies

The following  commitments  and  contingencies  are as of December 31, 2004. The
full effect of the Chapter 11 filing and subsequent reorganization plan on these
commitments and contingencies is not yet known.

ATA has a purchase  agreement  with the Boeing  Company  ("Boeing")  to purchase
seven new Boeing  737-800s,  which are currently  scheduled for delivery between
July 2007 and December  2007.  These  aircraft  are powered by General  Electric
CFM56-7B27  engines.  The  manufacturer's  list price is $52.4  million for each
737-800,  subject to  escalation.  ATA's  purchase  price for each  aircraft  is
subject to various  discounts.  According  to a 2004  amendment  to the purchase
agreement  with  Boeing,  if ATA does not have  permanent  financing  for  these
aircraft  suitable  to ATA and  does  not  have  suitable  pre-delivery  deposit
financing,  and if Boeing does not elect to provide such  financing  suitable to
the ATA, these  deliveries can be delayed for one year periods  annually through
December  31,  2010.  Aircraft  pre-delivery  deposits  are  required  for these
aircraft,  and ATA has  historically  funded these  deposits  for past  aircraft
deliveries using operating cash and pre-delivery  deposit financing  facilities.
ATA can provide no assurance that it will be able to secure pre-delivery deposit
financing  facilities or permanent  financing for any future aircraft purchases.
As of December 31, 2004, ATA had $4.9 million in long-term pre-delivery deposits
outstanding  for future  aircraft  deliveries  which were funded with  operating
cash. Upon delivery of the aircraft, pre-delivery deposits funded with operating
cash would be returned to ATA.

ATA also has an agreement to purchase  four spare  engines  CFM56-7B27  engines,
which are currently scheduled for delivery between 2005 and 2008.

As allowed under  section 365 on the  Bankruptcy  Code,  the Company may assume,
assume and assign, or reject certain executory contracts subject to the approval
of the Bankruptcy Court and certain other  conditions.  The Company's ability to
obtain financing at rates and terms similar to historical agreements, if at all,
is not known.  Therefore,  the future obligations for these deliveries cannot be
reasonably estimated.

In  the  Company's   aircraft  financing   agreements,   the  Company  typically
indemnifies  the financing  parties,  trustees  acting on their behalf and other
related parties against  liabilities  that arise from the  manufacture,  design,
ownership,  financing,  use,  operation and  maintenance of the aircraft and for
tort liability,  whether or not these  liabilities arise out of or relate to the
negligence of these  indemnified  parties,  except for their gross negligence or
willful  misconduct.  The Company  expects that it would be covered by insurance
(subject to deductibles) for most tort liabilities and related indemnities under
these aircraft leases.

In January 2002,  the Company  entered into an agreement  (the "Lease") to lease
land from the City of Chicago (the "City"), which had been purchased by the City
with Chicago Midway Airport Revenue Bonds  ("MARB's").  The Company also entered
into a redevelopment  agreement (the  "Agreement") with the City in January 2002
to develop  real  estate on the  property.  As part of the  Agreement,  the City
agreed  to pay for the debt  service  on the  MARB's  from the  incremental  tax
revenue  expected to be generated from the real estate  developments.  Under the
Agreement,  if the  incremental  tax revenue is  insufficient to fund the MARB's
debt  service,  the City has the right to require the  Company to provide  those
funds as additional rent under the lease.  The total amount of the debt service,
including interest,  from 2006 through 2021 is approximately $27.2 million.  The
Company  is  continuing  to work  with the City to find  alternate  uses for the
property.

Various  claims,  contractual  disputes and lawsuits  against the Company  arise
periodically involving complaints which are normal and reasonably foreseeable in
light of the nature of the Company's  business.  The majority of these suits are
covered by  insurance.  In the opinion of  management,  the  resolution of these
claims  will not have a  material  adverse  effect  on the  business,  operating
results or financial condition of the Company.

14.    Segment Reporting

The  Company's  revenues  are  derived  principally  from the sale of  scheduled
service or charter  air  transportation  to  customers  domiciled  in the United

                                       73
<PAGE>

States.  The most significant  component of the Company's property and equipment
is aircraft and related  improvements  and parts. All aircraft are registered in
the United States. The Company therefore considers all property and equipment to
be domestic.

The U.S.  Government is the only customer that  accounted for more than 10.0% of
consolidated  revenues.  U.S. Government revenues accounted for 21.3%, 19.6% and
13.9% of consolidated revenues for 2004, 2003 and 2002, respectively.

15.   Fleet Impairment

Effective  January 1, 2002,  the Company  adopted  FASB  Statement  of Financial
Accounting  Standard  No.  144,  Accounting  for the  Impairment  or Disposal of
Long-Lived  Assets ("FAS 144"),  which  superseded  FASB  Statement of Financial
Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived  Assets to Be Disposed of ("FAS 121").  However,  the Company
continues to account for the fleet and related  assets that were impaired  prior
to January 1, 2002, and classified as held for sale,  under FAS 121, as required
by FAS 144.

The Company began performing impairment reviews on its 727-200 fleet in 2000 and
the fleet became  impaired  under FAS 121 in 2001,  subsequent  to the terrorist
attacks of September  11. In accordance  with FAS 121, the Company  continues to
monitor the current fair market value of these previously  impaired  assets.  In
2004, the Company recorded an additional asset impairment charge of $7.9 million
against its remaining net book value of Boeing 727-200 aircraft  (recorded as an
investment  in the BATA joint  venture)  and  related  assets,  as  compared  to
recording a $5.3 million and a $35.9 million impairment charge in 2003 and 2002,
respectively.  The Company's  current estimate of this fleet's fair market value
was based on future cash flow analysis. The carrying amount of related assets to
this fleet is  classified  as long-term  assets held for sale and appears in the
deposits and other assets line of the accompanying balance sheet.

In  2002,  the  Company  recorded  a  charge  of $14.2  million  related  to the
retirement  of one owned  L-1011-500  aircraft.  As a result,  the Company began
evaluating  this fleet and related parts and inventory for impairment  under FAS
144  assuming a common  fleet  retirement  date of  December  2010 and the fleet
remained  unimpaired  through  2003.  In 2004,  given  the  Company's  financial
position,  cash  constraints and related  limitations  imposed by the Chapter 11
filing  initiated  in the fourth  quarter of 2004,  the Company  determined  the
likelihood of expending the funds to perform heavy checks on the airframes  when
they become due in late 2005 through mid 2007 is remote.  Therefore, the Company
evaluated the fleet and related parts and inventory for impairment  assuming the
aircraft  would be  retired at the date of their next  required  airframe  heavy
check. This evaluation indicated that the aircraft were impaired and the Company
recorded a related  impairment  charge of $44.5 million in the fourth quarter of
2004. The Company estimates this fleet's fair market value using discounted cash
flow analysis.  In accordance with SOP 90-7,  because the 2004 impairment charge
was  directly  related to the  Company's  reorganization  under  Chapter 11, the
charge was recorded as a  reorganization  expense on the Company's  statement of
operations. The carrying amount of these assets is classified as assets held for
use and  appears in the  property  and  equipment  section  of the  accompanying
consolidated balance sheets, as the Company is still flying these aircraft.  The
assets are being  depreciated  in accordance  with the planned fleet  retirement
schedule.

16.   Goodwill

The Company's goodwill is related to its ATA Leisure Corp. ("ATALC"),  ATA Cargo
and Chicago Express subsidiaries, which were acquired in 1999.

As required by FAS 142, the Company performed its first goodwill impairment test
in the fourth  quarter of 2002.  The Company  identified  two FAS 142  reporting
units for ATALC. The ATALC brands outsourced to MTC were one reporting unit. The
other  reporting unit related to the Key Tours brands ("KTI") that sold Canadian
rail packages and ground packages in Las Vegas. In the 2002 goodwill  impairment
review, the Company determined that the goodwill related to Chicago Express, ATA
Cargo  and the  Mark  Travel  Corporation  (the  "MTC")  reporting  unit was not


                                       74
<PAGE>

impaired.  However, the estimated fair value of the KTI reporting unit was lower
than the carrying amount, and an impairment loss of $6.9 million, reflecting the
total  goodwill  balance for KTI, was recorded in the fourth quarter of 2002. As
of July 1, 2003, the Company ceased marketing the KTI brands.

The Company's  2003 annual  goodwill  impairment  test resulted in no additional
goodwill  impairment  expense.  In its 2004 annual goodwill impairment test, the
Company  determined  that  goodwill  related  to Chicago  Express  and ATA Cargo
remained  unimpaired,  but that the estimated  fair value of the MTC product was
lower than the carrying amount  resulting in an impairment loss of $6.4 million.
The  Company  determined  that  the  impairment  was  directly  related  to  its
reorganization efforts,  including route and operating changes, and recorded the
charge as a reorganization expense on its statement of operations.

In all three years, the fair values of all of the Company's reporting units were
estimated  using  discounted  future  cash flows  since  market  quotes were not
readily available.

17.    Related Party Transactions

J. George Mikelsons,  the Company's Chairman and Chief Executive Officer, is the
sole owner of Betaco, Inc., a Delaware corporation ("Betaco").  Betaco currently
owns two airplanes, a Cessna Citation II and a Lear Jet, and two helicopters,  a
Bell 206B Jet Ranger III and a Bell 206L-3  LongRanger.  The two  airplanes  are
leased or  subleased  to ATA. The  LongRanger  helicopter  is leased to American
Trans Air  ExecuJet,  Inc.  ("ExecuJet"),  a subsidiary  of ATA  Holdings  Corp.
ExecuJet subleases the LongRanger to an Indianapolis  television station. During
a portion of 2004,  Betaco  leased a Jet Ranger III  helicopter  to ExecuJet for
specialty charter flying during 2004, but rejected this lease in January 2005 as
part of the Chapter 11 proceedings.

The lease for the  Cessna  Citation  currently  requires  a monthly  payment  of
$27,600 for a term  beginning  April 1, 2004,  and ending on March 31, 2007. The
lease  for the Lear  Jet  requires  a  monthly  payment  of  $27,600  for a term
beginning April 1, 2004, and ending March 31, 2007. The lease for the LongRanger
requires a monthly  payment of $15,000 for a term  beginning  April 1, 2004, and
ending March 31, 2007.  Pursuant to various  stipulations,  the Company has made
payments in respect of the Cessna  Citation,  the Lear Jet and the LongRanger at
the pre-bankruptcy lease rates in exchange for extensions of the 60-day election
period under section 1110 of the Bankruptcy  Code. As a result,  the Company has
preserved  its right to assume or reject the leases.  The Company  believes that
the current terms of the leases and subleases with Betaco for this equipment are
no less  favorable to the Company  than those that could be obtained  from third
parties.

Since 1996, the Company and Mr.  Mikelsons had an arrangement  pursuant to which
the Company provided  certain  domestic  employees of Mr. Mikelsons with salary,
health insurance and other non-cash benefits. The Company invoiced Mr. Mikelsons
quarterly  for the full amount of such  benefits.  Prior to 2003,  the timing of
payments from Mr. Mikelsons to the Company had been inconsistent,  but beginning
in 2003, Mr.  Mikelsons  reimbursed the Company prior to the date of each salary
payment for these employees. This arrangement ended in October 2004.

In 2004,  the Company paid  approximately  $236,000 in associated  compensation,
plus  associated  benefits,  to five employees who served as the crew for a boat
owned by another company owned by Mr. Mikelsons.  Under an agreement dated as of
July 1, 2002, the Company agreed to pay for these  employees in exchange for its
use of the boat for  business  purposes  (e.g.,  the  entertainment  of clients,
customers  and vendors of the  Company).  To the extent that for any fiscal year
the crew's compensation,  plus associated non-cash benefits,  exceeds 75% of the
amount  that would have been  charged by an  outside  third  party  under a fair
market rental  contract for the Company's  actual  business use of the boat, Mr.
Mikelsons is responsible for paying the  difference.  In 2004, the Company's use
of the boat resulted in no payments by Mr. Mikelsons to the Company.  In October
2004, the agreement was discontinued.

As of December 31, 2004, Mr.  Mikelsons owes $653,225 to the Company pursuant to
the arrangements relating to the domestic employees and the crew. On October 26,
2004, the Company and Mr. Mikelsons signed an agreement for the repayment of the

                                       75
<PAGE>

debt which requires quarterly installments of $19,403 beginning January 26, 2005
through  October 26, 2009 and bears  interest at 3.6% per annum.  The  remaining
balance becomes due and payable on October 26, 2009.

18. Subsidiary Guarantees

ATA Holdings Corp. has issued  unsecured  senior note indentures which are fully
and unconditionally  and jointly and severally  guaranteed on an unsecured basis
by the following  subsidiaries:  ATA, Ambassadair Travel Club Inc., ATALC, Amber
Travel Inc., ExecuJet,  Chicago Express and ATA Cargo. The subsidiary guarantors
are  100%-owned   subsidiaries  of  the  Company.  ATA  Holdings  Corp.  has  no
independent assets or operations and the guarantor  subsidiaries generated 99.9%
and  100.0%  of the  consolidated  revenues  and  net  profits  of the  Company,
respectively,  for the  years  ended  December  31,  2003 and  2004.  Therefore,
condensed consolidating financial information is not presented.

19.  Subsequent Events

On February 7, 2005,  the Company  announced  it intends to sell or  discontinue
Chicago Express'  business,  including its DOT and FAA certificates,  as part of
the Company's continuing  reorganization effort. The sale decision resulted from
a recent determination to change the Company's route network, including reducing
its flight schedules in the Indianapolis  market.  The Company presently intends
to  discontinue  all  flights  serviced  by Chicago  Express by March 28,  2005.
Chicago  Express is a regional  feeder  carrier  operating as ATA Connection and
connecting  small  and  medium-sized   cities  with  either   Chicago-Midway  or
Indianapolis. Chicago Express has a non-unionized workforce employing 400 people
in Chicago  and  another  200 people in various  other  cities  Chicago  Express
serves.  The Company can make no guarantees  that it will find a suitable  buyer
for Chicago Express.  As of December 31, 2004, the Company had made no change in
the  presentation  of assets and  liabilities  related to Chicago Express on the
accompanying  balance  sheets and  depending on the outcome of the sale process,
may incur a charge  against future  earnings  related to a write-down of certain
Chicago Express assets, including goodwill.

As of December 31, 2004, the Company operated 82 aircraft, including 76 aircraft
that were financed with operating leases. For the period from January 1, 2005 to
March 25, 2005, with regards to the 76 leased aircraft, the Company has returned
22 of these aircraft and related  engines to the lessor.  The Company expects to
return 28 additional  aircraft and related  engines to the lessor  between March
31, 2005 and January 25, 2006. The Company has  renegotiated  long-term rates on
10  aircraft  and  related  engines.  Finally,  the  Company has elected to cure
existing defaults and is paying the contract rates required under the Bankruptcy
Code with respect to 16 aircraft and related engines.  The Company expects these
changes in fleet to result in  additional  changes to  amounts  reported  in the
December 31, 2004 balance sheet associated with the aircraft,  including prepaid
aircraft  rent,  and to  result in  additional  significant  aircraft  rejection
charges in 2005.

                                       76
<PAGE>

20. Selected Supplemental Quarterly Data (Unaudited)

<TABLE>
<CAPTION>

                                  Financial Statements and Supplementary Data
                                      ATA Holdings Corp. and Subsidiaries
                                       2004 Quarterly Financial Summary
                                                  (Unaudited)



__________________________________________________________________________________________________________________
(In thousands,  except per share data)              3/31             6/30             9/30              12/31
__________________________________________________________________________________________________________________
<S>                                            <C>                <C>              <C>              <C>
Operating revenues                             $       387,333    $    390,774     $   401,219      $      353,245
Operating expenses (1)                                 409,684         401,297         417,397             404,356
Operating loss                                         (22,351)        (10,523)        (16,178)            (51,111)
Reorganization expenses (2)                                  -              -                -            (638,479)
Other expenses                                         (41,993)        (15,139)        (14,726)             (5,530)
Loss before income taxes                               (64,344)        (25,662)        (30,904)           (695,120)
Income taxes (credits)                                       -               -               -                (301)
Preferred stock dividends                                  375             375             375                   -
Loss available to common shareholders          $       (64,719)   $    (26,037)    $   (31,279)     $     (694,819)
Net loss per common share - basic              $         (5.47)   $      (2.20)    $     (2.65)     $       (58.76)
Net loss per common share - diluted            $         (5.40)   $      (2.20)    $     (2.65)     $       (58.76)

</TABLE>

<TABLE>
<CAPTION>
                                    Financial Statements and Supplementary Data
                                        ATA Holdings Corp. and Subsidiaries
                                        2003 Quarterly Financial Summary
                                                    (Unaudited)

____________________________________________________________________________________________________________________
(In thousands,  except per share data)                    3/31              6/30            9/30            12/31
____________________________________________________________________________________________________________________
<S>                                               <C>                 <C>             <C>             <C>
Operating revenues                                $       373,629     $     388,122   $     387,703   $     369,079
Operating expenses (1)                                    372,109           332,177         358,237         378,469
Operating income (loss)                                     1,520            55,945          29,466          (9,390)
Other expenses                                            (12,512)          (12,630)        (14,432)        (16,222)
Income (loss) before income taxes                         (10,992)           43,315          15,034         (25,612)
Income taxes (credits)                                         -                -             7,311          (6,000)
Preferred stock dividends                                     375             2,485           1,149             633
Income (loss) available to common shareholders    $       (11,367)    $      40,830   $       6,574   $     (20,245)
Net income (loss) per common share - basic        $         (0.97)    $        3.47   $        0.56   $       (1.72)
Net income (loss) per common share - diluted      $         (0.97)    $        2.93   $        0.53   $       (1.72)


</TABLE>


(1)  Operating  income  (loss) for the years  ended  December  31, 2004 and 2003
     include the following items:

                                       77
<PAGE>

<TABLE>
<CAPTION>
                                                                        2004
Quarter Ended                                    3/31       6/30        9/30    12/31       Total
                                                 _____________________________________________________
<S>                                              <C>     <C>            <C>     <C>         <C>
Aircraft impairments and retirements             $  -    $     -        $  -    $  (7,887)  $  (7,887)
                                                 ----    -------        ----    ---------   ---------
Total - income (loss)                            $  -    $     -        $  -    $  (7,887)  $  (7,887)
                                                 ====    =======        ====    =========   =========

</TABLE>
<TABLE>
<CAPTION>

                                                                        2003
Quarter Ended                                    3/31       6/30        9/30    12/31       Total
                                                 _____________________________________________________
<S>                                              <C>     <C>            <C>     <C>         <C>
Aircraft impairments and retirements             $  -    $     -        $  -    $  (5,288)  $  (5,288)

U.S. Government grants                              -     37,156           -            -      37,156
                                                 ----    -------        ----    ---------   ---------
Total - income (loss)                            $  -    $37,156        $  -    $  (5,288)  $  31,868
                                                 ====    =======        ====    =========   =========
</TABLE>


(2)  The accompanying  consolidated  financial statements,  for the period ended
     December 31, 2004,  of the Company have been  prepared in  accordance  with
     American  Institute of Certified Public  Accountants  Statement of Position
     90-7,   Financial  Reporting  by  Entities  in  Reorganization   under  the
     Bankruptcy   Code  ("SOP  90-7)  and  on  a  going-concern   basis,   which
     contemplates   continuity  of   operations,   realization   of  assets  and
     satisfaction   of   liabilities   in  the  ordinary   course  of  business.
     Reorganization  expenses  identify those costs not in the ordinary business
     and include aircraft lease rejection charges,  impairments and professional
     fees related to the Filing. See "Notes to Consolidated Financial Statements
     - Note 1 - The Company and the Chapter 11 Filing" for more information.

Item 9.    Changes in and Disagreements with Accountants on Accounting and +
           Financial Disclosure

No change of auditors or disagreements on accounting  methods has occurred which
would require disclosure hereunder.

Item 9A.  Controls and Procedures

The  Company  conducted  an  evaluation  (under  the  supervision  and  with the
participation of the Company's management, including the Chief Executive Officer
and Chief  Financial  Officer),  pursuant to Rule 13a-15  promulgated  under the
Securities   Exchange  Act  of  1934  ("Exchange  Act"),  as  amended,   of  the
effectiveness of the design and operation of the Company's  disclosure  controls
and procedures as of December 31, 2004. Based on this evaluation,  the Company's
Chief  Executive  Officer and Chief  Financial  Officer  concluded  that,  as of
December  31,  2004,  the  controls  and  procedures  were  effective to provide
reasonable assurance that information required to be disclosed by the Company in
reports it files or  submits  under the  Exchange  Act is  recorded,  processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission.

During the quarter ended December 31, 2004, there were no significant changes in
the Company's internal control over financial reporting or in other factors that
have  materially  affected,  or are reasonably  likely to affect,  the Company's
internal control over financial reporting.

                                       78
<PAGE>

Item 9B.  Other Information

Not applicable.

                                       79
<PAGE>

PART III

Item 10.   Directors and Officers of the Registrant

Directors:

J. GEORGE  MIKELSONS                                       Director  since 1993
J.  George  Mikelsons,  age 68, is the  founder,  Chairman  of the Board,  Chief
Executive  Officer and, prior to the Company's  initial  public  offering in May
1993, was the sole  shareholder of the Company.  Mr.  Mikelsons  founded ATA and
Ambassadair  Travel Club,  Inc. in 1973.  Mr.  Mikelsons  serves on the Board of
Directors  and is a  member  of the  Executive  Committee  of the Air  Transport
Association.  Mr.  Mikelsons  also  serves  on the  Board  of  Directors  of The
Indianapolis Zoo, the Indianapolis Convention and Visitors Association (where he
is a member  of the  Executive  Committee)  and the  Central  Indiana  Corporate
Partnership.  Mr.  Mikelsons has been an airline  captain since 1966 and remains
current  on  several  jet  aircraft.  Mr.  Mikelsons  is a citizen of the United
States.

JAMES W. HLAVACEK                                           Director since 1993
James W.  Hlavacek,  age 68,  joined  ATA in 1983 and served as  Executive  Vice
President from 1989 to 2005. In 1995, he was appointed Chief  Operating  Officer
for the carrier,  and in May 2003, he was appointed Vice Chairman.  In addition,
he oversees the Company's  regional commuter airline,  Chicago Express Airlines,
Inc.  (doing  business  as ATA  Connection),  which is  based at  Chicago-Midway
International  Airport.  From  1983  through  1989,  he  served  ATA in  various
capacities,  including Fleet Chief Pilot,  System Chief Pilot and Vice President
of Operations. He has served as a member of the National Air Carrier Association
(NACA) Board of  Directors  since 1997.  He is also a member of the  Chicagoland
Chamber of Commerce  Board of  Directions,  the Chicago  Convention  and Tourism
Bureau  Board of  Directors,  and the Military  Airlift and  Security  Practices
Committee for the National  Defense  Transportation  Association.  Mr.  Hlavacek
began his aviation  career as a pilot in the U.S.  Air Force.  He is a native of
Chicago and a graduate of the University of Illinois.  Mr. Hlavacek is a citizen
of the United States.

GILBERT F. VIETS                                            Director since 2003
Gilbert F. Viets,  age 61, is the Executive Vice  President and Chief  Financial
Officer of the Company.  Prior to joining the Company,  Mr. Viets was a clinical
professor in the Systems and Accounting Graduate Program of the Kelley School of
Business at Indiana  University,  Bloomington,  Indiana.  Mr. Viets, a Certified
Public Accountant,  was with Arthur Andersen LLP for 35 years before retiring in
2000. He graduated  from  Washburn  University  of Topeka,  Kansas.  He has been
active in  numerous  civic  organizations  and  presently  serves on the finance
committees of St. Vincent Hospital and Healthcare  Center,  Inc. and St. Vincent
Health,  both located in  Indianapolis,  Indiana.  Mr. Viets is a citizen of the
United States.

ROBERT A. ABEL                                              Director since 1993
Robert A. Abel,  age 52, is a director in the public  accounting  firm of Blue &
Co.,  LLC. Mr. Abel is a magna cum laude  graduate of Indiana  State  University
with a B.S. Degree in Accounting.  He is a Certified Public Accountant with over
25 years of public accounting  experience in the areas of auditing and corporate
tax. He has been involved with aviation  accounting and finance since 1976. Blue
& Co.,  LLC provides tax and  accounting  services to the Company in  connection
with  selected  matters.  Mr.  Abel's  principal  business  address  is 12800 N.
Meridian  Street,  Carmel,  Indiana  46032.  Mr. Abel is a citizen of the United
States.

ANDREJS P.  STIPNIEKS                                       Director since 1993
Andrejs  P.  Stipnieks,  age 64, is an  international  aviation  consultant.  He
graduated from the University of Adelaide,  South Australia,  and is a Barrister
and Solicitor of the Supreme Courts of South Australia,  the Australian  Capital
Territory and of the High Court of Australia.  Until 1998,  Mr.  Stipnieks was a
Senior Government  Solicitor in the Australian  Attorney  General's  Department,
specializing  in  aviation  and  surface  transport  law  and  practice.  He has
represented Australia on the Legal Committee of the International Civil Aviation
Organization  at  Montreal.   Mr.  Stipnieks'   principal  business  address  is
Gleznotaju Iela 5-6, Riga 1050, Latvia. Mr. Stipnieks is a citizen of Australia.

                                       80
<PAGE>

CLAUDE E. WILLIS,  D.D.S.                                   Director since 2001
Claude E. Willis,  age 59, has been in private dental  practice in  Indianapolis
for  29  years.  He  is  a  member  of  the  American  Dental  Association,  the
Indianapolis District Dental Society and was named on a list of "Top Dentists in
America" by the Consumers Research Council of America. A 1968 graduate of Purdue
University's  School of Science,  Dr.  Willis  completed  his  graduate  studies
earning a Doctor of Dental  Surgery  Degree from  Indiana  University  School of
Dentistry in 1972. Dr. Willis' principal  business address is 5938 W. State Road
135, Trafalgar, Indiana 46181. Dr. Willis is a citizen of the United States.

BYRON F. JOHNSON                                           Director  since 2004
Byron F.  Johnson,  age 64, is Chairman of the Audit  Committee of the Company's
Board of Directors.  Johnson, a Certified Public  Accountant,  worked for Arthur
Andersen  L.L.P.  for 38 years.  He served as  Director  of the  firm's  Utility
Industry  Program  for the  Central  Region of the U.S.  for many  years and the
Director of the firm's Airline Industry Program.  He had overall  responsibility
for several  well-known  public  companies in the regulated  utility and airline
industries  and  participated  on the American  Institute  of  Certified  Public
Accountants  (AICPA)  committees   supporting  the  development  of  appropriate
accounting  and  financial  reporting  initiatives  in the  utility  and airline
industries.  He became a retired partner in April 2000.  Johnson  graduated from
Iowa Wesleyan College in Mount Pleasant,  Iowa in 1962 where he continues on the
Board of Trustees after serving 18 years as Chairman of the Board.  He served in
U.S.  Marine  Corps  Reserve  from  1963 to  1969.  Johnson  currently  performs
consulting  services on a limited basis and assists in various  local  community
projects.  Mr. Johnson's principal business address is 36 Ridge Road, Barrington
Hills, Illinois. 60010. Mr. Johnson is a citizen of the United States.

Executive Officers:

J. GEORGE MIKELSONS   Chairman and Chief Executive Officer of ATA Holdings Corp.

JOHN G. DENISON       Co-Chief Restructuring Officer of ATA Holdings Corp. and
                              Chief Executive Officer of ATA Airlines, Inc.

Mr.  Denison  retired from  Southwest  Airlines as Executive  Vice  President of
Corporate  Services in 2001, after 15 years with the low-cost  carrier.  Denison
also previously held the position of Vice President  Finance and Chief Financial
Officer.  Prior to joining Southwest Airlines,  Mr. Denison held various finance
positions  with  The  LTV  Corporation   (May  1980-March   1986)  and  Chrysler
Corporation   (August  1969-May  1980).  Mr.  Denison   graduated  from  Oakland
University  in  Rochester,  Michigan,  with a B.A. in economics  and received an
M.B.A. in finance from Wayne State University in Detroit, Michigan.

GILBERT F. VIETS      Chief Financial Officer of ATA Holdings Corp.

JAMES W. HLAVACEK     Vice Chairman of ATA Holdings Corp.

JOHN GRABER           Senior Vice President of Flight Operations and Maintenance

John W. Graber,  age 48,  joined ATA in 1993 as a pilot.  From 1996 to 2005,  he
served ATA in various  capacities,  including  Director  of Flight  Standards  &
Training,  System Chief Pilot & Director of Line Operations,  Captain, and Check
Airman.  In  January  2005,  he was  appointed  Senior  Vice  President,  Flight
Operations  and  Maintenance.  Captain  Graber is  qualified  to fly  Boeing 737
aircraft. An officer and pilot in the Army Reserve, he has held numerous command
and flight  operations posts as a reservist and on active duty. He has served as
a member of the Air Transport Association's Training Committee,  and Chairman of
the Air Transport Association's National Crew Resource Management Conference. He
is a  member  of the  Advisory  Board  of the  American  Red  Cross  of  Greater
Indianapolis.  He graduated from Edison State University of Trenton, New Jersey,
and is a cum laude Master of Business  Administration graduate of the University
of Notre Dame. He is a citizen of the United States.

                                       81
<PAGE>

Audit Committee Composition

The Company has a separately  designated  standing Audit Committee  comprised of
Byron Johnson, Andrejs Stipnieks and Claude E. Willis. The Chairman of the Audit
Committee,  Byron Johnson,  meets the "independence  test" of the SEC and NASDAQ
Listing  Standards  and is a  "financial  expert"  as  defined  in  Item  401 of
Regulation  S-K.  The  other  members  of the  Audit  Committee  also  meet  the
"independence test."

Code of Ethics

The Company has a Corporate Code of Business  Conduct and Ethics which is posted
on the Company's web site (www.ata.com) in the "Investor Relations" section. The
Code is applicable to all members of the Company's  Board of Directors,  as well
as the  Company's  executive  officers.  The  Company  intends to  disclose  any
amendments  to, or waivers  from,  any of the  provisions of the Code by posting
such information on its website.

Section 16(a) Beneficial Ownership Reporting Compliance

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
directors  and  executive  officers and persons who own more than ten percent of
the Company's shares to file with the Securities and Exchange Commission reports
on their  ownership  of shares of the  Company.  Based  solely on its  review of
copies of such reports,  the Company believes that all filing  requirements were
satisfied by each such person during 2004.

                                       82
<PAGE>

Item 11.   Executive Compensation

<TABLE>
<CAPTION>

                                S U M M A R Y   C O M P E N S A T I O N   T A B L E
---------------------------------------------------------------------------------------------------------------------------

This table shows the  compensation  paid or accrued to the Chief  Executive  Officer and Chairman of the Board,  the Executive  Vice
President and Chief Financial Officer,  the next four (4) most highly compensated  executive officers of the Company in 2004 and the
former Senior Vice President,  Strategic  Sourcing and Process  Improvement (the "named executive  officers") for services  rendered
during the last three fiscal years.

                                                                                  Long-Term
                                                Annual Compensation              Compensation
                                                -------------------              ------------


                                                                                   Securities
      Name and                                                                    Underlying           All Other
 Principal Position             Year           Salary($)     Bonus($)             Options (#)      Compensation($)
 ------------------             ----           ---------     --------             -----------      ---------------

<S>                             <C>            <C>             <C>                 <c>                  <C>
J. George Mikelsons             2004           629,708         None                None                 5,715(1)
Chief Executive Officer and     2003           687,916         None                None                 7,200(2)
Chairman of the Board           2002           681,443         None                None                 6,600(3)

James W. Hlavacek               2004           269,231         None                None                 1,745(1)
Vice Chairman                   2003           280,000         None                None                 7,200(2)
                                2002           346,635         None                None                 6,600(3)

Gilbert Viets4                  2004           152,115         None                None                   None
Executive Vice President and    2003              None         None                None                   None
Chief Financial Officer         2002              None         None                None                   None

David M. Wing5                  2004           399,672         None                None                 2,908(1)
Former Executive Vice President 2003           319,846         None                None                 7,200(2)
And Chief Financial Officer     2002           207,981         None                None                 6,600(3)

William D. Beal6                2004           262,308         None                None                 1,904(1)
Former Sr. Vice President,      2003           248,500         None                None                 7,200(2)
Operations                      2002           207,981         None                None                 7,229(3)

John Happ7                      2004           252,769         None                None                   None
Former Sr. Vice President,      2003           122,308         None                None                   None
Marketing And Sales             2002              None         None                None                   None

Randy E. Marlar8                2004           199,298         None                None                 2,160(1)
Former Sr. Vice President,      2003           230,923         None                None                 7,200(2)
Strategic Sourcing and Process  2002           188,173         None                None                 7,494(3)
Improvement
</TABLE>

1    Represents the amount of the Company's matching  contribution to its 401(k)
     Plan for the first  quarter of 2004.  The  Company  has not made a matching
     contribution  for the second,  third and fourth quarters of 2004, but plans
     to do so in early 2005.

2    Represents the amount of the Company's matching  contribution to its 401(k)
     Plan in 2003.

3    Represents the amount of the Company's matching  contribution to its 401(k)
     Plan in 2002.

4    Mr. Viets became an employee of the Company in June 2004.

5    Mr. Wing resigned December 21, 2004.

6    Mr. Beal retired on January 24, 2005.

7    Mr. Happ resigned on February 3, 2005.

8    Mr. Marlar resigned on May 21, 2004.


                                       83
<PAGE>
<TABLE>
<CAPTION>

                                                  O P T I O N  E X E R C I S E S  AND
                                           Y E A R-E N D  O P T I O N  V A L U E S  T A B L E
---------------------------------------------------------------------------------------------------------------------------

This table shows the number and value of stock options (exercised and unexercised) for the named executive officers during 2004.


                                                                                                     Value of
                                                                                                    Unexercised
                                                             Number of Securities                   In-The-Money
                             Shares                         Underlying Unexercised                 Options At Fiscal
                             Acquired         Value       Options At Fiscal Year-End                 Year-End
                            On Exercise     Realized                                                Exercisable (E)/
 Name                        (#)               ($)      Exercisable     Unexercisable               Unexercisable(U)($)
-------------------------------------------------------------------------------------------------------------------

<S>                             <C>             <C>         <C>             <C>                    <C>      <C>
J. George Mikelsons             -0-             -0-           -0-           -0-                    -0-      (E)
                                                                                                   -0-      (U)

James W. Hlavacek               -0-             -0-         270,098         -0-                    -0-      (E)
                                                                                                   -0-      (U)

David M. Wing                   -0-             -0-          59,558         -0-                    -0-      (E)
                                                                                                   -0-      (U)

William D. Beal                 -0-             -0-          39,333         -0-                    -0-      (E)
                                                                                                   -0-      (U)

Gilbert Viets                   -0-             -0-           -0-           -0-                    -0-      (E)
                                                                                                   -0-      (U)

John Happ                       -0-             -0-           -0-           -0-                    -0-      (E)
                                                                                                   -0-      (U)

Randy E. Marlar                 -0-             -0-           -0-           -0-                    -0-      (E)
                                                                                                   -0-      (U)
</TABLE>


Compensation Committee Composition

The objectives of ATAH's executive compensation programs are to: (i) attract and
retain talented and experienced executives with compensation that is competitive
with other U.S.  airlines within a range of sizes,  both smaller and larger than
ATA;  (ii)  reward  outstanding  performance  and  provide  incentives  based on
individual and corporate  performance;  and (iii) use equity-based  compensation
(in the form of either restricted stock or stock options) to align the interests
of management with those of the shareholders.

The  Compensation  Committee is  responsible  for  administering  the  Company's
compensation  policies  and  programs.   The  Compensation  Committee  currently
consists  of three (3)  independent  non-employee  directors:  Claude E.  Willis
(Chairman),  Andrejs P. Stipnieks, and Robert A. Abel. Mr. Abel is a director in
the  accounting  firm of Blue & Co.,  LLC.  Mr.  Abel's  firm  provided  tax and
accounting services to the Company in 2004.

                                       84
<PAGE>

Compensation Committee Interlocks and Insider Participation

None of the Company's  executive officers or directors serves as a member of the
board of directors or compensation  committee of any entity that has one or more
of its  executive  officers  serving  as a  member  of the  Company's  Board  of
Directors.

Employment Agreements

In connection  with the  appointment  of John G. Denison as the Chief  Executive
Officer of ATA, ATA entered into an  employment  agreement  with Mr.  Denison on
March 7,  2005.  The  agreement  is for an  indefinite  period of time until the
earlier  of such time as Mr.  Denison  resigns  or  voluntarily  terminates  his
employment or ATA's Board of Directors  terminates his  employment,  removes him
form office or appoints him to another position.  The agreement provides for the
payment of the sum of $25,000 for the period from January 20, 2005 (the date Mr.
Denison's  employment  with ATA  commenced) to February 20, 2005 and a beginning
salary,  commencing February 21, 2005, of $315,000 per year. Mr. Denison is also
eligible to be considered  for a  discretionary  bonus upon the earlier to occur
of: (a) termination of his employment;  (b) a transaction  involving the Company
and/or  ATA such as a merger,  recapitalization,  acquisition  of the  Company's
stock or assets by a purchaser or  confirmation  of a Chapter 11  reorganization
plan for ATA or the Company or both of them; or (c) December 31, 2005.

                                       85
<PAGE>

Item 12.   Security Ownership of Certain Beneficial Owners and Management
<TABLE>
<CAPTION>
                                           B E N E F I C I A L  O W N E R S H I P  T A B L E
---------------------------------------------------------------------------------------------------------------------------

       This table indicates the number of shares of common stock owned by (i) the named executive officers (ii) the directors; (iii)
any person known by management to beneficially own more than 5% of the outstanding shares of common stock; and (iv) all directors
and executive officers of the Company as a group as of March 4, 2005.

                                                                                                       Percent of
                                                        Number of Shares               Right to        Outstanding
Name and Address of Individual/Group                         Owned 1                   Acquire 2          Shares 3
------------------------------------                         -------                   ---------          --------
<S>                                                        <C>                          <C>                  <C>

J. George Mikelsons                                         8,210,214                       --                 70
7337 West Washington Street
Indianapolis, IN 46231

James W. Hlavacek                                                  --                   264,098                --

Robert A. Abel                                                  4,000                     4,000                --

Gilbert F. Viets                                                4,000                        --                --

Andrejs P. Stipnieks                                           15,320                     4,000                --

Claude E. Willis                                                  300                     2,500                --

Byron F. Johnson                                                   --                        --                --

David M. Wing4                                                  1,074                        --                --

William D. Beal5                                                  57                     39,333                --

John Happ6                                                         --                        --                --

Randy E. Marlar7                                                  272                        --                --

Dimensional Fund Advisors, Inc.8                              683,379                        --               5.8

Air Transportation Stabilization Board9                     1,478,059                        --              12.5

All directors and executive officers
as a group 10 (excluding J. George Mikelsons)                  25,023                   313,931                --
</TABLE>

1    Includes shares for which the named person has shared voting and investment
     power with a spouse.

2    Shares that can be acquired through presently  exercisable stock options or
     stock options which will become exercisable by their terms within 60 days.

3    If more than 1%.

4    Mr. Wing resigned on December 21, 2004.

5    Mr. Beal retired on January 24, 2005.

6    Mr. Happ resigned on February 3, 2005.

7    Mr. Marlar resigned on May 21, 2004.

8    Dimensional  Fund Advisors  Inc.  ("Dimensional"),  an  investment  adviser
     registered  under  Section  203 of the  Investment  Advisers  Act of  1940,
     furnishes  investment advice to four investment  companies registered under
     the  Investment  Company Act of 1940,  and serves as investment  manager to
     certain  other  commingled  group  trusts  and  separate  accounts.  (These
     investment companies,  trusts and accounts are referred to as the "Funds.")
     In its role as  investment  adviser  and  investment  manager,  Dimensional
     possesses  voting and/or  investment  power over the shares of common stock
     described in this table that are owned by the Funds.  Such shares of common
     stock  are  owned  by  the  Funds,  and  Dimensional  disclaims  beneficial
     ownership  of such  securities.  The  information  in the  table  and  this
     footnote is based on  information  supplied by  Dimensional on Schedule 13G
     filed with the SEC on February 9, 2005.

9    The ATSB  beneficially  owns  1,478,059  shares of common stock through its
     ownership  of a warrant.  The warrant  has an  exercise  price of $3.53 per
     share and is immediately exercisable.

10   Group consists of 10 persons (Messers.  Hlavacek,  Abel, Stipnieks,  Viets,
     Willis, Johnson, Wing, Beal, Happ and Marlar).

                                       86
<PAGE>


Equity Compensation Plan Information

The following table gives  information about the Company's common stock that may
be issued upon the  exercise of options,  warrants  and rights  under all of our
existing equity compensation plans as of December 31, 2004:
<TABLE>
<CAPTION>

                            Number  of  securities
                             to be  issued  upon                           Number of  securities
                               exercise  of                              remaining available for
                           outstanding  options,   Weighted-average       future issuance under
                           warrants and rights   exercise price of       equity  compensation  plans
                                 (a)(#)             outstanding            (excluding securities
                                --------         options,  warrants        reflected in column (a))
Plan Category                                     and rights(b)($)              (c) (#)
------------                                     ----------------               -------
<S>                          <C>                     <C>                      <C>
Equity compensation
plans approved by
security holders(1)          1,214,443               $14.75                   3,000,000

Equity compensation
plans not approved by
security holders

              Total          1,214,443               $14.75                   3,000,000

</TABLE>
1    Includes  the  1993  Incentive  Stock  Plan  for Key  Employees,  the  1996
     Incentive  Stock Plan for Key Employees and the 2000  Incentive  Stock Plan
     for Key Employees.


Item 13.   Certain Relationships and Related Transactions

J. George Mikelsons,  the Company's Chairman and Chief Executive Officer, is the
sole owner of Betaco, Inc., a Delaware corporation ("Betaco").  Betaco currently
owns two airplanes, a Cessna Citation II and a Lear Jet, and two helicopters,  a
Bell 206B Jet Ranger III and a Bell 206L-3  LongRanger.  The two  airplanes  are
leased or  subleased  to ATA. The  LongRanger  helicopter  is leased to American
Trans Air  ExecuJet,  Inc.  ("ExecuJet"),  a subsidiary  of ATA  Holdings  Corp.
ExecuJet subleases the LongRanger to an Indianapolis  television station. During
a portion of 2004,  Betaco  leased a Jet Ranger III  helicopter  to ExecuJet for
specialty charter flying during 2004, but rejected this lease in January 2005 as
part of the Chapter 11 proceedings.

The lease for the  Cessna  Citation  currently  requires  a monthly  payment  of
$27,600 for a term  beginning  April 1, 2004,  and ending on March 31, 2007. The
lease  for the Lear  Jet  requires  a  monthly  payment  of  $27,600  for a term
beginning April 1, 2004, and ending March 31, 2007. The lease for the LongRanger
requires a monthly  payment of $15,000 for a term  beginning  April 1, 2004, and
ending March 31, 2007.  Pursuant to various  stipulations,  the Company has made
payments in respect of the Cessna  Citation,  the Lear Jet and the LongRanger at
the pre-bankruptcy lease rates in exchange for extensions of the 60-day election
period under section 1110 of the Bankruptcy  Code. As a result,  the Company has
preserved  its right to assume or reject the leases.  The Company  believes that
the current terms of the leases and subleases with Betaco for this equipment are
no less  favorable to the Company  than those that could be obtained  from third
parties.

                                       87
<PAGE>

Since 1996, the Company and Mr.  Mikelsons had an arrangement  pursuant to which
the Company provided  certain  domestic  employees of Mr. Mikelsons with salary,
health insurance and other non-cash benefits. The Company invoiced Mr. Mikelsons
quarterly  for the full amount of such  benefits.  Prior to 2003,  the timing of
payments from Mr. Mikelsons to the Company had been inconsistent,  but beginning
in 2003,  Mr.  Mikelsons  has  reimbursed  the Company prior to the date of each
salary payment for these employees. This arrangement ended in October 2004.

In 2004,  the Company paid  approximately  $236,000 in associated  compensation,
plus  associated  benefits,  to five employees who served as the crew for a boat
owned by Betaco and another company owned by Mr.  Mikelsons.  Under an agreement
dated as of July 1,  2002,  the  Company  agreed to pay for these  employees  in
exchange for its use of the boat for business  purposes (e.g., the entertainment
of clients,  customers and vendors of the  Company).  To the extent that for any
fiscal year the crew's compensation,  plus associated non-cash benefits, exceeds
75% of the amount that would have been charged by an outside third party under a
fair market rental  contract for the Company's  actual business use of the boat,
Mr.  Mikelsons is responsible for paying the difference.  In 2004, the Company's
use of the boat  resulted in no payments by Mr.  Mikelsons  to the  Company.  In
October 2004, the agreement was discontinued.

ATA received a $168.0  million  ATSB Loan in November  2002,  $148.5  million of
which is  guaranteed by the ATSB.  As of December 31, 2004,  $139.9  million was
outstanding  under the ATSB Loan. In connection with the ATSB Loan, ATA Holdings
Corp.  issued  1,478,059  warrants to the ATSB to purchase the Company's  stock.
During 2004,  the Company made principal  payments of $21.0 million  against the
$168.0  million ATSB loan and also made interest  payments of $8.2  million.  On
January 30, 2004,  the ATSB granted a waiver to the loan  agreement that allowed
the  Company  to  exchange  its 2004 Notes for 2009 Notes and its 2005 Notes for
2010 Notes. See "Notes to Consolidated Financial Statements - Note 6 - Debt" for
more information.

On October 29, 2004 the Bankruptcy  Court entered an interim order which permits
ATA to use  the  unrestricted  cash,  eligible  accounts  receivable  and  other
collateral pledged to secure ATA's ATSB Loan, a significant  portion of which is
guaranteed by the ATSB. The interim order has the effect of giving the ATSB Loan
lenders a  replacement  lien on  unrestricted  cash and all other  assets of the
Debtors to secure diminution of pre-petition cash collateral. This interim order
has been extended for successive short periods, currently through April 7, 2005,
and  requires  compliance  by  the  Debtors  with  certain  terms,  such  as the
maintenance  of  minimum  cash  collateral   balances  and  periodic   reporting
requirements.  Further  extensions cannot be assured,  and a failure to maintain
the right to use cash collateral would be material and adverse to the ability of
the Debtors to reorganize under Chapter 11 of the U. S. Bankruptcy Code.

As of December 31, 2004, Mr.  Mikelsons owes $653,225 to the Company pursuant to
the arrangements relating to the domestic employees and the crew. On October 26,
2004, the Company and Mr. Mikelsons signed an agreement for the repayment of the
debt which requires quarterly installments of $19,403 beginning January 26, 2005
through  October 26, 2009 and bears  interest at 3.6% per annum.  The  remaining
balance becomes due and payable on October 26, 2009.

In  2004,  Gordon  Moebius,  Director  of  ExecuJet  and  brother-in-law  to Mr.
Mikelsons,  received annual compensation of approximately  $87,000. In addition,
Eugene Moebius and Alan Moebius,  ATA airframe & powerplant  aircraft  mechanics
and  brothers-in-law  to  Mr.  Mikelsons,  received  approximately  $63,500  and
$58,500, respectively, in compensation from ATA in 2004.

David M. Wing, the Company's former Executive Vice President and Chief Financial
Officer,  filed a complaint  against ATA with the United  States  Department  of
Labor  ("DOL").  The  complaint  resulted  from a  disagreement  concerning  the
circumstances  under which Mr. Wing left his  employment  with the Company on or

                                       88
<PAGE>

about  June 24,  2004.  In order to  settle  the  dispute,  ATA  entered  into a
Settlement  Agreement on October 18, 2004 with Mr.  Wing,  pursuant to which Mr.
Wing  executed an  employment  contract with the Company and Mr. Wing resumed to
his former duties. The employment  contract required the Company to pay Mr. Wing
a sign up bonus of  $157,500.  Mr. Wing  subsequently  resigned on December  21,
2004. On November 15, 2004, the DOL dismissed the claim.

Item 14.  Principal Accountant Fee and Services

Audit Fees

The aggregate fees billed by Ernst & Young for  professional  services  rendered
for the years ended  December  31,  2004 and 2003 were  $610,619  and  $770,541,
respectively.  Audit fees include the audit of the  Company's  annual  financial
statements,  the reviews of the financial  statements  included in the Company's
quarterly  reports  on Form 10-Q  during  the year  2004,  attestation  services
required by statute or regulation,  comfort letters,  consents,  assistance with
and  review of  documents  filed  with the SEC,  and  accounting  and  financial
reporting  consultations  and research work  necessary to comply with  generally
accepted auditing standards.

Audit-Related Fees

The aggregate fees billed by Ernst & Young for  professional  services  rendered
for  audit-related  services for the years ended December 31, 2004 and 2003 were
$79,597  and   $204,641,   respectively.   The  fees   consisted   primarily  of
consultations  on accounting  matters,  consultation  related to preparation for
Sarbanes-Oxley 404 requirements and services for other filings.

Tax Fees

The aggregate fees billed by Ernst & Young for  professional  services  rendered
for tax fees for the years ended  December  31,  2004 and 2003 were  $39,460 and
$202,285,  respectively.  The fees consisted primarily of preparation and review
of federal and state tax returns and tax advice.

In 2004,  the Audit  Committee:  (1) reviewed  all services  provided by Ernst &
Young to ensure that they were within the scope  previously  pre-approved by the
Audit  Committee;  and (2) concluded  that the non-audit  services  performed by
Ernst  &  Young  for  the  Company  and its  subsidiaries  did  not  impair  its
independence as the Company's accountants.

                                       89
<PAGE>

PART IV

Item 15.   Exhibit and Financial Statement Schedules

         (a)    (1) Financial Statements

               The following  consolidated  financial  statements of the Company
               and its subsidiaries are included in Item 8:

          o    Consolidated Balance Sheets for the years ended December 31, 2004
               and 2003

          o    Consolidated   Statements  of  Operations  for  the  years  ended
               December 31, 2004, 2003 and 2002

          o    Consolidated Statements of Redeemable Preferred Stock, subject to
               compromise,  Shareholders'  Equity  (Deficit) for the years ended
               December 31, 2004, 2003 and 2002

          o    Consolidated  Statements  of  Cash  Flows  for  the  years  ended
               December 31, 2004, 2003 and 2002

          o    Notes to Consolidated Financial Statements

                 (2) Financial Statement Schedules

               The following  consolidated  financial  information for the years
          2004, 2003 and 2002 is included on page 91 of this report:

          o    Schedule II - Valuation and Qualifying Accounts

               All other schedules for which provision is made in the applicable
               accounting  regulation of the Securities and Exchange  Commission
               are  not  required   under  the  related   instructions   or  are
               inapplicable and therefore have been omitted.

                 (3)   Exhibits

               Exhibits  are filed as a separate  section of this  report as set
               forth in the Index to Exhibits attached to this report.


                                       90
<PAGE>

<TABLE>
<CAPTION>
Schedule II  Valuation and Qualifying Accounts

                                                              (Dollars in thousands)


COLUMN A                                                  COLUMN B               COLUMN C              COLUMN D       COLUMN E
-------------------------------------------------------   ----------------   ---------------------    ------------    -------------
                                                                                 Additions
                                                                                ----------

 <S>                                                      <C>             <C>            <C>           <C>            <C>
                                                                                         Charged to
                                                          Balance at      Charged to     Other
                                                          Beginning of    Costs and      Accounts -    Deductions -   Balance at
Description                                               Period          Expenses       Describe      Describe       End of Period
-------------------------------------------------------   ------------    ----------   -----------    ------------    -------------




Year ended December 31, 2002:
     Deducted from asset accounts:
         Allowance for doubtful accounts . . . . . . . . .       1,526        2,605           -             1,756   (1)      2,375
         Allowance for obsolescence - Inventory . . . . . .     10,905        4,258           -               433   (2)     14,730
         Valuation allowance for net deferred tax asset. .           -       43,324           -                -            43,324
                                                          --------------  ----------    -----------    ------------     -----------
     Totals . . . . . . . . . . . . . . . . . . . . . . . $     12,431    $  50,187      $    -        $    2,189       $   60,429
                                                          ==============  ==========    ===========    ============     ===========

Year ended December 31, 2003:
     Deducted from asset accounts:
         Allowance for doubtful accounts . . . . . . . . .       2,375         1,383          -             2,370   (1)      1,388
         Allowance for obsolescence - Inventory . . . . . .     14,730         6,493          -                -            21,223
         Valuation allowance for net deferred tax asset. .      43,324            -           -             9,871   (3)     33,453
                                                          --------------   ---------    -----------    ------------     -----------
     Totals . . . . . . . . . . . . . . . . . . . . . . . $     60,429    $    7,876     $    -        $   12,241       $   56,064
                                                          ==============  ==========    ===========    ============     ===========
Year ended December 31, 2004:
     Deducted from asset accounts:
         Allowance for doubtful accounts . . . . . . . . .       1,388         3,083          -             1,863   (1)      2,608
         Allowance for obsolescence - Inventory . . . . . .     21,223         3,240          -             7,207   (2)     17,256
         Valuation allowance for net deferred tax asset. .      33,453            -        (878)         (297,857)  (3)    330,432
                                                          --------------   ---------    -----------    ------------     -----------
     Totals . . . . . . . . . . . . . . . . . . . . . . . $     56,064    $    6,323     $ (878)       $ (288,787)      $ (288,787)
                                                          ==============  ==========    ===========    ============     ===========
(1)             Uncollectible accounts net of recoveries
(2)             Reduction of obsolesence allowance in 2004 of $7.2 million resulted from the FAS 144 impairment
                writedown of Lockheed L-1011-500 inventory. The reduction in 2002 related to inventory items
                transferred to flight equipment or sold.
(3)             The Company recorded a full valuation allowance against its net deferred tax assets as it had incurred
                a three-year cumulative loss.  The net increase in the valuation allowance in 2004 resulted from the
                net increase in deferred tax assets.
</TABLE>

                                       91
<PAGE>
Signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.
                                                     ATA Holdings Corp.

                                                            (Registrant)


Date:   March 30, 2005              by /s/ J. George Mikelsons
                                    --------------------------------------------
                                    J. George Mikelsons Chairman and Chief
                                    Executive Officer On behalf of the
                                    Registrant and as Director

Date:   March 30, 2005              /s/ James W. Hlavacek
                                    --------------------------------------------
                                    James W. Hlavacek
                                    Vice Chairman
                                    Director

Date:   March 30, 2005              /s/ Gilbert F. Viets
                                    --------------------------------------------
                                    Gilbert F. Viets
                                    Executive Vice President and
                                    Chief Financial Officer
                                    Director

Date:   March 30, 2005              /s/ Robert A. Abel
                                    --------------------------------------------
                                    Robert A. Abel
                                    Director

Date:   March 30, 2005              /s/ Claude E. Willis
                                    --------------------------------------------
                                    Claude E.Willis
                                    Director

Date:   March 30, 2005              /s/ Andrejs P. Stipnieks
                                    --------------------------------------------
                                    Andrejs P. Stipnieks
                                    Director

Date:   March 30, 2005              /s/ Byron F.  Johnson
                                    --------------------------------------------
                                    Byron F. Johnson
                                    Director

Date:  March 30, 2005               /s/ Wisty B. Malone
                                    --------------------------------------------
                                    Wisty B. Malone
                                    Vice President and Controller/Treasurer
<PAGE>

                                                    Index to Exhibits

                Exhibit No.

3    (i)(a) Restated Articles of Incorporation of Amtran, Inc.  (incorporated by
     reference to Exhibit 3(a) to Amtran,  Inc.'s Registration  Statement on S-1
     dated March 16, 1993, File No. 33-59630).

3(i)(b) Articles of Amendment to the Restated Articles of Incorporation  adopted
     as of September 19, 2000  (incorporated  by reference to Exhibit 3(i)(b) to
     Amtran,  Inc.'s  Annual  Report  on 10-K  dated  April  2,  2001,  File No.
     000-21642).

3(i)(c) Articles of Amendment to the Restated Articles of Incorporation  adopted
     as of December 28, 2000  (incorporated  by reference to Exhibit  3(i)(c) to
     Amtran,  Inc.'s  Annual  Report  on 10-K  dated  April  2,  2001,  File No.
     000-21642).

3(ii)Bylaws of Amtran,  Inc., as amended  (incorporated  by reference to Exhibit
     3(b) to Amtran, Inc.'s Registration  Statement on S-1 dated March 16, 1993,
     File No. 33-59630).

4.1  Indenture dated as of July 24, 1997, by and among Amtran,  Inc., as issuer,
     American Trans Air,  Inc.,  Ambassadair  Travel Club,  Inc., ATA Vacations,
     Inc., Amber Travel, Inc., American Trans Air Training Corporation, American
     Trans Air ExecuJet, Inc. and Amber Air Freight Corporation,  as guarantors,
     and First Security  Bank,  N.A., as trustee  (incorporated  by reference to
     Exhibit 4.1 to Amtran,  Inc.'s Registration  Statement on S-4 dated October
     6, 1997, File No. 333-37283).

4.2  Indenture  dated as of December 11, 1998,  by and among  Amtran,  Inc.,  as
     issuer,  American  Trans Air,  Inc.,  Ambassadair  Travel Club,  Inc.,  ATA
     Vacations,   Inc.,  Amber  Travel,   Inc.,   American  Trans  Air  Training
     Corporation,  American  Trans Air  ExecuJet,  Inc.  and  Amber Air  Freight
     Corporation,  as  guarantors,  and First  Security  Bank,  N.A., as trustee
     (incorporated  by reference to Exhibit 4.4 to Amtran,  Inc.'s  Registration
     Statement on S-3 dated August 26, 1998, File No. 333-52655).

4.3  First  Supplemental  Indenture  dated as of December 11, 1998, by and among
     Amtran, Inc., as issuer, American Trans Air, Inc., Ambassadair Travel Club,
     Inc., ATA Vacations,  Inc., Amber Travel, Inc., American Trans Air Training
     Corporation,  American  Trans Air  ExecuJet,  Inc.  and  Amber Air  Freight
     Corporation,  as guarantors,  and First Security Bank, N.A., as trustee, to
     the Indenture dated as of December 11, 1998  (incorporated  by reference to
     Exhibit 4.4 to Amtran,  Inc.'s  Registration  Statement on S-3 dated August
     26, 1998, File No. 333-52655).

4.4  First  Supplemental  Indenture  dated as of December 21, 1999, by and among
     Amtran, Inc., as issuer, American Trans Air, Inc., Ambassadair Travel Club,
     Inc., ATA Vacations,  Inc., Amber Travel, Inc., American Trans Air Training
     Corporation,  American  Trans Air  ExecuJet,  Inc.  and  Amber Air  Freight
     Corporation,  Chicago  Express  Airlines,  Inc., as  guarantors,  and First
     Security Bank, N.A., as trustee, to the Indenture dated as of July 24, 1997
     (incorporated  by reference to Exhibit 4.1 to Amtran,  Inc.'s  Registration
     Statement on S-4 dated January 25, 2000, File No. 333-95371).

<PAGE>

4.5  Indenture  relating to Senior  Notes due 2009 dated as of January 30, 2004,
     among ATA Holdings Corp., as issuer, ATA Airlines, Inc., Ambassadair Travel
     Club,  Inc.,  ATA Leisure  Corp.,  Amber Travel,  Inc.,  American Trans Air
     Training  Corporation,  American Trans Air ExecuJet,  Inc., ATA Cargo, Inc.
     and Chicago  Express  Airlines,  Inc., as guarantors,  and Wells Fargo Bank
     Northwest,  National Association,  as trustee (Incorporated by reference to
     Exhibit 4.1 to ATA Holding Corp.'s Registration Statement on Form S-4 dated
     February 13, 2004, File No. 333-112827).

4.6  Indenture  relating to Senior  Notes due 2010 dated as of January 30, 2004,
     among ATA Holdings Corp., as issuer, ATA Airlines, Inc., Ambassadair Travel
     Club,  Inc.,  ATA Leisure  Corp.,  Amber Travel,  Inc.,  American Trans Air
     Training  Corporation,  American Trans Air ExecuJet,  Inc., ATA Cargo, Inc.
     and Chicago  Express  Airlines,  Inc., as guarantors,  and Wells Fargo Bank
     Northwest,  National Association,  as trustee (Incorporated by reference to
     Exhibit 4.2 to ATA Holding Corp.'s Registration Statement on Form S-4 dated
     February 13, 2004, File No. 333-112827).

4.7  Second  Supplemental  Indenture  relating to 10 1/2% Senior  Notes due 2004
     dated as of January 30, 2004,  among ATA  Holdings  Corp.,  as issuer,  ATA
     Airlines,  Inc.,  Ambassadair  Travel Club, Inc., ATA Leisure Corp.,  Amber
     Travel, Inc., American Trans Air Training  Corporation,  American Trans Air
     ExecuJet,  Inc., ATA Cargo,  Inc. and Chicago  Express  Airlines,  Inc., as
     guarantors,  and Wells  Fargo  Bank  Northwest,  National  Association,  as
     trustee  (Incorporated  by reference to Exhibit 4.3 to ATA Holding  Corp.'s
     Registration  Statement  on Form S-4  dated  February  13,  2004,  File No.
     333-112827).

4.8  Second Supplemental  Indenture relating to 9 5/8% 2005 notes due 2004 dated
     as of January 21, 2004, among ATA Holdings Corp., as issuer,  ATA Airlines,
     Inc., Ambassadair Travel Club, Inc., ATA Leisure Corp., Amber Travel, Inc.,
     American Trans Air Training Corporation, American Trans Air ExecuJet, Inc.,
     ATA Cargo,  Inc. and Chicago  Express  Airlines,  Inc., as guarantors,  and
     Wells Fargo Bank Northwest,  National Association, as trustee (Incorporated
     by reference to Exhibit 4.4 to ATA Holding Corp.'s  Registration  Statement
     on Form S-4 dated February 13, 2004, File No. 333-112827).

4.9  Third Supplemental Indenture relating to 9 5/8% Senior Notes due 2005 dated
     as of January 30, 2004, among ATA Holdings Corp., as issuer,  ATA Airlines,
     Inc., Ambassadair Travel Club, Inc., ATA Leisure Corp., Amber Travel, Inc.,
     American Trans Air Training Corporation, American Trans Air ExecuJet, Inc.,
     ATA Cargo,  Inc. and Chicago  Express  Airlines,  Inc., as guarantors,  and
     Wells Fargo Bank Northwest,  National Association, as trustee (Incorporated
     by reference to Exhibit 4.5 to ATA Holding Corp.'s  Registration  Statement
     on Form S-4 dated February 13, 2004, File No. 333-112827).

4.10 Registration  Rights  Agreement  dated as of January  30,  2004,  among ATA
     Holdings Corp., as issuer,  ATA Airlines,  Inc.,  Ambassadair  Travel Club,
     Inc., ATA Leisure Corp.,  Amber Travel,  Inc.,  American Trans Air Training
     Corporation, American Trans Air ExecuJet, Inc., ATA Cargo, Inc. and Chicago
     Express  Airlines,  Inc., as  guarantors,  and Wells Fargo Bank  Northwest,
     National Association,  as trustee (Incorporated by reference to Exhibit 4.6
     to ATA Holding  Corp.'s  Registration  Statement on Form S-4 dated February
     13, 2004, File No. 333-112827).

<PAGE>

4.11 Pass Through  Trust  Agreement,  dated as of March 28, 2002,  among Amtran,
     Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as Trustee,
     made with  respect to the  formation  of American  Trans Air  2002-1A  Pass
     Through Trust and the issuance of 8.328% Initial American Trans Air 2002-1A
     Pass Through  Certificates  and 8.328% Exchange  American Trans Air 2002-1A
     Pass Through Certificates  (incorporated by reference to Exhibit 4.5 to ATA
     Holdings  Corp.'s  Registration  Statement  on Form S-4 dated  November 22,
     2002, File No. 333-101423).

4.12 Pass Through  Trust  Agreement,  dated as of March 28, 2002,  among Amtran,
     Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as Trustee,
     made with  respect to the  formation  of American  Trans Air  2002-1B  Pass
     Through Trust and the issuance  10.699% Initial American Trans Air 2002-1 B
     Pass Through  Certificates and 10.699% Exchange  American Trans Air 2002-1B
     Pass Through Certificates  (incorporated by reference to Exhibit 4.6 to ATA
     Holdings  Corp.'s  Registration  Statement  on Form S-4 dated  November 22,
     2002, File No. 333-101423).

4.13 Pass  Through  Trust  Agreement,  dated as of February  15,  2000,  between
     American Trans Air, Inc. and Wilmington  Trust  Company,  as Trustee,  made
     with respect to the formation of American  Trans Air 2000-1G-O Pass Through
     Trust and the issuance of 8.039% Initial  American Trans Air 2000-1G-O Pass
     Through Trust Certificates and 8.039% Exchange American Trans Air 2000-1G-O
     Pass  Through  Certificates  (incorporated  by  reference to Exhibit 4.5 to
     Amtran,  Inc.'s  Registration  Statement on S-4 dated August 11, 2000, File
     No. 333-43606).

4.14 Pass  Through  Trust  Agreement,  dated as of February  15,  2000,  between
     American Trans Air, Inc. and Wilmington  Trust  Company,  as Trustee,  made
     with respect to the formation of American  Trans Air 2000-1G-S Pass Through
     Trust and the issuance of 8.039% Initial  American Trans Air 2000-1G-S Pass
     Through  Certificates and 8.039% Exchange American Trans Air 2000-1G-S Pass
     Through  Certificates  (incorporated by reference to Exhibit 4.6 to Amtran,
     Inc.'s  Registration  Statement  on S-4 dated  August  11,  2000,  File No.
     333-43606).

4.15 Pass  Through  Trust  Agreement,  dated as of February  15,  2000,  between
     American Trans Air, Inc. and Wilmington  Trust  Company,  as Trustee,  made
     with respect to the formation of American  Trans Air 2000-1C-O Pass Through
     Trust and the issuance of 9.644% Initial  American Trans Air 2000-1C-O Pass
     Through  Certificates and 9.644% Exchange American Trans Air 2000-1C-O Pass
     Through  Certificates  (incorporated by reference to Exhibit 4.7 to Amtran,
     Inc.'s  Registration  Statement  on S-4 dated  August  11,  2000,  File No.
     333-43606).

4.16 Pass  Through  Trust  Agreement,  dated as of February  15,  2000,  between
     American Trans Air, Inc. and Wilmington  Trust  Company,  as Trustee,  made
     with respect to the formation of American  Trans Air 2000-1C-S Pass Through
     Trust and the issuance of 9.644% Initial  American Trans Air 2000-1C-S Pass
     Through  Certificates and 9.644% Exchange American Trans Air 2000-1C-S Pass
     Through  Certificates  (incorporated by reference to Exhibit 4.8 to Amtran,
     Inc.'s  Registration  Statement  on S-4 dated  August  11,  2000,  File No.
     333-43606).

<PAGE>

4.17 Purchase  and  Investor  Rights  Agreement  dated as of December  13, 2000,
     between  Amtran,  Inc. and Boeing  Capital  Corporation.  (incorporated  by
     reference  to Exhibit  4.9 to Amtran,  Inc.'s  Annual  Report on 10-K dated
     April 2, 2001, File No. 000-21642).

4.18 Purchase  and Investor  Rights  Agreement  dated as of September  19, 2000,
     between  Amtran,   Inc.  and  International   Lease  Finance   Corporation.
     (incorporated by reference to Exhibit 4.10 to Amtran,  Inc.'s Annual Report
     on 10-K dated April 2, 2001, File No. 000-21642).

4.19 Pass Through Trust Agreement,  dated as of December 16, 1996, among Amtran,
     Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as Trustee,
     made with  respect to the  formation  of American  Trans Air  1996-1A  Pass
     Through  Trust and the  issuance of 7.37%  American  Trans Air 1996-1A Pass
     Through Trust  Certificates  (incorporated  by reference to Exhibit 4.11 to
     Amtran,  Inc.'s  Annual  Report  on 10-K  dated  April  2,  2001,  File No.
     000-21642).

4.20 Pass Through Trust Agreement,  dated as of December 16, 1996, among Amtran,
     Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as Trustee,
     made with  respect to the  formation  of American  Trans Air  1996-1B  Pass
     Through  Trust and the  issuance of 7.64%  American  Trans Air 1996-1B Pass
     Through Trust  Certificates  (incorporated  by reference to Exhibit 4.12 to
     Amtran,  Inc.'s  Annual  Report  on 10-K  dated  April  2,  2001,  File No.
     000-21642).

4.21 Pass Through Trust Agreement,  dated as of December 16, 1996, among Amtran,
     Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as Trustee,
     made with  respect to the  formation  of American  Trans Air  1996-1C  Pass
     Through  Trust and the  issuance of 7.82%  American  Trans Air 1996-1C Pass
     Through Trust  Certificates  (incorporated  by reference to Exhibit 4.13 to
     Amtran,  Inc.'s  Annual  Report  on 10-K  dated  April  2,  2001,  File No.
     000-21642).

4.22 Pass  Through  Trust  Agreement,  dated as of December  23,  1997,  between
     Amtran,  Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as
     Trustee, made with respect to the formation of American Trans Air 1997-1A-O
     Pass Through Trust and the issuance of 6.99%  American  Trans Air 1997-1A-O
     Pass Through Trust Certificates  (incorporated by reference to Exhibit 4.14
     to  Amtran,  Inc.'s  Annual  Report on 10-K dated  April 2, 2001,  File No.
     000-21642).

4.23 Pass  Through  Trust  Agreement,  dated as of December  23,  1997,  between
     Amtran,  Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as
     Trustee, made with respect to the formation of American Trans Air 1997-1A-S
     Pass Through Trust and the issuance of 6.99%  American  Trans Air 1997-1A-S
     Pass Through Trust Certificates  (incorporated by reference to Exhibit 4.15
     to  Amtran,  Inc.'s  Annual  Report on 10-K dated  April 2, 2001,  File No.
     000-21642).

<PAGE>

4.24 Pass  Through  Trust  Agreement,  dated as of December  23,  1997,  between
     Amtran,  Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as
     Trustee, made with respect to the formation of American Trans Air 1997-1B-O
     Pass Through Trust and the issuance of 7.19%  American  Trans Air 1997-1B-O
     Pass Through Trust Certificates  (incorporated by reference to Exhibit 4.16
     to  Amtran,  Inc.'s  Annual  Report on 10-K dated  April 2, 2001,  File No.
     000-21642).

4.25 Pass  Through  Trust  Agreement,  dated as of December  23,  1997,  between
     Amtran,  Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as
     Trustee, made with respect to the formation of American Trans Air 1997-1B-S
     Pass Through Trust and the issuance of 7.19%  American  Trans Air 1997-1B-S
     Pass Through Trust Certificates  (incorporated by reference to Exhibit 4.17
     to  Amtran,  Inc.'s  Annual  Report on 10-K dated  April 2, 2001,  File No.
     000-21642).

4.26 Pass  Through  Trust  Agreement,  dated as of December  23,  1997,  between
     Amtran,  Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as
     Trustee, made with respect to the formation of American Trans Air 1997-1C-O
     Pass Through Trust and the issuance of 7.46%  American  Trans Air 1997-1C-O
     Pass Through Trust Certificates  (incorporated by reference to Exhibit 4.18
     to  Amtran,  Inc.'s  Annual  Report on 10-K dated  April 2, 2001,  File No.
     000-21642).

4.27 Pass  Through  Trust  Agreement,  dated as of December  23,  1997,  between
     Amtran,  Inc.,  American Trans Air, Inc. and Wilmington  Trust Company,  as
     Trustee, made with respect to the formation of American Trans Air 1997-1C-S
     Pass Through Trust and the issuance of 7.46%  American  Trans Air 1997-1C-S
     Pass Through Trust Certificates  (incorporated by reference to Exhibit 4.19
     to  Amtran,  Inc.'s  Annual  Report on 10-K dated  April 2, 2001,  File No.
     000-21642).

4.28 Form of Common Stock Certificate of Amtran, Inc. (incorporated by reference
     to Exhibit 4 to Amtran,  Inc.'s  Registration  Statement on S-1 dated March
     16, 1993, File No. 33-59630).

4.29 Form of Series A1 Preferred Stock Certificate of Amtran, Inc. (incorporated
     by reference to Exhibit 4.21 to Amtran,  Inc.'s Annual Report on 10-K dated
     April 2, 2001, File No. 000-21642).

4.30 Form of Series B Preferred Stock Certificate of Amtran, Inc.  (incorporated
     by reference to Exhibit 4.22 to Amtran,  Inc.'s Annual Report on 10-K dated
     April 2, 2001, File No. 000-21642).

4.31 Form of 1996 Class A American  Trans Air,  Inc.  Pass Through  Certificates
     (included in Exhibit 4.11).

4.32 Form of 1996 Class B American  Trans Air,  Inc.  Pass Through  Certificates
     (included in Exhibit 4.12).

4.33 Form of 1996 Class C American  Trans Air,  Inc.  Pass Through  Certificates
     (included in Exhibit 4.13).

<PAGE>

4.34 Form of 1997 Class A American  Trans Air,  Inc.  Pass Through  Certificates
     (included in Exhibit 4.14).

4.35 Form of 1997 Class B American  Trans Air,  Inc.  Pass Through  Certificates
     (included in Exhibit 4.16).

4.36 Form of 1997 Class C American  Trans Air,  Inc.  Pass Through  Certificates
     (included in Exhibit 4.18).

4.37 Form of 2000 Class G American Trans Air, Inc. Pass Through Certificates
                              (included in Exhibit 4.5).

4.38 Form of 2000 Class C American  Trans Air,  Inc.  Pass Through  Certificates
     (included in Exhibit 4.7).

4.39 Amtran,  Inc.  hereby  agrees to furnish to the  Commission,  upon request,
     copies of certain additional  instruments relating to long-term debt of the
     kind described in Item 601(b)(4)(iii)(A) of Regulation S-K.

10.1 1993  Incentive  Stock  Plan for Key  Employees  of  Amtran,  Inc.  and its
     Subsidiaries  (incorporated  by  reference  to Exhibit  10(r)(r) to Amtran,
     Inc.'s  Registration  Statement  on S-1  dated  March  16,  1993,  File No.
     33-59630).**

10.2 1996  Incentive  Stock  Plan for Key  Employees  of  Amtran,  Inc.  and its
     Subsidiaries  (incorporated  by  reference to Amtran,  Inc.'s  Registration
     Statement on S-8 dated June 20, 1997, File No. 333-29715).**

10.3 2000  Incentive  Stock  Plan for Key  Employees  of  Amtran,  Inc.  and its
     Subsidiaries  (incorporated  by  reference  to Exhibit A to Amtran,  Inc.'s
     Proxy Statement dated April 5, 2000).**

10.4 Stock Option Plan for Non-Employee Directors  (incorporated by reference to
     Appendix A to Amtran, Inc.'s Proxy Statement dated April 15, 1994).**

10.5 Aircraft  General Terms  Agreement  dated as of June 30, 2000,  between The
     Boeing Company ("Boeing") and American Trans Air, Inc.;  Purchase Agreement
     Number 2285 dated as of June 30, 2000,  between  Boeing and American  Trans
     Air,  Inc.;  Purchase  Agreement  Number  2262  dated as of June 30,  2000,
     between Boeing and American Trans Air, Inc.  (incorporated  by reference to
     Exhibit 10.5 to Amtran,  Inc.'s  Annual Report on 10-K dated April 2, 2001,
     File No. 000-21642).*

10.6(a) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(a) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.6(b) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(b) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.6(c) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(c) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

<PAGE>

10.6(d) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(d) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.6(e) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(e) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.6(f) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(f) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.6(g) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(g) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.6(h) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(h) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.6(i) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(i) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.6(j)  Aircraft  Lease  Agreement  dated as of September  20, 2000,  between
     Amtran, Inc. and International  Lease Finance Corporation  (incorporated by
     reference to Exhibit 10.6(j) to Amtran,  Inc.'s Annual Report on 10-K dated
     April 2, 2001, File No. 000-21642).*

10.6(k) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(k) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.6(l) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(l) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.6(m) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(m) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

<PAGE>

10.6(n) Aircraft Lease Agreement dated as of September 20, 2000, between Amtran,
     Inc. and International Lease Finance Corporation (incorporated by reference
     to Exhibit  10.6(n) to Amtran,  Inc.'s Annual Report on 10-K dated April 2,
     2001, File No. 000-21642).*

10.7 Aircraft Financing  Agreement dated as of December 6, 2000, between Amtran,
     Inc. and General Electric Capital Corporation (incorporated by reference to
     Exhibit 10.7 to Amtran,  Inc.'s  Annual Report on 10-K dated April 2, 2001,
     File No. 000-21642).*

10.8 Limited  Liability  Company  Agreement dated as of March 13, 2001,  between
     Amtran,  Inc.  and Boeing  Capital  Corporation  to form BATA  Leasing LLC.
     (incorporated  by reference to Exhibit 10.1.1 to Amtran,  Inc.'s  Quarterly
     Annual Report on 10-Q dated May 15, 2001, File No. 000-21642).*

10.9 Purchase and Voting  Agreement  dated as of May 16, 2001,  between  Amtran,
     Inc., and ILFC  (incorporated by reference to Exhibit 99.2 to the 8-K dated
     May 16, 2001).

10.11$168,000,000  Loan Agreement dated as of November 30, 2002,  among American
     Trans Air,  Inc.,  as  Borrower,  ATA  Holdings  Corp.,  as  Parent,  GOVCO
     Incorporated,  as Primary  Tranche A Lender,  Citibank,  N.A., as Alternate
     Tranche A Lender,  Citicorp  North America,  Inc., as GOVCO  Administrative
     Agent,  Citibank,  N.A., as Tranche B Lender,  BearingPoint,  Inc., as Loan
     Administrator,  Citibank,  N.A., as Collateral  Agent,  Citibank,  N.A., as
     Agent, and the Air  Transportation  Stabilization  Board.  (incorporated by
     reference to Exhibit  10.11 to ATA  Holdings  Corp.  Annual  Report on 10-K
     dated March 31, 2003, File No. 000-21642).*

10.11(a) Consent,  Waiver and  Amendment  dated as of January 29,  2004,  to the
     $168,000,000  Loan Agreement dated as of November 30, 2002,  among American
     Trans Air,  Inc.,  as  Borrower,  ATA  Holdings  Corp.,  as  Parent,  GOVCO
     Incorporated,  as Primary  Tranche A Lender,  Citibank,  N.A., as Alternate
     Tranche A Lender,  Citicorp  North America,  Inc., as GOVCO  Administrative
     Agent,  Citibank,  N.A., as Tranche B Lender,  BearingPoint,  Inc., as Loan
     Administrator,  Citibank,  N.A., as Collateral  Agent,  Citibank,  N.A., as
     Agent, and the Air  Transportation  Stabilization  Board.  (incorporated by
     reference to Exhibit 10.11 to ATA Holdings Corp. Registration of Securities
     on Form S-4 dated February 13, 2004, File No. 333-112827).

10.12 Mortgage and  Security  Agreement  dated as of November  20, 2002, made by
     American  Trans Air,  Inc. in favor of Citibank,  N.A.,  as the  Collateral
     Agent.  (incorporated  by reference to Exhibit 10.12 to ATA Holdings  Corp.
     Annual Report on 10-K dated March 31, 2003, File No. 000-21642).

10.13 Employment  Agreement  dated as of October  18, 2004 by and among David M.
     Wing and ATA Holdings. Corp.**

10.14 Settlement  Agreement  dated as of October  18, 2004 by and among David M.
     Wing, ATA Holdings Corp., J. George Mikelsons, and Gilbert F. Viets.**

10.15 Employment  Agreement  dated March 7, 2005 between ATA  Airlines,  Inc.and
     John G. Denison  (incorporated by reference to Exhibit 10.1 to ATA Holdings
     Corp. Current Report on Form 8-K dated March 7, 2005).**

<PAGE>


10.16 Summary Sheet of 2005 Compensation.**

10.17 Bid  Proposal to Purchase  Assets  from,  Provide a DIP  Facility and Exit
     Facility to, and Codeshare with ATA Holdings Corp.  dated December 15, 2004
     by Southwest  Airlines Co in  connection  with ATA Holdings  Corp.  and its
     debtor affiliates and subsidiaries.

10.18 Asset  Acquisition  Agreement  dated  December  22,  2004  among Southwest
     Airlines Co. as Purchaser  and  Assignee  and ATA  Holdings  Corp.  and ATA
     Airlines Inc. as Sellers.

10.19 First  Amendment  to Asset  Acquisition  Agreement  dated  January 31,2005
     among  Southwest  Airlines Co. as  Purchaser  and Assignee and ATA Holdings
     Corp. and ATA Airlines Inc. as Sellers.

10.20 Second  Amendment to Asset  Acquisition  Agreement  dated February 15,2005
     among  Southwest  Airlines Co. as  Purchaser  and Assignee and ATA Holdings
     Corp. and ATA Airlines Inc. as Sellers.

10.21 Third  Amendment to Asset  Acquisition  Agreement  dated February 28, 2005
     among  Southwest  Airlines Co. as  Purchaser  and Assignee and ATA Holdings
     Corp. and ATA Airlines Inc. as Sellers.

<PAGE>

10.22 Secured   Debtor-In-Possession   Credit  and  Security  Agreement ("Credit
     Agreement")  dated as of December  22, 2004  between ATA  Airlines  Inc., a
     Debtor and Debtor-in-Possession under Chapter 11 of the Bankruptcy Code, as
     the Borrower,  ATA Holdings  Corp., as guarantor,  Ambassadair  Travel Club
     Inc., as guarantor, ATA Leisure Corp., as guarantor,  Amber Travel Inc., as
     guarantor, American Trans Air ExecuJet, Inc., as guarantor, ATA Cargo Inc.,
     as  guarantor,  Chicago  Express  Airlines,  Inc, as  guarantor,  any other
     subsidiary of ATA Holdings Corp.,  as guarantor and Southwest  Airlines Co.
     as Lender.

10.23 First  Amendment to Credit  Agreement dated as of January 30, 2005 between
     ATA Airlines  Inc., a Debtor and  Debtor-in-Possession  under Chapter 11 of
     the Bankruptcy  Code, as the Borrower,  ATA Holdings  Corp.,  as guarantor,
     Ambassadair  Travel  Club  Inc.,  as  guarantor,   ATA  Leisure  Corp.,  as
     guarantor,  Amber Travel Inc., as guarantor,  American  Trans Air ExecuJet,
     Inc., as guarantor, ATA Cargo Inc., as guarantor, Chicago Express Airlines,
     Inc, as guarantor, any other subsidiary of ATA Holdings Corp., as guarantor
     and Southwest Airlines Co. as Lender.

10.24 Second Amendment to Credit Agreement dated as of February 25, 2005 between
     ATA Airlines  Inc., a Debtor and  Debtor-in-Possession  under Chapter 11 of
     the Bankruptcy  Code, as the Borrower,  ATA Holdings  Corp.,  as guarantor,
     Ambassadair  Travel  Club  Inc.,  as  guarantor,   ATA  Leisure  Corp.,  as
     guarantor,  Amber Travel Inc., as guarantor,  American  Trans Air ExecuJet,
     Inc., as guarantor, ATA Cargo Inc., as guarantor, Chicago Express Airlines,
     Inc, as guarantor, any other subsidiary of ATA Holdings Corp., as guarantor
     and Southwest Airlines Co. as Lender.

21   Subsidiaries of ATA Holdings Corp.

23   Consent of Independent Auditors.

31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


*Portions  of these  exhibits  have  been  omitted  pursuant  to a  request  for
confidential  treatment and filed  separately  with the  Securities and Exchange
Commission.

**Represents  a  management   contract  or   compensatory   plan,   contract  or
arrangement.