Exhibit 10.18

                           ASSET ACQUISITION AGREEMENT


                                      among


                             SOUTHWEST AIRLINES CO.,
                           as Purchaser and Assignee,

                                       and



                               ATA HOLDINGS CORP.
                                       and
                               ATA AIRLINES, INC.,
                                   as Sellers




                                December 22, 2004


<PAGE>



                                TABLE OF CONTENTS

RECITALS 1
ARTICLE I DEFINITIONS..........................................................1
     Section 1.1   Definitions... .............................................1
     Section 1.2   Disclosure Schedules .......................................1
ARTICLE II ACQUISITION OF ASSETS...............................................2
     Section 2.1   Acquisition of Transferred Assets...........................2
     Section 2.2   [This Section Reserved.]....................................2
     Section 2.3   [This Section Reserved.]....................................2
     Section 2.4   Excluded Assets.............................................2
ARTICLE III ASSUMPTION OF LIABILITIES..........................................2
     Section 3.1   Assumed Liabilities  .......................................2
     Section 3.2   Retained Liabilities........................................3
ARTICLE IV ACQUISITION PRICE...................................................4
     Section 4.1   Acquisition Price...........................................4
     Section 4.2   Allocation of Acquisition Price.............................4
     Section 4.3   Adjustments to Acquisition Price............................4
     Section 4.4   Prorations..................................................5
     Section 4.5   Transfer Taxes..............................................5
     Section 4.6   Offsets to Acquisition Price................................6
ARTICLE V CLOSING. ............................................................6
     Section 5.1   Closing.....................................................6
     Section 5.2   Deliveries at Closing.......................................6
     Section 5.3   Delivery of Transferred Assets..............................8
     Section 5.4   Conditions Precedent to Obligations of Southwest............8
     Section 5.5   Conditions Precedent to Obligations of Sellers.............10
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLERS. ........................11
     Section 6.1   Organization and Good Standing.............................11
     Section 6.2   Authorization and Effect of Agreement......................11
     Section 6.3   No Conflicts...............................................12
     Section 6.4   [This Section Reserved.]...................................12
     Section 6.5   Data.......................................................12
     Section 6.6   Consents and Approvals.....................................12
     Section 6.7   Permits; Compliance with Law...............................13
     Section 6.8   [This Section Reserved.]...................................13
     Section 6.9   Title to and Condition of Assets...........................13
     Section 6.10  U.S. Citizen; Air Carrier..................................13
     Section 6.11  Assumed Contracts..........................................13
     Section 6.12  [This Section Reserved.]...................................14
     Section 6.13   No Casualty...............................................14
     Section 6.14  [This Section Reserved.]...................................14
     Section 6.15  Midway Gates; Midway Gate Property; Midway Hangar;
     Midway Hangar Property ..................................................14
     Section 6.16  Environmental Matters......................................15
     Section 6.17  Taxes......................................................17
     Section 6.18  [This Section Reserved.]...................................17
     Section 6.19  [This Section Reserved.]...................................17
     Section 6.20  Real Property..............................................17
     Section 6.21  Disclosure.................................................19
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER.......................19
     Section 7.1   Corporate Organization.....................................19
     Section 7.2   Authorization and Effect of Agreement......................19
     Section 7.3   No Conflicts...............................................19
     Section 7.4   Litigation.................................................20
     Section 7.5   Southwest `34 Act Reports..................................20
ARTICLE VIII PRE-CLOSING COVENANTS............................................20
     Section 8.1   Access.....................................................20
     Section 8.2   Conduct of Business........................................21
     Section 8.3   Notification...............................................22
     Section 8.4   No Inconsistent Action.....................................22
     Section 8.5   Satisfaction of Conditions.................................22
     Section 8.6   [This Section Reserved.]...................................22
     Section 8.7   [This Section Reserved.]...................................22
     Section 8.8   Filings....................................................22
     Section 8.9   All Reasonable Efforts.....................................24
     Section 8.10  Further Assurances.........................................24
     Section 8.11  Publicity..................................................24
     Section 8.12  [This Section Reserved.]...................................24
     Section 8.13  Bankruptcy Court Approval..................................24
     Section 8.14  Specific Enforcement of Covenants..........................25
     Section 8.15  Due Diligence..............................................25
     Section 8.16  [This Section Reserved.]...................................25
     Section 8.17  [This Section Reserved.]...................................25
     Section 8.18  [This Section Reserved.]...................................25
     Section 8.19  Codeshare Alliance Agreement...............................26
     Section 8.20  [This Section Reserved.]...................................26
     Section 8.21  Midway Ticket Sales........................................26
     Section 8.22  [This Section Reserved.]...................................27
     Section 8.23  Assurances Regarding Renegotiation of Assumed Contracts....27
     Section 8.24  [This Section Reserved.]...................................27
ARTICLE IX POST-CLOSING COVENANTS.............................................27
     Section 9.1   Maintenance of Books and Records...........................27
     Section 9.2   Confidentiality............................................27
     Section 9.3   Exit Credit Facility.......................................28
     Section 9.4   Transition Operations......................................28
     Section 9.5   Plan of Reorganization.....................................28
     Section 9.6   Equity Investment..........................................29
ARTICLE X EMPLOYEE MATTERS....................................................29
ARTICLE XI RISK OF LOSS.......................................................29
     Section 11.1  Risk of Loss on Sellers....................................29
ARTICLE XII FURTHER AGREEMENTS AND TERMINATION................................30
     Section 12.1  [This Section Reserved.]...................................30
     Section 12.2  [This Section Reserved.]...................................30
     Section 12.3  Termination................................................30
     Section 12.4  Procedure and Effect of Termination........................32
ARTICLE XIII MISCELLANEOUS PROVISIONS.........................................32
     Section 13.1  Notices....................................................32
     Section 13.2  Actions by Sellers.........................................33
     Section 13.3  Expenses...................................................34
     Section 13.4  Successors and Assigns.....................................34
     Section 13.5  Waiver.....................................................34
     Section 13.6  Entire Agreement; Disclosure Schedules.....................34
     Section 13.7  Amendments, Supplements, Etc...............................34
     Section 13.8  Rights of the Parties......................................34
     Section 13.9  Applicable Law.............................................34
     Section 13.10 Execution in Counterparts..................................35
     Section 13.11 Titles and Headings........................................35
     Section 13.12 Invalid Provisions.........................................35
     Section 13.13 Transfers..................................................35
     Section 13.14 Brokers....................................................35
     Section 13.15 Exculpation................................................35
     Section 13.16 Principles of Interpretation...............................35
     Section 13.17 Survival...................................................36
     Section 13.18 Sellers Agreement to Indemnify.............................36
     Section 13.19 Southwest Agreement to Indemnify...........................36
     Section 13.20 Setoff.....................................................37

List of Schedules:

Schedule 4.2       Allocation of Acquisition Price
Schedule 6.7       Permits
Schedule 6.11      Assumed Contract Consents
Schedule 6.13      Casualty
Schedule 6.15(a)   Midway Gates and Midway Hangar Property
Schedule 6.15(b)   Leases
Schedule 6.15(c)   Midway Property Leases
Schedule 6.15(f)   Midway Gates, Midway Gate Property, Midway Hangar and Midway
                   Hangar  Property Not in Good Operating Condition
Schedule 6.15(i)   Deferred Maintenance for Midway Gates, Midway Gate Property,
                   Midway Hangar and Midway Hangar Property/Construction Defects
Schedule 6.16(a)   Environmental Compliance
Schedule 6.16(b)   Environmental Claims
Schedule 6.16(c)   Environmental Allegations
Schedule 6.16(d)   Environmental Sites
Schedule 6.17      Taxes
Schedule 6.20(a)   Midway Property Leases
Schedule 6.20(e)   Impaired Midway Property Leases


<PAGE>


List of Exhibits:

Exhibit A - Definitions
Exhibit B - Disclosure and Other Schedules
Exhibit C - Assignment of Facilities Lease
Exhibit D - Assignment of Hangar Lease
Exhibit E - Approval Order
Exhibit F - Bid Proposal




<PAGE>



                           ASSET ACQUISITION AGREEMENT


     This ASSET  ACQUISITION  AGREEMENT  (this  "Agreement") is made and entered
into as of December  22, 2004 (the  "Execution  Date"),  by and among  Southwest
Airlines Co., a Texas  corporation  ("Southwest"),  and ATA Holdings  Corp.,  an
Indiana corporation  ("Holdings") and its wholly-owned  subsidiary ATA Airlines,
Inc., an Indiana corporation ("ATA") (Holdings and ATA as debtors and debtors in
possession are  collectively  referred to as "Sellers" and each  individually is
referred to as "Seller").

                                    RECITALS

     WHEREAS,  Sellers  desire to sell,  assign and transfer to  Southwest,  and
Southwest desires to purchase and acquire from Sellers,  certain assets, rights,
interests and  properties of Sellers as herein  described,  all on the terms and
subject to the conditions set forth in this Agreement;

     WHEREAS, Sellers have filed voluntary petitions for reorganization pursuant
to chapter 11 of title 11 of the United States Code,  11 U.S.C.  Sections 101 et
seq.  (the  "Bankruptcy  Code") in the United  States  Bankruptcy  Court for the
Southern  District of Indiana (the "Bankruptcy  Court"),  and in connection with
such  filings  intend  to seek the  entry of an  order of the  Bankruptcy  Court
approving this Agreement and authorizing  Sellers to consummate the transactions
contemplated hereby;

     NOW, THEREFORE, in consideration of the mutual covenants,  representations,
warranties  and  agreements  herein  contained,  Holdings  and ATA,  jointly and
severally, hereby agree with Southwest as follows:

                                   ARTICLE I
                                   DEFINITIONS

     Section  1.1  Definitions.  As used in this  Agreement,  unless the context
otherwise  requires,  capitalized  terms used in this  Agreement  shall have the
meanings set forth in Exhibit A hereto.

     Section 1.2 Disclosure Schedules.  References to "Schedules" shall mean the
disclosure schedules delivered by Southwest and Sellers as of the Execution Date
that are specifically made part of this Agreement. Any Schedule not delivered as
of the Execution  Date shall be completed by the party  designated on Exhibit B,
delivered to the  non-preparing  party in accordance  with Section 13.1 on or by
the date set forth on Exhibit B and, upon acceptance by the non-preparing  party
(which acceptance shall not be unreasonably withheld or delayed),  shall be made
a part of this Agreement as if such Schedule were originally  attached hereto as
of the Execution Date (unless the context requires otherwise).



                                       1
<PAGE>

                                   ARTICLE II
                              ACQUISITION OF ASSETS

     Section 2.1 Acquisition of Transferred  Assets. On the terms and subject to
the conditions set forth herein, at one or more Closings as described in Article
V, Sellers shall:

          (i) assign and transfer to  Southwest,  and  Southwest  shall  assume,
     acquire and accept the  assignment  and transfer  of, (a)  Sellers'  right,
     title and interest in and to that certain  "Chicago  Midway Airport Amended
     and Restated  Airport Use  Agreement  and  Facilities  Lease" dated with an
     effective  date of January 1, 1997, as amended and  supplemented  as of the
     Execution  Date (the  "Facilities  Lease"),  solely with  respect to all of
     Sellers' right,  title and interest  thereunder in and to the six (6) gates
     identified on Schedule 6.15(a), including such gates' associated ramp space
     and service  facilities at Midway Airport (the "Midway  Gates") and (b) all
     of Sellers'  right,  title and  interest in and to that  certain  "Lease of
     Hangar  Facilities  at Midway  Airport"  between  the City of  Chicago  and
     American  Trans  Air,  Inc.,  dated  September  1,  1995,  as  amended  and
     supplemented as of the Execution Date (the "Hangar Lease"),  including with
     respect to all of Sellers' right,  title and interest  thereunder in and to
     facilities,  fixtures,  improvements and appurtenances associated therewith
     (the "Midway Hangar"), and

          (ii) sell,  transfer,  convey,  assign and deliver to  Southwest,  and
     Southwest  shall  purchase,  acquire and accept the assignment and transfer
     of, the  following  assets,  properties  and  rights:  (a) the Midway  Gate
     Property, and (b) the Midway Hangar Property.

All of the rights, interests,  assets and property, real and personal,  tangible
and  intangible,  referenced  in clauses (i) and (ii) above of this Section 2.1,
together  with  all  substitutions  therefor  and  all  accessions  thereto  and
replacements and renewals  thereof  (collectively,  the  "Transferred  Assets"),
shall be free and clear of all Liens except Permitted Liens.

     Section 2.2 [This Section Reserved.]

     Section 2.3 [This Section Reserved.]

     Section 2.4 Excluded Assets.  All rights,  properties and assets of Sellers
and their  Affiliates  other than those included in Transferred  Assets shall be
deemed excluded assets hereunder (collectively, the "Excluded Assets") and shall
not be included in the Transferred Assets.


                                       2
<PAGE>


ARTICLE III
                            ASSUMPTION OF LIABILITIES

     Section 3.1 Assumed  Liabilities.  Southwest shall assume and thereafter in
due course pay and fully satisfy only the following  liabilities and obligations
of  Sellers   (collectively  the  "Assumed   Liabilities")  and  no  other  such
liabilities or obligations:

          (i) the  liabilities  and  obligations  of the lessee under the Hangar
     Lease and the  Facilities  Lease  transferred  to and assumed by  Southwest
     hereunder; and

          (ii) [This Section Reserved.]

          (iii) the  liabilities  and  obligations  of  Sellers  under any other
     Assumed Contracts;

but in each such case only those accruing or arising solely from or with respect
to the period after the Closing.

     Except as set forth above,  Southwest shall not assume or be liable for any
other  obligations  or  liabilities  of  Sellers  or  either  Seller  whatsoever
(including,  without  limitation,  any cure or other  amounts  payable  to other
parties  under the Assumed  Contracts  accruing or arising  with  respect to any
period prior to  Closing);  provided,  however,  that  Southwest  shall have the
right,  upon prior written  notice to the Sellers,  to pay any such cure amounts
and offset such amounts against the Acquisition Price or any other amount due to
one or more of the Sellers by Southwest.

     Section 3.2 Retained  Liabilities.  Notwithstanding  anything  contained in
this  Agreement  to the  contrary,  Southwest  does not  assume or agree to pay,
satisfy,  discharge  or  perform,  and  shall  not be  deemed  by  virtue of the
execution  and  delivery of this  Agreement  or any  document  delivered  at the
Closing  pursuant to this Agreement,  or as a result of the  consummation of the
transactions  contemplated by this Agreement, to have assumed, or to have agreed
to pay, satisfy, discharge or perform, any liability, obligation or indebtedness
whatsoever of either Seller,  or any other Person whether  primary or secondary,
direct or  indirect,  contingent  or  guaranteed,  other than solely the Assumed
Liabilities.  Sellers  shall  retain  and,  except  to  the  extent  excused  or
prohibited by the applicable  provisions of the Bankruptcy  Code, pay,  satisfy,
discharge and perform in accordance with the terms thereof,  all liabilities and
obligations other than the Assumed Liabilities,  including,  without limitation,
those set forth below (all such  liabilities and obligations  retained by Seller
being referred to herein as the "Retained Liabilities"):

          (a) all obligations or liabilities of Sellers or any predecessor(s) or
     Affiliate(s)  of Sellers that relate to any assets  other than  Transferred
     Assets  or that  relate to the  Transferred  Assets  which are not  Assumed
     Liabilities;

          (b) all obligations or liabilities of Sellers or any predecessor(s) or
     Affiliate(s)  of Sellers  relating to Taxes with respect to the Transferred
     Assets or otherwise,  for all periods,  or portions thereof, on or prior to
     the Closing Date;

          (c)  all  obligations  or  liabilities  for  any  legal,   accounting,
     investment  banking,  brokerage  or similar  fees or  expenses  incurred by
     either Seller in connection  with,  resulting from or  attributable  to the
     transactions contemplated by this Agreement; and

          (d) all liabilities  and obligations of Sellers or any  predecessor(s)
     or  Affiliate(s) of Sellers'  resulting from,  caused by or arising out of,
     directly or  indirectly,  the  conduct of their  respective  businesses  or
     ownership or lease of any of their  properties or assets or any  properties

                                         3
<PAGE>


     or assets  previously used by either Seller (including  without  limitation
     the Transferred  Assets) at any time prior to or on the Closing,  including
     without limitation such of the foregoing (i) as constitute,  may constitute
     or are alleged to  constitute  a tort,  breach of contract or  violation of
     requirement  of any Law, or (ii) that relate to,  result in or arise out of
     the  existence or imposition of any liability or obligation to remediate or
     contribute  or  otherwise  pay  any  amount  under  or in  respect  of  any
     environmental,  superfund or other environmental  cleanup or remedial Laws,
     occupational safety and health Laws or other Laws.



     Neither of Sellers nor  Southwest  has granted to the other any covenant of
non-competition and nothing in this Agreement shall be deemed to preclude either
party from competing with any business or schedule flight services of the other.

                                   ARTICLE IV
                                ACQUISITION PRICE

     Section 4.1 Acquisition Price. In consideration of the assignment, transfer
and  conveyance  to  Southwest  of all right,  title and  interest in and to the
Transferred  Assets and the other rights  assigned,  granted or  transferred  to
Southwest  pursuant hereto, and subject to the conditions and in accordance with
the terms hereof, Southwest shall (a) assume at one or more Closings the Assumed
Liabilities,  and (b) pay to or on behalf  of  Sellers  as and when  hereinafter
provided an  aggregate of  $40,000,000,  subject to  adjustments  as provided in
Section  4.3,  prorations  as  provided  in Section  4.4 and any  offsets to the
Acquisition Price pursuant to Section 4.6 (collectively, the Assumed Liabilities
assumed  pursuant  to clause (a) above and the amount  referenced  in clause (b)
above,  as adjusted,  prorated  and/or setoff,  the  "Acquisition  Price").  The
portion of the Acquisition Price referenced in clause (b) above shall be paid as
follows: $40,000,000 in the aggregate to Sellers in cash at one or more Closings
(plus or minus the adjustments described above).

     Section 4.2 Allocation of Acquisition  Price.  Southwest shall,  within 120
days after the Closing  Date,  prepare and deliver to Sellers for their  consent
(which  consent shall not be  unreasonably  withheld,  conditioned or delayed) a
schedule  allocating  the  Acquisition  Price  among the  Transferred  Assets in
accordance with Treasury Regulation  1.1060-1T (or any comparable  provisions of
state or local tax law) or any successor provision. If Sellers do not give their
consent,  Southwest  and Sellers  will  negotiate  in good faith to resolve such
objections.  Southwest  and  Sellers  shall  report  and  file  all Tax  Returns
(including  amended  Tax  Returns  and claims for  refund)  consistent  with the
allocation,  if any,  consented  to, or required to be consented to, by Sellers,
and  shall  take  no  position   contrary  thereto  or  inconsistent   therewith
(including,  without  limitation,  in any audits or  examinations  by any taxing
authority or any other proceedings). Southwest and Sellers and each Affiliate of
Sellers shall  cooperate in the filing of any forms  (including  Form 8594) with
respect to such allocation, including any amendments to such forms required with
respect to any adjustment to the Acquisition Price,  pursuant to this Agreement.
If and to the extent the  parties are unable to agree on such  allocation,  each
shall be free to make its own allocation for tax purposes.  Notwithstanding  any
other  provisions of this Agreement,  the foregoing  agreement shall survive the
Closing Date without limitation.

     Section 4.3 Adjustments to Acquisition Price.


                                       4
<PAGE>

          (a) In the event that,  as a result of the  operation of Section 11.1,
     any Transferred Asset that would be otherwise  purchased or acquired at the
     Closing is not  purchased  or acquired at the Closing (or in the event that
     any  tangible  Transferred  Asset has been  damaged as described in Section
     11.1, but such damage has not been fully  repaired),  then the  Acquisition
     Price  shall be  reduced to the extent  and as  provided  in Section  11.1,
     except as otherwise set forth in paragraph (b) below; and

          (b) With  respect to any Midway  Gate,  Midway Gate  Property,  Midway
     Hangar,  Midway Hangar Property, or any other Transferred Asset that is not
     transferred to Southwest at the Closing for any reason,  the portion of the
     Acquisition  Price  allocated  to each such  item  (and,  accordingly,  the
     Acquisition Price as a whole) shall be reduced by an amount mutually agreed
     to by the parties hereto. Southwest and Sellers hereby agree that Southwest
     shall hold back  $6,000,000  until the  Closing  for the Midway  Hangar and
     Midway Hangar Property. Southwest and Sellers agree that such $6,000,000 is
     the  negotiated  amount to be held back pursuant to this Section 4.3(b) and
     paid in the event that a Closing  occurs with respect to the Midway  Hangar
     and Midway Hangar Property, and that, in the event the Closing with respect
     to such Midway Hangar and Midway Hangar Property occurs, the portion of the
     Acquisition  Price allocable to such assets pursuant to Section 4.2, may be
     more or less than $6,000,000.

          (c) [This Section Reserved.]

          (d) [This Section Reserved.]

     Section 4.4  Prorations.  Sellers  shall bear all personal  property and ad
valorem tax  liability  with  respect to the  Transferred  Assets if the lien or
assessment  date  arises or  relates  to any period  prior to the  Closing  Date
irrespective  of the  reporting  and  payment  dates of such  Taxes.  All  other
property  Taxes,  ad  valorem  Taxes and  similar  recurring  Taxes and fees and
charges on or with respect to the Transferred  Assets, and all lease payments or
similar  recurring  payments under lease agreements that are Assumed  Contracts,
shall be pro rated between  Southwest and the applicable Seller as of 12:01 a.m.
Indianapolis  time on the Closing Date.  All payments to be made by Southwest or
either Seller in  accordance  with this Section 4.4 shall be made, to the extent
then determinable,  by way of adjustments to the cash portion of the Acquisition
Price to be paid to Sellers by Southwest at the  Closing.  Southwest  shall have
the right of  reasonable  review and  approval  of each  Seller's  property  tax
returns  and  assessments  and the right to  contest  any  assessment  for which
Southwest bears any economic responsibility.  Sellers shall reasonably cooperate
with Southwest to advance any contest.

     Section 4.5 Transfer Taxes. Any sales, use, transfer,  recording or similar
taxes due as a result of the  transactions  provided for herein shall be paid by
Sellers.  Notwithstanding  the  foregoing,  the Approval  Order shall  contain a
provision  that the Sellers'  sale,  transfer,  assignment and conveyance of the
Transferred  Assets to Southwest  hereunder shall be entitled to the protections
afforded under Section  1146(c) of the  Bankruptcy  Code (but the failure of the
Approval  Order to contain  such  provisions  shall not relieve  Seller of their
obligation  to pay the items  specified  in the first  sentence of this  Section
4.5).  Southwest will cooperate  reasonably with reasonable  written requests of
Sellers to minimize any such Taxes, including with respect to delivery location.

                                       5
<PAGE>

     Section 4.6 Offsets to Acquisition  Price. The Acquisition Price payable by
Southwest to Sellers at the Closing shall be offset by crediting  Southwest with
the following amounts (collectively, the "Acquisition Price Offset Amount"):

          (a) Sellers' payment obligation to Southwest under Section 8.8; and

          (b) such  other  amounts,  if any,  owed by Sellers  to  Southwest  or
     required hereby to be paid by Sellers to third parties under this Agreement
     with respect to the  Transferred  Assets or  otherwise  that are unpaid and
     outstanding as of the Closing Date.

                                   ARTICLE V
                                    CLOSING

     Section 5.1 Closing.  The  consummation  of the  purchase,  assignment  and
transfer  of all right,  title and  interest  in and to the  Transferred  Assets
contemplated  hereby (the "Closing")  shall take place at the offices of Baker &
Daniels, 300 North Meridian Street, Suite 2700, Indianapolis, Indiana subject to
the  satisfaction  or waiver of the  conditions  set  forth in  Section  5.4 and
Section 5.5, as soon as  practicable  after the Execution  Date and in any event
not later than the  Scheduled  Closing Date, or at such other time and place and
on such other date as Southwest and Sellers shall agree (the "Closing Date"). In
the event the  conditions set forth in Section 5.4 and Section 5.5 have been met
with respect to some but not all of the  Transferred  Assets as of a given date,
Southwest and Sellers may  consummate  the purchase,  assignment and transfer of
the Transferred Assets at multiple Closings on multiple Closing Dates; provided,
that all of the terms and  conditions  set forth in this  Agreement  shall apply
equally at each such  Closing  except  that the terms  "Transferred  Assets" and
"Assumed  Liabilities"  shall  mean  only the  Transferred  Assets  and  Assumed
Liabilities,  respectively,  subject to such  Closing and the term  "Acquisition
Price"  shall  mean  only  such  portions  of the  $40,000,000  and the  Assumed
Liabilities as are applicable and allocable to the Transferred Assets subject to
such Closing. Anything to the contrary in this Agreement notwithstanding,  in no
event  shall the cash  portion of the  Acquisition  Price for all  assets  being
transferred by Sellers to Southwest be in excess of $40,000,000. It shall not be
deemed a default by any party to this Agreement if this Agreement  terminates in
accordance  with Section  12.3(b)(iii)  solely as a result of the failure of the
City of Chicago to grant any required  consent  with respect to any  Transferred
Assets;  provided,  however,  that no party  hereby  waives  any  claim or right
against a breaching party to the extent that such  termination  results from the
breach by a party hereto of any of its representations, warranties, covenants or
agreements set forth in this Agreement.

     Section 5.2 Deliveries at Closing: At the Closing:

          (a) Sellers shall deliver to Southwest the items  described in clauses
     (i)  through  (iv)  below,  to the extent  applicable  with  respect to the
     Closing:

               (i) an assignment of the  Facilities  Lease  containing the terms
          and conditions agreed between Southwest and the City of Chicago as set
          forth in Exhibit C, which  assignment  shall be in form and  substance
          satisfactory  to Southwest  and pursuant to which  Sellers will assign
          all right,  title and  interest  of  Sellers in and to the  Facilities
          Lease  with  respect  to  the  Midway  Gates

                                       6
<PAGE>

          (the "Facilities Lease Assignment"), an assignment of the Hangar Lease
          containing the terms and conditions  agreed between  Southwest and the
          City of Chicago as set forth in Exhibit D, which  assignment  shall be
          in form and substance  satisfactory to Southwest and pursuant to which
          Sellers will assign all right, title and interest of Sellers in and to
          the Hangar Lease (the "Hangar Lease Assignment") and a general bill of
          sale and assignment,  in form and substance reasonably satisfactory to
          Southwest  (the  "Bill of  Sale"),  in each case with  respect  to the
          Transferred  Assets to be conveyed by Sellers at the Closing  together
          with any other  documents  reasonably  requested by Southwest so as to
          assign,  transfer and convey to Southwest  good and valid title,  free
          and clear of all Liens  (other than  Permitted  Liens),  to all right,
          title and interest in and to the Transferred  Assets, each executed by
          ATA;

               (ii) the officers' certificates referenced in Section 5.4(c);

               (iii) the agreements referred to in Section 9.4; and

               (iv) all other agreements, documents,  certificates,  instruments
          or  writings   contemplated  or  described  herein  or  as  reasonably
          requested by Southwest in connection herewith.

          (b) Sellers  shall use their best  efforts to effect,  by  appropriate
     transfer  documents  satisfactory  in form and substance to Southwest,  the
     transfer  at Closing to  Southwest  of  Sellers'  interests  in the Assumed
     Contracts,  as Southwest may request.  In the event,  despite Sellers' best
     reasonable  efforts,  Sellers  are  unable to assign or  transfer  any such
     leases or agreements,  such failure shall not be a default by Sellers under
     this  Agreement or a basis for  termination of this Agreement by Southwest,
     but, in such event,  Sellers shall cooperate fully with Southwest,  by such
     alternative  arrangements  as  may  be  reasonably  available,  to  provide
     Southwest with the benefit of such leases or agreements;

          (c) Southwest shall deliver to Sellers,  to the extent applicable with
     respect to the  Closing,  the items  described  in clauses (i) through (iv)
     below:

               (i) the  portion of the  Acquisition  Price to be paid at Closing
          (less  amounts  as  provided  in Section  4.1),  by wire  transfer  of
          immediately  available funds to the account or accounts  designated by
          Sellers;

               (ii)  one  or  more  assumption   agreements  pursuant  to  which
          Southwest assumes at the Closing the Assumed Liabilities being assumed
          at the  Closing,  in form and  substance  reasonably  satisfactory  to
          Sellers (collectively, the "Assumption Agreement"), each duly executed
          and delivered by Southwest;

               (iii) the officer's certificate referenced in Section 5.5(c); and

               (iv) all other agreements, documents,  certificates,  instruments
          or  writings   contemplated  or  described  herein  or  as  reasonably
          requested by Sellers in connection herewith.

                                       7
<PAGE>

     Section 5.3  Delivery of  Transferred  Assets.  At Closing,  Sellers  shall
assign,  transfer  and convey to, and place  Southwest  in full  possession  and
control of, the Transferred Assets to be acquired by Southwest at the Closing.

     Section  5.4  Conditions   Precedent  to  Obligations  of  Southwest.   The
obligations of Southwest  under this  Agreement to consummate  the  transactions
contemplated  hereby to be  consummated  at the Closing  shall be subject to the
satisfaction,  at or prior to the Closing,  of all of the following  conditions,
any one or more of which may be waived in writing at the option of Southwest:

     (a) All  representations  and warranties of Sellers in this Agreement or in
any exhibit,  schedule or document  delivered  pursuant hereto shall be true and
correct  in  all  respects  (with  respect  to  representations  and  warranties
qualified  or limited  by  materiality  or  Material  Adverse  Effect) or in all
material  respects  (with  respect  to  representations  and  warranties  not so
qualified or limited),  in each case when made and on and as of the Closing Date
as if made on and as of that  date  (other  than  any  such  representations  or
warranties that expressly speak only as of an earlier date).

     (b) All of the terms,  covenants  and  conditions  to be complied  with and
performed  by Sellers on or prior to the Closing  Date shall have been  complied
with or performed in all material respects.

     (c) Southwest shall have received a certificate or  certificates,  dated as
of the  Closing  Date,  executed  on behalf of  Sellers,  each by an  authorized
executive officer thereof, certifying in such detail as Southwest may reasonably
request  that the  conditions  specified  in Section  5.4(a) and Section  5.4(b)
hereof have been fulfilled.

     (d) The waiting period under any applicable  competition,  merger, control,
Antitrust Law or similar Law shall have expired or terminated,  and the FAA, DOT
and any other  Governmental  Authorities whose consent is or may be required for
consummation  of the  transactions  contemplated  hereby  shall have  issued all
approvals required for the transactions contemplated hereby, and no condition or
requirement unacceptable to Southwest in its sole discretion shall be imposed on
or  required  of  Southwest  or any of its  Affiliates  as a  result  of or as a
condition to any of the foregoing.

     (e) All  Consents  described  or referred  to in Section 6.6 and  otherwise
required to consummate  the Closing  hereunder and to enter into the  agreements
described herein shall have been obtained  (without any limitation,  restriction
or condition not otherwise  applicable to the applicable Seller being imposed on
Southwest or its ownership or use of any Transferred Assets).

     (f) No action,  suit or  proceeding  (including,  without  limitation,  any
proceeding  over which the  Bankruptcy  Court has  jurisdiction  under 28 U.S.C.
ss.157(b)  and (c))  shall be pending  or  overtly  threatened  by or before any
Governmental  Authority or pending or overtly  threatened by any other Person to
enjoin,  restrain,   prohibit  or  obtain  substantial  damages  or  significant
equitable   relief  in  respect  of  or  related  to  any  of  the  transactions
contemplated by this Agreement, or that would be reasonably likely to prevent or
make illegal the consummation

                                       8
<PAGE>

of any  transactions  contemplated  by this  Agreement  or  that,  if  adversely
determined,  could  be  materially  adverse  to  the  operation  or  use  of the
Transferred  Assets,  and any such  actions,  suits  or  proceedings  that  have
theretofore  been brought and determined  shall have become Final Orders without
having any of the  foregoing  and without the  imposition  of any  condition  or
requirement on Southwest.

     (g) There shall not be in effect any Law of any  Governmental  Authority of
competent   jurisdiction   restraining,   enjoining  or  otherwise   preventing,
materially adversely affecting, or prohibiting  consummation of the transactions
contemplated by this Agreement.

     (h) No loss of or damage to any  Transferred  Asset(s)  shall have occurred
since the  Execution  Date,  except for (i) damage that has  already  been fully
repaired or is addressed in Section  11.1,  (ii) losses that have been  replaced
with assets of  comparable  or higher  quality with the  reasonable  approval of
Southwest,  or (iii)  uninsured  losses or damage to the Midway Gate Property or
Midway Hangar  Property which  Southwest,  acting  reasonably and in good faith,
considers immaterial.

     (i) No loss or modification of or limitation on any Assumed  Contract shall
have occurred since the Execution Date without the written  consent of Southwest
in its sole discretion, including without limitation any forfeiture,  expiration
without renewal,  termination or other loss thereof, other than modifications or
limitations  which  Southwest,  acting  reasonably and in good faith,  considers
immaterial.

     (j) [This Section Reserved.]

     (k) The Approval Order shall have been entered and shall be enforceable.

     (l) [This Section Reserved.]

     (m) No  event,  events  or  circumstance  shall  have  occurred  since  the
Execution Date which,  independently or together with any other event, events or
circumstance that have occurred or are in Southwest's  opinion reasonably likely
to  occur,  have or in  Southwest's  opinion  are  reasonably  likely  to have a
Material Adverse Effect.

     (n) The  agreements  referred to in Section 8.19 and Section 9.4,  together
with all other agreements required to be entered into by the terms hereof, shall
have been duly and validly executed and delivered by the parties.

     (o) The City of Chicago shall have given its consent to the  assignment and
transfer of the Facilities Lease with respect to the Midway Gates and the Hangar
Lease to Southwest, and shall have waived any default which now or hereafter may
exist by reason of any default under any other  agreement with Sellers (it being
acknowledged  that  the  consent  of  the  City  of  Chicago  may  include  gate
utilization  covenants  with  which  Southwest  must  comply,  but  Sellers  and
Southwest  agree  that  such  utilization  covenants  must  be  satisfactory  to
Southwest in its sole and absolute discretion) and shall have confirmed that the
unpaid amounts due under the Chicago  Construction  Loan  Indebtedness,  and any
other amounts necessary to satisfy any other obligations as to which the failure
to perform or cure would  constitute a default or an event of default  under the
Facilities  Lease,  the Hangar Lease or the Chicago  Construction  Loan, is less
than $7,000,000.

                                       9
<PAGE>

     (p) [This Section Reserved.]

     Section 5.5 Conditions Precedent to Obligations of Sellers. The obligations
of Sellers to consummate the transactions  contemplated hereby to be consummated
at the Closing shall be subject to the satisfaction, at or prior to the Closing,
of all the  following  conditions,  any one or more of which  may be  waived  in
writing at the option of Sellers:

     (a) All  representations and warranties of Southwest made in this Agreement
or in any exhibit,  schedule or document delivered pursuant hereto shall be true
and correct in all respects  (with  respect to  representations  and  warranties
qualified or limited by materiality)  or in all material  respects (with respect
to  representations  and warranties  not so qualified or limited),  in each case
when made and as of the  Closing  Date as if made on and as of that date  (other
than such  representations  or  warranties  that  expressly  speak only as of an
earlier date).

     (b) All of the terms,  covenants  and  conditions  to be complied  with and
performed by Southwest on or prior to the Closing Date shall have been  complied
with or performed in all material respects.

     (c)  Sellers  shall have  received a  certificate,  dated as of the Closing
Date,  executed  on behalf  of  Southwest  by an  authorized  executive  officer
thereof,  certifying in such detail as Sellers may  reasonably  request that the
conditions specified in Section 5.5(a) and Section 5.5(b) have been fulfilled.

     (d) The waiting period under any applicable  competition,  merger, control,
Antitrust Law or similar Law shall have expired or terminated, and the FAA, DOT,
City of Chicago,  Chicago  City Council and any other  Governmental  Authorities
whose  consent is required for  consummation  of the  transactions  contemplated
hereby  shall  have  issued  all   approvals   required  for  the   transactions
contemplated hereby.

     (e) There shall not be in effect any Law of any  Governmental  Authority of
competent  jurisdiction  restraining,   enjoining  or  otherwise  preventing  or
prohibiting consummation of the transactions contemplated by this Agreement.

     (f) The  agreements  referred to in Section 8.19 and Section 9.4,  together
with all other agreements required to be entered into by the terms hereof, shall
have been duly and  validly  executed  and  delivered  by the  parties.  (g) The
Approval Order shall have been entered and shall be enforceable.

     (h) The City of Chicago shall have given its consent to the  assignment and
transfer of the Facilities Lease with respect to the Midway Gates and the Hangar
to Southwest and waived any and all cross defaults  under the  Facilities  Lease
and the  Hangar  Lease  that now or  hereafter  exists  by  reason  of any other
agreement between the City of Chicago and Sellers.

                                       10
<PAGE>

     (i) No action,  suit or  proceeding  (including,  without  limitation,  any
proceeding over which the Bankruptcy Court has jurisdiction  under 28 U.S.C. ss.
157(b)  and (c))  shall be  pending  or  overtly  threatened  by or  before  any
Governmental  Authority or pending or overtly  threatened by any other Person to
enjoin,  restrain,   prohibit  or  obtain  substantial  damages  or  significant
equitable   relief  in  respect  of  or  related  to  any  of  the  transactions
contemplated by this Agreement, or that would be reasonably likely to prevent or
make  illegal  the  consummation  of  any  transactions   contemplated  by  this
Agreement, and any such actions, suits or proceedings that have theretofore been
brought and determined  shall have become Final Orders without having any of the
foregoing and without the imposition of any condition or requirement on Sellers.

     (j) Southwest shall have provided the Sellers a Debtor-in-Possession credit
facility in accordance with the terms and subject to the conditions described in
Exhibit F hereto.

                                   ARTICLE VI
                    REPRESENTATIONS AND WARRANTIES OF SELLERS

     Subject to any exceptions  set forth in the Schedules  delivered by Sellers
pursuant to Section 1.2, each of the Sellers makes the following representations
and  warranties to Southwest  with respect to itself and each other  Seller,  as
applicable, each of which shall be true and correct as of the Execution Date and
as of the Closing  Date  (except to the extent  expressly  relating  solely to a
specific  date, in which event it shall be true and correct as of such date) and
shall be unaffected by any  investigation  heretofore or hereafter made by or on
behalf of Southwest or its Affiliates.

     Section 6.1  Organization  and Good Standing.  Each Seller is a corporation
duly   organized  and  validly   existing  under  the  laws  of  its  respective
jurisdiction  of  organization   and  has  the  requisite   corporate  or  other
organizational  power  and  authority  to  own,  lease  or  otherwise  hold  its
properties  and assets and carry on its  business as presently  conducted.  Each
Seller is qualified or licensed to do business as a foreign  corporation  and is
in good  standing  in  every  jurisdiction  where  the  nature  of the  business
conducted by it or the properties owned or leased by it requires  qualification,
except where the failure to be so qualified,  licensed or in good standing would
not reasonably be expected to have a Material Adverse Effect.

     Section  6.2  Authorization  and Effect of  Agreement.  Each Seller has the
requisite  corporate  power and  authority  (a) to execute  and to deliver  this
Agreement  and the  Ancillary  Agreements to which it will be a party and (b) in
the event  Approval Order are entered by the  Bankruptcy  Court,  to perform its
obligations hereunder and under any such Ancillary Agreements. The execution and
delivery by each Seller of the Ancillary  Agreements to which it will be a party
have been (or will be at the time of execution  thereof) duly  authorized by all
necessary corporate or other  organizational  action on the part of such Seller.
The  execution and delivery of this  Agreement  and the Ancillary  Agreements by
Sellers,  and subject to clause (b) above,  the  performance by Sellers of their
obligations  hereunder and  thereunder  and the  consummation  by Sellers of the
transactions contemplated hereby and thereby, have been duly authorized by their
Boards of  Directors  and no other  corporate  action on the part of  Sellers is
necessary  to  authorize  the  execution  and  delivery of this  Agreement,  the
Ancillary Agreements or the consummation of the transactions contemplated hereby
or  thereby.  The  execution  and  delivery  by  each  Seller  of the  Ancillary
Agreements  to  which  it will be a party  have  been (or will be at the time of
execution  thereof)  duly  authorized  by  all  necessary   corporate  or  other
organizational  action on the part of such Seller.

                                       11
<PAGE>

  This Agreement has been duly
and validly  executed and delivered by Sellers and constitute  valid and binding
obligations  of Sellers,  enforceable  against  Sellers in  accordance  with its
terms, subject (a) to applicable bankruptcy,  insolvency, fraudulent conveyance,
reorganization,  moratorium  and similar laws  affecting  creditors'  rights and
remedies  generally,   including,   without  limitation,  for  purposes  of  the
representation and warranty being made as of the Closing Date, the discretion of
the Bankruptcy  Court for so long as the Bankruptcy  Court retains  jurisdiction
over the Chapter 11 Cases, and (b) as to  enforceability,  to general principles
of equity,  including  principles of commercial  reasonableness,  good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding at law
or in  equity),  and (c) entry of the  Approval  Order as  described  in Section
8.13(a). Each of the Ancillary Agreements,  executed and delivered by Sellers or
any Seller, or any of their  Affiliates,  as applicable,  at the Closing,  shall
constitute  a  valid  and  binding  agreement  of  Sellers  or such  Seller,  or
Affiliate, enforceable against Sellers or such Seller or Affiliate in accordance
with its terms,  subject (a) to applicable  bankruptcy,  insolvency,  fraudulent
conveyance,  reorganization,  moratorium and similar laws  affecting  creditors'
rights and remedies generally,  including, without limitation, the discretion of
the Bankruptcy  Court for so long as the Bankruptcy  Court retains  jurisdiction
over the Chapter 11 Cases, and (b) as to  enforceability,  to general principles
of equity,  including  principles of commercial  reasonableness,  good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding at law
or in equity).

     Section 6.3 No  Conflicts.  The  execution  and delivery by Sellers of this
Agreement and any Ancillary Agreements to which they or either of them will be a
party and the execution and delivery by each  Affiliate of either of the Sellers
of each  Ancillary  Agreement to which such Affiliate will be a party do not and
will not, as applicable,  and, in the event the Approval Order is entered by the
Bankruptcy  Court and shall become a Final Order and the requisite  consents are
obtained as  contemplated  by Section 6.6, the performance by each Seller of the
transactions  contemplated  by this Agreement or such Ancillary  Agreements,  as
applicable, will not, (a) affect the ability of Southwest to own, use or operate
the Transferred Assets following the Closing in substantially the same manner as
the Transferred  Assets are presently owned,  used or operated by either Seller,
(b)  create  any Lien on or any right of any  third  party to  purchase,  use or
operate any of the Transferred  Assets or (c) accelerate or trigger any right or
obligation of any party under any Assumed Contract.

     Section 6.4 [This Section Reserved.]

     Section 6.5 Data.  All Data are true and correct in all  material  respects
(other than FAA maintenance records, which are true and correct in all respects)
and are accurately extracted from the books and records of Sellers.

     Section 6.6 Consents and Approvals. Other than in connection with the entry
of the Approval  Order,  the execution and delivery by Sellers of this Agreement
and any Ancillary  Agreements to which it will be a party does not and will not,
and the  consummation  by Sellers of the  transactions  contemplated  hereby and
thereby will not, require any Consent, except (a) as disclosed on Schedule 6.11,
(b) as required by the FAA,  (c) as required by the DOT,  and (d) as required by
the City of Chicago.

                                       12
<PAGE>

     Section 6.7 Permits;  Compliance with Law.  Schedule 6.7 sets forth a true,
correct and complete list of all Permits.  Sellers possess all Permits necessary
for the operation and ownership of the Transferred Assets. All Permits issued to
either Seller are in full force and effect.  No  outstanding  violations  are or
have been  recorded in respect of any of the Permits.  The use and  operation by
either Seller of the  Transferred  Assets and the conduct of its business comply
with all Laws and the  requirements  and  conditions  of all Permits,  including
without limitation all applicable operating certificates and authorities, common
carrier obligations, airworthiness directives, and all other rules, regulations,
directives  and policies of the FAA, DOT, City of Chicago,  Chicago City Council
and all other Governmental  Authorities having jurisdiction over the Transferred
Assets and the business  conducted by Sellers.  No  proceeding is pending or, to
either  Seller's  knowledge,  threatened  to revoke,  withdraw or limit any such
Permit,  and there is no fact,  error or  admission  relevant to any Permit that
would permit the violation of or revocation,  withdrawal or limitation or result
in the threatened  violation of or  revocation,  withdrawal or limitation of any
such Permit.  Except as set forth on Schedule 6.7, on or  immediately  after the
Closing,  each Permit  will  continue in full force and effect and accrue to the
benefit of Southwest without any consent,  approval or modification  required by
or from any Governmental Authority.

     Section 6.8 [This Section Reserved.]

     Section 6.9 Title to and  Condition  of Assets.  Upon entry of the Approval
Order, the applicable  Seller has, and at the Closing,  such Seller shall convey
to Southwest,  good,  valid and  indefeasible  title to the  Transferred  Assets
(other than the Leased Assets), free and clear of all Liens other than Permitted
Liens.  With respect to any Leased  Assets,  the  applicable  Seller has a valid
leasehold  interest  therein for the term  specified  in Schedule  6.15(c).  The
Transferred Assets constituting tangible property, taken as a whole, are in good
operating  condition  and  repair,  subject  to normal  wear,  are usable in the
regular and ordinary  course of business and to the knowledge of Sellers conform
in all material respects to applicable Laws.

     Section  6.10  U.S.  Citizen;  Air  Carrier.  Holdings  and ATA are  each a
"citizen of the United  States" as defined in the Federal  Aviation Act, and ATA
is an "air carrier" within the meaning of such Act operating under  certificates
issued pursuant to such Act (49 U.S.C. Sections 41101-41112).

     Section  6.11  Assumed  Contracts.  The  Assumed  Contracts  are  valid and
enforceable in accordance  with their terms,  subject to applicable  bankruptcy,
reorganization,  moratorium,  and similar laws affecting  creditors'  rights and
remedies generally and subject,  as to enforceability,  to general principles of
equity. No Seller is, and to Sellers'  knowledge,  no other party thereto is, in
material default in the performance, observance or fulfillment of any obligation
under any Assumed Contract (other than payments or amounts due thereunder, which
shall be paid or  discharged  by Sellers at or prior to the  Closing),  and,  to
Sellers' knowledge,  no event has occurred,  which with or without the giving of
notice  or  lapse  of  time,  or  both,  would  constitute  a  material  default
thereunder,  except for the  commencement  of the Chapter 11 Cases and  Sellers'
insolvency.  Other than in connection  with the  commencement  of the Chapter 11
Cases,  entry of the  Approval  Order and as set forth on Schedule  6.11 hereto,
none  of  the  Assumed  Contracts  requires  the  Consent  of any  party  to its
assignment in connection with the  transactions  contemplated  hereby.  True and
complete copies of all Assumed Contracts have been delivered to Southwest.

                                       13
<PAGE>

     Section 6.12 [This Section Reserved.]

     Section 6.13 No Casualty.  Except as set forth on Schedule 6.13, since June
30, 2004, the Transferred Assets have not been affected by any fire,  explosion,
accident,  drought,  storm,  hail,  earthquake,  embargo,  act  of  God,  act of
terrorism  or of any public enemy or other  casualty  (whether or not covered by
insurance).

     Section 6.14 [This Section Reserved.]

     Section 6.15 Midway Gates;  Midway Gate  Property;  Midway  Hangar;  Midway
Hangar  Property.

     (a) Schedule  6.15(a) sets forth (i) a true,  correct and complete  list of
all Midway Gates included in the Transferred  Assets,  including the gate number
and the terminal or concourse  location of each such Midway Gate, (ii) the total
amount of airline fees and charges paid and payable (if different) by Sellers to
the City of Chicago  under the  Facilities  Lease with respect to calendar  year
2003,  (iii) a true,  correct and complete  list of all Midway  Hangar  Property
included in the  Transferred  Assets,  (iv) the total amount of fees and charges
paid and  payable  (if  different)  by Sellers to the City of Chicago  under the
Hangar Lease with respect to calendar year 2003.

     (b) Schedule  6.15(b) sets forth a true,  correct and complete  list of all
the use  agreements,  licenses,  permits,  certificates  or other  documents  or
agreements under which either Seller leases, occupies or otherwise has the right
to use, the Midway Gates (other than the Facilities  Lease) or the Midway Hangar
(other than the Hangar Lease), and, in each case, all amendments thereto.

     (c) Except for the Midway  Property Leases and the Right of Entry Agreement
set forth on Schedule 6.15(c), there are no leases,  subleases,  use agreements,
licenses,  permits,  certificates  or  other  documents  or  agreements,  or any
amendments to any of the foregoing,  under which any Seller leases,  occupies or
otherwise  has the  right to use any  Midway  Gate  Property  or  Midway  Hangar
Property.  Schedule 6.15(c) includes the identification of the applicable Seller
and the agreement expiration date.

     (d) [This Section Reserved.]

     (e) Neither  Holdings or ATA own any Midway Gate  Property or Midway Hangar
Property.

     (f)  Except as set  forth in  Schedule  6.15(f)  identifying  the  specific
equipment and specific condition or non-compliance, the Midway Gates, the Midway
Gate Property, the Midway Hangar and the Midway Hangar Property, are all in good
operating  condition  and  repair,  subject  to normal  wear,  are usable in the
regular and ordinary  course of business and, to Sellers  knowledge,  conform in
all material  respects to applicable  Laws.  The cost to make the repairs to the
Midway Hangar doors, as identified on Schedule 6.15(f) will not exceed $50,000.

                                       14
<PAGE>

     (g) The  Assumed  Contracts  are in full  force and  effect,  and except by
reason of the  filing of the  Chapter  11 Cases or the  insolvency  of  Sellers,
Sellers have no knowledge of any material default under the Assumed Contracts or
of any condition or event which has occurred which with notice or the passage of
time or both would  constitute a material  default,  by either  Seller under the
Assumed Contracts.

     (h)  Sellers  have not  received  any notice that any portion of the Midway
Gates, the Midway Gate Property, the Midway Hangar or the Midway Hangar Property
is or will be subject to, or affected by, any  condemnation,  eminent  domain or
similar  proceeding and there are no material  violations of record or otherwise
known to  Sellers  against  any  portion of the Midway  Gates,  the Midway  Gate
Property, the Midway Hangar or the Midway Hangar Property.

     (i) To Sellers' knowledge,  except as set forth in Schedule 6.15(i) hereto,
the Midway  Gates,  the Midway Gate  Property,  the Midway Hangar and the Midway
Hangar  Property,  as applicable,  have been constructed in good and workmanlike
manner,  are structurally  sound and free from material defects and all building
systems,   including  without   limitation,   the  heat,   ventilation  and  air
conditioning,  plumbing,  electrical,  elevator,  sewage and other  systems  and
systems  related to the  specific  uses  thereof  (as,  for  example,  passenger
terminal  facilities,   office  space,  cargo  facilities,  and  ground  support
equipment  maintenance  spaces,  and aircraft  maintenance  space) are free from
material  defects.  The Midway Gate Property and the Midway Hangar Property,  as
applicable,  are in good working  order,  subject to  reasonable  wear and tear.
Except as set  forth in  Schedule  6.15(i),  neither  Seller  has  deferred  any
material maintenance or repair obligations under the Assumed Contracts.

     (j) [This Section Reserved.]

     (k) [This Section Reserved.]

     Section 6.16 Environmental Matters.

     (a) Except as set forth on Schedule 6.16(a) hereto,  to Sellers'  knowledge
after reasonable inquiry, the use and operation of the Transferred Assets is and
has  been in  full  compliance  with  all  applicable  Environmental  Laws,  and
consistent with the  consummation  of the  transactions  contemplated  hereby or
Southwest's   ability  to  own,  use  or  operate  the  Transferred   Assets  in
substantially  the same manner as the  Transferred  Assets are presently  owned,
used or operated by Seller.  Except as set forth on  Schedule  6.16(a),  neither
Seller has received any written  communication from any Person that alleges that
such Seller is not in such full compliance,  the subject matter of which written
communication  has not been fully resolved and satisfied,  and, to such Sellers'
knowledge  after  reasonable  inquiry,  there are no  circumstances  (other than
changes in existing,  or future requirements of,  Environmental Laws) that would
reasonably be expected to prevent or interfere with such full  compliance in the
future.  Schedule  6.16(a) sets forth a true,  correct and complete  list of all
orders,  decrees or other agreements  relating to the Transferred  Assets issued
pursuant to or entered into under any Environmental Law.

     (b)  Except as set forth on  Schedule  6.16(b),  there is no  Environmental
Claim  relating  to  ownership  or use  of the  Transferred  Assets  pending  or
threatened  against  either Seller or, to Sellers'  knowledge  after  reasonable
inquiry, against any Person whose liability for such Environmental Claim Sellers
have retained or assumed either contractually or by operation of law.

                                       15
<PAGE>

     (c) Except as set forth on Schedule 6.16(c),  Sellers have not received any
written allegation or other information,  the subject matter of which allegation
or information  has not been fully resolved and satisfied,  that past or present
actions, activities, circumstances,  conditions, events or incidents, including,
without limitation, the release, emission, discharge or disposal of any Material
of  Environmental  Concern  relating to the ownership or use of the  Transferred
Assets  could  form  the  basis  of  any  Environmental  Claim  relating  to the
Transferred  Assets against either Seller or against any Person whose  liability
for  such   Environmental   Claim  either  Seller  retained  or  assumed  either
contractually or by operation of law.

     (d)  Without  in any way  limiting  the  generality  of the  foregoing,  to
Sellers'  knowledge  after  reasonable  inquiry,  (i) all  onsite  and  off-site
locations  where any  Seller or any  other  occupant  has  stored,  disposed  or
arranged for the disposal of Materials of Environmental Concern from 1993 to the
Execution  Date (and, as of the Closing  Date, to the Closing Date)  relating to
the Transferred Assets are identified on Schedule 6.16(d),  (ii) all underground
storage  tanks,  and the capacity  and  contents of such tanks,  included in the
Transferred Assets (if any) are identified on Schedule 6.16(d),  (iii) except as
set forth on  Schedule  6.16(d),  there is no damaged  and  friable  asbestos or
lead-based paint coatings in poor condition  contained in or forming part of any
building,  building  component,  structure  or office  space with respect to the
Midway  Gates or the  Midway  Hangar  and (iv)  except as set forth on  Schedule
6.16(d), no polychlorinated biphenyls (PCB's) are used at any Midway Gate or the
Midway Hangar in violation of Environmental Laws.

     (e)  For  purposes  of  this  Agreement  but  only  as it  relates  to  the
Transferred Assets, the following terms shall have the following meanings:

          (i) "Environmental Claim" means any written notice by any Governmental
     Authority  or  Person  alleging  potential  liability  (including,  without
     limitation,  potential  liability for investigatory  costs,  cleanup costs,
     governmental  response costs, natural resources damages,  property damages,
     personal injuries or penalties) (A) which would have a material and adverse
     effect  on  any  of  the  Transferred   Assets,  the  consummation  of  the
     transactions  contemplated  hereby or  Southwest's  ability to own,  use or
     operate  the  Transferred  Assets in  substantially  the same manner as the
     Transferred  Assets are presently owned,  used or operated by Sellers,  and
     (B) arising out of, based on or resulting from (x) the presence, or release
     into the  environment,  of any  Material  of  Environmental  Concern at any
     location,  whether or not owned by either  Seller or  Southwest  or (y) any
     material violation, or alleged violation, of any Environmental Law.

          (ii) "Environmental  Laws" means all Laws applicable to the respective
     Transferred  Assets and relating to pollution or protection of human health
     or the environment  (including,  without  limitation,  ambient air, surface
     water, ground water, land surface or subsurface strata), including, without
     limitation,  laws  and  regulations  relating  to  emissions,   discharges,
     releases or  threatened  releases of  Materials  of  Environmental  Concern
     arising from or relating to the Transferred  Assets, or otherwise  relating
     to the manufacture,  processing,  distribution,  use,  treatment,  storage,
     disposal,  transport  or handling of  Materials  of  Environmental  Concern
     arising  from  or  relating  to the  Transferred  Assets  or the  operation
     thereof.

                                       16
<PAGE>

          (iii)  "Materials of  Environmental  Concern" means  dangerous  goods,
     hazardous,  toxic or regulated substances,  materials, or wastes as defined
     in the Environmental Laws.

     Section  6.17  Taxes.   Except  as  set  forth  on  Schedule  6.17:

     (a) No  claim  for  assessment  or  collection  of  Taxes  relating  to the
Transferred  Assets or operation  thereof has been  asserted  against any Seller
excepting ordinary billings for property taxes. Neither Seller is a party to any
pending action,  proceeding or investigation  by any Governmental  Authority for
the assessment or collection of Taxes,  nor does either Seller have knowledge of
any  such  threatened  action,  proceeding  or  investigation,  relating  to the
Transferred Assets or operation of the Transferred Assets.

     (b) Each Seller has withheld and paid all Taxes  required to be withheld in
connection with any amounts paid or owing to any employee, creditor, independent
contractor or other third party relating to the Transferred  Assets or operation
of the Transferred Assets.

     (c) Neither  Seller is a foreign  person within the meaning of Section 1445
of the Code.

     (d) None of the Transferred  Assets is (i) "tax-exempt use property" within
the  meaning  of  Section  168(h) of the Code,  (ii)  "tax-exempt  bond-financed
property"  within the meaning of Section 168(g) of the Code,  (iii) "limited use
property" within the meaning of Revenue Procedure 76-30, (iv) subject to Section
168(g)(1)(i)(A)  of the Code or (v)  property  that is or will be required to be
treated as being owned by any Person  (other  than any  Seller)  pursuant to the
provisions  of  Section  168(f)(8)  of the  Internal  Revenue  Code of 1954,  as
amended, and in effect immediately before the enactment of the Tax Reform Act of
1986.

     Section 6.18 [This Section Reserved.]

     Section 6.19 [This Section Reserved.]

     Section 6.20 Real Property.

     (a) Except as set forth on Schedule  6.20(a),  each  applicable  Seller has
good and valid leasehold interests in, the Midway Property Leases.

     (b) All water, gas, electrical,  steam, compressed air,  telecommunication,
sanitary and storm sewage lines and systems and other similar systems  currently
serving  the  Midway  Property  Leases  are  installed  and  operating  and  are
sufficient  to enable  the Midway  Property  Leases to  continue  to be used and
operated in the manner currently being used and operated, and neither Seller has
any knowledge of any factor or condition that could result in the termination or
material impairment of the furnishing thereof. No Improvement or portion thereof
is dependent for its access, operation or utility on any land, building or other
Improvement  that is not both included in the Midway Property Leases that is not
available  for  use  pursuant  to  a  reciprocal  easement  agreement  or  other
contractual right of the applicable Seller.

                                       17
<PAGE>

     (c) All Permits required to have been issued to either Seller to enable any
Midway  Property Lease to be lawfully  occupied and used for all of the purposes
for which they are currently occupied and used have been lawfully issued and are
in full force and effect.  Neither  Seller has received  any notice,  or has any
knowledge,  of any pending,  threatened or contemplated  condemnation proceeding
affecting  any  Midway  Property  Lease  or any  part  thereof  or any  proposed
termination  or  impairment  of any  parking  at any such  owned or leased  real
property or of any sale or other  disposition of any such Midway  Property Lease
or any part thereof in lieu of condemnation.

     (d) No portion of any Midway Property Lease has suffered any damage by fire
or other casualty loss which has not  heretofore  been  completely  repaired and
restored to its original condition, reasonable wear and tear excepted.

     (e) Except as set forth on Schedule 6.20(e):

     (i) to Sellers' knowledge,  no structure on any Midway Property Lease fails
to conform in any material  respect  with  applicable  ordinances,  regulations,
zoning laws and  restrictive  covenants  nor  encroaches  upon real  property of
others,  nor is any such Midway Property Lease  encroached upon by structures of
others in any case in any manner that would have or would be  reasonably  likely
to have a Material Adverse Effect;

     (ii) no charges or violations have been filed,  served,  made or threatened
against  either  Seller,  or, to the  knowledge  of Sellers,  any other  Person,
against  or  relating  to  any  such  property  or  structure  on or  any of the
operations  conducted at any Midway Property Lease, as a result of any violation
or alleged violation of any applicable  ordinances,  requirements,  regulations,
zoning laws or restrictive  covenants or as a result of any  encroachment on the
property  of others  where the effect of same would have or would be  reasonably
likely to have a Material Adverse Effect;

     (iii) other than pursuant to applicable  Laws,  covenants that run with the
land, the terms of each lease or provisions in any agreement  listed on Schedule
6.20(a),  there exists no restriction on the use,  transfer or mortgaging of any
Midway Property Lease;

     (iv) each Seller, as applicable,  has adequate  permanent rights of ingress
to and egress from any such  property  used by it for the  operations  conducted
thereon; and

                                       18
<PAGE>

     (v) there are no  developments  affecting any of the Midway Property Leases
or  interests  of any Seller  therein  pending or, to the  knowledge of Sellers,
threatened  which might  reasonably  be expected to curtail or  interfere in any
material  respect  with the use of any such  Leased  Real  Estate  Asset for the
purposes for which it is now used.

     Section 6.21  Disclosure.  No  representation  or warranty of either Seller
contained herein, and no statement contained in any agreement, document or other
instrument to be furnished by either Seller to Southwest in connection  with the
transactions  contemplated hereby, contains or will contain any untrue statement
of a material fact or omits or will omit to state a material  fact  necessary to
make the representation, warranty or statement so made not misleading.

                                  ARTICLE VII
                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Southwest  hereby makes the  following  representations  and  warranties to
Sellers each of which shall be true and correct as of the Execution  Date and as
of the  Closing  Date  (except  to the  extent  expressly  relating  solely to a
specific  date, in which event it shall be true and correct as of such date) and
shall be unaffected by any investigation heretofore or hereafter made.

     Section  7.1  Corporate  Organization.  Southwest  is  a  corporation  duly
organized, and validly existing under the laws of the State of Texas and has the
requisite  corporate  power and  authority to own,  lease or otherwise  hold its
properties and assets and to carry on its business as presently conducted.

     Section  7.2  Authorization  and  Effect of  Agreement.  Southwest  has the
requisite  corporate  power and authority to execute and deliver this  Agreement
and the  Ancillary  Agreements  to which it will be a party and to  perform  its
obligations hereunder and thereunder. The execution and delivery by Southwest of
this Agreement and the performance by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary  corporate  action on the
part of  Southwest.  This  Agreement  has been duly  executed  and  delivered by
Southwest  and   constitutes  a  valid  and  binding   agreement  of  Southwest,
enforceable  against  Southwest  in  accordance  with  its  terms,   subject  to
applicable  bankruptcy,  reorganization,  moratorium  and similar laws affecting
creditors' rights and remedies generally and subject,  as to enforceability,  to
general  principles  of  equity.  Each  of the  Ancillary  Agreements  to  which
Southwest  will be a party,  when  executed  and  delivered by  Southwest,  will
constitute  a valid and binding  agreement  of  Southwest,  enforceable  against
Southwest  in  accordance  with its  terms,  subject to  applicable  bankruptcy,
reorganization,  moratorium,  and similar laws affecting  creditors'  rights and
remedies generally and subject,  as to enforceability,  to general principles of
equity.

     Section 7.3 No  Conflicts.  The execution and delivery by Southwest of this
Agreement and the Ancillary  Agreements to which  Southwest will be a party does
not or will  not  (as  applicable),  and the  performance  by  Southwest  of the
transactions  contemplated by this Agreement and such Ancillary  Agreements will
not, conflict with, or result in any violation of, or constitute a default under

                                       19
<PAGE>

(a) any provision of the  certificate of  incorporation  or bylaws of Southwest,
(b) any of the terms,  conditions,  or provisions  of any material  agreement or
other  material  document by which  Southwest is bound,  or (c) any Law or Order
applicable to or binding on Southwest. Except for the Approval Order, no Consent
is required to be obtained,  made or given (whether  pursuant to applicable Law,
contract or  otherwise)  in  connection  with the execution and delivery of this
Agreement  by  Southwest or the  performance  by  Southwest of the  transactions
contemplated hereby.

     Section 7.4 Litigation.  As of the Execution Date, there are no judicial or
administrative actions, proceedings or investigations pending or, to Southwest's
knowledge, threatened that question the validity of this Agreement or any action
taken or to be taken by Southwest in connection with this Agreement.

     Section 7.5 Southwest `34 Act Reports.  To the best knowledge and belief of
Southwest,  all Form 10-K,  10-Q and 8-K  reports  filed with the United  States
Securities and Exchange  Commission (the "SEC") by Southwest Airlines Co. during
the twelve months ended  November 30, 2004 did not contain any untrue  statement
of a  material  fact or omit to state a  material  fact  required  to be  stated
therein or necessary in order to make the statements made therein,  in the light
of the  circumstances  under which they were made, not misleading,  except where
any such misstatement, omission or non-compliance would not result in a material
adverse effect on the ability of Southwest to perform its obligations under this
Agreement or to consummate the transactions contemplated herein.

                                  ARTICLE VIII
                              PRE-CLOSING COVENANTS

     Section 8.1  Access.  Prior to the  Closing,  upon  reasonable  notice from
Southwest,  Sellers  shall,  and  shall  afford  to  the  officers,   attorneys,
accountants or other authorized agent or representatives of Southwest reasonable
access during normal  business  hours to the management  employees,  Transferred
Assets,  facilities  and  books  and  records  of each  Seller  relating  to the
Transferred  Assets  so as to afford  Southwest  full  opportunity  to make such
review,  examination and  investigation of such Transferred  Assets as Southwest
determines are reasonably  necessary in connection with the  consummation of the
transactions contemplated hereby; provided, however, that the foregoing right of
access shall not be  exercisable  in such a manner as to interfere  unreasonably
with the normal  operations  and business of either Seller.  Southwest  shall be
permitted to make  extracts  from or to make copies of such books and records as
may be  reasonably  necessary  in  connection  therewith.  Prior to the Closing,
Sellers  shall,  promptly  furnish  Southwest  with  access to such  maintenance
records, operating data and other information relating to the Transferred Assets
then owned and/or operated by either Seller as Southwest may reasonably request.
Seller shall  promptly  provide to Southwest  all  non-privileged  documents and
materials  relating to the  proposed  sale of the  Transferred  Assets,  Assumed
Contracts or any portion thereof, including, without limitation, with respect to
competing bids, and otherwise cooperate with Southwest, to the extent reasonably
necessary in connection with Southwest's preparation for or participation in any
part of the Chapter 11 Cases in which  Southwest's  participation  is necessary,
required or reasonably  appropriate.  Seller shall promptly deliver to Southwest
all pleadings, motions, notices, statements,  schedules,  applications,  reports
and  other  papers  filed  by  either  of  Sellers  in  any  other  judicial  or
administrative  proceeding as Southwest  may  reasonably  request.  In addition,
Sellers  shall advise  Southwest  with  respect to any material  written or oral
communication  with  the  creditors  committee  in the  Chapter  11 Cases or any
prospective acquirer or purchaser of the Transferred Assets or of the Sellers or
any  material  portion  of their  assets  concerning,  in whole or in part,  the
transactions contemplated by this Agreement.

                                       20
<PAGE>

     Section 8.2 Conduct of Business.  Except as expressly  contemplated by this
Agreement  (including,  without  limitation,  the  prosecution of the Chapter 11
Cases), or as otherwise consented to by Southwest in writing,  during the period
from the Execution Date and continuing until the Closing,  each Seller shall, in
respect of the Transferred Assets:

     (a) (i) conduct their business with respect to such  Transferred  Assets in
the usual,  regular and ordinary  course as presently  conducted and  consistent
with past practice, (ii) keep such Transferred Assets intact, and (iii) maintain
such  Transferred  Assets  in at least  as good a  condition  as  their  current
condition (reasonable wear and tear excepted);

     (b) not  take or  omit  to  take  any  action  as a  result  of  which  any
representation  or  warranty  of Sellers  made in  Article VI would be  rendered
untrue or incorrect if such  representation  or warranty  were made  immediately
following the taking or failure to take such action;

     (c) not mortgage or pledge any  Transferred  Assets unless such mortgage or
pledge is to  terminate  and be  released  at the  Closing  with  respect to the
Transferred Assets or to be transferred to and attach to the cash proceeds to be
received by Sellers  hereunder,  nor shall either  Seller sell or dispose of any
such Transferred Assets, and not waive,  release,  grant,  transfer or permit to
lapse any rights of material value with respect to the Transferred Assets;

     (d) not assign,  modify,  cancel,  otherwise  impair or permit to lapse any
Assumed  Contract except for Assumed  Contracts other than the Facilities  Lease
and the Hangar Lease which Southwest in good faith does not deem to be material;

     (e) comply in all  material  respects  with all  provisions  of any Assumed
Contract  to which such Seller is a party  except for  provisions  contained  in
Assumed  Contracts  other than the  Facilities  Lease and the Hangar Lease which
Southwest in good faith does not deem to be material;

     (f) comply with  applicable  Laws that relate to or affect any  Transferred
Assets or such Sellers' ownership,  lease and/or use thereof,  including but not
limited  to  the  timely,  complete  and  correct  filing  of  all  reports  and
maintenance of all records required by any Governmental Authority to be filed or
maintained;

     (g)  except as  Southwest  may  otherwise  agree,  having due regard to the
preservation of the Transferred Assets and business related thereto, continue to
use and  operate  the Midway  Gates and all other  Transferred  Assets  used and
operated by Sellers as of the Execution Date in a manner  consistent  with prior
practice,  applicable  agreements and in accordance  with  applicable  Laws, and
shall not enter into any  contract nor  otherwise  act, nor suffer or permit any
other  Person to act,  to  restrict,  interfere  with or prevent the use of such
Midway Gates or other Transferred Assets;

                                       21
<PAGE>

     (h) notify Southwest in writing of any incidents or accidents  occurring on
or after the Execution  Date involving any  Transferred  Assets that resulted or
could  reasonably  be  expected  to  result  in  damages  or losses in excess of
$50,000;

     (i)  notify  Southwest  in  writing  of the  commencement  of any  material
litigation  against either Seller or any litigation with respect to or involving
the Transferred  Assets or of the existence of any adverse  business  conditions
arising  on or after  the  Execution  Date  threatening  the  continued,  normal
business operations of Sellers,  including without limitation,  operation of the
Transferred Assets, or of any agreement,  consent or order of the FAA, DOT, City
of  Chicago,  or  Chicago  City  Council  involving  any  Seller  or  any of the
Transferred Assets; and

     (j) not take any action,  or fail to take  action,  which action or failure
could result in the loss of any of the Midway Gates,  the Midway Hangar,  or any
asset  which  is  or  reasonably  could  be  deemed  material  included  in  the
Transferred Assets.

          Section 8.3 Notification.

     (a) Sellers shall notify Southwest,  and Southwest shall notify Sellers, of
any litigation,  arbitration or administrative  proceeding  pending or, to their
knowledge,  threatened,  against  any Seller or  Southwest,  as the case may be,
which  challenges  or would  materially  affect  the  transactions  contemplated
hereby.

     (b) Sellers shall provide  prompt written notice to Southwest of any change
in any of the information  contained in the  representations and warranties made
by Sellers in Article VI hereof or any exhibits or schedules  referred to herein
or attached hereto and shall promptly  furnish any  information  which Southwest
may reasonably request in relation to such change; provided,  however, that such
notice  shall  not  operate  to  cure  any  breach  of the  representations  and
warranties  made by Sellers in Article VI hereof or any  exhibits  or  schedules
referred to herein or attached hereto.

     Section 8.4 No  Inconsistent  Action.  Neither  Southwest nor either Seller
shall take any action which is  materially  inconsistent  with their  respective
obligations under this Agreement.

     Section 8.5 Satisfaction of Conditions.  Prior to the Closing,  each of the
parties shall use best  reasonable  efforts with due diligence and in good faith
to satisfy promptly all conditions required hereby to be satisfied by such party
in order to expedite the consummation of the transactions contemplated hereby.

     Section 8.6 [This Section Reserved.]

     Section 8.7 [This Section Reserved.]

     Section 8.8 Filings. As promptly as practicable after the execution of this
Agreement, each party shall:

                                       22
<PAGE>

     (a) use its best  reasonable  efforts to obtain,  and to cooperate with the
other party in obtaining, all authorizations,  consents, orders and approvals of
any  Governmental  Authority that may be or become  necessary in connection with
the consummation of the transactions contemplated by this Agreement;

     (b) take all  reasonable  actions to avoid the entry of any order or decree
by any Governmental  Authority  prohibiting the consummation of the transactions
contemplated  hereby and shall furnish to the other all such  information in its
possession as may be necessary for the  completion  of the  notifications  to be
filed by the other.  Sellers shall pay and bear the cost of filing fees that may
be required in connection with any and all such filings; provided, however, that
in the event any filings are required under the HSR Act, Southwest shall pay and
bear the cost of filing fees with respect to such HSR Act filing;

     (c) respond as promptly as practicable  to any inquiries  received from the
Federal Trade Commission and the Antitrust Division of the Department of Justice
for  additional   information  or  documentation  and  respond  as  promptly  as
practicable  to all  inquires  and  requests  received  from any State  Attorney
General or other  Governmental  Authority in connection with antitrust  matters.
Each of the Sellers and Southwest  shall use all  reasonable  efforts to resolve
such obligations,  if any, as may be asserted by any Governmental Authority with
respect to the  transactions  contemplated  by this  Agreement and the Ancillary
Agreements  under the HSR Act, the Sherman Act, as amended,  the Clayton Act, as
amended,  and the Federal Trade  Commission Act, as amended  (collectively,  the
"Antitrust  Laws").  In connection with the filings under the Antitrust Laws, if
any administrative or judicial action or proceeding is instituted (or threatened
to be instituted) challenging any transaction contemplated by this Agreement and
the Ancillary  Agreements as violative of any Antitrust Law, each of the Sellers
and  Southwest  shall  cooperate  and us all  reasonable  efforts to contest and
resist any such action or proceeding  and to have vacated,  lifted,  reversed or
overturned  any  Order,  that is in  effect  and  that  prohibits,  prevents  or
restricts  consummation of the  transactions  contemplated by this Agreement and
the Ancillary  Agreements,  unless either party, in good faith,  determines that
litigation  is not in  their  respective  best  interests.  Notwithstanding  the
provisions of the immediately preceding sentence, it is expressly understood and
agreed  that  neither the Sellers nor  Southwest  shall have any  obligation  to
litigate or contest any  administrative  or judicial action or proceeding or any
Order; and

     (d) in complying with this Section 8.8 and not withstanding anything to the
contrary  in  Section  8.8(a),  (b) or  (c),  neither  Southwest  nor any of its
Affiliates  shall be  required  to (i)  divest or commit to divest any assets or
discontinue  or modify or commit to  discontinue or modify any of its operations
or (ii) accept or become subject to any condition or requirement unacceptable to
Southwest in its reasonable discretion.  Except as provided in this Section 8.8,
nothing in this Agreement  shall be deemed to require  Southwest to commence any
litigation  against  any  Governmental  Authority  in  order to  facilitate  the
consummation  of any of the  transactions  contemplated by this Agreement or the
Ancillary  Agreements  or to  defend  against  any  litigation  brought  by  any
Governmental  Authority  seeking  to  prevent  the  consummation  of  any of the
transactions  contemplated  by this  Agreement or the Ancillary  Agreements.  No
party shall withdraw any such filing or submission  prior to the  termination of
this Agreement  without the written consent of the other parties.  Southwest and
Sellers  agree that the filing fee  required to be paid in  connection  with the
filing under any regulatory  filings shall be paid by Sellers and if advanced by
Southwest,  Southwest shall subtract such filing fees from the Acquisition Price
in accordance with Section 4.6.

                                       23
<PAGE>

     Section 8.9 All  Reasonable  Efforts.  Subject to the terms and  conditions
herein  provided,  each of the parties hereto agrees to use its best  reasonable
efforts to take,  or cause to be taken,  all  action,  and to do, or cause to be
done as promptly as practicable, all things necessary, proper or advisable under
applicable  laws and regulations to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement,  including, without
limitation,  the  prompt  preparation  by  Sellers  of all  pleadings,  motions,
notices,  statements,  schedules,   applications,   reports,  and  other  papers
reasonably necessary for administration of the Chapter 11 Cases.

     Section 8.10 Further  Assurances.  From time to time following the Closing,
Sellers  shall  execute,  acknowledge  and deliver  such  additional  documents,
instruments of  conveyance,  transfer and assignment or assurances and take such
other action as Southwest may  reasonably  request to more  effectively  assign,
convey and  transfer  to  Southwest,  and fully vest  title in  Southwest,  with
respect to the Transferred Assets.

     Section 8.11 Publicity.  Subject to duties of the parties under  applicable
securities  laws,  the parties  hereto  shall  consult with each other and shall
mutually agree (the agreement of each party not to be  unreasonably  withheld or
delayed)  upon the  content  and  timing of any press  release  or other  public
statements with respect to the  transactions  contemplated by this Agreement and
shall not issue any such press release or make any such public  statement  prior
to such consultation and agreement,  except as may be required by applicable law
or by obligations pursuant to any listing agreement with any securities exchange
or any stock exchange regulations as advised by counsel; provided, however, that
each party  shall  give prior  notice to the other  parties of the  content  and
timing  of any  such  press  release  or  other  public  statement  required  by
applicable  law or by  obligations  pursuant to any listing  agreement  with any
securities exchange or any stock exchange regulations.

     Section 8.12 [This Section Reserved.]

     Section 8.13 Bankruptcy Court Approval.

     (a)  Sellers  have  filed a motion or  motions  with the  Bankruptcy  Court
seeking entry of the Approval Order (as defined in Section  8.13(d))  approving,
inter alia, the sale of the Transferred Assets to Southwest pursuant to sections
363 and 365 of the Bankruptcy Code. Southwest and Sellers agree to make promptly
any  filings,  to take all actions and to use their best  reasonable  efforts to
obtain entry of the Approval  Order and any and all other  approvals  and orders
necessary or appropriate for the consummation of the  transactions  contemplated
hereby.

     (b) Prior to entry of the  Approval  Order,  Sellers  and  Southwest  shall
accurately  inform the Bankruptcy  Court of all material facts of which they are
aware relating to this Agreement and the transactions contemplated hereby.

     (c) If the  Approval  Order or any  other  orders of the  Bankruptcy  Court
relating to this  Agreement  shall be appealed by any Person (or a petition  for
certiorari  or motion for  rehearing or  reargument  shall be filed with respect
thereto),  Sellers agree to take all steps as may be reasonable and  appropriate
to defend  against  such appeal,  petition or motion,  and  Southwest  agrees to
cooperate  in such  efforts,  and  each  party  hereto  agrees  to use its  best
reasonable efforts to obtain an expedited  resolution of such appeal;  provided,
however, that nothing herein shall preclude the parties hereto from consummating
the  transactions  contemplated  herein if the  Approval  Order  shall have been
entered and has not been stayed and Southwest, in its sole discretion, waives in
writing the requirement that the Approval Order be a Final Order.

                                       24
<PAGE>

     (d)  Southwest and Sellers  agree to use their best  reasonable  efforts to
cause the Bankruptcy Court to enter an order in substantially  the form attached
hereto as Exhibit E (with such  changes  thereto as Southwest  shall  approve or
request in its sole discretion,  the "Approval Order") approving this Agreement,
the sale,  assignment,  transfer and  conveyance  of the  Transferred  Assets to
Southwest  pursuant to this  Agreement  and the Ancillary  Agreements  and other
transactions contemplated by this Agreement, pursuant to sections 363 and 365 of
the Bankruptcy Code.

     (e)  Sellers   shall   cooperate   reasonably   with   Southwest   and  its
representatives  in  connection  with  the  Approval  Order  and the  bankruptcy
proceedings in connection therewith.  Such cooperation shall include, but not be
limited  to,  consulting  with  Southwest  at  Southwest's   reasonable  request
concerning the status of such proceedings and providing Southwest with copies of
requested  pleadings,  notices,  proposed orders and other documents relating to
such  proceedings  as soon as  reasonably  practicable  prior to any  submission
thereof to the Bankruptcy  Court.  Sellers  further  covenant and agree that the
terms of any plan submitted by Sellers to the Bankruptcy  Court for confirmation
shall not conflict with, supersede,  abrogate,  nullify,  modify or restrict the
terms of this  Agreement  and the rights of Southwest  hereunder,  or in any way
prevent or interfere with the  consummation  or performance of the  transactions
contemplated by this Agreement  including,  without limitation,  any transaction
that is contemplated by or approved pursuant to the Approval Order.

     Section 8.14 Specific  Enforcement  of Covenants.  The parties  acknowledge
that  irreparable  damage would occur in the event that any of the covenants and
agreements in this Agreement were not timely  performed in accordance with their
specific terms or were otherwise breached.  It is accordingly agreed that either
party shall be entitled to an injunction or  injunctions  to prevent or cure any
breach of such covenants and agreements  and to enforce  specifically  the terms
and  provisions  thereof,  this being in addition to any other remedy to which a
party  may be  entitled  at law or in  equity,  it  being  understood  that  the
Bankruptcy  Court  has  exclusive  jurisdiction  over  such  matters;  provided,
however,  that in the event the  Bankruptcy  Court  abstains from  exercising or
declines to exercise  jurisdiction  with  respect to any matter  provided for in
this sentence or is without  jurisdiction,  such abstention,  refusal or lack of
jurisdiction shall have no effect upon and shall not control,  prohibit or limit
the exercise of  jurisdiction of any other court having  competent  jurisdiction
with respect to any such matter.

     Section 8.15 Due  Diligence.  Southwest  has  completed  its due  diligence
review of the Transferred Assets.

     Section 8.16 [This Section Reserved.]

     Section 8.17 [This Section Reserved.]

     Section 8.18 [This Section Reserved.]

                                       25
<PAGE>

     Section 8.19 Codeshare Alliance  Agreement.  On or before the Closing Date,
Southwest  and  Sellers  shall  enter  into  an  interline   codeshare  alliance
arrangement  respecting  air  transportation  services  to and from Midway on or
about February 1, 2005 and airports in the cities set forth in the agreement, as
facilities  issues and ground  service  issues are  resolved at each  airport to
allow for  consistency  of onboard  and  airport  experiences  by  customers  of
Southwest  and Sellers  (the  "Codeshare  Agreement").  The initial  term of the
Codeshare  Agreement  shall  be one  (1)  year,  which  initial  term  shall  be
automatically  converted into an eight (8) year term (seven (7) addition  years)
upon the Bankruptcy Resolution Date.

     Section 8.20 [This Section Reserved.]

     Section 8.21 Midway Ticket Sales.

     (a) Sellers and Southwest shall enter into an agreement (the "Midway Ticket
Sales  Agreement")  with  respect to  pre-Closing  ticket  sales made by Sellers
(exclusive of  non-revenue,  credit  voucher,  miscellaneous  charge orders etc.
and/or  frequent  flyer tickets) prior to Closing for flights which are both (i)
cancelled on account of the transactions  contemplated hereby and (ii) to cities
to which Southwest operates regularly  scheduled flights,  to be flown after the
Transition Period (the "ATA Pre-Sold Tickets").


     (b) The Midway Ticket Sales Agreement will provide that:


          (i) ATA will assign to Southwest all its right,  title and interest in
     and to  (including  without  limitation,  the right to  receive  the Ticket
     Revenue  of)  all  ATA  Pre-Sold   Tickets  to  the  extent  the  same  are
     subsequently  reaccommodated  by Southwest on Southwest  operated  flights,
     including  all  amounts  due to ATA in respect  thereof  from  credit  card
     companies or credit card processors or travel agents;

          (ii) Southwest will reaccommodate in accordance with the terms of this
     Section 8.21 ATA Pre-Sold Tickets on flights operated by it;

          (iii)  Southwest  will be entitled to the Net Ticket  Revenue for each
     such  ATA  Pre-Sold  Ticket  reaccommodated  by  Southwest,  which  will be
     adjusted to ensure that;

          (iv)   Southwest   will   receive   its   applicable   fare   for  the
     reaccommodation  based on the seat inventory fare buckets  available at the
     time of  reaccommodation,  regardless of the fare  associated  with the ATA
     Pre-Sold Ticket. Southwest will bill to or remit to ATA any such difference
     between the ATA and Southwest fare as necessary; and

          (v) Any re-accommodation or refunds of any tickets sold by Sellers and
     not  reaccommodated by Southwest will be the  responsibility of Sellers and
     will be settled separately by ATA under ATA's interline agreements.

                                       26
<PAGE>

As used in this Section 8.21,  the term "Ticket  Revenue" means the gross amount
of an ATA Pre-Sold Ticket, less any credit card merchant fee or charge or credit
card processing  company fee paid by ATA with respect to any credit card payment
of such gross ticket amount;  and "Net Ticket Revenue" means the Ticket Revenue,
less travel agency commissions  actually paid by ATA with respect to the sale of
that ticket,  and less all  transportation and other taxes and governmental fees
and  charges  (including  TSA fees) and  passenger  facility  charges  which are
included in the gross amount of that ticket which shall be the responsibility of
ATA.

     Section 8.22 [This Section Reserved.]

     Section  8.23  Assurances  Regarding  Renegotiation  of Assumed  Contracts.
Southwest  may, up until  Closing,  and Sellers shall assist and cooperate  with
Southwest to,  renegotiate  any Assumed  Contract with the  applicable  Lessors,
lenders, or other applicable third parties, respectively.

     Section 8.24 [This Section Reserved.]

                                   ARTICLE IX
                             POST-CLOSING COVENANTS

     Section 9.1  Maintenance of Books and Records.  Sellers and Southwest shall
preserve until the seventh  anniversary of the Closing Date (or, with respect to
any Sellers, until such time as such Seller is liquidated) all records possessed
by such party relating to the ownership, leasing or operation of the Transferred
Assets  prior to the  Closing  Date.  After the Closing  Date,  where there is a
legitimate  purpose,  such party shall provide the other party with access, upon
prior reasonable  written request  specifying the need therefor,  during regular
business  hours, to (i) the relevant  officers and employees of such party,  and
(ii) the books of account and records of such party,  but, in each case, only to
the extent relating to the,  ownership,  leasing or operation of the Transferred
Assets prior to the Closing  Date,  and the other party and its  representatives
shall  have the  right to make  copies  of such  books  and  records;  provided,
however,  that the foregoing  right of access shall not be exercisable in such a
manner as to interfere  unreasonably  with the normal operations and business of
such party;  and further  provided  that, as to so much of such  information  as
constitutes  trade secrets or confidential  business  information of such party,
the requesting party and its representatives  shall use due care to not disclose
such  information  except (i) as  required by Law,  (ii) with the prior  written
consent of such party,  which consent  shall not be  unreasonably  withheld,  or
(iii) where such  information  becomes  available  to the public  generally,  or
becomes generally known to competitors of such party, through sources other than
the requesting party and its  representatives.  Such records may nevertheless be
destroyed by a party if such party sends the other party  written  notice of its
intent to destroy  records,  specifying with  particularity  the contents of the
records to be destroyed.  Such records may then be destroyed  after the 30th day
following  delivery  of such  notice  unless  the  other  party  objects  to the
destruction, in which case the party seeking to destroy the records shall either
agree to retain such records or to deliver such records to the objecting party.

     Section 9.2 Confidentiality.  Each party hereto acknowledges that the other
parties have legitimate and continuing  proprietary  interests in the protection
of their confidential information and that the parties have invested substantial
sums and will  continue  to invest  substantial  sums to develop,  maintain  and
protect such  confidential  information.

                                       27
<PAGE>

 Prior to and after the  Closing,  each
party agrees not to disclose,  furnish or make  accessible  to anyone or use for
its own benefit (other than as  contemplated  hereby) any trade secrets or other
confidential  or  proprietary  information  of another party  relating to either
Seller,  Southwest  and/or  their  respective  businesses  or the other  parties
including, but not limited to, information obtained by or revealed to such party
during any investigations, negotiations or review relating to this Agreement and
any other document  contemplated hereby or thereby or any past or future actions
taken in  connection  with,  pursuant  to, in  accordance  with,  or under  this
Agreement,  including  without  limitation any business plans,  marketing plans,
financial  information,  strategies,  systems,  programs,  methods and  computer
programs;  provided,  however, that such protected information shall not include
(i)  information  required to be  disclosed  by law,  legal or judicial  process
(including a court order, subpoena or order of a Governmental  Authority) or the
rules of any stock exchange,  (ii) information  that is or becomes  available to
the disclosing party on a non-  confidential  basis from a source other than the
other  parties  and not  obtained  in  violation  of this  Agreement,  and (iii)
information  known to the  public or  otherwise  in the  public  domain  without
violation of this Section 9.2;  provided,  further,  that this Section 9.2 shall
not in any way limit the  disclosure of information by Sellers (a) in connection
with the  prosecution of the Chapter 11 Cases to the extent  necessary to comply
with  applicable  Law or with  respect  to  information  of the  Sellers  or (b)
regarding  Sellers  (i) to other  bidders  or  potential  bidders  to the extent
specifically  permitted by this Agreement or (ii)  following the  termination of
this Agreement.

     Section 9.3 Exit Credit  Facility.  On the Effective Date,  Southwest shall
provide  the Sellers an exit credit  facility in  accordance  with the terms and
subject to the conditions described in Exhibit F hereto.

     Section  9.4  Transition  Operations.  In order to provide for a smooth and
orderly transition of Sellers'  ----------------------  operations at the Midway
Gates and use of the Midway Hangar to Southwest,

     (a) Sellers agree to continue during a transition period from and after the
date of the  transfer  of the  respective  Transferred  Assets  pursuant to this
Agreement  until  such  time as ATA's  operations  at the  Midway  Gates  can be
transferred  to  Southwest,  which shall occur not later than  February 1, 2005,
unless otherwise agreed by the Parties (the "Transition  Period"), to operate at
the Midway Gates pursuant to a Permit Agreement  between  Southwest and ATA (the
"Permit  Agreement"),  which  shall be  subject to the  approval  of the City of
Chicago to the extent  required in the Facilities  Lease.  The Permit  Agreement
shall  provide  for rent and  expenses  to be paid by Sellers on a  pass-through
basis and contain such other terms as  Southwest  and Sellers  shall  agree.  At
Southwest's  option, a representative  of Southwest may be stationed at Sellers'
headquarters  and at Sellers'  Chicago  Command Center to coordinate  operations
between  Southwest  and  Sellers  during the  Transition  Period.  Sellers  will
cooperate  reasonably and in good faith with such representatives and provide an
appropriate office,  telephone and computer facilities for such representatives'
use.  Notwithstanding  the assignment and transfer of the Transferred  Assets at
Closing,  Sellers will nevertheless during the entire Transition Period bear and
pay all costs of  operation  of the  business  associated  with the  Transferred
Assets, including without limitation, all rentals and all other amounts due, and
perform all obligations  accruing or arising under, the Assumed Contracts during
and with respect to the Transition Period.

                                       28
<PAGE>

     (b) Sellers  agree to continue  ATA's use of the Midway  Hangar  during the
Transition  Period and Southwest agrees to permit Sellers to continue to use one
(1) bay of the Midway Hangar and related Midway Hangar Property (or a reasonably
acceptable  replacement  bay) for a period of three  (3)  years  from end of the
Transition Period (the "Hangar Use Period"), pursuant to a Use Agreement between
Southwest and ATA (the "Use Agreement"),  which shall be subject to the approval
of the City of Chicago  to the extent  required  in the  Hangar  Lease.  The Use
Agreement  shall  provide  for  rent and  expenses  to be paid by  Sellers  on a
pass-through  basis for the use of the bay  during  the  Transition  Period  and
Hangar Use Period and contain  such other terms as Southwest  and Sellers  shall
agree.  Southwest  will  work with  Sellers  in good  faith to find a  permanent
solution for ATA's hangar needs as a result of the transactions  contemplated by
this Agreement.

     Section 9.5 Plan of  Reorganization.  The Sellers  will  propose  (and seek
confirmation  of) a plan  of  reorganization  with  respect  to the  Sellers  in
connection with the Chapter 11 Cases consistent with the plan of  reorganization
described in Exhibit F hereto.

     Section  9.6 Equity  Investment.  On the  Effective  Date,  Southwest  will
purchase, through a cash investment of $30,000,000,  shares of non-voting senior
convertible  preferred  equity  of  Holdings  in  accordance  with the terms and
subject to the conditions described in Exhibit F hereto.



                                   ARTICLE X
                                EMPLOYEE MATTERS

     Without  undertaking  any  obligation  to hire  any  employee  or  group of
employees of Sellers, to the extent Southwest requires any employees in addition
to  those  already  employed  by  Southwest  in  relation  to  operation  of the
Transferred  Assets and to the extent  practical and consistent with its outside
hiring needs and standards,  Southwest agrees to undertake good faith efforts to
interview and consider  individual  qualified  existing employees of Sellers who
were  displaced  as a result  of the  transactions  contemplated  herein  as new
employees of Southwest on a first-priority basis.

                                   ARTICLE XI
                                  RISK OF LOSS

     Section  11.1 Risk of Loss on Sellers.  Sellers  shall bear the risk of any
loss or damage to any  Transferred  Assets at all times prior to the delivery of
physical  possession  thereof to Southwest at Closing in accordance with Section
5.3.  Sellers shall promptly notify Southwest if any such loss or damage occurs.
If any such Transferred  Asset is damaged on or after the Execution Date but not
destroyed  then  Sellers  promptly  shall fully repair such  Transferred  Asset;
provided,  however,  that such repair  obligation shall not exist if the cost of
repair would be  sufficiently  large that the only  reasonable  course of action
would be to treat such  Transferred  Asset as a total loss.  In the event of any
total loss (or loss treated as a total loss in accordance  with the  immediately
prior  sentence)  of any  Transferred  Asset,  on or after  the  Execution  Date
Southwest may elect to either (i) have paid over to it all insurance proceeds to
which  Sellers  may be  entitled  in  respect  of such loss or (ii)  reduce  the
Acquisition  Price in accordance  with Section 4.4.

                                       29
<PAGE>

 If any loss or damage to any
tangible   Transferred   Asset  occurs  following  the  Closing  at  which  such
Transferred  Asset  was  conveyed  to  Southwest  but prior to the  delivery  of
physical  possession  thereof to Southwest in accordance  with Section 5.3, then
Sellers  promptly shall pay or cause the  applicable  Seller to pay to Southwest
the greater of (i) the aforesaid  insurance proceeds or (ii) the amount by which
the Acquisition  Price would have been reduced in accordance with Section 4.3(a)
if such loss or damage had occurred prior to the Closing.

                                  ARTICLE XII
                       FURTHER AGREEMENTS AND TERMINATION

     Section 12.1 [This Section Reserved.]

     Section 12.2 [This Section Reserved.]

     Section  12.3  Termination.  This  Agreement  may  be  terminated  and  the
transactions  contemplated  hereby  may be  abandoned  at any time  prior to the
Closing:

     (a) by mutual consent of each of Sellers and Southwest;

     (b) by either of Sellers or Southwest (provided that such terminating party
is not then in material breach of any provision of this Agreement):

          (i) if the Bankruptcy  Court by Final Order approves,  or under any of
     other circumstances there is, a sale of all or a substantial portion of the
     Transferred  Assets,  or issuance of all or substantially all of the equity
     securities of either  Seller,  to a Person (or group of Persons) other than
     Southwest or an Affiliate  of  Southwest or the  Bankruptcy  Court by Final
     Order  approves a merger,  consolidation  or  corporate  reorganization  of
     either  Sellers  following  which  neither  Southwest  nor an  affiliate of
     Southwest,  is an  Affiliate  of the merged,  consolidated  or  reorganized
     entity;

          (ii) if a Governmental Authority shall have issued an order, or ruling
     or taken any other action (which order, decree or ruling the parties hereto
     shall use their best reasonable  efforts to lift), in each case permanently
     restraining,   enjoining  or   otherwise   prohibiting   the   transactions
     contemplated  by this  Agreement  and such order,  decree,  or other action
     shall have become final and non-appealable; or

          (iii) if the Closing shall not have occurred on or before  January 31,
     2005.

          (c) by  Southwest  (provided  that  Southwest  is not then in material
     breach of any provision of this Agreement):

          (i)  two  (2)  Business   Days  after  the  closing  of  one  or  more
     transactions by which all of the Transferred  Assets have been  transferred
     or disposed of to a Person (or group of Persons) other than Southwest or an
     affiliate of Southwest;

                                       30
<PAGE>

          (ii)  ninety  (90) days after the entry of an order of the  Bankruptcy
     Court  approving  one  or  more   transactions  for  the  transfer  of  the
     Transferred  Assets to a Person (or group of Persons)  other than Southwest
     or an affiliate of Southwest;

          (iii) [This Section Reserved.]

          (iv) if the  Approval  Order has not been  entered  by the  Bankruptcy
     Court either before  execution of this  Agreement or within fifty (50) days
     of execution of this Agreement,  and as of the time of such  termination of
     this  Agreement,  the Approval Order has not been entered by the Bankruptcy
     Court;

          (v) if a material  default  or  material  breach  shall be made by any
     Seller  with  respect  to the  due  and  timely  performance  of any of its
     covenants or agreements  contained  herein,  or if its  representations  or
     warranties contained in the Agreement shall have become inaccurate (without
     giving effect to any materiality or Material Adverse Effect  qualifications
     or exceptions  contained  therein) and such  inaccuracy has had or would be
     reasonably  likely to have a Material Adverse Effect,  if such default,  or
     inaccuracy has not been cured or waived within 30 days after written notice
     to such Seller  specifying,  in reasonable  detail,  such claimed  default,
     breach or inaccuracy and demanding its cure or satisfaction;

          (vi) [This Section Reserved.]; or

          (vii) if an event or events or circumstance  shall have occurred since
     the Execution Date which,  independently  or together with any other event,
     events or  circumstance  that have  occurred  or are  reasonably  likely to
     occur, have or are reasonably likely to have a Material Adverse Effect.

          (d) by Sellers  (provided that Sellers are not then in material breach
     of any provision of this Agreement);

          (i) if a material  default or breach shall be made by  Southwest  with
     respect  to the due  and  timely  performance  of any of its  covenants  or
     agreements  contained  herein,  or if  its  representations  or  warranties
     contained in the Agreement shall have become inaccurate and such inaccuracy
     has had or would be reasonably likely to have a Southwest  Material Adverse
     Effect, if such default,  breach or inaccuracy has not been cured or waived
     within 30 days after written notice to Southwest specifying,  in reasonable
     detail,  such claimed default,  breach or inaccuracy and demanding its cure
     or satisfaction;

          (ii) [This Section Reserved.]

          (iii) [This Section Reserved.]

          (iv) if the  Approval  Order has not been  entered  by the  Bankruptcy
     Court either before  execution of this  Agreement or within fifty (50) days
     of execution of this Agreement,  and as of the time of such  termination of
     this  Agreement,  the Approval Order has not been entered by the Bankruptcy
     Court.

                                       31
<PAGE>

     Section  12.4  Procedure  and  Effect  of  Termination.  In  the  event  of
termination of this Agreement  pursuant to Section 12.3,  written notice thereof
shall  forthwith  be given  to the  other  parties  to this  Agreement  and this
Agreement  shall  terminate  (subject to the  provisions  of this Section  12.4)
without  further  action by any of the  parties  hereto.  If this  Agreement  is
terminated pursuant to Section 12.3 as provided herein:

     (a) upon request therefor,  each party shall redeliver all documents,  work
papers  and other  material  of any other  party  relating  to the  transactions
contemplated  hereby,  whether obtained before or after the execution hereof, to
the party furnishing the same; and

     (b) no party hereto shall have any  liability or further  obligation to any
other party to this Agreement  resulting from such  termination  except (i) that
the  provisions  of this Section 12.4 and Section 9.2 shall remain in full force
and effect and (ii) no party waives any claim or right against a breaching party
to the extent that such termination results from the breach by a party hereto of
any of its  representations,  warranties,  covenants or agreements  set forth in
this Agreement.

                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS

     Section  13.1  Notices.  All notices and other  communications  required or
permitted  hereunder shall be in writing and, unless otherwise  provided in this
Agreement,  will be deemed to have been duly given when  delivered  in person or
when dispatched by electronic  facsimile transfer  (confirmed in writing by mail
simultaneously dispatched) or one business day after having been dispatched by a
nationally  recognized overnight courier service to the appropriate party at the
address specified below:

     (a) If to Sellers, to:

     ATA Holdings Corp.
     ATA Airlines, Inc.
     7337 West Washington Street
     Indianapolis, Indiana  46231
     Attention.:  Mr. Gilbert F. Viets
                  Executive Vice President and Chief Restructuring Officer
     Facsimile: (317) 282-7091
     mail: Gilbert.Viets@IflyATA.com

                                       32
<PAGE>

     with a copy to:

     Baker & Daniels (which shall not constitute notice)
     300 N. Meridian Street, Suite 2700
     Indianapolis, Indiana  46204
     Attention:  Stephen A. Claffey, Esq.
     Facsimile:  (317) 237-1000
     Email: steve.claffey@bakerd.com

     (b) If to Southwest, to:
     Southwest Airlines Co.
     P.O. Box 36611
     2702 Love Field Dr.
     Dallas, Texas  75235
     Attention:  Laura Wright
                 Senior Vice President - Finance and Chief Financial Officer
     Facsimile:  (214) 792-4022
     Email: laura.wright@wnco.com

     and
     Attention:   Deborah Ackerman
                  Vice President - General Counsel
     Facsimile:  (214) 792-5151
     Email: debby.ackerman@wnco.com

     with a copy to:
     Bell, Boyd & Lloyd LLC
     70 West Madison Street, Suite 3200
     Chicago, Illinois  60602-4207
     Attention:  David F. Heroy, Esq.
     Facsimile:  (312) 827-8010
     Email:  DHeroy@bellboyd.com


or to such other  address or  addresses  as any such party may from time to time
designate as to itself by like notice.

     Section 13.2  Actions by Sellers.  Where any  provision  of this  Agreement
indicates  that either Seller shall take any  specified  action (or refrain from
taking any  specified  action) or requires  either  Seller to take any specified
action (or to refrain from taking any  specified  action),  then,  Sellers shall
cause such Seller to take such action (or to refrain from taking such action, as
applicable). Whenever any provision of this Agreement refers to the knowledge or
an obligation or liability of Sellers,  such provision  shall be deemed to refer
to the  knowledge,  obligation or liability or either Seller,  individually,  or
both Sellers, collectively, jointly, or severally.

                                       33
<PAGE>

     Section 13.3 Expenses.  Except as otherwise expressly provided herein or in
Exhibit F hereto,  each  party  hereto  shall pay any  expenses  incurred  by it
incident to this Agreement and in preparing to consummate and  consummating  the
transactions provided for herein.

     Section 13.4  Successors and Assigns.  This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their  respective  successors
(including, without limitation, any trustee appointed for Sellers) and permitted
assigns, but shall not be assignable or delegable by any party without the prior
written  consent of the other  party;  provided,  however,  that upon  notice to
Sellers  delivered in  accordance  with Section  13.1,  Southwest  may assign or
delegate any or all of their rights or  obligations  under this Agreement to any
Affiliate thereof or to any Person that directly or indirectly  acquires,  after
the  Closing,  all or  substantially  all of  the  assets  or  voting  stock  of
Southwest,  but such assignment or delegation shall not relieve Southwest of any
obligation hereunder.

     Section  13.5  Waiver.  Southwest  may, by written  notice to Sellers,  and
Sellers (for itself and on behalf of all other  Sellers) may, by written  notice
to Southwest,  (a) extend the time for  performance of any of the obligations of
the  other  party  under  this  Agreement,  (b) waive  any  inaccuracies  in the
representations  or warranties of the other party  contained in this  Agreement,
(c) waive  compliance with any of the conditions or covenants of the other party
contained in this  Agreement,  or (d) waive or modify  performance of any of the
obligations of the other party under this Agreement;  provided, however, that no
such party may,  without the prior written  consent of the other party,  make or
grant such extension of time,  waiver of inaccuracies or compliance or waiver or
modification  of performance  with respect to its  representations,  warranties,
conditions  or  covenants  hereunder.  Except  as  provided  in the  immediately
preceding  sentence,  no action taken pursuant to this Agreement shall be deemed
to  constitute  a waiver of  compliance  with any  representations,  warranties,
conditions  or  covenants  contained in this  Agreement  or shall  operate or be
construed  as a  waiver  of any  subsequent  breach,  whether  of a  similar  or
dissimilar nature.

     Section 13.6 Entire Agreement;  Disclosure Schedules. This Agreement, which
includes the  schedules and exhibits  hereto,  supercedes  any other  agreement,
whether  written or oral,  that may have been made or entered  into by any party
relating to the matters contemplated hereby and constitutes the entire agreement
by and among the parties hereto with respect to the Transferred Assets.

     Section 13.7 Amendments, Supplements, Etc. This Agreement may be amended or
supplemented  at any time by  additional  written  agreements as may mutually be
determined by Southwest  and Sellers to be necessary,  desirable or expedient to
further  the  purposes of this  Agreement  or to clarify  the  intention  of the
parties.

     Section  13.8 Rights of the Parties.  Nothing  expressed or implied in this
Agreement  is intended or shall be  construed  to confer upon or give any Person
other than the parties  hereto any rights or remedies under or by reason of this
Agreement or any transaction contemplated hereby.

     Section 13.9  Applicable  Law. This Agreement and the legal relations among
the parties  hereto shall be governed by and  construed in  accordance  with the
rules and substantive Laws of the State of New York, without regard to conflicts
of law provisions thereof.

                                       34
<PAGE>

     Section 13.10 Execution in Counterparts.  This Agreement and the agreements
referred to herein may be executed  in two or more  counterparts,  each of which
shall be deemed an original,  but all of which together shall constitute one and
the same agreement.  Any counterpart may be executed by facsimile  signature and
such facsimile signature shall be deemed an original. Transmission by telecopier
of an executed  counterpart of this Agreement  shall be deemed to constitute due
and sufficient delivery of such counterpart.



     Section 13.11 Titles and Headings.  Titles and headings to Sections  herein
are inserted for  convenience  of reference  only,  and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.

     Section 13.12 Invalid Provisions. If any provision of this Agreement (other
than  Section  5.4 or Article  XII of this  Agreement  or any part or  provision
thereof) is held to be illegal,  invalid,  or unenforceable under any present or
future Law, and if the rights or obligations  under this Agreement of Sellers on
the one hand  and  Southwest  on the  other  hand  will  not be  materially  and
adversely  affected  thereby,  (a) such provision shall be fully severable;  (b)
this  Agreement  shall be construed and enforced as if such illegal,  invalid or
unenforceable  provision  had never  comprised a part hereof;  (c) the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be  affected  by the  illegal,  invalid  or  unenforceable  provision  or by its
severance  from this  Agreement;  and (d) in lieu of such  illegal,  invalid  or
unenforceable  provision,  there shall be added  automatically as a part of this
Agreement a legal, valid, and enforceable  provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.

     Section 13.13  Transfers.  Southwest  and Sellers shall  cooperate and take
such action as may be  reasonably  requested  by the other in order to effect an
orderly  transfer of the Transferred  Assets with a minimum of disruption to the
operations and employees of the businesses of Southwest or Sellers.

     Section 13.14 Brokers.  Sellers hereby agree to indemnify and hold harmless
Southwest  against any liability,  claim,  loss,  damage or expense  incurred by
Sellers  relating  to any fees or  commissions  owed to any  broker,  finder  or
financial  advisor as a result of actions  taken by Sellers or any other Seller.
Southwest  hereby  agrees to indemnify  and hold  harmless  Sellers  against any
liability,  claim, loss, damage or expense incurred by Southwest relating to any
fees or commissions owed to any broker,  finder or financial advisor as a result
of actions taken by Southwest.

     Section  13.15  Exculpation.  Each Seller  agrees that none of  Southwest's
controlling persons, officers,  directors,  partners, agents, employees or other
representatives  shall be liable for any action heretofore or hereafter taken or
omitted  to be  taken  by  any of  them  in  connection  with  the  transactions
contemplated by this Agreement.

     Section  13.16  Principles  of   Interpretation.   Whenever  used  in  this
Agreement,  except  as  otherwise  expressly  provided  or  unless  the  context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders.  Unless otherwise specified,  the
terms "hereof,"  "herein," "hereby" and similar terms refer to this Agreement as
a whole (including the exhibits and schedules hereto),  and references herein to
Articles or Sections refer to Articles or Sections of this Agreement.

                                       35
<PAGE>

     Section 13.17 Survival.  The  representations,  warranties and covenants of
the Sellers and Southwest  contained in this Agreement shall survive the Closing
and the  consummation of the  transactions  contemplated  hereby until the third
anniversary of the Closing except that representations and warranties respecting
Environmental  Claims and Tax matters or claims shall  survive for the period of
the applicable statute of limitations in respect of such matters or claims.

     Section 13.18 Sellers Agreement to Indemnify.

     (a) Subject to the limitations  described in Section 12.4 in the event this
Agreement is  terminated by Southwest  pursuant to Section 12.3 hereof,  Sellers
hereby jointly and severally agree to indemnify and hold harmless  Southwest and
all officers, directors and employees and Affiliates of Southwest (collectively,
the "Indemnified Parties") from and against any and all liabilities, losses, and
damages and  attorney's  fees,  court costs,  and other  out-of-pocket  expenses
(collectively,  "Losses")  incurred or suffered by any Indemnified  Party to the
extent that the Losses arise by reason of, or result from (i) the failure of any
representation  or warranty of Sellers  contained in this Agreement to have been
true when made and as of the Closing  Date;  (ii) the breach of any  covenant or
agreement of the Sellers in this  Agreement or any Ancillary  Agreement to which
Sellers,  or either of them is a party, in each case to the extent not waived by
each of the Indemnified Parties;  (iii) the Retained  Liabilities;  and (iv) any
loss, damage, liability,  claim, demand or litigation made or brought against or
incurred by or imposed upon  Southwest or the  Transferred  Assets related to or
arising out of any acts, omissions, conditions, occurrences, liabilities, taxes,
duties,  claims,  demands or litigation existing or occurring on or prior to the
Closing Date,  including,  without limitation,  arising out of or related to any
matter disclosed on Schedule 6.16(a) hereto.

     (b) Any  Indemnified  Party seeking  indemnification  under this  Agreement
shall notify the Sellers of the basis upon which the  Indemnified  Party makes a
claim for  indemnification  hereunder  within a reasonable  time after Southwest
becomes  aware of the  incurrence  of any such Loss;  provided,  however that an
Indemnified Party's failure to give such notice, or to give such notice within a
reasonable time,  shall not adversely  affect such Indemnified  Party's right to
indemnification for such Loss.

     Section 13.19 Southwest Agreement to Indemnify.

     (a) Southwest  hereby agrees to indemnify and hold harmless Sellers and all
officers,  directors and employees and Affiliates of Seller  (collectively,  the
"Seller Indemnified Parties") from and against any and all liabilities,  losses,
and damages and attorney's fees, court costs, and other  out-of-pocket  expenses
(collectively, "Sellers' Losses") incurred or suffered by any Seller Indemnified
Party to the extent that the Sellers'  Losses arise by reason of, or result from
(i) the failure of any representation or warranty of Southwest contained in this
Agreement  to have been true when made and as of the Closing  Date;  or (ii) the
breach of any covenant or agreement of Southwest  contained  herein or contained
in any  Ancillary  Agreement  to the  extent  not  waived by each of the  Seller
Indemnified Parties.

                                       36
<PAGE>

     (b)  Any  Seller  Indemnified  Party  seeking  indemnification  under  this
Agreement shall notify Southwest of the basis upon which the Seller  Indemnified
Party makes a claim for indemnification hereunder within a reasonable time after
Seller  becomes aware of the  incurrence of any such  Sellers'  Loss;  provided,
however,  that a Seller  Indemnified  Party's  failure to give notice or to give
such notice  within a  reasonable  time shall not  adversely  affect such Seller
Indemnified Party's right to indemnification for such Sellers' Loss.

     Section 13.20 Setoff.  Southwest  shall have the right to set-off and apply
against all amounts due and owing from Southwest to Sellers under this Agreement
or any Ancillary  Agreements or other matter  pursuant to which Southwest is may
become  liable or indebted to the  Sellers,  any Losses  incurred or suffered by
Southwest or any amounts due Southwest from Sellers under any other provision of
this Agreement or any of the Ancillary Agreements.


                                       37
<PAGE>



     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.

                               SELLERS:

                               ATA HOLDINGS CORP.


                               By: /s/ Gilbert F. Viets
                               Name:   Gilbert F. Viets
                               Title:  Executive  Vice  President
                                       Chief  Restructuring Officer


                               ATA AIRLINES, INC.


                               By:      /s/ Gilbert F. Viets
                               Name:    Gilbert F. Viets
                               Title:   Executive Vice President
                                        Chief Restructuring Officer


                                SOUTHWEST:

                                SOUTHWEST AIRLINES CO.


                                By:      /s/ Gary C. Kelly
                                Name:    Gary C. Kelly
                                Title:   Chief Executive Officer






<PAGE>



                                     EXHIBIT A

                                   DEFINITIONS

     "Acquisition Price" shall have the meaning ascribed to such term in Section
4.1 of this Agreement.

      "Acquisition Price Offset Amount" shall have the meaning ascribed to
such term in Section 4.6 of this Agreement.

     "Affiliate"  shall mean with  respect to any Person,  any other person who,
directly or indirectly,  controls,  is controlled by, or is under common control
with that Person.

     "Agreement" shall have the meaning ascribed to such term in the preamble to
this Agreement.

     "Ancillary  Agreements"  shall mean the Facilities  Lease  Assignment,  the
Hangar  Lease  Assignment,  Bill of Sale,  Assumption  Agreement  and the  other
assignment  or  transfer  documents,   the  Assumed  Contracts,  and  the  other
agreements referred to herein to be delivered at or after the Closing.

     "Antitrust  Laws" shall have the  meaning  ascribed to such term in Section
8.8(c) of this Agreement.

     "Approval  Order"  shall have the meaning  ascribed to such term in Section
8.13(d) of this Agreement.

     "Assumed  Contracts"  shall  mean the  following  contracts  or  agreements
(provided  that  if  any  such  contracts  or  agreements  relate  not  only  to
Transferred  Assets  but also  other  assets,  then  only the  portions  of such
contracts and agreements  that relate  specifically  to the  Transferred  Assets
shall be deemed to be Assumed Contracts):

         (a) the Facilities Lease;

         (b) the Hangar Lease, and;

         (c) all other Contracts included in the Transferred Assets.

     "Assumed  Liabilities"  shall  have the  meaning  ascribed  to such term in
Section 3.1 of this Agreement.

         "Assumption Agreement" shall have the meaning ascribed to such term in
Section 5.2(c)(ii) of this Agreement.

     "ATA" shall have the meaning  ascribed to such term in the preamble of this
Agreement.

<PAGE>

     "ATA  Pre-Sold  Tickets"  shall have the  meaning  ascribed to such term in
Section 8.21 of this Agreement.

     "Bankruptcy  Code"  shall  have the  meaning  ascribed  to such term in the
Recitals of this Agreement.

     "Bankruptcy  Court"  shall have the  meaning  ascribed  to such term in the
Recitals of this Agreement.

     "Bankruptcy  Resolution  Date" means the date on which a Final Order of the
Bankruptcy Court has been entered dismissing,  closing or otherwise  terminating
the Chapter 11 Cases.

     "Bill of Sale"  shall  have the  meaning  ascribed  to such term in Section
5.2(a)(i) of this Agreement.

     "Business Day" shall mean a day other than a Saturday,  Sunday or other day
on which  commercial banks in Texas or Indiana are authorized or required by Law
to close.

     "Change" shall have the meaning  ascribed to such term in subsection (b) of
the definition of "Material Adverse Effect."

     "Chapter  11 Case" or  "Chapter 11 Cases"  shall mean the  voluntary  cases
commenced   by   Sellers   under   chapter  11  of  the   Bankruptcy   Code  and
administratively consolidated as In re ATA Holdings Corp. et al, 04-19866 (BHL).

     "Chicago  Construction  Loan" shall mean two separate  loans made to ATA by
the City of Chicago to fund a jet bridge extension at Midway Airport, such loans
having an outstanding  principal  amount as of October 1, 2004 of  approximately
$6,990,362.

     "Chicago  Construction  Loan  Indebtedness"  shall  mean the  approximately
$6,990,362  outstanding principal amount of unsecured construction loans made to
ATA to fund the jet bridge extension at Midway Airport (such  obligations  being
loan  advances in the  aggregate  principal  amount of  $7,173,763  representing
indebtedness for money borrowed by Sellers pursuant to the Chicago  Construction
Loan).

     "Closing"  shall have the  meaning  ascribed to such term in Section 5.1 of
this Agreement.

     "Closing Date" shall have the meaning  ascribed to such term in Section 5.1
of this Agreement.

     "Code" shall mean the Internal  Revenue Code of 1986,  as amended,  and all
regulations promulgated thereunder.

     "Codeshare  Agreement"  shall  have the  meaning  ascribed  to such term in
Section 8.19 hereof.

 <PAGE>

     "Consent" shall mean any consent,  approval or authorization of, notice to,
or designation, registration, declaration or filing with, any Person.

     "Contract" shall mean any agreement, contract, lease, commitment,  license,
undertaking or other legally binding  contractual right or obligation to which a
Person is a party or by which a Person or its assets or properties are bound.

     "Data" shall mean all documents,  books, drawing, logs, manuals and records
relating primarily or exclusively to the Transferred Assets.

     "DOT" shall mean the United  States  Department  of  Transportation  or any
successor thereto.

     "Effective Date" shall mean the date on which a plan of reorganization,
including the terms and conditions set forth in Exhibit F hereto, with respect
to the Sellers in connection with the Chapter 11 Cases shall be effective.

     "Environmental Assessments" shall mean an environmental inspection
and/or survey of Sellers' real.

     "Environmental  Claim"  shall  have the  meaning  ascribed  to such term in
Section 6.16(e)(i) of this Agreement.`

     "Environmental  Laws"  shall  have the  meaning  ascribed  to such  term in
Section 6.16(e)(ii) of this Agreement.

     "Excluded  Assets" shall have the meaning  ascribed to such term in Section
2.4 of this Agreement.

     "Execution  Date"  shall  have the  meaning  ascribed  to such  term in the
opening paragraph of this Agreement.

     "FAA"  shall mean the  Federal  Aviation  Administration  or any  successor
thereto.

     "Facilities  Lease" shall have the meaning ascribed to such term in Section
2.1(i) of this Agreement.

     "Facilities  Lease Assignment" shall have the meaning ascribed to such term
in Section 5.2(a)(i) of this Agreement.

     "Federal  Aviation  Act" shall mean the Federal  Aviation  Act of 1958,  as
amended,  together with the aviation  regulations of the FAA, as the same may be
in effect from time to time.

     "Final  Order" shall mean an order or judgment  the  operation or effect of
which  is not  stayed,  and as to  which  order or  judgment  (or any  revision,
modification  or  amendment  thereof),  the time to  appeal  or seek  review  or
rehearing  has  expired,  and as to which no appeal or  petition  for  review or
motion for rehearing or  re-argument  has been taken or been made and is pending
for argument.
<PAGE>

     "Governmental  Authority"  shall  mean  any  U.S.  federal,  state or local
government or any subdivision,  agency, instrumentality,  authority, department,
commission,  board or  bureau  thereof  or any  federal,  state or local  court,
tribunal or arbitrator (including, without limitation, the Bankruptcy Court).

     "Hangar Lease" shall have the meaning  ascribed to such term in Section 2.1
of this Agreement.

     "Hangar Lease  Assignment"  shall have the meaning ascribed to such term in
Section 5.2(a)(i) of this Agreement.

     "Hangar Use Period" shall have the meaning ascribed to such term in Section
9.4 of this Agreement.


     "Holdings"  shall have the meaning ascribed to such term in the preamble of
this Agreement.

     "HSR Act" shall mean Hart-Scott-Rodino Act of 1976, as amended.

     "Improvements"  shall mean any repairs,  replacements  and  improvements to
Midway Property Leases.

     "Indemnified  Parties"  shall  have the  meaning  ascribed  to such term in
Section 13.18(a) of this Agreement.


     "Laws" shall mean all federal, state, local or foreign laws, orders, writs,
injunctions,  decrees, ordinances,  awards, stipulations,  statutes, judicial or
administrative doctrines, rules or regulations enacted,  promulgated,  issued or
entered  by  a  Governmental  Authority,   including  without  limitation,   the
Bankruptcy Code, the Federal Aviation Act and any Environmental Laws.

     "Leased Assets" means the Facilities Lease and the Hangar Lease.

     "Liens"  shall mean all title  defects  or  objections,  mortgages,  liens,
claims,  charges,  pledges,  or other  encumbrances  of any  nature  whatsoever,
including  without  limitation  licenses,  leases,  chattel or other  mortgages,
collateral  security  arrangements,  pledges,  title  imperfections,  defect  or
objection  liens,   security   interests,   conditional  and  installment  sales
agreements,  easements,  encroachments  or  restrictions,  of any kind and other
title or interest  retention  arrangements,  reservations  or limitations of any
nature.

     "Losses" shall have the meaning  ascribed to such term in Section  13.18(a)
hereof.
<PAGE>

     "Material Adverse Effect" shall mean:

     (a)  any  change,  circumstance,   development,   effect,  event,  fact  or
occurrence  after the  Execution  Date that is or may  reasonably  be  expected,
individually or in the aggregate, to be materially adverse to (i) the ability of
the Sellers, individually or taken as a whole to perform their obligations under
this Agreement or to consummate the transactions  contemplated  herein,  or (ii)
the business, tangible assets,  liabilities,  results of operations or condition
(financial or other) or prospects of the business operated by Sellers related to
the Transferred  Assets,  other than (A) relating solely to or resulting  solely
from  entering  into this  Agreement  or the  consummation  of the  transactions
contemplated  herein or the  announcement  thereof,  (B)  relating  solely to or
resulting solely from the filing of the Chapter 11 Cases, or (iii) the legality,
validity or  enforceability  of this Agreement or the agreements and instruments
to be entered into in connection  herewith or the  realization of the rights and
remedies hereunder;

     (b)  any  change,  circumstance,   development,   effect,  event,  fact  or
occurrence  after the Execution  Date (a "Change")  that is or reasonably may be
expected to (i) give rise to any liability on the part of Southwest,  other than
the Assumed  Liabilities,  with respect to or result in a reduction in the value
of the Transferred Assets or (ii) increase the amount of the Assumed Liabilities
in an amount,  individually  or in the aggregate  with all other  liabilities or
reductions in value of the  Transferred  Assets arising from a Change,  which is
equal to or greater than in the aggregate  $2,500,000 but only after application
of all of Southwest's  holdback and setoff rights under this Agreement which are
applicable  to any such  reduction  in value of the  Transferred  Assets  or the
increase in the Assumed Liabilities or other liabilities;

     (c) [This Section Reserved.]

     (d) [This Section Reserved.]

     (e) the  entry by a court  having  jurisdiction  in the  premises  of (A) a
decree or order for relief in respect of either of the Sellers in an involuntary
case or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization  or other similar law seeking the  liquidation  of one or more of
the Sellers  under  Chapter 7 of the  Bankruptcy  Code or the  conversion of the
Chapter 11 Cases to Chapter 7 for any purpose or (B) a decree or order approving
as properly filed a petition seeking reorganization,  arrangement, adjustment or
composition  of or in respect of either of the  Sellers  under  Chapter 7 of the
Bankruptcy  Code,  or the  commencement  by either of the Sellers of a voluntary
case or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law to convert the Chapter 11 Cases to Chapter 7
proceedings  under  the Code or other  similar  liquidation  proceeding,  or the
consent by either of the Sellers to the entry of a decree or order for relief in
respect of either of the Sellers in an involuntary  case or proceeding under any
applicable  Federal or State  bankruptcy,  insolvency,  reorganization  or other
similar law or to the  commencement  of any  bankruptcy  or  insolvency  case or
proceeding  against  either of them,  or the consent by either of the Sellers to
the  filing  of a  petition  or the  appointment  of or taking  possession  by a
custodian,  receiver,  liquidator,  assignee,  trustee,  sequestrator  or  other
similar  official of either of the Sellers,  in each  instances,  to convert the
Chapter 11 Cases to Chapter 7  proceedings  under the  Bankruptcy  Code or other
similar liquidation proceedings or to otherwise effect the liquidation of either
of the Sellers;  provided,  however,  in no event shall the proposed transfer of
the Transferred  Assets to Southwest  pursuant to this Agreement and the Chapter
11 Cases be deemed to violate this subsection (e);
<PAGE>

     (f) [This Section Reserved.]

     (g) any  outbreak  or  escalation  of  hostilities  or  other  national  or
international  calamity or crisis or material  adverse  change or  disruption in
economic  conditions  in, or in the  financial  markets of, the United States or
elsewhere  (it being  understood  that any such  change or  disruption  shall be
relative to such conditions and markets as in effect on the Execution  Date), if
the effect of such outbreak,  escalation,  calamity,  crisis or material adverse
change in the economic conditions in, or in the financial markets of, the United
States or  elsewhere  could be  reasonably  expected to make it, in  Southwest's
reasonable judgment,  impracticable or inadvisable to proceed with any financing
contemplated by it for the  acquisition of the  Transferred  Assets on the terms
and in the manner contemplated herein;

     (h) the  suspension  or  limitation  of  trading  for more  than  three (3)
consecutive  Business  Days  generally  in  securities  on the  New  York  Stock
Exchange,  the  American  Stock  Exchange or the NASDAQ  National  Market or any
setting of  limitations  on prices for securities on any such exchange or NASDAQ
National Market;

     (i) the  enactment,  publication,  decree or other  promulgation  after the
Execution  Date of any applicable  law that in  Southwest's  reasonable  opinion
materially and adversely affects,  or could be reasonably expected to materially
and adversely affect, the properties, business, prospects, operations, earnings,
assets, liabilities or condition (financial or otherwise) of Southwest, taken as
a whole;

     (j) the declaration of a banking moratorium by any Governmental  Authority;
or the taking of any action by any  Governmental  Authority  after the Execution
Date in respect of its monetary or fiscal affairs that in Southwest's reasonable
opinion could  reasonably be expected to have a material  adverse  effect on the
financial markets in the United States; and

     (k) any general suspension of commercial  aviation operations in the United
States for a period of more than forty-eight (48) consecutive  hours or for more
than four days in any month.

     "Materials of  Environmental  Concern"  shall have the meaning  ascribed to
such term in Section 6.16(e)(iii) of this Agreement.

     "Midway" or "Midway  Airport" shall mean Midway Airport located in the City
of Chicago, Illinois.

     "Midway  Gates"  shall have the  meaning  ascribed  to such term in Section
2.1(i) of this Agreement.
<PAGE>

     "Midway  Gate  Property"  shall mean all  facilities,  fixtures  (including
permanent  improvements  to  any  property  comprising  Midway  Gate  Property),
leasehold  improvements and appurtenances owned or leased by any Seller and used
exclusively  or  primarily in  connection  with the Midway Gates and any and all
existing manufacturer or vendor warranties,  customer support agreements,  books
and  records  (or  copies  thereof,  in which case the  originals  shall be made
available to Southwest)  and similar items of Sellers  relating to the foregoing
(excluding  Sellers'  general home office  financial  and  accounting  books and
records, access to which, however, shall be provided to Southwest upon request).

     "Midway  Hangar"  shall have the  meaning  ascribed to such term in Section
2.1(i) of this Agreement.

     "Midway Hangar  Property"  shall mean all facilities,  fixtures  (including
permanent  improvements  to any property  comprising  Midway  Hangar  Property),
leasehold  improvements and appurtenances owned or leased by any Seller and used
exclusively  or primarily in  connection  with the Midway Hangar and any and all
existing manufacturer or vendor warranties,  customer support agreements,  books
and  records  (or  copies  thereof,  in which case the  originals  shall be made
available to Southwest)  and similar items of Sellers  relating to the foregoing
(excluding  Sellers'  general home office  financial  and  accounting  books and
records, access to which, however, shall be provided to Southwest upon request).

     "Midway  Property  Leases" shall mean the  Facilities  Lease and the Hangar
Lease.

     "Midway  Ticket Sales  Agreement"  shall have the meaning  ascribed to such
term in Section 8.21 of this Agreement.

     "Net  Ticket  Revenue"  shall  have the  meaning  ascribed  to such term in
Section 8.21 of this Agreement.

     "Order" means any decree, judgment, injunction, writ or similar judicial or
administrative action and whether temporary, preliminary or permanent.

     "Permit  Agreement" shall have the meaning ascribed to such term in Section
9.4 hereof.

     "Permits" shall mean all permits, licenses, approvals,  franchises, notices
and  authorizations  issued  by any  Governmental  Authority  that  relate to or
otherwise are used or are necessary in connection with the ownership,  operation
or other use of any of the Transferred Assets.

     "Permitted  Liens"  shall  mean  Liens  for  taxes,  assessments  and other
governmental charges which are not due and payable.

     "Person"  shall  mean  any   individual,   general   partnership,   limited
partnership,  limited  liability  company,  joint venture,  corporation,  trust,
unincorporated organization, Governmental Authority or other entity.

     "Retained  Liabilities"  shall have the  meaning  ascribed  to such term in
Section 3.2 of this Agreement.
<PAGE>

     "Right of Entry Agreement" shall mean that certain Right of Entry Agreement
between the City of Chicago and ATA dated as of November 1, 2003.

          "Scheduled   Closing   Date"  shall  mean  January  12,  2005,  or  as
     otherwise agreed.

          "Schedules"  shall have the  meaning  ascribed to such term in Section
     1.2 hereof.

          "SEC"  shall have the  meaning  ascribed  to such term in Section  7.5
     hereof.

          "Seller  Indemnified  Parties" shall have the meaning ascribed to such
     term in Section 13.19 of this Agreement.

          "Sellers" shall have the meaning ascribed to such term in the preamble
     to this Agreement.

          "Southwest"  shall  have  the  meaning  ascribed  to such  term in the
     preamble to this Agreement.

     "Southwest  Material Adverse Effect" shall mean a materially adverse effect
on the business,  results of operations or financial  condition of Southwest and
its  subsidiaries,  taken as a whole,  other than any  change,  circumstance  or
effect caused by (i) the economy or financial  markets in general,  (ii) changes
in general  political  or  regulatory  conditions  in the United  States,  (iii)
conditions generally in the airline industry in which Southwest operates and not
specifically relating to Southwest or (iv) or resulting from the announcement or
pendency of the transactions contemplated by this Agreement.

     "Tax" and "Taxes" shall mean all federal,  state, local, or foreign income,
payroll, employee withholding,  unemployment insurance,  social security, sales,
use,  service,  service use,  leasing,  leasing use,  excise,  franchise,  gross
receipts,  value added,  alternative or add-on minimum,  estimated,  occupation,
real and personal property, stamp, transfer,  workers' compensation,  severance,
windfall profits, environmental (including taxes under Section 59A of the Code),
or  other  tax of the  same or of a  similar  nature,  including  any  interest,
penalty, or addition thereto, whether disputed or not.

          "Tax Return"  shall mean any return,  declaration,  report,  claim for
     refund,  or  information  return  or  statement  relating  to  Taxes or any
     amendment thereto, and including any schedule or attachment thereto.

          "Ticket  Revenue"  shall  have the  meaning  ascribed  to such term in
     Section 8.21 of this Agreement.

          "Transferred  Assets" shall have the meaning  ascribed to such term in
     Section 2.1 of this Agreement.

          "Transition  Period"  shall have the meaning  ascribed to such term in
     Section 9.4 of this Agreement.

          "Use  Agreement"  shall  have the  meaning  ascribed  to such  term in
     Section 9.4 of this Agreement.

<PAGE>