American Trans Air, Inc.
7337 West Washington St.
Indianapolis International Airport
Indianapolis, Indiana  46231

     Subject: Demonstration Flight Waiver

     Reference:  Purchase  Agreement 2285 (the Purchase  Agreement)  between The
Boeing  Company  (Boeing) and American  Trans Air, Inc.  (Customer)  relating to
Model 757-33N aircraft (the Aircraft)

     This Letter  Agreement amends and supplements the Purchase  Agreement.  All
terms used but not defined in this Letter  Agreement shall have the same meaning
as in the Purchase Agreement.

DEFINITION OF TERMS:

CORRECTION  COSTS:  Customer's  direct  labor costs and the cost of any material
required to correct a Flight  Discrepancy  where direct labor costs are equal to
the warranty  labor rate in effect between the parties at the time such labor is
expended.

FLIGHT DISCREPANCY: A failure or malfunction of an Aircraft, or the accessories,
equipment or parts  installed on the Aircraft which results from a defect in the
Aircraft,  Boeing Product, engine or Supplier Product or a nonconformance to the
Detail Specification for the Aircraft.

The AGTA  provides  that each  aircraft will be test flown prior to delivery for
the purpose of demonstrating  the functioning of such Aircraft and its equipment
to Customer;  however,  Customer  may elect to waive this test flight.  For each
test flight waived,  Boeing agrees to provide  Customer an amount of jet fuel at
delivery  that,  including the standard fuel  entitlement,  totals the following
amount of fuel:

 ---------------------- -----------------------------------------------
 AIRCRAFT MODEL         TOTAL FUEL ENTITLEMENT
                        (U.S. GALLONS)
 ---------------------- -----------------------------------------------
 ---------------------- -----------------------------------------------
 737                    Full tanks (approx.  5,300 to 6,800, depending
                        on model)
 ---------------------- -----------------------------------------------
 ---------------------- -----------------------------------------------
 747                    26,000
 ---------------------- -----------------------------------------------
 ---------------------- -----------------------------------------------
 757                    9,600
 ---------------------- -----------------------------------------------
 ---------------------- -----------------------------------------------
 767                    11,000
 ---------------------- -----------------------------------------------
 ---------------------- -----------------------------------------------
 777                    10,300
 ---------------------- -----------------------------------------------

Further,  Boeing agrees to reimburse  Customer for any Correction Costs incurred
as a result of the discovery of a Flight  Discrepancy during the first flight of
the aircraft by Customer  following delivery to the extent such Correction Costs
are not covered under a warranty provided by Boeing, the engine  manufacturer or
any of Boeing's suppliers.

Should a Flight Discrepancy be detected by Customer which requires the return of
the Aircraft to Boeing's facilities at Seattle,  Washington,  so that Boeing may
correct such Flight  Discrepancy,  Boeing and  Customer  agree that title to and
risk of loss of such  Aircraft  will remain with  Customer.  In addition,  it is
agreed that Boeing will have  responsibility for the Aircraft while it is on the
ground at Boeing's facilities in Seattle, Washington, as is chargeable by law to
a bailee for mutual benefit, but Boeing shall not be chargeable for loss of use.

To be reimbursed for Correction Costs,  Customer shall submit a written itemized
statement describing any flight discrepancies and indicating the Correction Cost
incurred by Customer  for each  discrepancy.  This  request must be submitted to
Boeing's Contracts Regional Director at Renton,  Washington,  within ninety (90)
days after the first flight by Customer.


Very truly yours,

THE BOEING COMPANY


By
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Its           ATTORNEY-IN-FACT
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ACCEPTED AND AGREED TO this

Date:                                , 2000
      -------------------------------

AMERICAN TRANS AIR, INC.


By
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Its
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