<PAGE 1>
                 SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, DC 20549
                                  
                              FORM 10-K
                                  
   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                        EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1998

Commission file number 0-21976

               ATLANTIC COAST AIRLINES HOLDINGS, INC.
       (Exact name of registrant as specified in its charter)
                                  
          Delaware                           13-3621051
          (State of incorporation)                     (IRS Employer
                                             Identification No.)

          515-A Shaw Road, Dulles, Virginia                 20166
          (Address of principal executive offices)
(Zip Code)

Registrant's telephone number, including area code:  (703) 925-6000

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

          Common Stock par value $ .02                 NASDAQ
     National Market
                    (Title of Class)
(Name of each exchange
                                             on which registered)

Indicate  by  check mark whether the registrant (1)  has  filed  all
reports  required  to  be  filed by  Section  13  or  15(d)  of  the
Securities Act of 1934 during the preceding 12 months (or  for  such
shorter  period  that  the  registrant was  required  to  file  such
reports),  and (2) has been subject to such filing requirements  for
the past 90 days.
                    Yes   X           No__

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

The aggregate market value of voting stock held by nonaffiliates  of
the registrant as of March 1, 1999 was approximately $358,046,414.

As  of March 1, 1999 there were 20,925,359 shares of Common Stock of
the  registrant  issued and 19,452,859 shares of Common  Stock  were
outstanding.
                                  
                 Documents Incorporated by Reference
                                  
Certain portions of the document listed below have been incorporated
by reference into the indicated part of this Form 10-K.

Document Incorporated                           Part of Form 10-K
Proxy Statement for 1999 Annual Meeting of Shareholders
Part III, Items 10-13
                                  
                                  
                                  
                                  
                                  
<PAGE 2>
                               PART I

Item 1.        Business

     General

          This  Annual Report on Form 10-K contains forward  looking
statements.  Statements in the Summary of Company Business  Strategy
and Management's Discussion and Analysis of Operations and Financial
Condition  sections of this filing, together with  other  statements
beginning  with  such words as "believes", "intends",  "plans",  and
"expects"  include  forward-looking statements  that  are  based  on
management's  expectations  given  facts  as  currently   known   by
management.   Actual  results may differ materially.   Factors  that
could  cause the Company's future results to differ materially  from
the  expectations  described  herein include  the  response  of  the
Company's  competitors  to the Company's business  strategy,  market
acceptance  of regional jet ("RJ") service to new destinations,  the
cost  of  fuel, the weather, satisfaction of regulatory requirements
and general economic and industry conditions.

           Atlantic Coast Airlines Holdings, Inc. ("ACAI"),  is  the
holding  company of Atlantic Coast Airlines ("ACA"), together,  (the
"Company"), a large regional airline, serving 51 destinations in  24
states  in the Eastern and Midwestern United States as of  March  1,
1999  with 530 scheduled non-stop flights system-wide every weekday.
The Company markets itself as "United Express" and is the only code-
sharing  regional  airline  for  United  Airlines,  Inc.  ("United")
operating  as  United  Express in the Eastern  United  States.   The
Company  caters primarily to business travelers with  its  principle
operations  at Washington-Dulles International Airport ("Washington-
Dulles"),  which  serves the Northern Virginia and Washington,  D.C.
markets.   In  August  1998, the Company began operating  as  United
Express  from  Chicago's  O'Hare  International  Airport  ("Chicago-
O'Hare")  and,  as  of  December 31, 1998, served  six  cities  from
Chicago-O'Hare.  The Company coordinates its schedules with  United,
particularly  at Washington-Dulles, where United operates  75  daily
departures to 32 destinations in the U.S., Europe and Latin  America
and at Chicago-O'Hare, where United operates 519 daily departures to
105 destinations in the U.S., Europe, Asia and Latin America.  As of
March  1,  1999,  the Company operated a fleet of  75  aircraft  (15
regional  jets and 60 turboprop aircraft) having an average  age  of
approximately five years.

     Summary of Company Business Strategy

          The  Company's long-term corporate objective is to achieve
sustained earnings growth by focusing its resources in the following
areas:
          
          1.   Continue  to  capitalize on and  grow  the  Company's
identity  with  United:  The Company intends to  capitalize  on  and
promote its code-sharing relationship with United, which has already
contributed  significantly  to  the Company's  growth.  The  Company
markets   itself  as  "United  Express"  under  its  United  Express
Agreements  ("Agreements") with United.  The Agreements, as  further
described under "United Express Agreement", provide the Company with
a  shared market identity with United, allow the Company to list its
flights  under United's two letter flight designator code in airline
Computer  Reservation Systems ("CRSs") and other published schedules
and  to  award United's "Mileage Plus" frequent flyer miles  to  its
passengers.  The Company coordinates its schedules with United,  and
participates  with United in cooperative advertising  and  marketing
agreements.   In  most  cities served  by  the  Company  other  than
Washington-Dulles  and Chicago-O'Hare, United provides  all  airport
facilities and related ground support services to the Company.   The
Company  also  participates in United's "Apollo" reservation  system
and  all  major CRSs, uses the United Express logo and has  exterior
aircraft paint schemes similar to those of United.
<PAGE 3>
          2.   Continued implementation of the regional  jet  fleet:
During 1998, the Company placed into service nine additional 50-seat
RJs,  confirmed  the  delivery  for  five  of  the  six  outstanding
conditionally  ordered RJs, and converted an  additional  20  option
orders  to  firm deliveries.  This brings the total number  of  firm
ordered RJs to 43 with remaining option RJs totaling 27.  The future
delivery  schedule  of  the remaining undelivered  firm  ordered  RJ
aircraft  is as follows:  For 1999, one RJ was delivered in  January
and  eight  additional RJs are scheduled for delivery between  March
and  December.  Nine aircraft are scheduled for delivery in 2000 and
eleven are scheduled for delivery in 2001.
          
          The  Company has utilized the RJ to complement  its  route
system  by  initiating  service  from Washington-Dulles  to  markets
beyond  the  economic  operating range  of  turboprop  aircraft  and
selectively deploying the RJ to its existing turboprop routes in the
short-haul,  high-density  East Coast markets.   This  has  provided
additional connecting passengers to the Company's turboprop  flights
and to United's jets flying from Washington-Dulles.
          
          During  1998,  the Company also initiated  RJ  service  at
Chicago's  O'Hare airport providing connecting service  to  United's
large  hub  operation.   Operating as United  Express  with  all  RJ
aircraft,  as of March 1, 1999 the Company offered non-stop  flights
from  Chicago-O'Hare  to  Charleston, WV; Springfield,  MO;  Wilkes-
Barre/Scranton, PA; Sioux Falls, SD; Fargo, ND; and Peoria, IL.
          
          3.    Continue   to  emphasize  operational   safety   and
efficiency:  During the last four years, the Company has worked with
the  Federal Aviation Administration ("FAA") to develop a  prototype
Crew  Resource Management ("CRM") training program for  the  airline
industry  called  Advanced  Crew Resource Management  ("ACRM").  The
research team concluded that developing and training ACRM procedures
has  a  significant advantage over traditional CRM training  methods
like those being used at most commercial airlines.  The Company  and
the  research  team developed specific ACRM procedures allowing  the
crews  to use ACRM skills on a daily basis.  The Company anticipates
that it will continue to work with the FAA on developing new methods
for training and evaluating the effectiveness of pilot performance.
          
          The  Company  equipped  its  turboprop  aircraft  with  an
automated  aircraft time reporting system which enables the  Company
to  more  efficiently  communicate with  flight  crews  and  further
automate  the  flight  tracking process.   The  Company  intends  to
install  an automatic aircraft time reporting system in its  RJs  as
early  as  the  fourth  quarter  1999.   This  system  improves  the
timeliness  and  accuracy  of  flight information  communicated  and
displayed to the Company's passengers.
          
          The  Company  has  initiated  the  utilization  of  global
positioning  satellite  technology  ("GPS")  and  flight  management
systems  ("FMS")  onboard its aircraft.  With the  entire  fleet  of
regional jets and turboprop aircraft equipped with FMS, the  Company
believes it has improved safety and efficiency.  The first 22 of  96
GPS routes between Dulles and other markets were implemented in 1998
with  the remaining routes expected to be implemented in the  second
quarter 1999.  These routes, combined with the continued success  of
FMS  procedure development for Washington-Dulles, have  reduced  the
number of required miles flown by ACA aircraft while reducing  pilot
and  air  traffic controller workload.  In 1999, the Company intends
to  implement  more FMS procedures at Washington-Dulles  which  will
increase the capacity and efficiency of Washington-Dulles' airspace.
<PAGE 4>          
           In 1998 the Company signed an agreement for participation
in  an  airline  safety  program called Flight  Operational  Quality
Assurance ("FOQA").  FOQA programs obtain and analyze certain  data,
recorded   during  flights,  to  improve  many  aspects  of   flight
operations,  including flight crew performance,  training  programs,
operating  and  Air  Traffic  Control  ("ATC")  procedures,  airport
maintenance and design as well as aircraft design.
     
     Markets

           As  of  March 1, 1999, the Company scheduled 232 non-stop
flights  from  Washington-Dulles which was more  flights  from  that
airport  than any other airline. During 1998, the Company  accounted
for more passenger boardings from Washington-Dulles than any airline
other  than  United.  On a combined basis, the  Company  and  United
generated  approximately  57% of passenger  traffic  at  Washington-
Dulles during 1998.

           The  Company's  top four airports based on  frequency  of
operations  are Washington-Dulles, Chicago O'Hare, New York-JFK  and
Newark.   During 1998, the Company added new routes from Washington-
Dulles  and  commenced  operations at Chicago-O'Hare.   The  Company
increased  operations in existing Washington-Dulles  markets  by  22
daily departures and added new service to six cities:  Indianapolis,
IN;  Greenville/Spartanburg, SC; and  Savannah,  GA  with  RJs,  and
Wilkes-Barre/Scranton, PA; Wilmington, NC; and  Worcester,  MA  with
turboprop  aircraft.   During 1998, the  Company  also  replaced  or
complemented  turboprop  service with RJ service  in  the  following
markets:   Charleston,  SC; Charleston, WV; Portland,  ME;  Raleigh-
Durham,  NC;  Detroit, MI; and Hartford, CT.  The Company  commenced
operations  at  Chicago-O'Hare on August 3, 1998  with  non-stop  RJ
service  to Charleston, WV.  Additional Chicago-O'Hare non-stop  all
RJ   service   was  added  to:   Springfield/Branson,  MO;   Wilkes-
Barre/Scranton, PA; Fargo, ND; Sioux Falls, SD; and Peoria, IL.   In
1998,  the  Company ceased operations to Worcester, MA.  In  January
1999, the Company ceased operations to Atlanta, GA and Tampa, FL.
<PAGE 5>
          The following table sets forth the destinations served  by
the Company as of March 1, 1999:
          
                     Washington-Dulles (To/From)

<TABLE>
<C>                              <C>
Albany, NY                       Manchester, NH
Allentown, PA                    Nashville, TN
Baltimore, MD                    New York, NY (Kennedy)
Binghamton, NY                   New York, NY (LaGuardia)
Buffalo, NY                           Newark, NJ
Burlington, VT**                 Newport News, VA
Charleston, SC**                 Norfolk, VA
Charleston, WV**                 Philadelphia, PA
Charlottesville, VA              Pittsburgh, PA
Cleveland, OH                    Portland, ME*
Columbia,SC (Effective           Providence, RI
5/25/99)*
Columbus, OH**                   Raleigh-Durham, NC**
Dayton, OH**                     Richmond, VA
Detroit, MI**                    Roanoke, VA
Fort Myers, FL*                  Rochester, NY
Greensboro, NC                   Savannah, GA*
Greenville/Spartanburg, SC*      State College, PA
Harrisburg, PA                   Stewart, NY
Hartford, CT**                   Syracuse, NY
Indianapolis, IN*                Westchester  County, NY
Jacksonville, FL*                Wilkes-Barre/Scranton,
                                 PA
Knoxville, TN                    Wilmington, NC
Lynchburg, VA                    
</TABLE>
                      Chicago-O'Hare (To/From)
<TABLE>
<C>                              <C>
Charleston, WV*                  Sioux Falls, SD*
Fargo, ND*                       Springfield/Branson, MO*
Peoria, IL*                      Wilkes-Barre/Scranton,
                                 PA*
Savannah, GA (Effective 5/17/99) 
*
</TABLE>

                         Other Routes Served
                                  
 New York, NY (Kennedy) to: Boston, MA; Baltimore, MD; Rochester, NY
                      Boston, MA to Stewart, NY


*    Denotes all RJ service
**  Denotes mixture of RJ and turboprop service

<PAGE 6>


     United Express Agreements

           The  Company's  United Express Agreements  ("Agreements")
define  the  Company's  relationship  with  United.  The  Agreements
authorize the Company to use United's "UA" flight designator code to
identify its flights and fares in the major CRSs, including United's
"Apollo"  reservation  system, to use the United  Express  logo  and
exterior  aircraft paint schemes and uniforms similar  to  those  of
United,  and to otherwise advertise and market its association  with
United.

           In  December 1998, the Company and United agreed to a ten
year  extension of the Agreements. Prior to March 31,  2004,  United
may  terminate  the Agreements at any time if the Company  fails  to
maintain  certain  performance standards, and may terminate  without
cause  after  March 31, 2004 by providing one year's notice  to  the
Company.  If by January 2, 2001 United has not given the Company the
ability  to  operate  regional jets of  44  seats  or  less  seating
capacity as United Express, in addition to its allocation of 50 seat
regional jets, the Company may terminate the Agreements as of  March
31,  2004.  The  Company  would be required  to  provide  notice  of
termination prior to January 2, 2002, which notice would be void  if
United ultimately grants such authority prior to January 2, 2002.

          Under the terms of the Agreements, the Company pays United
monthly fees based on the total number of revenue passengers boarded
by  the  Company on its flights for the month. The fee per passenger
is subject to periodic increases during the duration of the ten year
extension period.

          Company  passengers may participate in  United's  "Mileage
Plus"  frequent flyer program and are eligible to receive a  certain
minimum  number  of  United frequent flyer miles  for  each  of  the
Company's flights.  Mileage Plus members are also eligible to redeem
their  awards on the Company's route system.  In 1998, approximately
56%  of  the Company's passengers participated in United's  "Mileage
Plus"  frequent  flyer program.  The Company limits  the  number  of
"Mileage  Plus" tickets that may be used on its flights and believes
that the displacement, if any, of revenue passengers is minimal.

           The Agreements also provide for coordinated schedules and
through-fares.  A  through-fare is a fare offered  by  a  major  air
carrier  to  prospective  passengers  who,  in  order  to  reach   a
particular destination, transfer between the major carrier  and  its
code-sharing partner. Generally, these fares are less expensive than
purchasing  the  combination of local fares. United establishes  all
through-fares and allows the Company a portion of these fares  on  a
fixed  rate  or  formula basis subject to periodic  adjustment.  The
Agreements  also  provide for interline baggage  handling,  and  for
reduced airline fares for eligible United and Company personnel  and
their families.

           Pursuant  to the Agreements, United provides a number  of
additional services to the Company. These include publication of the
fares,  rules and related information that are part of the Company's
contracts of carriage for passengers and freight; publication of the
Company's  flight  schedules and related information;  provision  of
toll-free   reservations  services;  provision  of  ground   support
services  at  most  of the airports served by both  United  and  the
Company; provision of ticket handling services at United's ticketing
locations; provision of airport signage at airports where  both  the
Company  and  United operate; provision of United ticket  stock  and
related  documents; provision of expense vouchers, checks  and  cash
disbursements  to  Company  passengers  inconvenienced   by   flight
cancellations,  diversions  and  delays;  and  cooperation  in   the
development  and execution of advertising, promotion, and  marketing
efforts featuring United Express and the relationship between United
and the Company.
<PAGE 7>
           The  Agreements  require the Company to  obtain  United's
consent  to operate service between city pairs as "United  Express".
If  the  Company  experiences  net operating  expenses  that  exceed
revenues  for  three consecutive months on any required  route,  the
Company  may withdraw from that route if United and the Company  are
unable  to  negotiate  an alternative mutually acceptable  level  of
service  for that route. The Agreements also require the Company  to
obtain  United's  approval if it chooses to enter into  code-sharing
arrangements  with other carriers, but do not prohibit  United  from
competing, or from entering into agreements with other airlines  who
would compete, on routes served by the Company.

           The  Agreements restrict the ability of  the  Company  to
merge  with another company or dispose of certain assets or aircraft
without  offering  United a right of first refusal  to  acquire  the
Company or such assets or aircraft. United also has a right of first
refusal  with  respect to issuance by the Company of shares  of  its
Common  Stock  if,  as  a  result of the issuance,  certain  of  the
Company's stockholders and their permitted transferees do not own at
least 50% of the Company's Common Stock after such issuance. Because
the  holdings of these stockholders and their permitted  transferees
are  currently substantially less than 50%, management believes that
such a right is unlikely to be exercised.

     Fleet Description

          Fleet  Expansion:     As  of March 1,  1999,  the  Company
operated a fleet of 15 RJs and 60 turboprop aircraft, consisting  of
32 British Aerospace Jetstream-41 ("J-41s") and 28 British Aerospace
Jetstream-32 ("J-32s").
          
          As  of March 1, 1999, the Company had a total of 28 RJs on
order   from  Bombardier,  Inc.,  in  addition  to  the  15  already
delivered, and held options for 27 additional RJs.  During 1998, the
Company  converted five of the six conditional orders and  converted
20  option  aircraft  to  firm orders.  Of  the  remaining  28  firm
aircraft deliveries, eight are scheduled for the remainder of  1999,
nine are scheduled for 2000, and eleven are scheduled for 2001.
          
          Fleet  Composition:   The following  table  describes  the
Company's fleet of aircraft, scheduled deliveries and options as  of
March 1, 1999:

<TABLE>           Number of   Passenger    Average      Future
<CAPTION>         Aircraft    Capacity      Age in     Scheduled
                                            Years     Deliveries
                                                           /
                                                        Options
<S>                  <C>         <C>         <C>         <C>
Canadair             15          50          1.0        28/27
Regional Jets
British              32          29          4.2          -
Aerospace J-41
British              28          19          9.1          -
Aerospace J-32
                     75                      5.4        28/27
</TABLE>
          The   Company   is   continually   assessing   its   fleet
requirements, including the feasibility of operating less  than  50-
seat  regional jets. The Company requires United's approval for  the
addition   of   regional  jet  aircraft  that  exceed  its   current
allocation.
<PAGE 8>

           The  Company  previously announced that it  is  exploring
alternatives to accelerate the retirement of its fleet of 28  leased
19 seat J-32 aircraft.  The Company is assessing plans to target the
phase-out of the J-32 from its United Express operation by  the  end
of  2001.  As of March 1, 1999, the Company has J-32 operating lease
commitments with remaining lease terms ranging from three  to  seven
years  and  related  minimum  lease payments  of  approximately  $47
million.   The Company intends to complete its analysis of a  phase-
out   plan,   including  quantification  of   any   one-time   fleet
rationalization charge, during 1999.

     Lufthansa Agreement

          The  Company  has a code-sharing agreement with  Lufthansa
German Airlines ("Lufthansa"), which permits Lufthansa to place  its
airline  code  on  flights  operated by the  Company.  Additionally,
Lufthansa  is  a  member  of  the STAR Alliance,  a  global  airline
alliance,  comprised of United, Air Canada, Ansett,  SAS,  Thai  and
Varig. The United Express-Lufthansa agreement provides a wide  range
of benefits for code-share passengers including the ability to check-
in  once at their initial departure city and receive boarding passes
and  seat  assignments for the flights on both carriers while  their
luggage is automatically checked through to their final destination.
Members of the Lufthansa Miles & More frequent flyer program receive
mileage credit for these flights.
          
          The following markets served by the Company now carry both
the  United  (UA)  and Lufthansa (LH) designator codes  on  selected
flights:  Washington-Dulles to: Charlottesville, VA; Cleveland,  OH;
Charleston,  WV;  Fort Myers, FL; Greensboro,  NC;  Greenville,  SC;
Jacksonville,  FL;  Nashville, TN; Newport News,  VA;  Norfolk,  VA;
Pittsburgh,  PA;  Raleigh-Durham, NC;  Richmond,  VA;  Roanoke,  VA;
Savannah, GA; and Syracuse, NY; Chicago-O'Hare to; Springfield, MO.

     Fuel

          The  Company  has not experienced difficulties  with  fuel
availability  and  expects to be able to obtain fuel  at  prevailing
prices  in  quantities  sufficient to meet its future  requirements.
During  1998, the Company purchased approximately 50%  of  its  fuel
from  United  Aviation Fuels Corporation ("UAFC"), an  affiliate  of
United,  utilizing fixed price forward purchase agreements  for  the
delivery  of  33,000  barrels of jet fuel per month  at  Washington-
Dulles.   For the first six months of 1999, the Company  has  hedged
the   price   it  will  ultimately  record  as  fuel   expense   for
approximately 80% of its anticipated fuel requirements  by  entering
into  contracts  with  independent counterparties  that  reduce  the
Company's  exposure to upward movements in the price per  gallon  of
jet  fuel.  The Company has also contracted with UAFC and other fuel
suppliers  to  provide  jet  fuel  at  the  airports  it  serves  at
prevailing market prices.

     Marketing

            The   Company's  advertising  and  promotional  programs
emphasize  the  Company's close affiliation with  United,  including
coordinated  flight  schedules  and the  ability  of  the  Company's
passengers to participate in United's "Mileage Plus" frequent  flyer
program.  The Company's services are marketed primarily by means  of
listings  in  CRSs and the Official Airlines Guide, advertising  and
promotions,  and  through direct contact with  travel  agencies  and
corporate travel departments. For the year ended December 31,  1998,
approximately  72%  of the Company's passenger revenue  was  derived
from  ticket sales generated  through travel agencies and  corporate
travel  departments.  In  marketing to travel  agents,  the  Company
relies  on  personal  contacts and direct mail  campaigns,  provides
familiarization  flights  and hosts group  presentations  and  other
functions  to  acquaint travel agents with the  Company's  services.
Many  of  these activities are conducted in cooperation with  United
marketing  representatives.  In addition,  the  Company  and  United
jointly  run  radio and print advertising in markets served  by  the
Company.
<PAGE 9>
           The Company participates in United's electronic ticketing
program.  This  program allows customers to  travel  on  flights  of
United  and  the  Company without the need for a paper  ticket.  The
primary  benefit  of this program is improved customer  service  and
reduced ticketing costs. For the year ended December 31, 1998, 43.5%
of  the  Company's passengers utilized electronic  tickets  up  from
25.6% for the year ended December 31, 1997.

     Competition

          The Company competes primarily with regional and major air
carriers  as  well  as  with  ground transportation.  The  Company's
competition  from  other air carriers varies by  location,  type  of
aircraft (both turboprop and jet), and in certain cities, comes from
carriers  which  serve  the same destinations  as  the  Company  but
through  different hubs. The Company believes that  its  ability  to
compete  in  its  market areas is strengthened by  its  code-sharing
relationship  with  United,  which has  a  substantial  presence  at
Washington-Dulles,  thereby enhancing the  importance  of  the  "UA"
flight designator code on the East Coast. The Company competes  with
other  airlines  by  offering frequent  flights.  In  addition,  the
Company's  competitive position benefits from the  large  number  of
participants in United's "Mileage Plus" frequent flyer  program  who
fly regularly to or from the markets served by the Company.

          In  late  1998,  US  Airways announced  its  intention  to
increase   activity  at  Washington-Dulles  utilizing  its  mainline
service,  lowfare  MetroJet  product, and  its  US  Airways  Express
affiliates.   US Airways has since implemented or announced  service
to  eight  of  the  Company's markets using both jet  and  turboprop
equipment.  In two of the Company's existing markets, MetroJet  will
provide  the  service at a significantly lower fare  structure.  The
Company  continually  monitors the effects competition  has  on  its
routes,  fares and frequencies.  The Company believes  that  it  can
compete  effectively  with  US Airways,  however  there  can  be  no
assurances that US Airways expansion at Washington-Dulles  will  not
have  a  material  adverse  effect  on  the  Company's  results   of
operations or financial position.
          
          In  early 1999, United announced its intention to increase
its level of activity at Washington-Dulles by 60% beginning in April
and May 1999.  The Company believes that United's announced increase
will add approximately 7,000 additional daily seat departures to the
United/United Express operation at Washington-Dulles.  The  Company,
in  concert with United, also announced either increased frequencies
or  upgraded  equipment, or both, in all of its markets affected  by
the US Airways expansion.
                                  
          The  Airline Deregulation Act of 1978 ("Deregulation Act")
eliminated  many  regulatory  constraints  on  airline  competition,
thereby freeing airlines to set prices and, with limited exceptions,
to  establish  domestic  routes without  the  necessity  of  seeking
government  approval.  The airline industry is  highly  competitive,
and  there  are  few  barriers to entry in  the  Company's  markets.
Furthermore, larger carriers with greater resources can  impact  the
Company's  markets  through  fare  discounting  as  well  as  flight
schedule modifications.
<PAGE 10>
     Yield Management

          The Company closely monitors its inventory and pricing  of
available  seats  by use of a computerized yield management  system.
Effective with flights departing after January 31, 1999, the Company
upgraded  its  yield management system to United's enhanced  revenue
management  system, "Orion".  This system represents the  latest  in
revenue  management  technology and is  designed  to  manage  entire
passenger  itineraries  rather than  individual  flight  legs.   The
Company  now  is  able  to  expand the  number  of  booking  classes
available on its flights.  These expanded booking classes will allow
the  Company  to  broaden the number of fare categories  offered  to
customers,  while  simplifying booking procedures.   Orion  uses  an
advanced  derivative  of  IBM's "Deep Blue" computer  technology  to
process  the large number of complex calculations involved  in  this
analysis.   Orion replaces the PROS IV yield management system  that
the Company had implemented in the second quarter 1997.

     Slots

           Slots  are  reservations  for takeoffs  and  landings  at
specified  times  and  are required by governmental  authorities  to
operate  at  certain  airports.  The Company  utilizes  takeoff  and
landing slots at Chicago-O'Hare and the LaGuardia, Kennedy and White
Plains, New York airports.  The Company also uses slot exemptions at
Chicago-O'Hare, which differ from slots in that they  allow  service
only to designated cities and are not transferable to other airlines
without  the  approval  of  the  U.S. Department  of  Transportation
("DOT").  Airlines may acquire slots by governmental grant, by lease
or  purchase  from other airlines, or by loan when  another  airline
does  not  use a slot but desires to avoid governmental reallocation
of  a slot for lack of use.  All leased and loaned slots are subject
to renewal and termination provisions.

           As  of  March 1, 1999 the Company utilized  18  slots  at
LaGuardia,  15  slots  at Kennedy, 30 slots or  slot  exemptions  at
Chicago-O'Hare, and six slots at White Plains. These  slots  can  be
withdrawn without compensation under certain circumstances.

     Employees

            As of March 1, 1999, the Company had 1,918 full-time and
296 part-time employees, classified as follows:
<TABLE>

<CAPTION>  Classification               Full-    Part-
                                         Time     Time
           <S>                            <C>      <C>
           Pilots                         750        -
           Flight attendants              224        -
           Station personnel              441      267
           Maintenance personnel          208        4
           Administrative        and      285       25
           clerical personnel
           Management                      10        -
                                                      
           Total employees              1,918      296
</TABLE>
<PAGE 11>
          The Company's pilots are represented by the Airline Pilots
Association  ("ALPA"), its flight attendants by the  Association  of
Flight  Attendants  ("AFA"),  and  its  mechanics  by  the  Aircraft
Mechanics Fraternal Association ("AMFA").

           The  ALPA collective bargaining agreement was amended  on
February  26, 1997 and is amendable after three years.  The  amended
contract  modified  work rules to allow more  flexibility,  includes
regional  jet  pay  rates, and transfers pilots into  the  Company's
employee benefit plans.

          The  AMFA  was  certified  as  the  collective  bargaining
representative  elected by mechanics and related  employees  of  the
Company in 1994.  On June 22, 1998, the Company's mechanics ratified
an  initial  four year contract.  The new contract  includes  a  pay
scale  comparable  to  the Company's peers in the  regional  airline
industry, and a one-time signing bonus, and allows the mechanics  to
participate in the Company's employee benefit plans.

          The  Company's contract with the AFA became  amendable  on
April  30, 1997.  An agreement was negotiated and agreed to  between
the  Company and AFA during 1998, and was ratified by the  Company's
flight attendants on October 11, 1998.  The new agreement is  for  a
four  year  duration  and  provides for  a  higher  than  previously
provided  starting  pay  rate and a pay  scale  and  per  diem  rate
comparable to the Company's peers in the regional airline industry.
          
          The  Company believes that the wage rates and benefits for
other  employee  groups are comparable to similar  groups  at  other
regional  airlines.  The Company also believes that the  incremental
costs as a result of the new and amended contracts will not have any
material  effect on the Company's financial position or  results  of
its  operations  over the life of the agreements.   The  Company  is
unaware  of  any significant organizing activities by  labor  unions
among its other non-union employees at this time.

          As  the  Company continues to pursue its growth  strategy,
its employee staffing needs and recruitment efforts are expected  to
increase commensurately.  Due to competitive local labor markets and
normal  attrition to the major airlines, there can be  no  assurance
that  the  Company will be able to satisfy its hiring  requirements.
The  Company  has  committed additional resources  to  its  employee
recruiting and retention efforts.  In 1998, the Company began to pay
for  new hire pilot training.  Annual turnover of Company pilots was
approximately 10% during 1998, compared to 11% during 1997.

     Pilot Training

           The  Company performs pilot training in state-of-the-art,
full motion simulators and conducts training in accordance with  FAA
Part  121  regulations.  In 1993, the Company initiated an  Advanced
Qualification Program ("AQP") to enhance pilot performance  in  both
technical  and  CRM  skills.  The FAA has recognized  the  Company's
leadership  in CRM training and selected the Company to  participate
in  a FAA sponsored training grant called ACRM.  The Company and the
grant  team were successful in introducing improvements in  CRM  and
AQP  training that have benefited not only the Company, but also the
entire airline industry.

          In  December  1998, the Company entered into an  agreement
with  Pan  Am  International  Flight Academy  ("PAIFA")  to  provide
simulator training for the Company's RJ program.  Under terms of the
agreement,  PAIFA will develop a comprehensive training facility  to
be  based  near  the Company's headquarters in Loudoun  County,  VA.
This  facility is expected to be completed during the fourth quarter
of  1999.   The Company has committed to purchase an annual  minimum
number  of simulator training hours for a period of ten years  at  a
guaranteed fixed price once the facility receives FAA certification.
The  Company's  payment  obligations for  the  next  ten  years  are
approximately $13 million.
<PAGE 12>

     Regulation

          Economic.  With the passage of the Deregulation Act,  much
of   the  regulation  of  domestic  airline  routes  and  rates  was
eliminated.  DOT still has extensive authority to issue certificates
authorizing  carriers  to  engage in air  transportation,  establish
consumer  protection regulations, prohibit certain unfair  or  anti-
competitive  pricing practices, mandate conditions of  carriage  and
make ongoing determinations of a carrier's fitness, willingness  and
ability  to  provide  air transportation.  The DOT  can  also  bring
proceedings for the enforcement of its regulations under  applicable
federal  statutes, which proceedings may result in civil  penalties,
revocation of operating authority or criminal sanctions.
          
          The  Company holds a certificate of public convenience and
necessity,  issued  by the DOT, that authorizes it  to  conduct  air
transportation of persons, property and mail between all  points  in
the   United   States,  its  territories  and   possessions.    This
certificate   requires  that  the  Company  maintain  DOT-prescribed
minimum levels of insurance, comply with all applicable statutes and
regulations  and  remain  continuously  "fit"  to  engage   in   air
transportation.
          
          Based  on  conditions in the industry, or as a  result  of
Congressional  directives or statutes, the DOT  from  time  to  time
proposes  and adopts new regulations or amends existing  regulations
which  new  or amended regulations may impose additional  regulatory
burdens and costs on the Company.
          
          The DOT has also enacted rules establishing guidelines for
setting   reasonable  airport  charges  and  procedural  rules   for
challenging  such charges.  The DOT has adopted a compliance  policy
regarding  the increasing use of ticketless travel and the consumer-
related  notices that must be supplied to passengers before  travel.
The  DOT  has also proposed rules to implement a statutory directive
and  a  Presidential Commission recommendation to improve notice  to
families of passengers involved in aviation accidents.  The  DOT  is
considering  the  means  by  which  it  will  require  domestic  and
international   carriers  to  collect  additional  passenger-related
information, including emergency contact names and telephone numbers
and  other identifying information.  The DOT has estimated that  the
cost  to  the  industry  of  obtaining this  information  from  each
passenger could be significant.
          
          Safety.   The FAA extensively regulates the safety-related
activities  of air carriers.  The Company is subject  to  the  FAA's
jurisdiction  with respect to aircraft maintenance  and  operations,
equipment,   ground  facilities,  flight  dispatch,  communications,
training,  weather observation, flight personnel and  other  matters
affecting  air  safety.  To ensure compliance with its  regulations,
the  FAA  requires  that airlines under its jurisdiction  obtain  an
operating   certificate  and  operations  specifications   for   the
particular  aircraft  and  types of  operations  conducted  by  such
airlines.   The Company possesses an Air Carrier Certificate  issued
by  the  FAA  and  related  authorities authorizing  it  to  conduct
operations  with  turboprop and turbojet equipment.   The  Company's
authority   to   conduct  operations  is  subject   to   suspension,
modification  or  revocation for cause.  The FAA  has  authority  to
bring proceedings to enforce its regulations, which proceedings  may
result  in  civil or criminal penalties or revocation  of  operating
authority.
<PAGE 13>          
          From time to the time, the FAA conducts inspections of air
carriers  with varying degrees of intensity.  The Company  underwent
an  intensive,  two-week FAA Regional Aerospace  Inspection  Program
("RASIP") audit during the fourth quarter of 1997.  The final  audit
report   consisted  of recommendations and minor findings,  none  of
which  resulted  in civil penalties.  The Company responded  to  the
findings  and  believes that it has met and continues  to  meet  the
required  standards  for  safety and operational  performance.   The
Company's airline operations will continue to be audited by the  FAA
for compliance with applicable safety regulations.
          
          In  order  to  ensure the highest level of safety  in  air
transportation,   the  FAA  has  authority  to   issue   maintenance
directives  and  other  mandatory orders relating  to,  among  other
things,  inspection  of  aircraft  and  the  mandatory  removal  and
replacement of parts that have failed or may fail in the future.  In
addition,  the  FAA from time to time amends its regulations.   Such
amended regulations may impose additional regulatory burdens on  the
Company  such  as  the  installation of  new  safety-related  items.
Depending upon the scope of the FAA's order and amended regulations,
these  requirements  may  cause the Company  to  incur  substantial,
unanticipated expenses.
          
          The  FAA  requires  air  carriers  to  adopt  and  enforce
procedures  designed to safeguard property, ensure airport  security
and  screen passengers to protect against terrorist acts.  The  FAA,
from  time to time, imposes additional security requirements on  air
carriers and airport authorities based on specific threats or  world
conditions or as otherwise required.  The Company incurs substantial
expense  in  complying  with current security  requirements  and  it
cannot  predict what additional security requirements may be imposed
in the future or the cost of complying with such requirements.
          
          Associated with the FAA's security responsibility  is  its
program   to   ensure   compliance   with   rules   regulating   the
transportation of hazardous materials.  The Company neither  accepts
nor ships hazardous materials or other dangerous goods. Employees of
the  Company are trained in hazardous materials and dangerous  goods
recognition  through  a  FAA  approved  training  course.   The  FAA
enforces  its  hazardous material regulations by the  imposition  of
civil penalties, which can be substantial.
          
          Other  Regulation.   In the maintenance  of  its  aircraft
fleet  and  ground  equipment, the Company  handles  and  uses  many
materials  that  are  classified as  hazardous.   The  Environmental
Protection Agency and similar local agencies have jurisdiction  over
the handling and processing of these materials.  The Company is also
subject  to  the  oversight of the Occupational  Safety  and  Health
Administration concerning employee safety and health  matters.   The
Company  is  subject  to  the  Federal  Communications  Commission's
jurisdiction regarding the use of radio frequencies.
          
          The  Airport  Noise  Control Act  ("ANCA")  requires  that
airlines phase-out the operation of certain types of aircraft.  None
of the Company's aircraft are subject to the phase-out provisions of
ANCA.    While  ANCA  generally  preempts  airports  from   imposing
unreasonable local noise rules that restrict air carrier operations,
airport  operators  may  implement reasonable and  nondiscriminatory
local noise abatement procedures, which procedures could impact  the
ability  of  the Company to serve certain airports, particularly  in
off-peak  hours.  Certain local noise rules adopted  prior  to  ANCA
were grandfathered under the statute.
<PAGE 14>         
 
          Federal Excise Taxes.  Ticketing airlines are obligated to
collect a U.S. transportation excise tax on passenger ticket  sales.
This  tax,  known as the aviation trust tax or the "ticket  tax"  is
used  to  defray  the  cost  of FAA operations  and  other  aviation
programs.   Beginning  on October 1, 1997,  a  revised  formula  for
determining the ticket tax took effect.  Under this revised formula,
the  ticket  tax is now comprised of a percentage of  the  passenger
ticket  price plus a flat fee for each segment flown,  and  will  be
adjusted  annually.   For the period from October  1,  1997  through
September  30,  1998, the ticket tax was equal to  nine  percent  of
passenger  ticket price plus $1 per segment.  Beginning  October  1,
1998,  the  ticket tax was eight percent of passenger  ticket  price
plus $2 per segment.
          
     Seasonality

           As  is  common  in the industry, the Company  experiences
lower  demand for its product during the period of December  through
February.  Because the Company's services and marketing efforts  are
focused  on  the business traveler, this seasonality  of  demand  is
somewhat  greater than for airlines which carry a larger  proportion
of   leisure   travelers.  In  addition,  the  Company's   principal
geographic  area  of  operations experiences  more  adverse  weather
during  this  period, causing a greater percentage of the  Company's
and  other airlines' flights to be canceled. These seasonal  factors
have combined in the past to reduce the Company's capacity, traffic,
profitability,  and cash generation for this three month  period  as
compared to the rest of the year.

Item 2.        Properties

     Leased Facilities

          Airports

           The Company leases gate and ramp facilities at all of the
airports  it  serves and leases ticket counter and office  space  at
those  locations  where ticketing is handled by  Company  personnel.
Payments  to airport authorities for ground facilities are generally
based  on a number of factors, including space occupied as  well  as
flight  and  passenger volume. In June 1998, the  Company  announced
that  the  Metropolitan  Washington Airports Authority  ("MWAA")  in
coordination  with  the Company,  will build a  69,000  square  foot
passenger   concourse  at  Washington-Dulles  dedicated  solely   to
regional  airline  operations.  The 36-gate concourse,  designed  to
support  the  Company's  expanding  United  Express  operation,   is
scheduled  to  open  in May 1999.  MWAA will provide  the  permanent
financing  for the $18 million concourse through passenger  facility
charges and/or airport facility bonds, with the Company agreeing  to
provide  short  term  interim financing for up  to  $15  million  of
construction  costs.  (See Management's Discussion  and  Analysis  -
Other Commitments)

          Corporate Offices

           The  Company's leased headquarters in Dulles, VA provides
over   45,000  square  feet  in  one  building  for  the  executive,
administrative, training and system control departments. The Company
believes  that these facilities are adequate to conduct its  current
and planned operations.

          Maintenance Facilities

           The  FAA's safety regulations mandate periodic inspection
and  maintenance of commercial aircraft. The Company  performs  most
line maintenance, service and inspection of its aircraft and engines
at its maintenance facilities using its own personnel.
<PAGE 15>

           In  February  1998, the Company occupied its  new  90,000
square foot aircraft maintenance facility comprised of 60,000 square
feet  of  hangar  space and 30,000 square feet of support  space  at
Washington-Dulles.  The  Company has  consolidated  all  maintenance
functions  to this facility which includes hangar, shop  and  office
space necessary to maintain the Company's growing fleet.


Item 3.        Legal Proceedings

           The  Company  is  a party to routine litigation  and  FAA
proceedings incidental to its business, none of which is  likely  to
have  a  material effect on the Company's financial position or  the
results of its operations.

          The Company was a party to an action pending in the United
States  District Court for the Southern District of Ohio,  Peter  J.
Ryerson,  administrator of the estate of David Ryerson, v.  Atlantic
Coast  Airlines, Case No. C2-95-611. In September and October  1998,
this  action  and all related litigation was settled,  the  cost  of
which was covered by insurance and was not borne by the Company.

           The  Company is also a party to an action pending in  the
United States Court of Appeals for the Fourth Circuit known as Afzal
v.  Atlantic Coast Airlines (No. 98-1011).  This action is an appeal
of  the December 1997 decision granted in favor of the Company in  a
case  claiming  wrongful termination of employment  brought  in  the
United  States District Court for the Eastern District  of  Virginia
known as Afzal v. Atlantic Coast Airlines (Civil Action No. 96-1537-
A).   The  Company does not expect the outcome of this case to  have
any material adverse effect on its financial condition or results of
its operations.


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

          No  matter  was submitted during the fiscal quarter  ended
December 31, 1998, to a vote of the security holders of the  Company
through the solicitation of proxies or otherwise.
                                  
<PAGE 16>                                  
                               PART II

Item  5.         Market for Registrant's Common Equity  and  Related
Stockholder Matters

           The Company's common stock, par value $.02 per share (the
"Common   Stock"),   is  traded  on  the  Nasdaq   National   Market
("Nasdaq/NM") under the symbol "ACAI". Trading of the  Common  Stock
commenced on July 21, 1993.

           On  April 14, 1998, the Company declared a 2-for-1  stock
split  payable  as  a  stock dividend on May 15,  1998.   The  stock
dividend  was  contingent on shareholder approval  to  increase  the
number  of  authorized Common Shares from 15,000,000  to  65,000,000
shares,  which  was obtained at the Company's 1998  Annual  Meeting.
References  in the Company's Annual Report on Form 10-K related   to
Common  Shares,  including price, number of shares, etc.  have  been
adjusted to reflect the stock split.

           The following table sets forth the reported high and  low
closing  sale  prices of the Common Stock on the Nasdaq/NM  for  the
periods indicated:
<TABLE>
          <S>                        <C>            <C>
                        1997           High            Low
          First quarter             $  8.50         $ 5.94
          Second quarter            $  8.63         $ 6.13
          Third quarter              $11.00         $ 7.75
          Fourth quarter             $15.94         $ 9.25
                                   
          1998
          First quarter              $25.38          $15.56
          Second quarter             $33.00          $23.50
          Third  quarter             $35.00          $17.00
          Fourth quarter             $30.50          $13.25

          1999
         First   quarter
      (through  March  1,  1999)     $35.00          $26.81

</TABLE>
          As of March 1, 1999, the closing sales price of the Common
Stock   on    Nasdaq/NM  was  $30.875  per  share  and  there   were
approximately 121 holders of record of Common Stock.

           The Company has not paid any cash dividends on its Common
Stock and does not anticipate paying any Common Stock cash dividends
in the foreseeable future. The Company intends to retain earnings to
finance  the  growth of its operations. The payment of Common  Stock
cash  dividends  in  the future will depend  upon  such  factors  as
earnings  levels,  capital  requirements,  the  Company's  financial
condition,  the applicability of any restrictions imposed  upon  the
Company's  subsidiary  by certain of its financing  agreements,  the
dividend restrictions imposed by the Company's $35 million  line  of
credit, and other factors deemed relevant by the Board of Directors.
In  addition,  ACAI  is a holding company and its  only  significant
asset is its investment in its subsidiary, ACA.
<PAGE 17>

          In  July  1997, the Company issued $57.5 million aggregate
principal amount of 7.0% Convertible Subordinated Notes due July  1,
2004  (the "Notes"), pursuant to Rule 144A under the Securities  Act
of  1933,  and received net proceeds of approximately $55.6  million
related  to  the  sale of the Notes. The Notes are convertible  into
shares  of  Common  Stock, par value $0.02 of  the  Company  by  the
holders  at any time after sixty days following the latest  date  of
original  issuance thereof and prior to maturity, unless  previously
redeemed  or  repurchased, at a conversion price of  $9  per  share,
subject to certain adjustments.  The Company may not call the  Notes
for redemption prior to July 1, 2000.
          
          In  January 1998, $5.9 million face amounts of Notes  were
converted  at the option of several holders into 660,826  shares  of
the  Company's Common Stock.  On March 3, 1998, the Company notified
holders  of the Notes that the Company was temporarily reducing  the
conversion  price  in order to induce the holders  to  redeem  their
Notes  for Common Stock  During the reduced conversion price period,
which  was  effective  from March 20 through April  8,  1998,  $31.7
million  of  the Notes were converted to common stock, resulting  in
the  issuance  of 3,576,782  common shares.  The reduced  conversion
price  caused  approximately 56,174 additional common shares  to  be
issued  to  converting  Note  holders,  resulting  in  a  charge  of
approximately  $1.4  million.  As of March  1,  1999,  approximately
$19.8 million principal amount of Notes were outstanding, which were
convertible into approximately 2.2 million shares of Common Stock.

          In  July 1997, the Company repurchased 1.46 million shares
of  the  Company's  Common Stock from British  Aerospace  for  $16.9
million  using a portion of the proceeds received from the  issuance
of the Notes.
          

Item 6.        Selected Financial Data

           The  following selected financial data under the  caption
"Consolidated Financial Data" and "Consolidated Balance Sheet  Data"
relating to the years ended December 31, 1994, 1995, 1996, 1997  and
1998  have  been  derived from the Company's consolidated  financial
statements.  The following selected operating data under the caption
"Selected  Operating Data" have been derived from  Company  records.
The data should be read in conjunction with "Management's Discussion
and  Analysis of Results of Operations and Financial Condition"  and
the  Consolidated  Financial Statements and Notes  thereto  included
elsewhere     in    this    Annual    Report    on    Form     10-K.
<PAGE 18>

<TABLE>
<CAPTION>
               SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
       (Dollars in thousands, except per share amounts and operating data)
                                        
Consolidated Financial Data:    Years  ended December 31,
<S>                      <C>          <C>        <C>        <C>       <C>
                                                     
                             1994       1995       1996      1997       1998
                                                                        
Operating revenues:                                           
  Passenger revenues    $156,047   $153,918   $179,370  $202,540   $285,243
  Total operating        158,919    156,968    182,484   205,444    289,940
revenues
Operating expenses:                                                         
  Salaries and related    41,590      40,702     44,438    49,661     68,135
costs
  Aircraft fuel           15,189      13,303     17,124    17,766     23,978
  Aircraft maintenance    22,345      15,252     16,841    16,860     22,730
and materials
  Aircraft rentals        35,565      25,947     29,137    29,570     36,683
  Traffic commissions     25,913      25,938     28,550    32,667     42,429
and related fees
  Facility rent and        9,598       7,981      8,811    10,376     13,475
landing fees
  Depreciation and         2,329       2,240      2,846     3,566      6,472
amortization
  Other                   15,569      13,281     14,900    16,035     23,347
  Write-off of             6,000           -          -         -          -
intangible assets
  Restructuring charges    8,099       (521)      (426)         -          -
(reversals)
  Total operating        182,197     144,123    162,221   176,501    237,249
expenses

Operating income (loss)  (23,278)     12,845     20,263    28,943     52,691
                               
                                                                            
 Interest expense         (2,153)     (1,802)    (1,013)   (3,450)    (4,207)
  Interest income              -          66        341     1,284      4,145
  Debt conversion              -           -          -         -    (1,410)
expense (1)
  Other income               295         181         17        62     326  
(expense), net                                                        
Total non operating      (1,858)     (1,555)      (655)   (2,104)    (1,146)
expenses
                                                                            
Income (loss) before                                                        
income tax expense       (25,136)     11,290     19,608    26,839     51,545
   and extraordinary          
item
Income tax provision           -     (1,212)        450    12,339     21,133
(benefit)
                                                                            
Income (loss) before    (25,136)      12,502     19,158    14,500     30,412
extraordinary item             
Extraordinary item (2)         -         400          -         -          -
  Net Income (loss)     $(25,136)     $12,902    $19,158   $14,500    $30,412
                             
</TABLE>
<PAGE 19>
<TABLE>
<CAPTION>
               SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
       (Dollars in thousands, except per share amounts and operating data)
                                        
                                Years ended December 31,
<S>                        <C>       <C>       <C>        <C>        <C>
                          1994      1995      1996       1997       1998
Income (loss) per share:                                           
  Basic:                                                                  
    Income (loss) before $(1.84)     $0.73     $1.13       $0.93     $1.68
extraordinary item
    Extraordinary item         -      0.03         -           -         -
  Net  income (loss) per $(1.84)     $0.76     $1.13       $0.93     $1.68
share
                                                                          
  Diluted:                                                                
    Income (loss) before $(1.84)     $0.65     $1.08       $0.80     $1.42
extraordinary item
    Extraordinary item         -      0.02         -           -         -
  Net  income (loss) per $(1.84)     $0.67     $1.08       $0.80     $1.42
share

Weighted average  number                                                  
of shares used                                                            
   in computation  (in    13,716    16,684    16,962      15,647    18,128
 thousands)               13,716    19,742    17,840      19,512    22,186
      Basic
      Diluted
                                                                          
Selected Operating Data:                                                  
  Departures           134,804   131,470   137,924     146,069   170,116
  Revenue passengers 1,545,520   1,423,463  1,462,241  1,666,975  2,534,077
carried                 
  Revenue passenger    393,013   348,675   358,725     419,977   792,934
miles (000s) (3)
  Available seat miles 885,744   731,109   771,068     861,222   1,410,763
(000s) (4)                                                              
    Passenger load         44.3%     47.7%     46.5%       48.8%     56.2%
factor (5)
    Breakeven passenger    47.0%     43.9%     41.4%       41.8%     45.8%
load factor (6)
    Revenue per           $0.179    $0.215    $0.237      $0.239    $0.206
available seat mile
    Cost per available    $0.189    $0.198    $0.211      $0.205    $0.168
seat mile (7)
    Average yield per     $0.397    $0.441    $0.500      $0.482    $0.360
revenue passenger mile
(8)
    Average fare            $101      $108      $123        $122      $113
    Average passenger        254       245       245         252       313
trip length (miles)
    Aircraft in service       56        54        57          65        74
(end of period)
    Destinations served       42        41        39          43        53
(end of period)
                                                                          
Consolidated Balance                                                      
Sheet Data:
  Working capital    $(4,488)    $4,552   $17,782     $45,028   $68,130
(deficiency)                 
    Total assets      40,095    47,499    64,758     148,992   227,626
    Long-term debt and                                                
capital leases, less   6,675     7,054     5,673      76,145    64,735
current
         portion
    Redeemable Series A,                                                  
Cumulative,            3,825     3,825         -           -         -
Convertible,
         Preferred Stock
Total stockholders'    1,922    14,561    34,637      34,805   110,377
equity
</TABLE>
<PAGE 20>
[FN]
1.   In connection with the induced conversion of a portion of the 7%
  Convertible Subordinated Notes ("Notes"), the Company recorded a non-cash,
 non-operating charge of approximately $1.4 million.  No similar charges were
  recognized for the period from 1994 to 1997.

2.   In connection with the early extinguishment of certain senior notes, in
  1995 the Company recorded an extraordinary gain of $400,000 associated with
 the extinguished debt.  No similar extinguishments were recognized in 1994,
 1996,  1997 or 1998.

3.   "Revenue passenger miles" or "RPMs" represent the number of miles flown by
  revenue passengers.

4.   "Available seat miles" or "ASMs" represent the number of seats available
  for passengers multiplied by the number of scheduled miles the seats are
 flown.

5.   "Passenger load factor" represents the percentage of seats filled by
  revenue passengers and is calculated by dividing revenue passenger miles by
  available seat miles.

6.   "Breakeven passenger load factor" represents the percentage of seats needed
  to be filled by revenue passengers for the airline to break even after
 operating expenses, less other revenues and excluding restructuring and
 write-offs of  intangible assets.  Had restructuring and write-offs of
 intangible assets been included for the years ended December 31, 1994, 1995,
 1996, 1997 and 1998, this percentage would  have been 51.0%, 43.8%, 41.3%,
 41.8% and 45.8%, respectively.

7.   "Operating cost per available seat mile" represents total operating
  expenses excluding restructuring and write-offs of intangible assets divided
 by available seat miles.  Had restructuring and write-offs of intangible assets
  been included for the years ended December 31, 1994, 1995, 1996, 1997 and
 1998, cost per available seat mile would have been  $0.206, $0.197, $0.210,
$0.205 and $0.168, respectively.

8.   "Average yield per revenue passenger mile" represents the average passenger
  revenue received for each mile a revenue passenger is carried.

<PAGE 21>
Item  7.         Management's Discussion and Analysis of Results  of
Operations                    and Financial Condition

General

           In  1998, Atlantic Coast Airlines Holdings, Inc. ("ACAI")
and  its  wholly-owned subsidiary, Atlantic Coast Airlines  ("ACA"),
together  (the  "Company"),  recorded  a  profit  of  $30.4  million
compared to a profit of $14.5 million for 1997, and $19.2 million in
1996.   The  increased profitability from 1997 to 1998 is  primarily
the result of the Company's growth and operating margin improvement.
For  1998, the Company's available seat miles ("ASM") increased  64%
with  the  addition of nine Regional Jets ("RJs") during  the  year.
Passenger  acceptance  of  the  RJ   and  the  related  increase  in
connecting  traffic to turboprop flights resulted in a 52%  increase
in  total passengers and an 89% increase in revenue passenger  miles
("RPM").

          The reduction in net income from 1996 to 1997 is primarily
due  to  an increase in the Company's provision for income taxes  of
approximately  $12.3  million in 1997 as compared  to  approximately
$500,000  for  1996.   The  increase in tax  expense  was  primarily
attributable  to higher levels of taxable income that could  not  be
offset  by net operating loss carryforwards that were fully utilized
in 1996.

Results of Operations

           The Company earned net income of $31.8 million (excluding
a  non-cash,  non-operating charge of $1.4  million)  or  $1.49  per
diluted  share  in 1998 compared to net income of $14.5  million  or
$0.80  per  diluted share in 1997, and $19.2 million  or  $1.08  per
diluted  share in 1996. Net income was $30.4 million  or  $1.42  per
diluted  share including the $1.4 million charge.  During 1998,  the
Company  generated  operating income of $52.7  million  compared  to
$28.9  million  for  1997, and $20.3 million  for  1996.   Operating
margins  for  1998,  1997  and 1996 were  18.2%,  14.1%  and  11.1%,
respectively.

          The  improvement  in operating income from  1997  to  1998
reflects  a  63.8%  increase in ASMs partially  offset  by  a  13.8%
decrease in unit revenue (revenue per ASM) from $0.239 to $0.206 and
a 18% decrease in unit cost (cost per ASM) from $0.205 to $0.168.

           The  improvement in operating income from  1996  to  1997
reflects  a  0.8% increase in unit revenue (revenue  per  ASM)  from
$0.237  to $0.239 coupled with an 11.7% increase in ASMs and a  2.8%
decrease in unit cost (cost per ASM).

Fiscal Year 1997 vs. 1998

<PAGE 22>
Operating Revenues

          The Company's operating revenues increased 41.1% to $289.9
million  in  1998 compared to $205.4 million in 1997.  The  increase
resulted  from  a  63.8% increase in ASMs, and an increase  in  load
factor  of  7.4  points, partially offset by  a  25.3%  decrease  in
revenue per revenue passenger mile (yield).  The reduction in  yield
is  caused  principally by a 24.2% increase in the average passenger
stage  length from 252 miles in 1997 to 313 miles for 1998.  Revenue
passengers
increased  52%  in  1998 compared to 1997, which combined  with  the
increase in the average passenger stage length resulted in an  88.8%
increase in RPMs.

Operating Expenses

          The Company's operating expenses increased 34.4% to $237.2
million in 1998 compared to $176.5 million in 1997 due primarily  to
the  63.8% increase in ASMs and the 52% increase in passengers.  The
increase in ASMs reflects the addition of nine RJ aircraft  in  1998
and  the  full  year  effect of adding five  RJs  and  five  British
Aerospace Jetstream-41 ("J-41") aircraft during 1997.

          A  summary  of  operating  expenses  as  a  percentage  of
operating  revenue and operating cost per ASM for  the  years  ended
December 31, 1997 and 1998 is as follows:
<TABLE>
<CAPTION>
                                      Year Ended December 31,
                              1997              1998
                        Percent    Cost   Percent    Cost
                           of                of
                       Operating   per   Operating  per ASM
                                   ASM       
                        Revenues  (cents  Revenue  (cents)
                                    )        s
<S>                       <C>      <C>      <C>      <C>
Salaries  and   related  24.2%     5.8    23.5%      4.8
costs
Aircraft fuel             8.6%     2.1     8.3%      1.7
Aircraft    maintenance   8.2%     2.0     7.8%      1.6
and materials
Aircraft rentals         14.4%     3.4    12.7%      2.6
Traffic commissions and  15.9%     3.8    14.6%      3.0
related fees
Facility    rent    and   5.1%     1.1     4.6%      1.0
landing fees
Depreciation        and   1.7%      .4     2.2%       .5
amortization
Other                     7.8%     1.9     8.1%      1.6
                                                   
    Total                85.9%     20.5   81.8%     16.8
</TABLE>

          Costs per ASM decreased 18% to 16.8 cents in 1998 compared
to  20.5 cents in 1997 primarily due to a 63.8% increase in ASMs  in
1998  compared  to  1997,  offset by a 52%  increase  in  passengers
carried.   The  increase in ASMs reflects the addition  of  nine  RJ
aircraft during 1998 and the full year effect of adding five RJs and
five J-41 aircraft during 1997.

          Salaries and related costs per ASM decreased 17.2% to  4.8
cents  in  1998 compared to 5.8 cents in 1997.  In absolute dollars,
salaries and related expenses increased 37.2% from $49.7 million  in
1997 to $68.1 million in 1998.  The increase primarily resulted from
the  addition  of 609 full and part time employees  during  1998  to
support the additional aircraft.

          The  cost per ASM of aircraft fuel decreased to 1.7  cents
in  1998 compared to 2.1 cents in 1997.  The total price per  gallon
of  fuel decreased 15% to 67.4 cents in 1998 compared to 79.3  cents
in  1997.  In absolute dollars, aircraft fuel expense increased  35%
from  $17.8 million in 1997 to $24 million in 1998 reflecting a  23%
increase in block hours and the higher fuel consumption per hour  of
a RJ aircraft versus a turboprop aircraft.

          The  cost  per  ASM of aircraft maintenance and  materials
decreased  to 1.6 cents in 1998 compared to 2.0 cents in 1997.   The
decreased  maintenance expense per ASM resulted primarily  from  the
addition of the RJ aircraft.  In addition to generating higher ASMs,
the  RJ  aircraft are covered by manufacturer's warranty for  up  to
three  years on certain components. The Company did not  record  any
heavy  maintenance repair costs related to the RJ aircraft.  The  RJ
cost  savings  are partially offset by the increasing costs  of  the
turboprop  aircraft  as  they  age.  In absolute  dollars,  aircraft
maintenance and materials expense increased 34.8% from $16.9 million
in 1997 to $22.7 million in 1998.
<PAGE 23>
          The  cost  per  ASM of aircraft rentals decreased  to  2.6
cents  in  1998  compared to 3.4 cents in 1997.  The decreased  unit
costs  reflect the full year effect of refinancing to  lower  rental
rates, eleven used J-41 aircraft, and the purchase of three used  J-
41s  all during the second half of 1997 and the refinancing of three
J-41s,  combined with the purchases of two RJs and one J41  aircraft
during 1998.  In absolute dollars, aircraft rental expense increased
24.1%  to $36.7 million as compared to $29.6 million in 1997 due  to
the additional aircraft added to the fleet.

          The  cost per ASM of traffic commissions and related  fees
decreased  to  3.0 cents in 1998 as compared to 3.8 cents  in  1997.
The decrease reflects the reduced (from 10% to 8%) agency commission
rate  for domestic travel adopted in late 1997.  Since substantially
all passenger revenues are derived from interline sales, the Company
did  not  begin  to  realize the savings from this  reduction  until
February  1998.   In addition, the Company's percentage  of  tickets
sold by travel agents decreased year over year by approximately  ten
percentage  points due principally to the acceptance  of  electronic
ticketing  by  the travelling public.  Related fees include  program
fees  paid  to United and CRS segment booking fees for reservations.
In  absolute dollars, traffic commissions and related fees increased
29.9% to $42.4 million in 1998 from $32.7 million in 1997.

          The  cost  per  ASM  of  facility rent  and  landing  fees
decreased  to 1.0 cent in 1998 compared to 1.1 cents  in  1997.   In
absolute dollars, facility rent and landing fees increased 29.9%  to
$13.5  million  for 1998 from $10.4 million in 1997.   The  absolute
increase is the result of expansion of the Company's business to new
markets and increased landing fees due to the heavier RJ aircraft.

          The   cost   per  ASM  of  depreciation  and  amortization
increased  to 0.5 cents in 1998 compared to 0.4 cents in  1997.   In
absolute  dollars, depreciation and amortization  expense  for  1998
increased  81.5%  to $6.5 million from $3.6 million  in  1997.   The
absolute increase results from the purchase of two RJ aircraft, a J-
41 aircraft and RJ rotable spare parts in 1998 for approximately $51
million  and  the full year effect of purchasing four J-41  aircraft
and rotable spare parts in late 1997.

          The cost per ASM of other operating expenses decreased  to
1.6  cents  in  1998  compared to 1.9 cents in  1997.   In  absolute
dollars,  other operating expenses increased 45.6% to $23.3  million
for  1998  from  $16.0 million in 1997.  This absolute  increase  is
caused  primarily by increases in crew accommodations  and  training
costs related to the general expansion of the Company's business and
increased distressed passenger expenses.  During the fourth  quarter
1998,  the Company began to pay for new hire training.  Due  to  the
scheduled addition of six additional RJs in the first five months of
1999,  the  Company  incurred  new  hire  pilot  training  costs  of
approximately  $678,000  in the fourth quarter  1998.   The  Company
expects  pilot  training  costs  to  continue  to  increase  as  the
remaining firm ordered RJ aircraft are received.

          As   a  result  of  the  foregoing  expense  items,  total
operating  expenses  were $237.2 million for 1998,  an  increase  of
34.4% compared to $176.5 million in 1997.  Total ASMs increased
63.8% year over year causing the cost per ASM to decrease from  20.5
cents in 1997 to 16.8 cents in 1998.
<PAGE 24>
          Interest  expense increased from $3.4 million in  1997  to
$4.2  million in 1998.  During the first part of 1998,  the  Company
accepted for conversion into common stock approximately $38  million
of  its  7%  Convertible Subordinated Notes ("Notes").  The  reduced
interest  costs resulting from the debt conversion partially  offset
the  full  year effect of the debt outstanding for the  purchase  of
four J-41s in 1997, and the issuance of new debt to acquire two  RJs
and one J-41 in 1998.
          
          Interest  income increased from $1.3 million  in  1997  to
$4.1 million in 1998.  This is primarily the result of the Company's
significantly higher cash balances during 1998 as compared  to  1997
and  the  capitalization  of interest on the  Company's  outstanding
aircraft deposits with the manufacturers.
          
          From   March  20  through  April  8,  1998,  the   Company
temporarily  reduced  the conversion price  from  $9  to  $8.86  for
holders  of the Notes.  During this temporary period, $31.7  million
of  the  Notes  converted into approximately 3.6 million  shares  of
common  stock.   As a result of this temporary price reduction,  the
Company recorded a $1.4 million charge to other expense during  1998
representing  the  fair value of the additional  shares  distributed
upon conversion.

          The  Company  recorded a provision  for  income  taxes  of
$21.1 million for 1998, compared to a provision for income taxes  of
$12.3 million in 1997.  The 1998 effective tax rate of approximately
41%  and the 1997 effective tax rate of approximately 46% are higher
than  the  statutory federal and state rates.  The higher  effective
tax  rates  reflect  non-deductible  permanent  differences  between
taxable  and  book  income.  Net operating loss  carryforwards  were
fully utilized in 1996.

Fiscal Year 1996 vs. 1997

Operating Revenues
          
          The Company's operating revenues increased 12.6% to $205.4
million  in  1997 compared to $182.5 million in 1996.  The  increase
resulted from an 11.7% increase in ASMs, an increase in load  factor
of 2.3 points, partially offset by a 3.6% decrease in yield.
          
          The   reduction  in  yield  is  related  in  part  to  the
reinstatement  of the federal excise ticket tax from March  7,  1997
through  the remainder of the year.  During 1996, this tax was  only
in  effect  from  August  27,  1996 to  December  31,  1996.   Total
passengers increased 14.0% in 1997 compared to 1996 as a  result  of
the 11.7% increase in ASMs and 2.3 point increase in load factor.

Operating Expenses

           The Company's operating expenses increased 8.8% to $176.5
million in 1997 compared to $162.2 million in 1996 due primarily  to
an  11.7% increase in ASMs, and a 14.0% increase in passengers.  The
increase in ASMs reflects the net addition of five J-41 and five  RJ
aircraft during 1997.

<PAGE 25>
           A  summary  of  operating expenses  as  a  percentage  of
operating  revenue and operating cost per ASM for  the  years  ended
December 31, 1996 and 1997 is as follows:
<TABLE>
<CAPTION>
                                      Year Ended December 31,
                              1996              1997
                        Percent    Cost   Percent    Cost
                           of                of
                      Operating    per   Operating  per ASM
                                   ASM       
                        Revenues  (cents)  Revenues  (cents)
                                   
<S>                        <C>     <C>      <C>      <C>
Salaries  and   related  24.4%     5.8    24.2%      5.8
costs
Aircraft fuel             9.4%     2.2     8.6%      2.1
Aircraft    maintenance   9.2%     2.2     8.2%      2.0
and materials
Aircraft rentals         16.0%     3.8    14.4%      3.4
Traffic commissions and  15.6%     3.7    15.9%      3.8
related fees
Facility    rent    and   4.8%     1.1     5.1%      1.1
landing fees
Depreciation        and   1.5%      .4     1.7%       .4
amortization
Other                     8.2%     1.9     7.8%      1.9
                                                   
       Total    (before                                
reversals of             89.1%     21.1   85.9%     20.5
restructuring                           
charges)
</TABLE>

          Costs  per  ASM before reversals of restructuring  charges
decreased 2.8% to 20.5 cents in 1997 compared to 21.1 cents in  1996
primarily due to an 11.7% increase in ASMs in 1997 compared to 1996,
offset  by a 14.0% increase in passengers carried.  The increase  in
ASMs  resulted from the net addition of five J-41 aircraft and  five
50-seat  RJ aircraft along with a 1.2% improvement in daily aircraft
block hour utilization.
          
          Salaries  and related costs per ASM remained unchanged  at
5.8  cents in 1997 compared to 1996.  In absolute dollars,  salaries
and related expenses increased 11.9% from $44.4 million in  1996  to
$49.7  million in 1997. The increase resulted from additional flight
payroll  related to a contractual increase in May 1996 and  February
1997 and a 10.7% increase in profit sharing expense year over year.

          The  cost per ASM of aircraft fuel decreased to 2.1  cents
in  1997 compared to 2.2 cents in 1996.  The total cost of fuel  per
gallon  decreased 4.2% to 79.3 cents in 1997 compared to 82.8  cents
in  1996.  In absolute dollars, aircraft fuel expense increased 4.1%
from $17.1 million in 1996 to $17.8 million in 1997.

          The  cost  per  ASM of aircraft maintenance and  materials
decreased  to 2.0 cents in 1997 compared to 2.2 cents in 1996.   The
decreased maintenance expense resulted primarily from the receipt of
performance  guarantee fees from an overhaul  vendor.   In  absolute
dollars,  aircraft maintenance and materials expense increased  0.6%
from $16.8 million in 1996 to $16.9 million in 1997.
          
          The  cost  per  ASM of aircraft rentals decreased  to  3.4
cents  in  1997  compared to 3.8 cents in 1996.  The decreased  unit
costs reflect the refinancing to lower rental rates of eleven used J-
41  aircraft  and the purchase by the Company of three  used  J-41s.
All  of  these transactions were accomplished in the second half  of
1997.   In  absolute dollars, aircraft rentals increased  1.7%  from
$29.1 million in 1996 to $29.6 million in 1997.
<PAGE 26>          
          The  cost per ASM of traffic commissions and related  fees
increased  to 3.8 cents in 1997 compared to 3.7 cents in 1996.   The
increased commissions reflect the  contractual increases in  program
fees  paid  to  United  and a higher percentage of tickets  sold  by
travel  agencies.  Commission rates as a percent of total  passenger
revenue  fluctuate  based  on  the mix of  commissionable  and  non-
commissionable tickets, and have changed due to a cap on  the  total
amount of commission that travel agents can earn.  Commissions as  a
percentage of total passenger revenue averaged 7.3% in 1997 and 7.4%
in  1996.   Related fees include program fees to United and  segment
booking   fees  for  reservations.  In  absolute  dollars,   traffic
commissions and related fees increased 14.3% from $28.6  million  in
1996 to $32.7 million in 1997.

          The  cost  per  ASM  of  facility rent  and  landing  fees
remained  unchanged  at  1.1 cents in 1997  compared  to  1996.   In
absolute dollars, facility rent and landing fees increased 17.8%  to
$10.4  million  for 1997 from $8.8 million in 1996.   This  absolute
increase is the result of expansion of the Company's business to new
markets and increased landing fees due to the heavier RJ aircraft.

          The cost per ASM of depreciation and amortization remained
unchanged at 0.4 cents in 1997 compared to 1996.  Absolute increases
in  depreciation  expense were offset by  increases  in  ASMs.   The
absolute  increase results primarily from the purchase of four  J-41
aircraft  (one  of  these aircraft was new to the  fleet  in  1997),
additional  rotable  spare  parts associated  with  additional  J-41
aircraft,  improvements  to  aircraft,  leasehold  improvements  and
purchases  of computer equipment.  In absolute dollars, depreciation
and  amortization expense increased 28.6% from $2.8 million in  1996
to $3.6 million in 1997.
          
          The  cost  per  ASM  of other operating expenses  remained
unchanged at 1.9 cents in 1997 compared to 1996.  Absolute increases
were  offset  by increased ASMs.  The absolute increase in  expenses
are  primarily  attributable to increased  training  and  distressed
passenger  expenses.  In absolute dollars, other operating  expenses
increased 7.6% from $14.9 million in 1996 to $16 million in 1997.
          
          As   a  result  of  the  foregoing  expense  items,  total
operating  expenses before reversals of restructuring  charges  were
approximately $176.5 million for 1997, an increase of 8.5%  compared
to  $162.6  million in 1996.  Total ASMs increased 11.7%  year  over
year and the cost per ASM decreased from 21.1 cents for 1996 to 20.5
cents for 1997.
          
          The  Company  reversed  excess restructuring  reserves  of
$426,000  in 1996 (0.1 cents per ASM).  The Company established  the
reserves  with  a  charge of $8.1 million in  1994.   The  reversals
reflected  remaining  unused  reserves  for  pilot  requalification,
return  conditions,  spare  parts reconciliation  and  miscellaneous
professional fees.  As of December 31, 1996, there were no remaining
reserves related to the restructuring.
          
          Interest expense, net of interest income, was $2.2 million
in  1997  and $672,000 in 1996.  The increased expense reflects  the
Company's  issuance in July 1997 of $57.5 million of 7%  convertible
debt  and  $16.4  million of equipment notes  associated  with  pass
through  trust certificates issued in September 1997  reduced  by  a
significant increase in the Company's cash balances in 1997 and  use
of  proceeds  from  the  convertible debt to repay  higher  interest
bearing debt.
          
          The  Company  recorded a provision  for  income  taxes  of
approximately  $12.3 million for 1997, compared to a  provision  for
income  taxes of approximately $500,000 in 1996.  The 1996 effective
tax  rate  of  approximately 2.3% was significantly  less  than  the
statutory  federal  and  state rates due  principally  to  the  full
utilization  of net operating loss carryforwards and the elimination
of
the   valuation  allowance.   The  1997  effective   tax   rate   of
approximately  46%  is higher than the statutory federal  and  state
rates primarily due to permanent differences.

<PAGE 27>
          
Outlook

           This  Outlook  section  and  the  Liquidity  and  Capital
Resources  section  below  contain forward-looking  statements.  The
Company's  actual results may differ significantly from the  results
discussed  in forward-looking statements. Factors that  could  cause
the   Company's  future  results  to  differ  materially  from   the
expectations  described here include the response of  the  Company's
competitors to the Company's business strategy, market acceptance of
RJ  service  to  new  destinations, the cost of fuel,  the  weather,
satisfaction  of  regulatory requirements and general  economic  and
industry conditions.

           A  central element of the Company's business strategy  is
expansion  of  its jet aircraft fleet.  At December  31,  1998,  the
Company  had firm commitments to acquire 29 additional 50-seat  RJs.
The  Company  believes  that the continued implementation  of  these
aircraft  will expand the Company's business into new  markets.   In
general,  service  to new markets may result in increased  operating
expenses  that  may  not  be  immediately  offset  by  increases  in
operating revenues.

          In  the  fourth quarter of 1998, the Company  began  using
United's  "ORION"  revenue management system for  flights  departing
after  January 31, 1999 and beyond.  The PROS IV revenue  management
system,  which has been in operation since May 1997 at the  Company,
was  no  longer used as of that date.  ORION allows the  Company  to
take  advantage of state of the art "Origin and Destination" revenue
maximization  capabilities.  As with the  previous  system,  revenue
management  analysts  will continue to monitor  forecasts  and  make
adjustments for changes in demand and behavior.  The ORION system is
designed to optimize all of the passenger itineraries that flow over
the  entire United/United Express network.  Management believes that
ORION  will  further  promote  maximization  of  passenger  revenue,
although there can be no assurance that this will occur.

          As  a  result  of  the recent addition  of  new  RJs,  the
Company's  maintenance expense on these aircraft were  not  material
due  to  manufacturers' warranties and the generally  lower  failure
rates  of major components due to the newness of the aircraft.   The
current  average age of the Company's RJ fleet is approximately  one
year.  The  Company's  maintenance  expense  for  RJ  aircraft  will
increase  in  future  periods when substantial airframe  and  engine
repair  costs are incurred. The Company has fixed, "not  to  exceed"
airframe  maintenance cost per hour flown rates  guaranteed  by  the
manufacturer.  To  date, the Company's actual  airframe  maintenance
cost per hour flown has not exceeded the guaranteed rate.

          In  late  1998,  US  Airways announced  its  intention  to
increase   activity  at  Washington-Dulles  utilizing  its  mainline
service,  lowfare  MetroJet  product, and  its  US  Airways  Express
affiliates.   US Airways has since implemented or announced  service
to  eight  of  the  Company's markets using both jet  and  turboprop
equipment.  In two of the Company's existing markets, MetroJet  will
provide  the  service at a significantly lower fare  structure.  The
Company  continually  monitors the effects competition  has  on  its
routes,  fares and frequencies.  The Company believes  that  it  can
compete  effectively  with  US Airways,  however  there  can  be  no
assurances that US Airways' expansion at Washington-Dulles will  not
have  a  material  adverse  effect  on  the  Company's  results   of
operations or financial position.
          
          In  early 1999, United announced its intention to increase
its level of activity at Washington-Dulles by 60% beginning in April
and  May 1999. The Company believes that United's announced increase
will add approximately 7,000 additional daily seat departures to the
United/United Express operation at Washington-Dulles.  The  Company,
in  concert with United, also announced either increased frequencies
or  upgraded  equipment, or both, in all of its markets affected  by
the US Airways expansion.
<PAGE 28>
Liquidity and Capital Resources

          The  Company's balance sheet improved significantly during
1998  compared  to 1997.  As of December 31, 1998, the  Company  had
cash  and  cash equivalents of $64.4 million and working capital  of
$68.1   million  compared  to  $39.2  million  and  $45.2   million,
respectively,  as  of  December 31, 1997.   During  the  year  ended
December  31,  1998,  cash  and  cash  equivalents  increased  $25.2
million,  reflecting  net cash provided by operating  activities  of
$39.7  million,  net  cash  used in investing  activities  of  $39.7
million  (related  to  purchases  of  aircraft  and  equipment   and
decreases  in  short  term investments) and  net  cash  provided  by
financing  activities  of  $25.2  million.   Net  cash  provided  by
financing  activities increased principally due to the  issuance  of
long term debt to acquire two RJ and one J-41 aircraft.
          
          The  Company's  balance sheet also improved  significantly
during  1997 compared to 1996.  As of December 31, 1997, the Company
had  cash and cash equivalents of $39.2 million and working  capital
of  $45.2  million  compared  to $21.5 million  and  $17.8  million,
respectively,  as  of  December 31, 1996.   During  the  year  ended
December  31,  1997,  cash  and  cash  equivalents  increased  $17.7
million,  reflecting  net cash provided by operating  activities  of
$21.3  million,  net  cash  used in investing  activities  of  $55.2
million (related to deposits for the RJs, purchases of equipment and
increases  in  short  term investments) and  net  cash  provided  by
financing  activities  of  $51.6  million.   Net  cash  provided  by
financing activities increased principally due to the receipt of net
proceeds  of  $55.6  million  in July  1997  from  the  issuance  of
convertible  notes  due 2004 partially offset by the  $16.9  million
purchase  of  the Company's common stock from British  Aerospace  in
July 1997.

          Other Financing

           On  February 8, 1999, the Company entered into an  asset-
based  lending  agreement  with  two  financial  institutions   that
provides  the  Company with a line of credit of up to  $35  million,
depending on the amount of assigned ticket receivables and the value
of  certain  rotable spare parts. This line replaced a previous  $20
million  line. Borrowings under the line of credit can  provide  the
Company  a  source  of  working capital until proceeds  from  ticket
coupons  are  received.  The line is collateralized by  all  of  the
Company's receivables and certain rotable spare parts.   There  were
no  borrowings  under  the previous line during  1998.  The  Company
pledged $2.9 million of this line of credit as collateral to  secure
letters  of  credit issued on behalf of the Company by  a  financial
institution.

          In  July  1997, the Company issued $57.5 million aggregate
principal  amount of 7% Convertible Subordinated Notes due  July  1,
2004 ("the Notes").  The Notes are convertible into shares of Common
Stock  unless  previously redeemed or repurchased, at  a  conversion
price  of  $9 per share, (after giving effect to the stock split  on
May 15, 1998) subject to certain adjustments.  Interest on the Notes
is payable on April 1 and October 1 of each year.  The Notes are not
redeemable by the Company until July 1, 2000.
<PAGE 29>
          In  January 1998, approximately $5.9 million of the  Notes
were  converted,  pursuant  to their original  terms,  into  660,826
shares  of Common Stock.  From March 20, 1998 to April 8, 1998,  the
Company  temporarily reduced the conversion price from $9  to  $8.86
for  holders of the Notes.  During this period, $31.7 million of the
Notes  converted  into approximately 3.6 million  shares  of  Common
Stock.   As a result of this temporary price reduction, the  Company
recorded  a  non-cash, non-operating charge to earnings  during  the
second  quarter of 1998 of $1.4 million representing the fair  value
of the additional shares distributed upon conversion.

           In  September  1997, approximately $112 million  of  pass
through  certificates were issued in a private placement by separate
pass  through  trusts, which purchased with the proceeds,  equipment
notes  (the  "Equipment  Notes")  issued  in  connection  with   (i)
leveraged lease transactions relating to four J-41s and six RJs, all
of  which  were  leased to the Company (the "Leased Aircraft"),  and
(ii)  the  financing of four J-41s owned by the Company (the  "Owned
Aircraft").  The Equipment Notes issued with respect  to  the  Owned
Aircraft are direct obligations of ACA, guaranteed by ACAI  and  are
included  as  debt  obligations  in  the  accompanying  consolidated
financial statements. The Equipment Notes issued with respect to the
Leased Aircraft are not obligations of ACA or guaranteed by ACAI.

           With  respect to one RJ leased aircraft, at December  31,
1997  (the "Prefunded Aircraft"), the proceeds from the sale of  the
Equipment  Notes  were  deposited into collateral  accounts,  to  be
released  at  the  closing  of  a leveraged  lease  related  to  the
Prefunded  Aircraft.  In January 1998, an equity investor  purchased
this  aircraft and entered into a leveraged lease with  the  Company
and the collateral accounts were released.

     Other Commitments

          In July 1997, the Company entered into a series of put and
call contracts having an aggregate notional amount of $39.8 million.
The   contracts  matured  between  March  and  September  1998.  The
contracts  were entered into as an interest rate hedge  designed  to
limit  the  Company's  exposure  to interest  rate  changes  on  the
anticipated issuance of permanent financing relating to the delivery
of  aircraft  in  1998.   During 1998,  the  Company  settled  these
contracts,  paying the counterparty approximately $2.3 million,  and
is amortizing this cost over the life of the related aircraft leases
or is depreciating the cost as part of the aircraft acquisition cost
for  owned  aircraft.   On July 2, 1998, the  Company  entered  into
additional  put  and  call contracts having  an  aggregate  notional
amount  of  $51.8  million to hedge its exposure, to  interest  rate
changes  on the anticipated issuance of permanent financing for  six
RJ  aircraft scheduled for delivery between October 1998  and  April
1999.   In  the  fourth  quarter  1998,  the  Company  settled   two
contracts,  paying the counterparty approximately $700,000,  and  is
amortizing this cost over the life of the related aircraft lease for
the  leased  aircraft and is depreciating the cost as  part  of  the
aircraft acquisition cost for the owned aircraft.  The Company would
have  been  obligated  to  pay the counterparty  approximately  $1.5
million had the remaining contracts settled on December 31, 1998.
<PAGE 30>          
          In  September and December 1998, the Company entered  into
call option contracts to hedge price changes on approximately 34,000
barrels of jet fuel per month during the period from January 1999 to
June   1999.  The  contracts  provide  for  a  premium  payment   of
approximately  $273,000 and sets a cap on the average maximum  price
equal  to  40.625 cents per gallon of jet fuel excluding  taxes  and
into-plane  fees with the premium and any gains on this contract  to
be  recognized as a component of fuel expense during the  period  in
which the Company purchases fuel. In October and November 1998,  the
Company  entered  into commodity swap transactions  to  hedge  price
changes  on approximately 34,000 additional barrels of jet fuel  per
month  during  the  period  from January  1999  to  June  1999.  The
contracts  provide  for an average fixed price of  44.35  cents  per
gallon  of  jet  fuel  with  any gains or  losses  recognized  as  a
component  of  fuel expense during the period in which  the  Company
purchases  fuel.  With these transactions, the  Company  has  hedged
approximately 80% of its jet fuel requirements for the first half of
1999.  Had  the commodity swap transactions settled on December  31,
1998,  the  Company  would have incurred approximately  $900,000  in
additional fuel expense.
          
          In  the second quarter of 1998, the Company announced that
the   Metropolitan   Washington  Airport  Authority   ("MWAA"),   in
coordination  with  the Company, will build an approximately  69,000
square foot regional passenger concourse at Washington-Dulles.   The
facility  is  scheduled to open in May 1999.  The new facility  will
offer improved passenger amenities and operational enhancements, and
will  provide  additional space to support  the  Company's  expanded
operations  resulting from the introduction of  RJs.   The  facility
will be designed, financed, constructed, operated and maintained  by
MWAA,  and  will be leased to the Company.  The lease rate  will  be
determined based upon final selection of funding methods and  rates.
MWAA  has  agreed to fund the construction through the  proceeds  of
bonds  and,  subject  to  approval by the  FAA,  passenger  facility
charges  ("PFC").  In  order to obtain the most favorable  permanent
financing,  the  Company agreed to obtain its own interim  financing
from  a  third  party lender to fund a portion of the total  program
cost  of the regional concourse for approximately $15 million.  MWAA
has  agreed  to  replace the Company's interim  financing  with  the
proceeds of bonds or, if obtained, PFC funds, no later than one year
following  the substantial completion date of the project.  If  MWAA
replaces  the  interim financing with PFC funding rather  than  bond
financing, the Company's lease cost will be significantly lower. The
Company  obtained financing for this obligation from  two  banks  in
February  1999 and has borrowed $4.5 million through March 1,  1999.
MWAA  has  agreed to reimburse principal borrowings but the  Company
will be responsible for all interest costs.

     Aircraft

          The Company has significant lease obligations for aircraft
including seven additional RJ leveraged leases entered into in  1998
that  are  classified  as operating leases  and  therefore  are  not
reflected  as  liabilities  on  the Company's  balance  sheet.   The
remaining terms of such leases range from two to sixteen and a  half
years.   The  Company's total rent expense in 1998  under  all  non-
cancelable  aircraft operating leases with remaining terms  of  more
than  one year was approximately $37.5 million.  As of December  31,
1998, the Company's minimum rental payments for 1999 under all  non-
cancelable  aircraft operating leases with remaining terms  of  more
than one year were approximately $42 million.

          As  of March 1, 1999, the Company had a total of 28 RJs on
order   from  Bombardier,  Inc.,  in  addition  to  the  15  already
delivered, and held options for 27 additional RJs.  During 1998, the
Company  converted five of the six conditional orders and  converted
20  option  aircraft  to  firm orders.  Of  the  remaining  28  firm
aircraft deliveries, eight are scheduled for the remainder of  1999,
nine are scheduled for 2000, and eleven are scheduled for 2001.
<PAGE 31>
          The   Company   is  obligated  to  purchase  and   finance
(including  leveraged  leases) the 28 firm ordered  aircraft  at  an
approximate capital cost of $520 million.
          
          The  Company  previously announced that  it  is  exploring
alternatives to accelerate the retirement of its fleet of 28  leased
19 seat J-32 aircraft.  The Company is assessing plans to target the
phase-out of the J-32 from its United Express operation by  the  end
of  2001.  As of March 1, 1999, the Company has J-32 operating lease
commitments with remaining lease terms ranging from three  to  seven
years  and  related  minimum  lease payments  of  approximately  $47
million.   The Company intends to complete its analysis of a  phase-
out   plan   including   quantifications  of  any   one-time   fleet
rationalization charge during 1999.

          In  order  to  ensure the highest level of safety  in  air
transportation,   the  FAA  has  authority  to   issue   maintenance
directives  and  other  mandatory orders relating  to,  among  other
things,  inspection  of  aircraft  and  the  mandatory  removal  and
replacement of parts that have failed or may fail in the future.  In
addition,  the  FAA  from time to time amends its regulations.  Such
amended regulations may impose additional regulatory burdens on  the
Company  such  as  the  installation of  new  safety-related  items.
Depending upon the scope of the FAA's order and amended regulations,
these  requirements  may  cause the Company  to  incur  substantial,
unanticipated expenses.

     Capital Equipment and Debt Service

           In  1999  the  Company anticipates  capital  spending  of
approximately $51 million consisting of $47 million to  own  two  RJ
aircraft, rotable spare parts, spare engines and equipment,  and  $4
million  for other capital assets.  The Company anticipates that  it
will  be  able to arrange financing for the aircraft and  spares  on
generally favorable terms, although there is no certainty that  such
financing  will be available or in place before the commencement  of
deliveries.

          Debt service for 1999 is estimated to be approximately $10
million  reflecting  borrowings related to the purchase  of  two  RJ
aircraft, five J-41s acquired in 1997 and 1998 and interest  due  on
the  remaining  7%  Convertible Subordinated Notes.   The  foregoing
amount does not include additional debt that may be required for the
financing of the RJs, spare parts and engines.

          The  Company  believes  that, in the  absence  of  unusual
circumstances, its cash flow from operations, the $35 million credit
facility, and other available equipment financing will be sufficient
to   meet  its  working  capital  needs,  expected  operating  lease
commitments, capital expenditures, and debt service requirements for
the next twelve months.

     Inflation

           Inflation has not had a material effect on the  Company's
operations.
<PAGE 32>
Year 2000 Readiness

     Background

          The   "Year   2000  problem"  refers  to   the   potential
disruptions  arising  from the inability of  computer  and  embedded
microprocessor  systems  to  process or  operate  with  data  inputs
involving  the  years beginning with 2000 and, to a  lesser  extent,
involving the year 1999.  As used by the Company, "year 2000  ready"
means  that  a  system  will  function  in  the  year  2000  without
modification or adjustment, or with a one-time manual adjustment.

     State of Readiness

          The  Company  is highly reliant on information  technology
("IT")  systems  and  non-IT embedded technologies  of  third  party
vendors  and contractors and governmental agencies, such as the  CRS
systems, United, aircraft and parts manufacturers, the FAA, the DOT,
and  MWAA  and  other local airport authorities.  The  Company  sent
questionnaires  to  these  third  party  vendors,  contractors   and
government  agencies. For all mission critical and key vendors,  the
Company  has  received a response and has assessed  which  of  their
systems  may be affected by year 2000 issues and what the status  of
their  remediation plans are. All mission critical and  key  vendors
have  stated that they will be year 2000 compliant by June 30, 1999.
In  cases  where  the Company has not received assurances  from  non
critical third parties that their systems are year 2000 ready, it is
initiating  further mail or phone correspondence. The  Company  also
has  surveyed  its  internal  IT and  non-IT  systems  and  embedded
operating  systems to evaluate and prioritize those  which  are  not
year  2000 ready.  The Company has completed remediation and testing
of  approximately  97% of its internal IT and  non-IT  systems,  and
expects  the  Company's remaining IT systems to  be  remediated  and
tested by April 30, 1999.

     Costs

          The  Company has utilized existing resources and  has  not
incurred  any significant costs to evaluate or remediate  year  2000
issues  to  date.   The  Company does not  utilize  older  mainframe
computer technology in any of its internal IT systems.  In addition,
most of its hardware and software were acquired within the last  few
years,  and  many  functions are operated by third  parties  or  the
government.  Because of this, the Company believes that the cost  to
modify its own non-year 2000 ready systems or applications will  not
have  a material effect on its financial position or the results  of
its operations.

     Risks

          The  Company's  year 2000 compliance efforts  are  heavily
dependent on year 2000 compliance by governmental agencies,  United,
CRS  vendors and other critical vendors and suppliers.  The  failure
of  any  one of these mission critical functions (which the  Company
believes to be the most likely worst case scenario), such as a shut-
down  of  the  air  traffic  control system,  could  result  in  the
reduction or suspension of the Company's operations and could have a
material adverse effect on the
Company's  financial  position and results of its  operations.   The
failure  of  other systems could cause disruptions in the  Company's
flight  operations, service delivery and/or cash flow. Until it  has
fully  completed  its  evaluation of  all  internal  IT  and  non-IT
systems,  the  Company cannot accurately estimate all risks  of  its
Year  2000  issue.  The Company may identify internal  systems  that
present  a risk of Year 2000 related disruption. Any such disruption
could  have  a material adverse effect upon the Company's  financial
condition and results of operations.

<PAGE 33>

     Contingency Plans

          The  Company  is  in the process of developing  year  2000
contingency plans.  The Company intends to closely monitor the  year
2000  compliance  efforts  of the third parties  upon  which  it  is
heavily  reliant  and its own internal remediation  efforts.   While
certain  of  the Company's systems could be handled manually,  under
certain  scenarios  the Company may not be able to  operate  in  the
absence of certain systems, in which cases the Company would need to
reduce  or  suspend operations until such systems were  restored  to
operational  status. Any such reduction or suspension could  have  a
material  adverse effect upon the Company's financial condition  and
results of operations.
          
Recent Accounting Pronouncements
          
          The  American  Institute of Certified  Public  Accountants
issued  Statement of Position 98-5 on accounting for start-up costs,
including  preoperating  costs related to the  introduction  of  new
fleet  types by airlines.  The new accounting guidelines  will  take
effect  for  fiscal years beginning after December  15,  1998.   The
Company  has previously deferred certain start-up costs  related  to
the  introduction of the RJs and is amortizing such costs to expense
ratably over four years. The Company will be required to expense any
remaining  unamortized amounts as of January 1, 1999 as a cumulative
effect  of  a change in accounting principle.  In January 1999,  the
Company  recorded a charge for the remaining unamortized balance  of
approximately $1.5 million associated with preoperating costs.

          In   June  1998,  the  FASB  issued  Statement  No.   133,
"Accounting for Derivative Instruments and Hedging Activities." This
Statement   establishes  accounting  and  reporting  standards   for
derivative instruments and all hedging activities. It requires  that
an  entity recognize all derivatives as either assets or liabilities
at their fair values. Accounting for changes in the fair value of  a
derivative  depends  on  its  designation  and  effectiveness.   For
derivatives  that qualify as effective hedges, the  change  in  fair
value  will have no impact on earnings until the hedged item affects
earnings.  For  derivatives  that  are  not  designated  as  hedging
instruments, or for the ineffective portion of a hedging instrument,
the  change  in fair value will affect current period earnings.  The
Company  will  adopt Statement No. 133 during its first  quarter  of
fiscal  2000  and is currently assessing the impact  this  statement
will  have  on interest rate swaps and any future hedging  contracts
that may be entered into by the Company.
          
Item 7A.       Quantitative and Qualitative Disclosures about Market
Risk
          
          The  Company's principal market risk results from  changes
in jet fuel pricing and in interest rates.
          
          For  1999, the Company has hedged its exposure to jet fuel
price  fluctuations by entering into jet fuel option  contracts  for
approximately  40%  of  its estimated 1999 fuel  requirements.   The
option  contracts are designed to provide protection  against  sharp
increases  in  the price of jet fuel.  Based on the  Company's  1999
projected  fuel  consumption  of  45  million  gallons,  a  one-cent
increase  in the average annual price per gallon of jet  fuel  would
increase the Company's annual aircraft fuel expense by approximately
$366,000.
          
          The  Company's  exposure to market  risk  associated  with
changes  in  interest rates relates to the Company's  commitment  to
acquire  regional jets.  The Company has entered into put  and  call
contracts designed to limit the Company's exposure to interest  rate
changes  until permanent financing is secured upon delivery  of  the
aircraft.   At December 31, 1998 the Company had four swap contracts
outstanding  related to the delivery of the next four  RJs.   A  one
percentage point decrease in interest rates from the Company's  call
contracts  would  increase the Company's annual  aircraft  lease  or
ownership costs associated with these contracts by $160,000.

<PAGE 34>          
          As  of  March  1,  1999, the Company  has  commitments  to
purchase 28 additional RJ aircraft.  The Company expects to  finance
this  commitment using a combination of debt, leveraged  leases  and
single  entity  operating leases.  Changes in  interest  rates  will
impact the actual cost to the Company for these transactions in  the
future.
          
          The Company does not have significant exposure to changing
interest rates on its long-term debt as the interest rates  on  such
debt  are  fixed.   Likewise, the Company does  not  hold  long-term
interest  sensitive assets and therefore is not exposed to  interest
rate  fluctuations for its assets. The Company does not purchase  or
hold any derivative financial instruments for trading purposes.

<PAGE 35>
Item 8.        Consolidated Financial Statements

     INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

Page

Independent Auditors' Report for the years ended  December  36
31, 1997 and 1998

Report of Independent Certified Public Accountants for the  37
year ended December 31, 1996                                                

Consolidated  Balance Sheets as of December 31,  1997  and  38
1998                                                    

Consolidated Statements of Operations for the years ended   39
December 31, 1996, 1997 and 1998  

Consolidated  Statements of Stockholders' Equity  for  the  40
years ended December 31, 1996, 1997 and 1998

Consolidated Statements of Cash Flows for the years ended   41
December 31, 1996, 1997 and 1998                     
                          
Notes to Consolidated Financial Statements                  42

<PAGE 36>
                    Independent Auditors' Report


The Board of Directors and Stockholders
Atlantic Coast Airlines Holdings, Inc.:

We  have  audited  the accompanying consolidated balance  sheets  of
Atlantic Coast Airlines Holdings, Inc. and subsidiary as of December
31,  1997  and  1998,  and  the related consolidated  statements  of
operations, stockholders' equity, and cash flows for the years  then
ended.    These   consolidated   financial   statements   are    the
responsibility  of the Company's management.  Our responsibility  is
to  express  an  opinion on these consolidated financial  statements
based on our audits.

We  conducted  our  audits  in accordance  with  generally  accepted
auditing  standards.   Those standards  require  that  we  plan  and
perform  the audit to obtain reasonable assurance about whether  the
financial  statements are free of material misstatement.   An  audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements.  An audit also includes
assessing  the accounting principles used and significant  estimates
made  by  management,  as well as evaluating the  overall  financial
statement  presentation.   We believe  that  our  audits  provide  a
reasonable basis for our opinion.

In  our  opinion, the consolidated financial statements referred  to
above  present  fairly,  in  all material  respects,  the  financial
position of Atlantic Coast Airlines Holdings, Inc. and subsidiary as
of  December  31, 1997 and 1998 and the results of their  operations
and  their  cash  flows for the years then ended in conformity  with
generally accepted accounting principles.


                                             KPMG LLP

Washington, D.C.
January 27, 1999

<PAGE 37>
         Report of Independent Certified Public Accountants
                                  
                                  
Board of Directors and Stockholders
Atlantic Coast Airlines Holdings, Inc.

We  have  audited  the accompanying consolidated  statements of income,
stockholders'equity and cash flows
of Atlantic  Coast  Airlines  Holdings,  Inc.  and  subsidiary,  as  of
December  31,  1996.  These financial
statements are the responsibility of the Company's management.   Our
responsibility   is  to  express  an  opinion  on  these   financial
statements based on our audits.

We  conducted  our  audit  in  accordance  with  generally  accepted
auditing  standards.   Those standards  require  that  we  plan  and
perform  the audit to obtain reasonable assurance about whether  the
financial  statements  are free of material misstatement.  An  audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements.  An audit also includes
assessing  the accounting principles used and significant  estimates
made  by  management,  as well as evaluating the  overall  financial
statement  presentation.   We believe  that  our  audits  provide  a
reasonable basis for our opinion.

In  our  opinion, the consolidated financial statements referred  to
above  present  fairly,  in  all material  respects,  the  results of
operations and the cash flows of Atlantic Coast Airlines Holdings, Inc.
 and subsidiary at
December  31,  1996 in   conformity  with  generally  accepted   accounting
principles.


                                             BDO Seidman, LLP

Washington, D.C.
January 24, 1997, except for Note 18,
The date which is May 29, 1997

<PAGE 38>
<TABLE>
<CAPTION>
(In thousands, except for share data and par values)
December 31,                                      1997       1998
Assets                                                            
Current:                                                          
<S>                                                 <C>        <C>
    Cash and cash equivalents                         $          $
                                                 39,167     64,412
    Short term investments                       10,737         63
    Accounts receivable, net                     22,321     30,210
    Expendable parts and fuel inventory, net      2,477      3,377
    Prepaid expenses and other current            2,006      3,910
assets
    Deferred tax asset                                -      2,534
    Total current assets                         76,708    104,506
Property and equipment at cost, net of                             
accumulated depreciation and amortization        40,638     88,326
Preoperating costs, net of accumulated            2,004      1,486
amortization
Intangible assets, net of accumulated             2,613      2,382
amortization
Deferred tax asset                                  688          -
Debt issuance costs, net of accumulated           3,051      3,420
amortization
Aircraft deposits                                19,040     21,060
Other assets                                      4,250      6,446
    Total assets                                      $          $
                                                148,992    227,626
Liabilities and Stockholders' Equity                              
Current:                                                          
    Current portion of long-term debt                 $          $
                                                  1,851      3,450
    Current portion of capital lease              1,730      1,334
obligations
    Accounts payable                                              
                                                  4,768      5,262
    Accrued liabilities                                           
                                                 23,331     26,330
    Total current liabilities                    31,680     36,376
Long-term debt, less current portion             73,855     63,289
Capital lease obligations, less current           2,290      1,446
portion
Deferred tax liability                                -      6,238
Deferred credits, net                             6,362      9,900
    Total liabilities                           114,187    117,249
Stockholders' equity:                                             
Preferred Stock: $.02 par value per share;                         
shares authorized                                     -          -
  5,000,000; no shares issued or outstanding
in 1997 or 1998
Common stock: $.02 par value per share;                            
shares authorized 15,000,000 in 1997 and                          
65,000,000 in 1998; shares issued 16,006,514                      
in 1997 and 20,821,001 in 1998; shares              175        416
outstanding 14,534,014 in 1997 and
19,348,501 in 1998
Class A common stock: nonvoting; par value;                        
$.02 stated value per share; shares                   -          -
authorized 6,000,000; no shares issued or
outstanding
Additional paid-in capital                       40,296     85,215
Less:  Common stock in treasury, at cost,                      
1,472,500 shares in 1997 and in 1998                          
                                               (17,069)   (17,069)
Retained earnings                                             
                                                11,403     41,815
Total Stockholders' Equity                       34,805    110,377
    Total Liabilities and Stockholders'               $          $
Equity                                          148,992    227,626
    Commitments and Contingencies                                 
       See accompanying  notes to consolidated financial statements.
</TABLE>
<PAGE 39>
<TABLE>
<CAPTION>
(In thousands, except for per share data)
Years ended December 31,                                     
                                       1996       1997      1998
Operating revenues:                                                  
<S>                                          <C>        <C>       <C>
  Passenger                                    $          $         $
                                         179,370    202,540   285,243
  Other                                    3,114      2,904     4,697
     Total operating revenues            182,484    205,444   289,940
Operating expenses:                                                  
  Salaries and related costs              44,438     49,661    68,135
  Aircraft fuel                           17,124     17,766    23,978
  Aircraft maintenance and materials      16,841     16,860    22,730
  Aircraft rentals                        29,137     29,570    36,683
  Traffic commissions and related fees    28,550     32,667    42,429
  Facility rents and landing fees          8,811     10,376    13,475
  Depreciation and amortization            2,846      3,566     6,472
  Other                                   14,900     16,035    23,347
  Restructuring charges (reversals)                               
                                          (426)       -         -
     Total operating expenses            162,221    176,501   237,249
Operating income                          20,263     28,943    52,691
Other income (expense):                                              
  Interest expense                                                  
                                         (1,013)   (3,450)   (4,207)
  Interest income                            341      1,284     
                                                              4,145
  Debt conversion expense                      -          -   (1,410)
  Other income (expense), net                 17         62       326
     Total other expense                                    
                                          (655)    (2,104)   (1,146)
             Income before income tax                        
provision                                 19,608     26,839    51,545
  Income tax provision                       450     12,339    21,133
Net income                               $19,158    $14,500   $30,412
Income per share:                                                         
Basic                                      $1.13      $0.93     $1.68
                                                                     
Diluted                                    $1.08      $0.80     $1.42
                                                                          
 Weighted average shares used in                                     
computation:                              16,962     15,647    18,128
     Basic                                17,840     19,512    22,186
     Diluted
        See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE 40>
<TABLE>
<CAPTION>
(In thousands, except                                            
for share data)       Common Stock   Addit   Treasury Stock  Retained
                      -------------  ional  ---------------  Earnings
                      -------------  Paid-   --------------  (Deficit)
                           --          In            Shares
                            Shares   Capit       Amount
                         Amount        al
<S>                      <C>    <C>     <C>     <C>      <C>       <C>
Balance, December 31, 8,356,411  167   36,774  12,500    (125)  (22,255)
1995                     
Exercise of common    142,499      3     351       -        -         -
stock options              
Tax benefit of stock       -      -     564       -        -         -
option exercise
Net Income                 -      -       -       -        -     19,158
                                                              
Balance December 31, 8,498,910 170  37,689    12,500    (125)   (3,097)
1996              
                                          
Exercise of common   240,597    5   1,250       -        -         -
stock options              
Tax benefit of stock     -      -   1,357       -        -         -
option exercise
Purchase of treasury     -      -       - 1,460,000   (16,944)      -
stock                                          
Net Income               -      -       -       -        -     14,500
                                                            
Balance December 31, 8,739,507 $175 $40,296 $1,472,500 $(17,069) $11,403
1997                  
Exercise of common     286,011    6   2,473       -        -         -
stock options              
Tax benefit of stock       -      -   4,239       -        -         -
option exercise
Amortization of                                                       
  deferred                 -      -     574       -        -         -
compensation
Stock split         9,673,901    193  (193)       -        -         -
Conversion of debt  2,121,582     42   37,826     -        -     
Net Income                 -      -       -       -        -     30,412
Balance December 31, 20,821,001 $416 $85,215 1,472,500 $(17,069) $41,815
1998             
          See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE 41>
<TABLE>
<CAPTION>
(In thousands)
Years ended December 31,                                              
                                          1996         1997       1998
<S>                                          <C>         <C>       <C>
Cash flows from operating activities:                                 
    Net income                               $ 19,158    $ 14,500  $ 30,412
    Adjustments to reconcile net income to                                 
net cash provided by  operating
activities:
          Depreciation and amortization         2,434       3,111     5,829
          Amortization of intangibles and         412         455       690
preoperating costs
          Provision for uncollectible             387         168       124
accounts receivable
          Provision for inventory                  50          63        86
obsolescence
          Amortization of deferred credits       (27)       (243)     (801)
          Amortization of debt issuance             -         181       465
costs
          Capitalized interest, net                 -           -   (1,640)
          Deferred tax (benefit) provision    (1,640)       2,452     4,392
          Net loss on disposal of fixed             1         450       247
assets
          Amortization of debt discount and        46          76        70
finance costs
          Debt conversion expense                   -           -     1,410
          Deferred compensation                     -           -       574
    Changes in operating assets and                          
liabilities:
              Accounts receivable        (1,741)     (5,829)   (6,077)
              Expendable parts and            41       (781)     (990)
fuel inventory
              Prepaid expenses and         (796)         403     
other current assets                                          (2,512)
              Preoperating costs               -     (2,057)         -
              Accounts payable               238         998       423
              Accrued liabilities          1,590       7,313     7,028
              Net cash provided by        20,153      21,260    39,730
operating activities    
Net cash provided by (used in) operating activities
Cash flows from investing activities:                                 
   Purchase of property and equipment    (2,128)    (26,005)  (51,020)
   Proceeds from sales of fixed assets         -           -     
                                                                1,318
   Maturities of short term                    -                 
investments                                        (10,737)    10,677
   Refund of aircraft deposits                 -           -      120
   Payments for aircraft and other          (61)    (18,447)     (832)
deposits
              Net cash used in           (2,189)    (55,189)  (39,737)
investing activities
Cash flows from financing activities:                                 
   Proceeds from issuance of long-term       486      75,220    29,650
debt
   Payments of long-term debt            (1,234)     (3,241)   (2,248)
   Payments of capital lease             (1,171)     (2,258)   (2,656)
obligations
   Proceeds from receipt of deferred         513         809        96
credits and other
   Deferred financing costs                (239)     (3,215)   (2,069)
   Payment of convertible preferred        (335)           -         -
stock dividend
   Redemption of convertible preferred   (3,825)           -         -
stock
   Proceeds from exercise of stock           915       1,255     2,479
options
   Purchase of treasury stock                  -    (16,944)         -
              Net cash (used in)         (4,890)      51,626    25,252
provided by financing activities  
Net increase in cash and cash             13,074      17,697    25,245
equivalents
Cash and cash equivalents, beginning       8,396      21,470    39,167
of year
Cash and cash equivalents, end of year  $ 21,470    $ 39,167  $ 64,412
       See accompanying  notes to consolidated financial statements.
</TABLE>

<PAGE 42>                      
1.   Summary of    (a)
Accounting          Basis of Presentation
Policies
                    The     accompanying    consolidated    financial
                    statements include the accounts of Atlantic Coast
                    Airlines Holdings, Inc. ("ACAI") and its  wholly-
                    owned   subsidiary,   Atlantic   Coast   Airlines
                    ("ACA"),    together,   (the   "Company").    All
                    significant     intercompany     accounts     and
                    transactions    have    been    eliminated     in
                    consolidation.  As  of  December  31,  1998,  the
                    Company   operated  in  the  air   transportation
                    industry   providing   scheduled   service    for
                    passengers to 53 destinations in 24 states in the
                    Eastern and Midwestern United States.  All of the
                    Company's flights are currently operated under  a
                    code sharing agreement with United Airlines, Inc.
                    ("United")  and are identified as United  Express
                    flights in computer reservation systems.
                    
                 (b)Cash, Cash Equivalents and Short-Term Investments
                    
                    The   Company  considers  investments   with   an
                    original  maturity of three months or  less  when
                    purchased  to  be cash equivalents.   Investments
                    with  an  original  maturity greater  than  three
                    months  and  less  than one year  are  considered
                    short-term     investments.    All     short-term
                    investments  are considered to be  available  for
                    sale.   Due  to  the short maturities  associated
                    with  the  Company's investments,  the  amortized
                    cost     approximates    fair    market    value.
                    Accordingly,  no  adjustment  has  been  made  to
                    record unrealized holding gains and losses.
                    
                 (c)Airline Revenues
                    
                    Passenger  fares and cargo revenues are  recorded
                    as  operating revenues at the time transportation
                    is  provided. Substantially all of the  Company's
                    passenger   tickets  are  sold   by   other   air
                    carriers.  The value of unused passenger  tickets
                    sold  by  the  Company,  which  is  minimal,   is
                    included  in  current  liabilities.  The  Company
                    participates  in United's Mileage  Plus  frequent
                    flyer  program. The Company does not  accrue  for
                    incremental   costs   for  mileage   accumulation
                    relating  to  this  program because  the  Company
                    believes  such costs are immaterial.  Incremental
                    costs   for  awards  redeemed  on  the  Company's
                    flights are expensed as incurred.
                    
                 (d)Accounts Receivable
                    
                    Accounts  receivable are stated net of allowances
                    for   uncollectible  accounts  of   approximately
         
<PAGE 43>
                    $269,000  and $364,000 at December 31,  1997  and
                    1998, respectively.  Amounts charged to costs and
                    expenses for uncollectible accounts in 1996, 1997
                    and  1998  were $387,000, $168,000 and  $124,000,
                    respectively.   Write-off of accounts  receivable
                    were $650,000, $186,000 and $29,000 in 1996, 1997
                    and   1998,  respectively.   Accounts  receivable
                    included approximately $700,000 and $3.6  million
                    related  to  manufacturers credits to be  applied
                    towards future spare parts purchases and RJ pilot
                    training  expenses for the years  ended  December
                    31, 1997 and 1998, respectively.
                    
                 (e)Concentrations of Credit Risk
                    
                    The     Company    provides    commercial     air
                    transportation  in  the  Eastern  and  Midwestern
                    United States. Substantially all of the Company's
                    passenger tickets are sold by other air carriers.
                    The  Company  has a significant concentration  of
                    its  accounts receivable with other air  carriers
                    with  no  collateral. At December  31,  1997  and
                    1998,   accounts  receivable  from  air  carriers
                    totaled  approximately $18.7  million  and  $24.4
                    million,  respectively. Such accounts  receivable
                    serve as collateral to a financial institution in
                    connection  with  the Company's  line  of  credit
                    arrangement.  (See note 4).  Of the total amount,
                    approximately  $14.8 million  and  $20.8  million
                    at   December  31,  1997 and 1998,  respectively,
                    were  due  from  United.  Historically,  accounts
                    receivable losses have been insignificant.
                    
                 (f)Risks and Uncertainties
                    
                    
                    The  airline  industry is highly competitive  and
                    volatile.  The  Company competes  primarily  with
                    other   air   carriers  and,  particularly   with
                    respect  to  its  shorter  flights,  with  ground
                    transportation.  Airlines  primarily  compete  on
                    the  basis  of pricing, scheduling  and  type  of
                    equipment.    The   Company's   operations    are
                    primarily dependent upon business-related  travel
                    and    are   not   subject   to   wide   seasonal
                    fluctuation. However, some seasonal decline  does
                    occur  during portions of the winter  months  due
                    to  lesser demand. The ability of the Company  to
                    compete with ground transportation and other  air
                    carriers  depends upon public acceptance  of  its
                    aircraft   and   the  provision  of   convenient,
                    frequent  and reliable service to its markets  at
                    reasonable rates.
                    
                    The   Company  operates  under  code-sharing  and
                    other  marketing  agreements with  United,  which
                    expire   on   March  31,  2009,  unless   earlier
                    terminated  by  United (the "Agreements").  Prior
                    to  March  31,  2004, United  may  terminate  the
                    Agreements  at any time if the Company  fails  to
                    maintain certain performance standards,  and  may
                    terminate without cause after March 31,  2004  by
                    providing  one year's notice to the Company.   If
<PAGE 44>         
                    by  January  2,  2001 United has  not  given  the
                    Company  the abiltiy to operate regional jets  of
                    44  seats  or  less  seating capacity  as  United
                    Express,  in  addition to its  allocation  of  50
                    seat  regional  jets, the Company  may  terminate
                    the  Agreements as of March 31, 2004. The Company
                    would   be   required   to  provide   notice   of
                    termination  prior  to  January  2,  2002,  which
                    notice  would be void if United ultimately grants
                    such  authority prior to January 2,  2002.  Under
                    the  terms  of  the Agreements, the Company  pays
                    United monthly fees based on the total number  of
                    revenue passengers boarded by the Company on  its
                    flights  for the month. The fee per passenger  is
                    subject   to   periodic  increases   during   the
                    duration  of  the ten year extension period.  The
                    agreement  allows  the Company to  operate  under
                    United's  colors,  utilize the  "United  Express"
                    name  and  identify  its flights  using  United's
                    designator  code. The Company believes  that  its
                    relationship  with United substantially  enhances
                    its  ability to compete for passengers.  The loss
                    of  the  Company's affiliation with United  could
                    have  a  material adverse effect on the Company's
                    business.
                    
                    The  Agreements  require the  Company  to  obtain
                    United's consent to operate service between  city
                    pairs   as  "United  Express".   If  the  Company
                    experiences  net operating expenses  that  exceed
                    revenues  for  three consecutive  months  on  any
                    required  route,  the Company may  withdraw  from
                    that  route if United and the Company are  unable
                    to  negotiate an alternative mutually  acceptable
                    level  of  service for that route. The Agreements
                    also  require  the  Company  to  obtain  United's
                    approval  if  it  chooses  to  enter  into  code-
                    sharing arrangements with other carriers, but  do
                    not  prohibit  United  from  competing,  or  from
                    entering into agreements with other airlines  who
                    would  compete, on routes served by the  Company.
                    The  Agreements  may be canceled if  the  Company
                    fails   to   meet  certain  financial  tests   or
                    performance   standards  or  fails  to   maintain
                    certain minimum flight frequency levels.
                    
                    The  Company's  pilots  are  represented  by  the
                    Airline  Pilots Association ("ALPA"), its  flight
                    attendants   by   the   Association   of   Flight
                    Attendants  ("AFA"),  and its  mechanics  by  the
                    Aircraft    Mechanics    Fraternal    Association
                    ("AMFA").
                    
                    The  ALPA  collective  bargaining  agreement  was
                    amended   on   February  26,  1997  and   becomes
                    amendable  again in February 2000.   The  current
                    contract  modified  work  rules  to  allow   more
                    flexibility,  includes regional  jet  pay  rates,
                    and  transfers pilots into the Company's employee
                    benefit plans.
                    
                    The   AMFA   was  certified  as  the   collective
                    bargaining  representative elected  by  mechanics
                    and  related  employees of the Company  in  1994.
                    On   June   22,  1998,  the  Company's  mechanics
                    ratified an initial four year contract.  The  new
                    contract includes a pay scale comparable  to  the
                    regional airline industry and a one-time  signing
                    bonus,  and  allows the mechanics to  participate
                    in the Company's employee benefit plans.
<PAGE 45>                    
                    The   Company's  contract  with  the  AFA  became
                    amendable  on  April 30, 1997.  An agreement  was
                    negotiated and agreed to between the Company  and
                    AFA   during  1998,  and  was  ratified  by   the
                    Company's flight attendants on October 11,  1998.
                    The  new  agreement is for a four  year  duration
                    and  provides for a higher starting pay rate  and
                    a  pay scale and per diem rate comparable to  the
                    regional airline industry.
                              
                    The  Company  believes that the  wage  rates  and
                    benefits   for   other   employee   groups    are
                    comparable  to  similar groups at other  regional
                    airlines.  The Company is unaware of  significant
                    organizing  activities  by  labor  unions   among
                    other non-union employees at this time.
                    
                 (g)Use of Estimates
                    
                    The preparation of financial statements in
                    accordance with generally accepted accounting
                    principles requires management to make certain
                    estimates and assumptions regarding valuation of
                    assets, recognition of liabilities for costs such
                    as aircraft maintenance, differences in timing of
                    air traffic billings from United and other
                    airlines, operating revenues and expenses during
                    the period and disclosure of contingent assets
                    and liabilities at the date of the consolidated
                    financial statements.  Actual results could
                    differ from those estimated.
                 (h)Expendable Parts
                    
                    Expendable parts and supplies are stated  at  the
                    lower  of  cost or market, less an allowance  for
                    obsolescence  of  $232,600  and  $318,000  as  of
                    December   31,   1997  and  1998,   respectively.
                    Expendable  parts  and supplies  are  charged  to
                    expense  as  they are used.  Amounts  charged  to
                    costs and expenses for obsolescence in 1996, 1997
                    and  1998  were  $49,950,  $62,652  and  $86,000,
                    respectively.
                    
                 (i)Property and Equipment
                    
                    Property  and  equipment  are  stated  at   cost.
                    Depreciation  is  computed on  the  straight-line
                    method  over  the estimated useful lives  of  the
                    related  assets which range from five to  sixteen
                    and one half years.  Capital leases and leasehold
                    improvements  are  amortized over  the  remaining
                    life of the lease. Amortization of capital leases
                    and   leasehold  improvements  is   included   in
                    depreciation expense.
<PAGE 46>                    
                    The Company periodically evaluates whether events
                    and  circumstances have occurred which may impair
                    the  estimated  useful life or the recoverability
                    of   the  remaining  balance  of  its  long-lived
                    assets.  If such events or circumstances were  to
                    indicate that the carrying amount of these assets
                    would  not  be  recoverable,  the  Company  would
                    estimate the future cash flows expected to result
                    from  the  use  of the assets and their  eventual
                    disposition.   If the sum of the expected  future
                    cash  flows  (undiscounted and  without  interest
                    charges) is less than the carrying amount of  the
                    asset, an impairment loss would be recognized  by
                    the Company.

                 (j)Preoperating Costs
                    
                    Preoperating   costs  represent   the   cost   of
                    integrating  new types of aircraft.  Such  costs,
                    which  consist primarily of flight crew  training
                    and   aircraft  ownership  related   costs,   are
                    deferred  and  amortized over a  period  of  four
                    years on a straight-line basis.
                    
                    During 1997 the Company capitalized approximately
                    $2.1  million  of  these  costs  related  to  the
                    introduction of the regional jet ("RJ") into  the
                    Company's  fleet.   Accumulated  amortization  of
                    preoperating costs at December 31, 1997 and  1998
                    were  $53,000  and  $571,000,  respectively.   In
                    1997, the J-41 preoperating costs were completely
                    amortized.   In 1999, the Company will  write-off
                    the   remaining  unamortized  preoperating  costs
                    balance (See Note 16).

                 (k)Intangible Assets
                    
                    Goodwill    of   approximately   $3.2    million,
                    representing  the excess of cost above  the  fair
                    value  of  net assets acquired in the acquisition
                    of  ACA,  is being amortized by the straight-line
                    method  over twenty years. The primary  financial
                    indicator  used  by  the Company  to  assess  the
                    recoverability  of its goodwill  is  undiscounted
                    future cash flows from operations. The amount  of
                    impairment,   if  any,  is  measured   based   on
                    projected future cash flows using a discount rate
                    reflecting the Company's average cost  of  funds.
                    Costs   incurred  to  acquire  slots  are   being
                    amortized by the straight-line method over twenty
                    years.   Accumulated amortization  of  intangible
                    assets  at  December 31, 1997 and 1998  was  $1.1
                    million and $1.3 million, respectively.
                    
                 (l)Maintenance
                    
                    The Company's maintenance accounting policy is  a
                    combination  of expensing events as incurred  and
                    accruing for certain maintenance events. For  the
                    J-41  and J-32 aircraft, the Company accrues  for
                    airframe  components  and certain  engine  repair
                    costs  on  a per flight hour basis.  For  the  RJ
<PAGE 47>         
                    aircraft, the Company accrues for the replacement
                    of major engine life limited parts on a per cycle
                    basis  and  for  APU repairs on a  per  APU  hour
                    basis.   All other maintenance costs are expensed
                    as incurred.
                    
                 (m)Deferred Credits
                    
                    The  Company accounts for incentives provided  by
                    the  aircraft  manufacturers as deferred  credits
                    for leased aircraft.  These credits are amortized
                    on  a straight-line basis as a reduction to lease
                    expense  over  the respective  lease  term.   The
                    incentives  are  credits  that  may  be  used  to
                    purchase  spare  parts, pay  for  pilot  training
                    expenses,  satisfy aircraft return conditions  or
                    be applied against future rental payments.

                 (n)Income Taxes
                    
                    The  Company accounts for income taxes using  the
                    asset and liability method.  Under the asset  and
                    liability   method,  deferred  tax   assets   and
                    liabilities  are recognized for  the  future  tax
                    consequences attributable to differences  between
                    the  financial  statement  carrying  amounts  for
                    existing   assets  and  liabilities   and   their
                    respective  tax bases.  Deferred tax  assets  and
                    liabilities are measured using enacted tax  rates
                    expected  to  apply to taxable income  in  future
                    years  in  which those temporary differences  are
                    expected to be recovered or settled.

                 (o)Stock-Based Compensation
                    
                    The   Company   accounts  for   its   stock-based
                    compensation  plans  using  the  intrinsic  value
                    method  prescribed  under  Accounting  Principles
                    Board (APB) No. 25.  Under these principles,  the
                    Company  records compensation expense  for  stock
                    options and awards only if the exercise price  is
                    less  than the fair market value of the stock  on
                    the measurement date.
<PAGE 48>                    
                 (p)Income Per Share

                    Basic  income per share is computed  by  dividing
                    net   income,   after  deducting  any   preferred
                    dividend  requirements, by the  weighted  average
                    number  of  common  shares outstanding.   Diluted
                    income  per  share is computed  by  dividing  net
                    income,  after  deducting any preferred  dividend
                    requirements, by the weighted average  number  of
                    common   shares  outstanding  and  common   stock
                    equivalents, which consist of shares  subject  to
                    stock  options computed using the treasury  stock
                    method.    In   addition,  dilutive   convertible
                    securities are included in the denominator  while
                    interest,  on convertible debt, net  of  tax,  is
                    added back to the numerator.
                    
                    In  1996,  the  dilutive  effect  of  convertible
                    preferred  stock  is included in the  calculation
                    of  diluted  income  per  share.   In  1997,  the
                    calculation included the dilutive effect  of  new
                    convertible   debt,  but  not   the   convertible
                    preferred stock as it was redeemed in  1996.   In
                    1998,   the  calculation  included  the  dilutive
                    effect of the convertible debt issued in 1997
<PAGE 49>                    
                   A  reconciliation of the numerator and denominator 
                   used  in  computing income per share is as follows
                   (in thousands, except per share amounts):
                   
    <TABLE>                                                
    <CAPTION>                                              
                             1996          1997          1998
    <S>                   <C>    <C>    <C>    <C>    <C>    <C>
                        Basic  Diluted Basic  Diluted  Basic  Diluted
Share calculation:                                               
Average number of common                                         
    shares              16,962  16,962  15,647  15,647  18,128  18,128
     Outstanding        
         Incremental                                             
    shares due to            -     622      -      701      -      876
    assumed exercise of
    options
  Incremental shares                                             
    due to assumed        -        256  -          -  -          -
    conversion of
    preferred stock
  Incremental shares                                             
    due to assumed            -          -      -  3,164      -  3,182
    conversion of
    convertible debt
  Weighted average                                               
    common shares       16,962  17,840  15,647  19,512  18,128  22,186
       Outstanding         
                                                                 
Adjustments to net                                               
    income:
Net income             $19,158 $19,158 $14,500 $14,500 $30,412 $30,412
                           
  Preferred dividend                                             
    requirements based                                           
    on average number     (64)      -      -      -      -      -
    of preferred shares
    Interest expense on      -      -      -  1,187      -  1,202
    convertible debt,
         net of tax
  Net income available                                           
    to common              
    shareholders         $19,094 $19,158 $14,500 $15,687 $30,412 $31,614
                                                                 
    Net income per        
    share                $1.13  $1.08  $0.93  $0.80  $1.68  $1.42
</TABLE>                                                               
                 (q)Reclassifications
                    
                    Certain   prior   year  amounts  as   previously
                    reported  have been reclassified to  conform  to
                    the current year presentation.
                    
                 (r)Interest rate hedges
                    
                    The Company has periodically used swaps to hedge
                    the  effects  of fluctuations in interest  rates
                    associated   with  aircraft  financings.   These
                    transactions meet the requirements  for  current
                    hedge  accounting.  Gains and  losses  resulting
                    from  the  interest  rate  swap  contracts   are
                    deferred  until  the contracts are  settled  and
                    then  amortized over the aircraft lease term  or
                    capitalized  as  part  of acquisition  cost,  if
                    purchased, and depreciated over the life of  the
                    aircraft.
<PAGE 50>                    
                 (s)Segment Information
                    
                    In  1998, the Company adopted the provisions  of
                    Financial  Accounting Standards Board  Statement
                    No.  131,  "Disclosure  about  Segments  of   an
                    Enterprise  and Related Information (SFAS  131).
                    SFAS  131  establishes standards  for  reporting
                    information about operating segments and related
                    disclosures   about   products   and   services.
                    Operating segments are defined as components  of
                    an  enterprise  about which  separate  financial
                    information  is  available  that  is   regularly
                    evaluated by chief operating decision makers  in
                    deciding  how  to  allocate  resources   or   in
                    assessing performance.
                    
                    The   Company's  chief  decision  makers  assess
                    operating and financial performance based on the
                    consolidated   results  of   the   Company   and
                    accordingly,  no further disclosure  of  segment
                    information     is     considered     necessary.
                    Substantially all of the Company's revenues  and
                    operating  activity relate to passenger  airline
                    transportation  service.  The Company  does  not
                    have any international service.

2.  Property     Property and equipment consist of                    
and              the following:
     Equipment   
                 <TABLE>                                            
                 <CAPTION>                                          
                 (in thousands)                       1997      1998
                 December 31,
                 <S>                                   <C>       <C>
                 Owned aircraft and improvements         $         $
                                                    18,916    58,912
                 Improvements to leased aircraft     3,521     4,949
                 Flight equipment, primarily        18,456    27,420
                    rotable spare parts
                 Maintenance and ground equipment    4,166     5,850
                 Computer hardware and software      2,029     2,408
                 Furniture and fixtures                445       753
                 Leasehold improvements              1,831     2,144
                                                    49,364   102,436
                 Less:  Accumulated depreciation     8,726    14,110
                    and amortization
                                                  $ 40,638  $88,326
</TABLE>

                                                                   
<PAGE 51>                
3.  Accrued        Accrued liabilities consist of the                 
     Liabilities      following:
                <TABLE>
                <CAPTION>
                (in thousands)
                   <S>                                 <C>       <C>
                   December 31,                                   
                                                    1997     1998
                Payroll and employee benefits     $  6,914 $  9,597
                Air traffic liability                1,404      516
                Interest                             1,352    1,061
                Aircraft rents                       1,644    2,118
                Passenger related expenses           2,441    3,233
                Maintenance costs                    3,589    3,866
                Fuel                                   977    2,260
                Taxes payable                        2,704        -
                Other                                2,306    3,679
                                                   $23,331  $26,330
                </TABLE>
4.  Debt        On  November  1,  1995, the Company entered  into  a
                line   of   credit   agreement  with   a   financial
                institution  which, based on a specified  percentage
                of   outstanding  interline  receivables  (financing
                base),   provides  for  borrowings  of  up  to   $20
                million.   The  line of credit is collateralized  by
                accounts  receivable  and  general  intangibles  and
                will   expire  on  September  30,  2000,   or   upon
                termination   of   the  United   Express   marketing
                agreement,   whichever  is  sooner.    Interest   is
                payable  monthly at an annual rate of prime plus  1%
                (9%  at December 31, 1998).  The Company has pledged
                approximately   $5.8  million  of   this   line   as
                collateral  to  secure letters of credit  issued  on
                behalf  of  the Company.  At December 31, 1998,  the
                Company's  remaining available borrowing  limit  was
                approximately  $7.5 million. There  was  no  balance
                outstanding  under  the line of credit  at  December
                31,  1997 or December 31, 1998. On February 8, 1999,
                the  Company replaced the $20 million line of credit
                agreement  with  a  new  line  of  credit  with  two
                financial    institutions   which    provides    for
                borrowings up to $35 million.  See footnote  15  for
                additional information regarding this matter.
                
                
                
                
                
                
                
<PAGE 52>                
                
                <TABLE>
      Long-term debt consists of the following:  
      (in thousands)                                        
      December 31,                                      1997       1998 
      <S>                                                <C>        <C>
      Convertible subordinated notes, principal                     
         due July 1, 2004, interest payable in                        
         semi-annual installments on the             $57,500    $19,820
         outstanding principal with interest at
         7%, unsecured.
      
      Equipment Notes associated with Pass     
         Through Trust Certificates, due                              
               January 1, 2008 and January 1,                                   
         2010, principal payable annually through       
         January 1, 2006 and semi-annually            16,431     15,388
         thereafter through maturity, interest                        
         payable semi-annually at 7.49%
         throughout term of notes, collateralized
         by J-41 aircraft.
      
      Notes payable to supplier, due December                   
         1999, principal and interest payable in          
         monthly installments of $14,027, with           331        161 
         interest at 8%, collateralized by flight                    
         equipment, spare engines and parts, and                         
         ground equipment.
      
      Notes payable to supplier, due between May              
         15, 2000 and January 15, 2001, principal      1,225      1,839 
         payable monthly with interest of 6.74%
         and 7.86%, unsecured.
                                                              
      Notes payable to institutional lenders, due            
         between March 29 and May 19, 2015,                
         principal payable semiannually with               -     25,556  
         interest of 5.65% and 5.88% through
         maturity, collateralized by RJ aircraft.
      
      Note payable to institutional lender,                     
         principal payable monthly with interest         217          -  
         at 6.61%, unsecured.                                         
      
      Note payable to institutional lender, due                    
         October 2, 2006, principal payable                -      3,975  
         semiannually with interest at 6.56%,                         
         collateralized by J41 aircraft.
      
      Other                                                2          -  
      Total                                           75,706     66,739  
      Less:  Current Portion                           1,851      3,450   
                                                     $73,855    $63,289 
</TABLE>
                In  September  1997, approximately  $112  million  of
                pass  through certificates were issued in  a  private
                placement  by  separate  pass through  trusts,  which
                used  the  proceeds to purchase equipment notes  (the
                "Equipment  Notes")  issued in  connection  with  (i)
                leveraged  lease transactions relating to four  J-41s
                and  six RJs (delivered or expected to be delivered),
                all  of  which are leased to the Company (the "Leased
                Aircraft"),  and  (ii) the financing  of  four  J-41s
                owned  by  the  Company (the "Owned Aircraft").   The
                Equipment  Notes  issued with respect  to  the  Owned
                Aircraft  are  direct obligations of ACA,  guaranteed
                by  ACAI and are included as debt obligations in  the
                accompanying  financial statements. These  borrowings
                carry   a   weighted   average   interest   rate   of
                approximately   7.49%  with  three  Equipment   Notes
                maturing  on January 1, 2008, and one Equipment  Note
                maturing   January  1,  2010.  The  Equipment   Notes
                issued  with  respect  to  the  Leased  Aircraft  are
                neither  debt  obligations of ACA nor  guaranteed  by
                ACAI.
<PAGE 53>                
                With  respect to one RJ leased aircraft, at  December
                31,  1997  (the "Prefunded Aircraft"),  the  proceeds
                from  the  sale of the Equipment Notes were deposited
                into  collateral  accounts, to  be  released  at  the
                closing   of  a  leveraged  lease  related   to   the
                Prefunded  Aircraft.   In  January  1998,  an  equity
                investor purchased this aircraft and entered  into  a
                leveraged  lease with the Company and the  collateral
                accounts were released.

                In  July  1997,  the  Company issued  $57.5  million
                aggregate   principal  amount  of   7%   Convertible
                Subordinated  Notes due July 1, 2004 ("the  Notes").
                The  Notes  are convertible into 6.4 million  shares
                of  Common Stock, $9 per share, (after giving effect
                to  the  stock  split on May 15,  1998)  subject  to
                certain  adjustments.   Interest  on  the  Notes  is
                payable on April 1 and October 1 of each year.   The
                Notes  are not redeemable by the Company until  July
                1,  2000.  Thereafter, the Notes will be redeemable,
                at  any  time,  on at least 15 days  notice  at  the
                option  of the Company, in whole or in part, at  the
                redemption  prices set forth in the Indenture  dated
                July  2,  1997, in each case, together with  accrued
                interest.   The Notes are unsecured and subordinated
                in  right  of  payment in full to all  existing  and
                future   Senior  Indebtedness  as  defined  in   the
                Indenture.   The holders of the Notes  have  certain
                registration  rights with respect to the  Notes  and
                the underlying Common Stock.
                
                In  January 1998, approximately $5.9 million of  the
                Notes  were  converted, pursuant to  their  original
                terms,  into  660,826 shares of Common Stock.   From
                March  20,  1998  to  April  8,  1998,  the  Company
                temporarily reduced the conversion price from $9  to
                $8.86  for  holders  of  the  Notes.   During   this
                period,  $31.7  million of the Notes converted  into
                approximately  3.6 million shares of  Common  Stock.
                As  a result of this temporary price reduction,  the
                Company  recorded  a non-cash, non-operating  charge
                to  earnings during the second quarter  of  1998  of
                $1.4  million  representing the fair  value  of  the
                additional shares distributed upon conversion.
                
                On  April  1,  1997,  the Company  executed  an  $11
                million  short-term  promissory  note  for  deposits
                related  to  the acquisition of RJs.  The promissory
                note  was  paid  in full on July 2,  1997  from  the
                proceeds  of  the Notes issued on July  2,  1997  as
                described  above.  During 1997, the Company  retired
                $3.1  million  of  certain high interest  rate  debt
                with the proceeds of the Notes.
                
                On  September 29, and November 19, 1998 the  Company
                issued  long-term promissory notes for $12.7 million
                and  $12.9 million respectively, for the acquisition
                of  two  new  RJ  aircraft.   The  promissory  notes
                mature   on  March  29,  2015  and  May   19,   2015
                respectively,  and  are  collateralized  by  the  RJ
                aircraft  delivered, with principal and interest  at
                rates  of  5.65% and 5.88%, payable on a semi-annual
                basis through maturity.
<PAGE 54>
                On  September  29, 1998, the Company issued  a  long-
                term  promissory  note for approximately  $4  million
                for  the  acquisition  of one  Jetstream  41  ("J-41)
                aircraft  that was delivered in December  1997  under
                an  interim manufacturer financing arrangement.   The
                promissory  note matures on October 2,  2006  and  is
                collateralized  by the J-41 aircraft  delivered  with
                principal  and interest, at a rate of 6.56%,  payable
                semiannually through maturity.
                
                As of December 31, 1998, maturities of long-term
                debt are as follows:
                (in thousands)
                                                
                1999                   $  3,450
                2000                      3,439
                2001                      2,575
                2002                      2,742
                2003                      2,865
                Thereafter               51,668
                                        $66,739
                
                The    Company   has   various   financial   covenant
                requirements  associated with  its  debt  and  United
                marketing   agreements.   These   covenants   require
                meeting  certain  financial  ratio  tests,  including
                tangible  net worth, net earnings, current ratio  and
                debt service levels.
                
5.  Obligations The    Company    leases   certain   equipment    for
     Under      noncancellable terms of more than one year.  The  net
Capital         book  value of the equipment under capital leases  at
     Leases     December 31, 1997 and 1998, is $4.5 million and  $3.0
                million,  respectively.  The leases were  capitalized
                at  the  present  value of the lease  payments.   The
                weighted  average interest rate for these  leases  is
                approximately 8 %.
                                  
                 At December 31, 1998, the future minimum payments, by
                 year  and in the aggregate, together with the present
                 value  of  the  net  minimum lease payments,  are  as
                 follows:
<PAGE 55>                 
                  (in thousands)
                Year Ending December 31,
                 1999                                       $  1,501
                 2000                                            686
                 2001                                            453
                 2002                                            358
                 2003                                            161
                 Future minimum lease payments                 3,159
                 Amount representing interest                    379
                 Present value of minimum lease                2,780
                payments
                 Less:  Current maturities                     1,334
                                                            $  1,446
                 
6.  Operating    Future  minimum  lease payments under  noncancellable
     Leases      operating leases at December 31, 1998 are as follows:
                
                 (in thousands)
                <TABLE>
                <CAPTION>
                Year ending December 31,            Aircraft
                Other                             Total
                <S>                      <C>     <C>              <C>
                1999                $42,322    $2,789       $45,111        
                2000                 42,057     2,640        44,697
                2001                 40,684     2,498        43,182
                2002                 39,992     2,060        42,052
                2003                 38,257     2,078        40,335           
                Thereafter          259,880    29,108       288,988
                  Total  minimum   $463,192  $41,173       $504,365         
                  lease payments      
                 </TABLE>
                 
                 Certain  of the Company's leases require aircraft  to
                 be  in  a  specified maintenance condition  at  lease
                 termination or upon return of the aircraft.
                 
                The Company's lease agreements generally provide that
                the  Company  pay taxes, maintenance,  insurance  and
                other operating expenses applicable to leased assets.
                Operating lease expense related to aircraft was $33.8
                million;  $35.7 million; and  $37.5 million  for  the
                years   ended  December  31,  1996,  1997  and  1998,
                respectively.
                
                   
7.  Stockholders'  Stock Split
       Equity      
                On  April  14, 1998, the Company declared  a  2-for-1
                stock  split payable as a stock dividend on  May  15,
                1998.    The   stock  dividend  was   contingent   on
                shareholder  approval  to  increase  the  number   of
                authorized   Common   Shares   from   15,000,000   to
                65,000,000 shares.  Shareholder approval was obtained
                on  May  5, 1998.  The effect of this stock split  is
                reflected in the calculation of income per share  and
                in  the stock option table presented below as of  and
                for the years ended December 31, 1996, 1997 and 1998,
                respectively.
<PAGE 56>                
                Stock Option Plans
                The  Company has two nonqualified stock option  plans
                which provide for the issuance of options to purchase
                common stock of the Company to certain employees  and
                directors  of  the Company. Under the plans,  options
                are  granted  by  the compensation committee  of  the
                board of directors and vest over a one, three or five
                year  period, commencing one year after the  date  of
                the grant.
                
                In  1998,  the  Company's shareholders  approved  the
                addition of one million shares to the Company's stock
                based  compensation plans. The Company  has  reserved
                4,000,000  shares of common stock for  issuance  upon
                the  exercise  of  options and stock  awards  granted
                under the plans.

                A  summary  of  the  status of  the  Company's  stock
                options  awarded as of December 31,  1996,  1997  and
                1998  and changes during the periods ending on  those
                dates is presented below:
                
                              1996           1997            1998
<TABLE>                     Weighted-      Weighted-       Weighted-
<CAPTION>                   average         average          average
                            Shares          Shares           Shares  
                            exercise      exercise          exercise
                                price           price          price
<S>                         <C>     <C>     <C>     <C>     <C>    <C>
Options outstanding at  1,459,116   $1.43 1,916,784 $3.16 2056922 $5.14
beginning of year          
Granted                  791,000    $5.71  684,000  $8.91 539000 $19.42
Exercised                284,998    $1.24  481,194  $2.60 572023  $4.33
Canceled                  48,334    $3.92   62,668  $5.45 260000 $17.25
Options outstanding at  1,916,784   $3.16  2056922  $5.14 1763899 $7.97
end of year              
                                                                      
Options exercisable at  1,062,887  $1.67  916,568 $2.27  872,878  $3.88
year-end                
Options available for   1,649,514       1,028,182        649,182
granting at year end             
                                                                
Weighted-average fair                                           
value of options         $4.25           $6.49          $11.88
granted during the
year
</TABLE>

                The  Company  awarded  100,000 shares  of  restricted
                stock  to certain employees during 1998. These shares
                vest   over   three  years.  The  Company  recognized
                $281,000  in  compensation  expense  associated  with
                these  awards  and  $293,000  associated  with  other
                stock options awards during 1998. No such expense was
                recognized in the years ended 1996 and 1997.
                
                The  Company uses the Black Sholes stock option model
                to  estimate fair value. A risk-free interest rate of
                5.25%,  5.8%  and  4.73% for  1996,  1997  and  1998,
                respectively, a volatility rate of 71%, 50%  and  55%
                for  1996,  1997  and  1998,  respectively,  with  an
                expected life of 7.5 years for 1996 and 1997 and  6.5
                years  for 1998, was assumed in estimating  the  fair
                value.   No dividend rate was assumed for any of  the
                years.
                
<PAGE 57>
                The  following  table  summarizes  information  about
                stock options outstanding at December 31, 1998:
<TABLE>                                                      
<CAPTION
                         Options Outstanding      Options Exercisable
                              Weighted-                          
                     Number    average  Weighted-  Number    Weighted-
                    outstand  remainin   average  exercisa   average
Range of exercise    ing at       g     exercise     ble     exercise
      price         12/31/98  contract    price   12/31/98    price
                              ual life
                               (years)
<S>                      <C>        <C>       <C>       <C>       <C>
$0.00  -  $3.23      527,666        3.9   $  1.13   527,666   $  1.13
$3.23 -   $6.45      290,113        7.4   $  5.20   134,114   $  4.82
$6.45 -   $9.68      415,181        8.2   $  7.63   108,502   $  7.83
$9.68 -   $12.90     246,939        8.8    $11.08    76,930    $11.05
$12.90 - $16.13       86,000        9.7    $14.43     1,666    $15.25
$16.13 - $19.35       68,000        9.1    $17.25    24,000    $17.25
$19.35 - $22.58        1,000        9.8    $20.00         -   $  0.00
$22.58 - $29.03       49,500        9.9    $24.61         -   $  0.00
$29.03 - $32.25       79,500        9.4    $30.24         -   $  0.00
                    1,763,899       7.1   $  7.97   872,878   $  3.88
                           
</TABLE>        
                The   following  summarizes  the  pro  forma  effects
                assuming  compensation  for  such  awards  had   been
                recorded  based  upon the estimated fair  value.  The
                proforma information disclosed below does not include
                the  impact of awards made prior to January  1,  1995
                (in thousands, except per share data):
<PAGE 58>
<TABLE>
<CAPTION>
                      1996            1997              1998
                   As      Pro     As      Pro      As      Pro
                Reporte   Forma  Report   Forma   Reporte  Forma
                   d               ed                d
   <S>          <C>      <C>     <C>      <C>     <C>     <C>
   Net Income   $        $       $        $       $       $
                19,158   18,117  14,500   13,436  30,412  27,201
                                                          
   Basic                                                  
   earnings     $        $       $        $       $       $
    per share   1.13     1.07    0.93     0.86    1.68    1.50
                                                          
   Diluted                                                
   earnings     $        $       $        $       $       $
   per share    1.08     1.02    0.80     0.75    1.42    1.28
 </TABLE>                                                                
                
                Preferred Stock
                
                The  Board  of Directors of the Company is  authorized    
                to   provide  for  the  issuance  by  the  Company  of
                preferred stock in one or more series and to  fix  the
                rights,   preferences,   privileges,   qualifications,
                limitations   and  restrictions  thereof,   including,
                without  limitation, dividend rights, dividend  rates,
                conversion  rights, voting rights, terms of redemption
                or   repurchase,  redemption  or  repurchase   prices,
                limitations   or  restrictions  thereon,   liquidation
                preferences and the number of shares constituting  any
                series or the designation of such series, without  any
                further vote or action by the stockholders.
                                                                               
8.  Employee    Employee Stock Ownership Plan                                 
   Benefit      
        Plans   The  Company  established an Employee Stock  Ownership
                Plan   (the   "ESOP")   covering   substantially   all
                employees.  For each of the years 1992  through  1995,
                the  Company made contributions to the ESOP which were
                used  in part to make loan and interest payments.   No
                contributions were made to the ESOP in 1996,  1997  or
                1998.   Shares of common stock acquired  by  the  ESOP
                are  to  be  allocated to each employee based  on  the
                employee's annual compensation.  The number of  shares
                allocated  to  the  plan  at  December  31,  1998  was
                1,110,754.
                
                Effective June 1, 1998, the Board of Directors of  the
                Company  voted  to terminate the Plan.  On  March  15,
                1999,   the   Internal  Revenue   Service   issued   a
                determination  letter notifying the Company  that  the
                termination of the Plan does not adversely affect  the
                Plan's  qualification for federal tax  purposes.  Upon
                termination  of the Plan, a participant  becomes  100%
                vested  in  his or her account. The interest  of  each
                participant  will  be distributed to such  participant
                or  his  or her beneficiary at the time prescribed  by
                the  Plan  terms. As a result of this termination,  no
                new  participants  were  eligible  to  join  the  Plan
                during 1998.
<PAGE 59>                
                401K Plan
                
                Effective  January  1,  1992, the  Company  adopted  a
                401(k)    Plan   (the   "Plan").   The   Plan   covers
                substantially  all full-time employees  who  meet  the
                Plan's  eligibility requirements. Employees may  elect
                a  salary  reduction contribution up  to  17%  through
                June  30,  1998  and 15% thereafter  of  their  annual
                compensation not to exceed the maximum amount  allowed
                by the Internal Revenue Service.
                
                Effective  October 1, 1994, the Plan was  amended  to
                require the Company to make contributions to the Plan
                for   eligible   pilots  in  exchange   for   certain
                concessions.   These contributions are in  excess  of
                any  discretionary contributions made for the  pilots
                under   the  original  terms  of  the  plan.    These
                contributions are 100% vested and equal to 3% of  the
                first  $15,000 of each eligible pilot's  compensation
                plus  2%  of  compensation in excess of $15,000.  The
                Company's  contributions for  the  pilots  shall  not
                exceed  15%  of  the  Company's adjusted  net  income
                before  extraordinary items for such plan  year.  The
                Company's  obligations  to  make  contributions  with
                respect to all plan years in the aggregate is limited
                to    $2.5   million.    Contribution   expense   was
                approximately  $370,000, $445,000, and  $552,000  for
                1996, 1997 and 1998, respectively.
                
                Effective June 1, 1995 and October 1, 1998,  the  Plan
                was   amended  to  allow  the  Company   to   make   a
                discretionary  matching  contribution  for   non-union
                employees,  pilots  and  mechanics  equal  to  25%  of
                salary  contributions up to 4% of total  compensation.
                The  Company's  matching contribution, if  any,  vests
                ratably  over  five years.  Contribution  expense  was
                approximately  $29,000,  $133,000  and  $235,000   for
                1996,  1997  and 1998, respectively.  Effective  April
                1,  1997, all eligible pilots were included under  the
                terms of the Plan.
                
                Profit Sharing Programs
                
                The  Company has profit sharing programs which  result
                in   periodic  payments  to  all  eligible  employees.
                Profit   sharing  compensation,  which  is  based   on
                attainment   of  certain  performance  and   financial
                goals,  was approximately $2.6 million, $3.6  million,
                and   $3.9   million   in   1996,   1997   and   1998,
                respectively.

<PAGE 60>
   9.  Income   The  provision (benefit) for income taxes includes the        
                following components:
     Taxes      <TABLE>
                <CAPTION>
                (in thousands)
                Year Ended December 31,
                1996                 1997                  1998
                Federal:
                <S>                          <C>       <C>        <C>
                     Current                   $         $          $
                                           1,699     7,342     13,580
                     Deferred            (1,344)     1,907      3,591
                Total          federal       355     9,249     17,171
                provision
                State:                                               
                     Current                 391     2,545      3,161
                     Deferred              (296)       545        801
                Total state provision         95     3,090      3,962
                Total provision            $ 450   $ 12,339    $ 21,133
</TABLE>
                A   reconciliation  of  income  tax  expense  at   the 
                applicable  federal statutory income tax rate  of  35%
                to the tax provision recorded is as follows:
<TABLE>
<CAPTION>
                (in thousands)                                  
                Year   ended  December                               
                31,                         1996       1997      1998
                <S>                          <C>        <C>       <C>
                Income tax expense                                   
                    at statutory rate    $ 6,863    $ 9,394   $18,041
                Increase    (decrease)                               
                in tax expense due to:
                Change     in 
                valuation                (1,640)          -         -
                 allowance
                Utilization  of                               
                net operating            (5,811)          -         -
                                  loss
                carryforward
                             Permanent                               
                differences                   58        937       517
                       and other
                        State   income                               
                taxes, net                   980      2,008     2,575
                          of   federal
                benefit
                Income tax expense      $    450    $12,339   $21,133
   </TABLE>                                                               
                Deferred    income   taxes   result   from   temporary
                differences which are the result of provisions of  the
                tax  laws that either require or permit certain  items
                of  income or expense to be reported for tax  purposes
                in  different  periods  than for  financial  reporting
                purposes.


<PAGE 61>
                The  following is a summary of the Company's  deferred
                income taxes as of December 31, 1997, and 1998:
<TABLE>
<CAPTION>
                 (in thousands)                                 
                 December 31,                                        
                                                      1997       1998
                 Deferred tax assets:                                
                 <S>                                  <C>         <C>
                      Engine maintenance          $ 1,489   $   1,268
                 accrual
                      Intangible assets             1,139         934
                      Air traffic liability           746         503
                      Allowance for bad debts         150         146
                   Deferred aircraft rent               -         530
                      Deferred credits              1,940       2,335
                      Accrued vacation                392         534
                      Other                           323         582
                         Total deferred tax         6,179       6,832
                 assets
                                                                     
                 Deferred tax liabilities:                           
                      Depreciation and            (4,614)     (9,756)
                 amortization
                      Preoperating costs            (828)       (596)
                      Other                          (49)       (184)
                          Total deferred tax      (5,491)    (10,536)
                 liabilities
                 Net deferred income tax         $    688   $(3,704)
                 assets (liabilities)                        
                 </TABLE>
                 
                 No  valuation  allowance was established  in  either
                 1997  or  1998 as the Company believes  it  is  more
                 likely than not that the deferred tax assets can  be
                 realized.
                 
                 The  Tax  Reform Act of 1986 enacted an  alternative
                 minimum tax ("AMT") system, generally effective  for
                 taxable  years  beginning after December  31,  1986.
                 The  Company  is not subject to alternative  minimum
                 tax  for the year ended December 31, 1998.   An  AMT
                 tax  credit carryover of approximately $564,000  was
                 fully utilized in 1997.

10.              Aircraft
   Commitments   
   and
                 As  of December 31, 1998, the Company had a total of
   Contingencie  29  RJs  on  order from Bombardier, Inc.,  and  held
   s             options for 27 additional RJs. Of the remaining firm
                 aircraft deliveries, nine are scheduled for delivery
                 in  1999,  nine  in 2000 and eleven  in  2001.   The
                 Company   is  obligated  to  purchase  and   finance
                 (including  leveraged leases) the  29  firm  ordered
                 aircraft  at  an approximate capital  cost  of  $539
                 million.
                 
                 The  Company  is  continually  assessing  its  fleet
                 requirements, including the feasibility of operating
                 less   than  50-seat  regional  jets.  The   Company
                 requires  United's  approval  for  the  addition  of
                 regional  jet  aircraft  that  exceed  its   current
                 allocation.
<PAGE 62>                 
                 The   Company  previously  announced  that   it   is
                 exploring  alternatives to accelerate the retirement
                 of  its  fleet  of 28 leased 19 seat J-32  aircraft.
                 The  Company is assessing plans to target the phase-
                 out of the J-32 from its United Express operation by
                 the  end  of 2001.  As of March 1, 1999, the Company
                 has  J-32 operating lease commitments with remaining
                 lease  terms ranging from three to seven  years  and
                 related minimum lease payments of approximately  $47
                 million.   The  Company  intends  to  complete   its
                 analysis    of    a   phase-out   plan,    including
                 quantification of any one-time fleet rationalization
                 charge, during 1999.
                 
                 Training
                 
                 The  Company has entered into an agreement with  Pan
                 Am  International  Flight Academy ("PAIFA")  whereby
                 PAIFA will develop a RJ simulator training facility.
                 The  Company  has  committed to purchase  an  annual
                 minimum  number of simulator training  hours  for  a
                 period of ten years at a guaranteed fixed price once
                 the     facility    receives    Federal     Aviation
                 Administration ("FAA") certification.
                 
                 At   December   31,  1998,  the  Company's   payment
                 obligations are as follows:
                 
                 (in thousands)
                 Year ended December 31,
                 <TABLE>
                 <S>
                 <C>
                 1999                $   -
                 2000                 1,748
                 2001                 1,331
                 2002                 1,351
                 2003                 1,371
                 Thereafter           7,457
                                    $13,258
                 </TABLE>
                 Derivative Financial Instruments
                 
                 In  July 1997, the Company entered into a series  of
                 put  and call contracts having an aggregate notional
                 amount  of  $39.8  million.  The  contracts  matured
                 between March and September 1998. The contracts were
                 entered  into as an interest rate hedge designed  to
                 limit  the  Company's  exposure  to  interest   rate
                 changes  on  the anticipated issuance  of  permanent
                 financing  relating to the delivery of  aircraft  in
                 1998.    During  1998,  the  Company  settled  these
                 contracts,  paying  the  counterparty  approximately
                 $2.3  million, and is amortizing this cost over  the
                 life   of   the  related  aircraft  leases   or   is
                 depreciating  the  cost  as  part  of  the  aircraft
                 acquisition  cost for owned aircraft.   On  July  2,
                 1998,  the Company entered into additional  put  and
                 call  contracts having an aggregate notional  amount
                 of  $51.8  million to hedge its exposure to interest
                 rate   changes  on  the  anticipated   issuance   of
                 permanent  financing for six RJ  aircraft  scheduled
                 for  delivery between October 1998 and  April  1999.
<PAGE 63>         
                In  the fourth quarter 1998, the Company settled two
                 contracts,  paying  the  counterparty  approximately
                 $700,000, and is amortizing this cost over the  life
                 of   the  related  aircraft  lease  for  the  leased
                 aircraft and is depreciating the cost as part of the
                 aircraft  acquisition cost for the  owned  aircraft.
                 The  Company would have been obligated  to  pay  the
                 counterparty  approximately  $1.5  million  had  the
                 remaining contracts settled on December 31, 1998.
                           
                 In  September and December 1998, the Company entered
                 into call option contracts to hedge price changes on
                 approximately 34,000 barrels of jet fuel  per  month
                 during  the  period from January 1999 to June  1999.
                 The  contracts  provide for  a  premium  payment  of
                 approximately $273,000 and set a cap on the  average
                 maximum  price equal to 40.625 cents per  gallon  of
                 jet  fuel  excluding taxes and into-plane fees  with
                 the  premium  and any gains on this contract  to  be
                 recognized as a component of fuel expense during the
                 period  in  which  the Company  purchases  fuel.  In
                 October and November 1998, the Company entered  into
                 commodity  swap transactions to hedge price  changes
                 on  approximately 34,000 additional barrels  of  jet
                 fuel  per month during the period from January  1999
                 to  June  1999. The contracts provide for an average
                 fixed  price of 44.35 cents per gallon of  jet  fuel
                 with  any  gains or losses recognized as a component
                 of  fuel  expense  during the period  in  which  the
                 Company purchases fuel. With these transactions, the
                 Company has hedged approximately 80% of its jet fuel
                 requirements  for the first half of  1999.  Had  the
                 commodity swap transactions settled on December  31,
                 1998,  the Company would have incurred approximately
                 $900,000 in additional fuel expense.
                 

 11.             The  Company  wrote off the remaining  accruals  for
   Restructuring restructuring costs of $426,000 as of  December  31,
        Charges  1996   related   to  a  fleet  simplification   plan
                 initiated in 1994.   No similar costs were  recorded
                 in 1997 or 1998.
                 
 12.  Litigation The  Company  is  a party to routine litigation  and
                 FAA proceedings incidental to its business, none  of
                 which  is  likely to have a material effect  on  the
                 Company's financial position or the results  of  its
                 operations.
                 
                 The  Company was a party to an action pending in the
                 United   States  District  Court  for  the  Southern
                 District  of  Ohio, Peter J. Ryerson,  administrator
                 of  the  estate of David Ryerson, v. Atlantic  Coast
                 Airlines,  Case No. C2-95-611.    In  September  and
                 October   1998,   this  action   and   all   related
                 litigation  was  settled,  the  cost  of  which  was
                 covered  by  insurance  and was  not  borne  by  the
                 Company.
<PAGE 64>                 
                 The Company is also a party to an action pending  in
                 the  United  States Court of Appeals for the  Fourth
                 Circuit  known as Afzal v. Atlantic Coast  Airlines,
                 Inc.  (No.  98-1011).  This action is an  appeal  of
                 the  December 1997 decision granted in favor of  the
                 Company  in a case claiming wrongful termination  of
                 employment  brought  in the United  States  District
                 Court for the Eastern District of Virginia known  as
                 Afzal   v.  Atlantic  Coast  Airlines,  Inc.  (Civil
                 Action  No. 96-1537-A).  The Company does not expect
                 the  outcome  of  this  case to  have  any  material
                 adverse   effect  on  its  financial  condition   or
                 results of its operations.

 13.  Financial  In  December 1995, the Company adopted Statement  of
                 Financial  Accounting Standards No. 107, "Disclosure
   Instruments   of  Fair Value of Financial Instruments" (SFAS 107).
                 SFAS  107 requires the disclosure of the fair  value
                 of  financial instruments; however, this information
                 does  not represent the aggregate net fair value  of
                 the  Company.  Some  of  the  information  used   to
                 determine  fair  value is subjective and  judgmental
                 in   nature;   therefore,  fair   value   estimates,
                 especially  for  less  marketable  securities,   may
                 vary.  The  amounts actually realized or  paid  upon
                 settlement   or   maturity  could  be  significantly
                 different.
                 
                 Unless quoted market price indicates otherwise,  the
                 fair  values  of  cash and cash  equivalents,  short
                 term  investments, accounts receivable and  accounts
                 payable generally approximate market because of  the
                 short  maturity  of these instruments.  The  Company
                 has  estimated  the  fair value of  long  term  debt
                 based on quoted market prices.

                  The   estimated   fair  values  of  the   Company's
                  financial instruments, none of which are  held  for
                  trading   purposes,  are  summarized   as   follows
                  (brackets denote liability):
                  
                  <TABLE>
                  <CAPTION>
                  (in thousands)    December 31,        December 31,
                                        1997                1998
                                Carrying   Estimated   Carrying Estimated
                                 Amount     Fair         Amount   Fair
                                          Value                  Value
                 <S>              <C>      <C>      <C>      <C>
                 Cash and cash                               
                   equivalents    $39,167  $39,167  $64,412  $64,412
                 Short-term                                  
                 investments      10,737   10,737   63           63
                  Long-term debt (75,706)(120,125) (66,739)  (101,975)

                  See note 10 for information regarding the fair value of
                  derivative financial instruments.

14.               Supplemental disclosures of cash flow
   Supplemental   information:
   Cash Flow      Year ended December 31,
                  (in thousands)
                  Cash paid during the                       
   Information    period for:               1996    1997    1998
                                                             
                        - Interest         $883    $1,778  $3,665
                        - Income taxes     1,319   5,767   15,426
<PAGE 65>
                  The  following  non  cash investing  and  financial
                  activities took place in 1996, 1997 and 1998:
                  
                  In  1996,  the  Company acquired  $1.2  million  in
                  rotable  parts, ground equipment, telephone  system
                  upgrades  and  Director's and  Officer's  Liability
                  Insurance  under capital lease obligations  and  by
                  issuing  notes.  These purchases were  financed  by
                  suppliers and outside lenders.
                  
                  In  1997,  the  Company acquired  $2.9  million  in
                  rotable   parts,  spare  engines,  market  planning
                  software  and  other  fixed assets  and  expendable
                  parts  under capital lease obligations and  through
                  the  use  of manufacturers credits.  As of December
                  31, 1997, there was a remaining balance of $700,000
                  in earned, but unused manufacturer credits which is
                  reflected in accounts receivable.
                  
                  In November 1997, the Company received $4.3 million
                  in additional manufacturers credits pursuant to the
                  terms of aircraft agreements of which $261,000  was
                  received  in  cash  by the end of  1997  leaving  a
                  balance  of  $4.1 million due from the manufacturer
                  as  of  December  31, 1997.  Such amount  has  been
                  classified as other assets.
                  
                  In   September  and  December  1998,  the   Company
                  received  $352,000 of manufacturers  credits  which
                  were applied against the purchase price of two  RJs
                  purchased  in  1998  from  the  manufacturer.   The
                  credits  will  be  utilized primarily  through  the
                  purchase  of rotable parts and other fixed  assets,
                  expendable parts, and pilot training.
                  
                  In   1998,   the  Company  acquired  $3.0   million
                  consisting  primarily of rotable  parts  and  other
                  fixed  assets  and expendable parts  under  capital
                  lease   obligations   and  through   the   use   of
                  manufacturer  credits.  As of  December  31,  1998,
                  there  was  a  remaining balance  of  approximately
                  $607,000 in earned, but unused manufacturer credits
                  which is reflected in accounts receivable.
                  
                  In  1998, the note holders elected to convert $37.8
                  million  of  the  Company's Notes to  common  stock
                  resulting in a recognition of $1.4 million of  debt
                  conversion expense.
                  
                  In April 1998, the Company declared a 2-for-1 stock
                  split  payable  as a stock dividend.   Pursuant  to
                  this   dividend,  $193,000  was  transferred   from
                  additional  paid-in  capital  to  common  stock  to
                  properly maintain the par value per share.
<PAGE 66>                  
                  On  September 29, and November 19, 1998 the Company
                  issued long-term promissory notes for $12.7 million
                  and $12.9 million respectively, for the acquisition
                  of  two  new  RJ  aircraft.  The  promissory  notes
                  mature  on   March  29,  2015  and  May  19,   2015
                  respectively,  and  are collateralized  by  the  RJ
                  aircraft delivered with principal and interest,  at
                  rates  of  5.65% and 5.88%, payable on a semiannual
                  basis through maturity.
                  
                  In  1998,  the Company capitalized $1.7 million  in
                  interest  related to a $15 million deposit  with  a
                  manufacturer.
                  
   15.            SubsequentIn February 1999, the Company entered into an
     Events       asset-based lending agreement  with two  financial
                  institutions that provides the Company with a  line
                  of  credit of up to $35 million, depending  on  the
                  amount of assigned ticket receivables and the value
                  of  certain rotable spare parts.  Borrowings  under
                  the line of credit can provide the Company a source
                  of  working  capital  until  proceeds  from  ticket
                  coupons  are  received.  The line is collateralized
                  by  all  of  the Company's receivables and  certain
                  rotable  spare  parts.   The Company  pledged  $2.9
                  million  of  this line of credit as  collateral  to
                  secure  letters of credit issued on behalf  of  the
                  Company by a financial institution.
                  
                  In   the   second  quarter  of  1998,  the  Company
                  announced that the Metropolitan Washington  Airport
                  Authority  ("MWAA"),  in  coordination   with   the
                  Company, will build an approximately 69,000  square
                  foot  regional  passenger concourse  at  Washington
                  Dulles  International  Airport.   The  facility  is
                  scheduled  to  open in May 1999.  The new  facility
                  will   offer   improved  passenger  amenities   and
                  operational   enhancements,   and   will    provide
                  additional space to support the Company's  expanded
                  operations resulting from the introduction of  RJs.
                  The    facility   will   be   designed,   financed,
                  constructed, operated and maintained by  MWAA,  and
                  will be leased to the Company.  The lease rate will
                  be determined based upon final selection of funding
                  methods  and  rates. MWAA has agreed  to  fund  the
                  construction  through the proceeds  of  bonds  and,
                  subject  to approval by the FAA, passenger facility
                  charges  ("PFC").  In  order  to  obtain  the  most
                  favorable  permanent financing, the Company  agreed
                  to  obtain its own interim financing from  a  third
                  party lender to fund a portion of the total program
                  cost  of  the  regional concourse for approximately
                  $15  million.   MWAA  has  agreed  to  replace  the
                  Company's  interim financing with the  proceeds  of
                  bonds or, if obtained, PFC funds, no later than one
                  year  following the substantial completion date  of
                  the project. If MWAA replaces the interim financing
                  with  PFC  funding rather than bond financing,  the
                  Company's  lease cost will be significantly  lower.
                  The  Company obtained financing for this obligation
                  from  two  banks in February 1999 and has  borrowed
                  $4.5  million  through March  1,  1999.   MWAA  has
                  agreed  to reimburse principal borrowings  but  the
                  Company will be responsible for all interest costs.
<PAGE 67>
   16.  Recent    The   American   Institute   of   Certified   Public
   Accounting     Accountants  issued  Statement of Position  98-5  on
   Pronouncement  accounting    for    start-up    costs,    including
   s              preoperating  costs related to the  introduction  of
                  new  fleet  types by airlines.  The  new  accounting
                  guidelines   will  take  effect  for  fiscal   years
                  beginning after December 15, 1998.  The Company  has
                  previously  deferred certain start-up costs  related
                  to  the  introduction of the RJs and  is  amortizing
                  such  costs to expense ratably over four years.  The
                  Company  will  be required to expense any  remaining
                  unamortized  amounts  as of January  1,  1999  as  a
                  cumulative   effect  of  a  change   in   accounting
                  principle.  In January 1999, the Company recorded  a
                  charge  for  the  remaining unamortized  balance  of
                  approximately    $1.5   million   associated    with
                  preoperating costs.
                  
                  In  June  1998, the FASB issued Statement  No.  133,
                  "Accounting  for Derivative Instruments and  Hedging
                  Activities."  This Statement establishes  accounting
                  and  reporting standards for derivative  instruments
                  and  all  hedging  activities. It requires  that  an
                  entity recognize all derivatives as either assets or
                  liabilities  at  their fair values.  Accounting  for
                  changes in the fair value of a derivative depends on
                  its  designation and effectiveness. For  derivatives
                  that qualify as effective hedges, the change in fair
                  value  will  have  no impact on earnings  until  the
                  hedged  item affects earnings. For derivatives  that
                  are  not designated as hedging instruments,  or  for
                  the ineffective portion of a hedging instrument, the
                  change  in  fair  value will affect  current  period
                  earnings. The Company will adopt Statement  No.  133
                  during  its  first  quarter of fiscal  2000  and  is
                  currently  assessing the impact this statement  will
                  have  on  interest rate swaps and any future hedging
                  contracts that may be entered into by the Company.

<PAGE 68>
17.  Selected     
   Quarterly      
   Financial      
   Data           (in thousands, except per share amounts)
   (Unaudited)    
   
</TABLE>
<TABLE>                                 
   <CAPTION>
                                     Quarter Ended
                       March 31,    June 30,   September December 31,
                            1998        1998         30,         1998
                                                    1998
   <S>                       <C>         <C>         <C>          <C>
   Operating             $58,055     $75,759     $78,100      $78,026
   revenues
   Operating               5,875      17,358      17,055       12,403
   income
   Net income              2,983       9,092      10,613        7,725
   Net income                                                        
   per share
      Basic             $   0.20    $   0.48      $   0.55     $   0.40
      Diluted           $   0.16    $   0.42<FN>1 $   0.49     $   0.36
   Weighted                                                          
   average                22,034      22,246      22,244       22,289
   shares
   outstanding
                                                         
   </TABLE>                                              
   
   
   Quarter Ended
   <TABLE>                                                     
   <CAPTION
                    March 31,     June 30,    September  December 31,
                       1997         1997         30,         1997
                                                1997
   <S>                       <C>         <C>         <C>          <C>
   Operating             $41,114     $53,220     $54,864      $56,246
   revenues
   Operating               1,037       9,968       9,054        8,884
   income
   Net income                703       5,885       4,844        3,068
   Net income                                                        
   per share
      Basic             $   0.04    $   0.35    $   0.34     $   0.21
      Diluted           $   0.04    $   0.33    $   0.26     $   0.17
   Weighted                                                          
   average                17,002      17,675      21,149       21,545
   shares
   outstanding
</TABLE>


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

            Reference  is hereby made to the Company's Form 8-K  Item  4,
      filed October 29, 1997.
      
<PAGE 69>
                                    
                                PART III

          The information required by this Part III (Items 10, 11, 12 and
13)  is  hereby  incorporated by reference from the Company's  definitive
proxy statement which is expected to be filed pursuant to Regulation  14A
of  the Securities Exchange Act of 1934 not later than 120 days after the
end of the fiscal year covered by this report.
                                    
                                    
                                    
                                 PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

     (a)  1.   Financial Statements

               The  Consolidated Financial Statements listed in the index
               in Part II, Item 8, are filed as part of this report.

          2.   Consolidated Financial Statement Schedules

               Reference  is  hereby  made to the Consolidated  Financial
               Statements  and the Notes thereto included in this  filing
               in Part II, Item 8.
               
          3.   Exhibits

Exhibit
Number                Description of Exhibit

3.1  (note 3)    Restated Certificate of Incorporation of the Company.
3.2  (note 3)    Restated By-laws of the Company.
4.1  (note 1)    Specimen Common Stock Certificate.
4.2  (note 9)    Stockholders' Agreement, effective as of October 15,
                 1991, among the Company, the stockholders and the holder
                 of warrants of the Company named on the signature pages
                 thereto and a trust established pursuant to the Atlantic
                 Coast Airlines, Inc. Employee Stock Ownership Plan,
                 together with Amendment and Second Amendment thereto
                 dated as of February 24, 1992 and May 1, 1992
                 respectively.
4.3  (note 9)    Registration Rights Agreement, dated as of September 30,
                 1991, among the Company and the stockholders named on
                 the signature pages thereto (the "Stockholders
                 Registration Rights Agreement").
4.4  (note 9)    Form of amendment to the Stockholders Registration
                 Rights Agreement.
4.17  (note 5)   Indenture, dated as of July 2, 1997, between the Company
                 and First Union National Bank of Virginia
4.18  (note 6)   Registration Rights Agreement, dated as of July 2, 1997,
                 by and among the Company, Alex. Brown & Sons
                 Incorporated and the Robinson-Humphrey Company, Inc.
<PAGE 70>
4.19 (note 2)    Rights Agreement between Atlantic Coast Airlines
                 Holdings, Inc. and Continental Stock Transfer & Trust
                 Company dated as of January 27, 1999
10.1  (note 9)   Atlantic Coast Airlines, Inc. 1992 Stock Option Plan.
10.2  (note 6)   Restated Atlantic Coast Airlines, Inc. Employee Stock
                 Ownership Plan, effective October 11, 1991, as amended
                 through December 31, 1996.
10.4  (note 6)   Restated Atlantic Coast Airlines 401(k) Plan, as amended
                 through February 3, 1997.
10.4(a) (note 4) Amendment to the Atlantic Coast Airlines 401(k) Plan
                 effective May 1, 1997
10.6 (notes 9 & 10)                                             United
                 Express Agreement, dated October 1, 1991, among United
                 Airlines, Inc., Atlantic Coast Airlines and the Company,
                 together with Amendment No. 1, dated as of April 1,
                 1993.
10.6(a) (note 4) Third Amendment to United Express Agreement, dated March
                 3, 1998, among United Airlines, Inc., Atlantic Coast
                 Airlines and the Company.
10.6(b) notes 1 & 11                                            Fourth
                 Amendment to the United Express Agreement, dated
                 December 11, 1998, among United Airlines, Inc., Atlantic
                 Coast Airlines and the Company.
10.7 (notes 9 & 10)                                             Agreement
                 to Lease British Aerospace Jetstream-41 Aircraft, dated
                 December 23, 1992, between British Aerospace, Inc. and
                 Atlantic Coast Airlines.
10.12(b)  (note 1)                                              Amended
                 and Restated Severance Agreement, dated as of January
                 20, 1999, between the Company and Kerry B. Skeen.
10.12(c)  (note 1)                                              Amended
                 and Restated Severance Agreement, dated as of January
                 20, 1999, between the Company and Thomas J. Moore.
10.12(h)  (note 1)                                              Form of
                 Severance Agreement.  The Company has entered into
                 substantially identical agreements with Michael S.
                 Davis, renewed as of January 1, 1999, and with Paul H.
                 Tate, renewed as of February 1, 1999.
10.13(a)  (note 6)                                              Form of
                 Indemnity Agreement. The Company has entered into
                 substantially identical agreements with the individual
                 members of its Board of Directors.
10.21  (note 8)  Acquisition Agreement, dated as of December 30, 1994, by
                 and among Jetstream Aircraft, Inc., JSX Capital
                 Corporation, and Atlantic Coast Airlines.
10.21(a)  (note 6)                                              Amendment
                 Number One to Acquisition Agreement, dated as of June
                 17, 1996, by and among Jetstream Aircraft, Inc., JSX
                 Capital Corporation, and Atlantic Coast Airlines.
10.23  (note 1)  Amended and Restated Loan and Security Agreement dated
                 February 8, 1999 between Atlantic Coast Airlines and
                 Fleet Capital Corporation.
10.24  (note 1)  Stock Incentive Plan of 1995, as amended as of May 5,
                 1998.
10.25(a)  (note 1)                                              Form of
                 Incentive Stock Option Agreement.  The Company enters
                 into this agreement with employees who have been granted
                 incentive stock options pursuant to the Stock Incentive
                 Plans.
10.25(b)  (note 1)                                              Form of
                 Incentive Stock Option Agreement.  The Company enters
                 into this agreement with corporate officers who have
                 been granted incentive stock options pursuant to the
                 Stock Incentive Plans.
10.25(c) (note 1)Form of Non-Qualified Stock Option Agreement. The
                 Company enters into this agreement with employees who
                 have been granted non-qualified stock options pursuant
                 to the Stock Incentive Plans.
10.25(d)  (note 1)                                              Form of
                 Non-Qualified Stock Option Agreement. The Company enters
                 into this agreement with corporate officers who have
                 been granted non-qualified stock options pursuant to the
                 Stock Incentive Plans.
<PAGE 71>
10.25(e)  (note 1)                                              Form of
                 Restricted Stock Agreement. The Company entered into
                 this agreement with corporate officers who were granted
                 restricted stock pursuant to the Stock Incentive Plans.
10.27  (note 7)  Split Dollar Agreement, dated as of December 29, 1995,
                 between the Company and Kerry B. Skeen.
10.27(a)  (note 6)                                              Form of
                 Split Dollar Agreement.  The Company has entered into
                 substantially identical agreements with Thomas J. Moore
                 and with Michael S. Davis, both dated as of July 1,
                 1996, and with Paul H. Tate, dated as of February 1,
                 1998.
10.29  (note 7)  Agreement of Assignment of Life Insurance Death Benefit
                 As Collateral, dated as of December 29, 1995, between
                 the Company and Kerry B. Skeen.
10.29(a)  (note 6)                                              Form of
                 Agreement of Assignment of Life Insurance Death Benefit
                 As Collateral.  The Company has entered into
                 substantially identical agreements with Thomas J. Moore
                 and with Michael S. Davis, both dated as of July 1,
                 1996, and with Paul H. Tate, dated as of February 1,
                 1998.
10.31  (note 6)  Summary of Senior Management Bonus Program. The Company
                 has adopted a plan in substantially the form as outlined
                 in this exhibit for 1999 and 1998.
10.32  (note 4)  Summary of "Share the Success" Profit Sharing Plan.  The
                 Company has adopted a plan in substantially this form
                 for 1999 and for the three previous years. (what about
                 the change from 3 bonus groups to three - was this
                 filed?)
10.40A (notes 1, 10 & 11)Purchase Agreement between Bombardier Inc. and
                 Atlantic Coast Airlines Relating to the Purchase of
                 Canadair Regional Jet Aircraft dated January 8, 1997, as
                 amended through December 31, 1998.
10.50(a) (note 4)Form of Purchase Agreement, dated September 19, 1997,
                 among the Company, Atlantic Coast Airlines, Morgan
                 Stanley & Co. Incorporated and First National Bank of
                 Maryland, as Trustee.
10.50(b) (note 4)Form of Pass Through Trust Agreement, dated as of
                 September 25, 1997, among the Company, Atlantic Coast
                 Airlines, and First National Bank of Maryland, as
                 Trustee.
10.50(c) (note 4)Form of Pass Through Trust Certificate.
10.50(d) (note 4)Form of Participation Agreement, dated as of September
                 30, 1997, Atlantic Coast Airlines, as Lessee and Initial
                 Owner Participant, State Street Bank and Trust Company
                 of Connecticut, National Association, as Owner Trustee,
                 the First National Bank of Maryland, as Indenture
                 Trustee, Pass-Through Trustee, and Subordination Agent,
                 including, as exhibits thereto, Form of Lease Agreement,
                 Form of Trust Indenture and Security Agreement, and Form
                 of Trust Agreement.
10.50(e) (note 4)Guarantee, dated as of September 30, 1997, from the
                 Company.
10.80 (note 4)   Ground Lease Agreement Between The Metropolitan
                 Washington Airports Authority And Atlantic Coast
                 Airlines dated as of June 23, 1997.
10.85 (note 1)   Lease Agreement Between The Metropolitan Washington
                 Airports Authority and Atlantic Coast Airlines, with
                 amendments as of March 12, 1999.
10.90 (notes 4 & 10)                                            Schedules
                 and Exhibits to ISDA Master Agreement between the
                 Company and Bombardier Inc. dated as of July 11, 1997
                 (the Company entered into substantially similar
                 arrangements for interest rate hedges that are presently
                 outstanding).
<PAGE 72>
21.1  (note 1)   Subsidiaries of the Company.
23.1 (note 1)    Consent of KPMG Peat Marwick.
23.2  (note 1)   Consent of BDO Seidman.

Notes

(1)    Filed  as  an Exhibit to this Annual Report on Form 10-K  for  the
       fiscal year ended December 31, 1998.
               (2)   Filed  as  Exhibit 99.1 to Form 8-A (File  No.  000-
               21976), incorporated herein by reference.
(3)    Filed  as  Exhibit to the Quarterly Report on Form  10-Q  for  the
       three month period ended June 30, 1998.
(4)    Filed  as an Amendment to the Annual Report on Form 10-K  for  the
       fiscal  year  ended  December  31, 1997,  incorporated  herein  by
       reference.
(5)    Filed  as an Exhibit to the Quarterly Report on Form 10-Q for  the
       three  month  period ended June 30, 1997, incorporated  herein  by
       reference.
(6)    Filed  as an Amendment to the Annual Report on Form 10-K  for  the
       fiscal  year  ended  December  31, 1996,  incorporated  herein  by
       reference.
(7)    Filed  as  an  Exhibit to the Annual report on Form 10-K  for  the
       fiscal  year  ended  December  31, 1995,  incorporated  herein  by
       reference.
(8)    Filed  as  an  Exhibit to the Annual Report on Form 10-K  for  the
       fiscal  year  ended  December  31, 1994,  incorporated  herein  by
       reference.
(9)    Filed  as  an  Exhibit  to  Form S-1, Registration  No.  33-62206,
       effective July 20, 1993, incorporated herein by reference.
(10)   Portions of this document have been omitted pursuant to a  request
       for confidential treatment that has been granted.
(11)   Portions of this document have been omitted pursuant to a  request
       for confidential treatment that is pending.
       
(b)  Reports on Form 8-K.
       
       None.


                                    
<PAGE 73>

                               SIGNATURES
                                    
      Pursuant  to  the  requirements of  Section  13  of  15(d)  of  the
Securities  Exchange  Act of 1934, the registrant has  duly  caused  this
report  to  be  signed on its behalf by the undersigned,  thereunto  duly
authorized on March 18, 1999.

                                            ATLANTIC COAST AIRLINES, INC.
                                                                         
                                                     By        /S/
                                                      :
                                    /                     C. Edward Acker
                                                    Chairman of the Board
                                                                         
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 16, 1998.

Name                            Title
                                
                                
            /S/                 Chairman of the Board of
                                Directors
C. Edward Acker                 
                                
                                
            /S/                 Director, President
Kerry B. Skeen                  and Chief Executive Officer
                                (principal executive officer)
                                
                                
            /S/                 Director, Executive Vice
                                President
Thomas J. Moore                 and Chief Operating Officer
                                
                                
            /S/                 Senior Vice President, Treasurer
                                and
Paul H. Tate                    Chief Financial Officer
                                (principal financial officer)
                                
                                
            /S/                 Vice President, Financial
                                Planning and Controller
David W. Asai                   (principal accounting officer)
                                                
                                                
            /S/                               /S/
John Sullivan                   Susan M. Coughlin
Director                        Director
                                
                                                
            /S/                               /S/
Robert Buchanan                 James Kerley
Director                        Director
                                                
                                                
            /S/                               /S/
Joseph Elsbury                  James Miller
Director                        Director

_______________________________
1 Excluding a non-cash, non-operating charge to earnings during the
second quarter of 1998 of $1.4 million representing the fair value of the
additional shres distributed upon conversion.