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, 1999

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, 2000 was approximately $290,200,000.

As  of March 1, 2000 there were 21,149,056 shares of common stock of  the
registrant issued and 18,625,890 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 2000 Annual Meeting         Part III, Items 10-13
 of Shareholders




<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 here include the response  of
the  Company's  competitors  to the Company's business  strategy,  market
acceptance  of  new regional jet service, the costs of  implementing  jet
service,  the  cost  of fuel, the amount and timing of  ACJet's  start-up
costs,  obtaining  FAA  regulatory approval  for  ACJet  to  conduct  air
transportation  on a timely basis, the ability of the Company  to  obtain
favorable  financing terms for its aircraft, the ability of the  aircraft
manufacturers to deliver aircraft on schedule, the ability  to  identify,
implement and profitably operate new business opportunities, the  ability
to hire and retain employees, the weather, changes in and satisfaction of
regulatory   requirements  including  requirements  relating   to   fleet
expansion, and general economic and industry conditions.

          Atlantic Coast Airlines Holdings, Inc. ("ACAI"), is the holding
company of Atlantic Coast Airlines ("ACA"), and Atlantic Coast Jet,  Inc.
("ACJet") together, (the "Company"), a large regional airline, serving 51
destinations in 24 states in the Eastern and Midwestern United States  as
of  March  1, 2000 with 561 scheduled non-stop flights system-wide  every
weekday.   ACA 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.  ACJet is currently  in
the pre-operating stage, awaiting government certification as a scheduled
airline, and has negotiated a fee per departure agreement with Delta  Air
Lines,  Inc.  ("Delta") to operate as a Delta Connection carrier  in  the
Northeast  United  States. As of March 1, 2000, the  Company  operated  a
fleet  of 84 aircraft (24 regional jets and 60 turboprop aircraft) having
an average age of approximately six 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  growth of the Company's ACA subsidiary. ACA markets
itself  as  "United  Express" under its United  Express  Agreements  with
United.    These  agreements,  as  further  described  under   "Marketing
Agreements", provide ACA with a shared market identity with United, allow
ACA  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.   ACA  coordinates  its  schedules  with  United,   and
participates  with  United  in  cooperative  advertising  and   marketing
agreements.   In  most cities served by both United and  ACA  other  than
Washington-Dulles  and  Chicago-O'Hare,  United  provides   all   airport
facilities and related ground support services.  ACA 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.   Capitalize on the Company's new relationship  with  Delta:
The  Company  intends to begin capitalizing on its new fee per  departure
agreement with Delta.  ACJet will operate as "Delta Connection" under its
Delta  Connection  Agreement  with  Delta.   The  agreement,  as  further
described under "Marketing Agreements", will provide ACJet with a  shared
market  identity  with Delta, and will allow ACJet to  list  its  flights
under  Delta's  two letter flight designator in airline  CRSs  and  other
published schedules and to award Delta's "SkyMiles" frequent flyer  miles
to  its  passengers.  Delta will also provide all airport facilities  and
related ground support services in the cities where Delta and ACJet  both
provide   service.   ACJet  will  participate  in  Delta's   "Deltamatic"
reservation system and all major CRSs, and will use the Delta  Connection
logo and have exterior aircraft paint schemes similar to those of Delta.

          3.   Continued  expansion through regional jet  aircraft:   The
Company has expanded its United Express operation with regional jets, and
will  exclusively  operate its Delta Connection operation  with  regional
jets.   During  1999, the Company placed into service ten additional  50-
seat  Bombardier  Regional  Jets ("CRJs"),  converted  an  additional  17
option  orders  to  firm deliveries, and placed new firm  orders  for  an
additional  six CRJs and received 17 new aircraft options.   This  brings
the  total number of delivered CRJs to 24, firm ordered undelivered  CRJs
to  42,  and CRJ options to 27.  Also in 1999, the Company placed a  firm
order  with  Fairchild Aerospace Corporation for 25 Fairchild Dornier  32
seat  328JET  feeder regional jet ("328JET") aircraft, and a  conditional
order  for  15  328JET aircraft and 40 Fairchild Dornier 44  seat  428JET
feeder  regional  jet  ("438JET") aircraft (328JET  aircraft  and  428JET
aircraft  are  collectively  referred to as "FRJs".)   In  addition,  the
Company has options to acquire an additional 85 FRJ aircraft.

          The  Company has utilized regional jets to complement its route
system by initiating service from Washington-Dulles to markets beyond the
economic  operating  range  of  turboprop aircraft  and  has  selectively
deployed the CRJ 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.  The Company has also utilized CRJs to  begin  a
second hub operation at United's Chicago-O'Hare hub.

          4.   Commitment  to 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  ACRM
procedures  have  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  has  equipped  its  turboprop  aircraft  with  an
automated  aircraft time reporting system which enables  the  Company  to
communicate  more efficiently with flight crews and further automate  the
flight  tracking  process.   The  Company intends  to  install  automatic
aircraft  time  reporting systems in all of its  CRJs  beginning  in  the
second quarter 2000.  This system improves the timeliness and accuracy of
flight   information  communicated  and  displayed   to   the   Company's
passengers.
<PAGE> 4
          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, and the  entire  turboprop  fleet
equipped  with  GPS,  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 implemented by
the  end  of  the  third quarter 1999. These routes,  combined  with  the
continued  success  of  FMS procedure development for  Washington-Dulles,
have  reduced  the number of miles required to be flown by  ACA  aircraft
while reducing pilot and air traffic controller workload.

     Markets

          As of March 1, 2000, the Company scheduled 245 non-stop flights
from  Washington-Dulles per weekday, which were more  flights  from  that
airport  than any other airline.  During 1999, 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 59% of passenger traffic at Washington-Dulles during 1999.

            The  Company's  top  five  airports  based  on  frequency  of
operations  are Washington-Dulles, Chicago O'Hare, New York-JFK,  Newark,
and  Raleigh-Durham.   During 1999, the Company  added  new  routes  from
Washington-Dulles  and Chicago-O'Hare.  The Company increased  operations
in  existing Washington-Dulles markets by 35 daily departures  and  added
new service to three cities:  Columbia, SC, Akron/Canton, OH, and Mobile,
AL.  The Company also replaced or complemented turboprop service with CRJ
service   in   the  following  markets:   Albany,  NY,  Burlington,   VT,
Charleston, SC, Newark, NJ, New York-LaGuardia.  In 1999 the Company also
continued to build its operations at Chicago-O'Hare.  Additional Chicago-
O'Hare  non-stop CRJ service was added to:  Akron/Canton, OH, Charleston,
SC, Savannah, GA, and Mobile, AL. In 1999, the Company ceased operations,
and  United added service, from Washington-Dulles to Atlanta, GA,  Tampa,
FL,  and  Hartford, CT and the Company ceased operations from Washington-
Dulles  to Manchester, NH, and Fort Lauderdale, FL.  In 2000, new service
was  added  between  Roanoke,  VA  and Chicago-O'Hare,  and  service  was
discontinued between Washington-Dulles and Fort Myers, FL.
<PAGE> 5
          The  following table sets forth the destinations served by  ACA
as of March 1, 2000:

                       Washington-Dulles (To/From)

Akron/Canton, OH*                    Mobile, AL*
Albany, NY**                         Nashville, TN*
Allentown, PA                        New York, NY (Kennedy)
Baltimore, MD                        New York, NY  (LaGuardia)*
Binghamton, NY                       Newark, NJ**
Buffalo, NY                          Newport News, VA
Burlington, VT*                      Norfolk, VA
Charleston, SC**                     Philadelphia, PA
Charleston, WV**                     Pittsburgh, PA
Charlottesville, VA                  Portland, ME*
Cleveland, OH                        Providence, RI
Columbia, SC *                       Raleigh-Durham, NC**
Columbus, OH**                       Richmond, VA
Dayton, OH                           Roanoke, VA
Detroit, MI                          Rochester, NY
Greensboro, NC                       Savannah, GA*
Greenville/Spartanburg, SC*          State College, PA
Harrisburg, PA                       Stewart, NY
Indianapolis, IN*                    Syracuse, NY
Jacksonville, FL*                    Westchester County, NY
Knoxville, TN                        Wilkes-Barre/Scranton, PA
Lynchburg, VA                        Wilmington, NC

                        Chicago-O'Hare (To/From)

Akron/Canton, OH*                Roanoke, VA*
Charleston, SC*                  Savannah, GA *
Charleston, WV*                  Sioux Falls, SD*
Fargo, ND*                       Springfield/Branson, MO*
Mobile, AL*                      Wilkes-Barre/Scranton, PA*
Peoria, IL*


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

           ACJet's Delta Connection service is expected to serve  markets
in the Northeastern United States with an all regional jet fleet.  Routes
will be determined by Delta.
<PAGE> 6
     Marketing Agreements

     United Express:

           The  Company's  United  Express Agreements  ("UA  Agreements")
define  the  Company's  relationship  with  United.   The  UA  Agreements
authorize  the  Company to use United's "UA" flight  designator  code  to
identify  ACA's  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 ACA's association with United.

           In  December 1998, the Company and United agreed to a ten year
extension  of  the  UA Agreements. Prior to March 31,  2004,  United  may
terminate the UA Agreements at any time if ACA 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
UA  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.

          ACA  passengers  may  participate in  United's  "Mileage  Plus"
frequent flyer program and are eligible to receive United frequent  flyer
miles  for each of ACA's flights.  Mileage Plus members are also eligible
to  redeem their awards on ACA's route system.  ACA 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  UA 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  ACA  a
portion  of  these  fares  on a fixed rate or formula  basis  subject  to
periodic adjustment. The UA Agreements also provide for interline baggage
handling,  and for reduced airline fares for eligible United and  Company
personnel and their families.

           Pursuant  to the UA Agreements, United provides  a  number  of
additional services to ACA. These include publication of the fares, rules
and  related information that are part of ACA's contracts of carriage for
passengers and freight; publication of ACA'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
ACA;   provision  of  ticket  handling  services  at  United's  ticketing
locations;  provision of airport signage at airports where both  ACA  and
United  operate; provision of United ticket stock and related  documents;
provision  of  expense  vouchers, checks and cash  disbursements  to  ACA
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 ACA.

          Under  the terms of the UA Agreements, the Company pays United,
for  these  services, monthly fees based on the total number  of  revenue
passengers  boarded  by ACA on its flights for the  month.  The  fee  per
passenger is subject to periodic increases during the duration of the ten
year extension period.
<PAGE> 7
           The  UA  Agreements require ACA to obtain United's consent  to
operate  service  between  city  pairs  as  "United  Express".   If   ACA
experiences  net  operating  expenses  that  exceed  revenues  for  three
consecutive  months  on any required route, ACA 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 UA  Agreements
do  not  prohibit United from competing, or from entering into agreements
with  other airlines who would compete, on routes served by the  Company,
but  state  that United may terminate the UA Agreements if ACAI  and  ACA
enter  into a similar arrangement with any other carrier without United's
approval.   The Company believes that its agreement to operate  ACJet  as
part of the Delta Connection program does not provide United the right to
terminate the UA Agreements.

           The  UA Agreements limit the ability of ACAI and ACA 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,  and provide United a right  to  terminate  the  UA
Agreements  if they merge with or are controlled or acquired  by  another
carrier.   United  also  has a right of first  refusal  with  respect  to
issuance by ACAI and ACA of shares of their common stock if, as a  result
of  the  issuance,  certain  of their stockholders  and  their  permitted
transferees  do  not own at least 50% of their 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.

     Delta Connection:

           In  September, 1999, the Company reached a ten year  agreement
with  Delta Air Lines, Inc. to operate regional jet aircraft as  part  of
the Delta Connection program on a fee-per-departure basis.  The Company's
Delta   Connection  Agreement  ("DL  Agreement")  defines  the  Company's
relationship  with  Delta.  The DL Agreement authorizes  the  Company  to
operate regional jet aircraft as part of the Delta Connection program  on
a  fee-per-departure  basis. Under the fee-per-departure  structure,  the
Company  is  contractually obligated to operate the flight schedule,  for
which  Delta  pays the Company an agreed amount regardless  of  passenger
revenue.   The Company thereby assumes the risk of operating  the  flight
schedule and Delta assumes the risk of marketing and selling seats to the
traveling public.

By  operating as part of the Delta Connection program, ACJet is  able  to
use  Delta's "DL" flight designator to identify ACJet's flights and fares
in the major CRSs, including Delta's "Deltamatic" reservation system, and
to  use the Delta Connection logo and exterior aircraft paint schemes and
uniforms  similar to those of Delta.  In addition, ACJet  passengers  may
participate in Delta's "SkyMiles" frequent flyer program and are eligible
to  receive  a certain number of Delta frequent flyer miles for  each  of
ACJet's  flights.   SkyMiles members are also eligible  to  redeem  their
awards on ACJet's route system

           Pursuant  to  the DL Agreement, Delta, at its expense,  is  to
provide a number of support services to ACJet. These include handling all
customer   reservations,  customer  service,  ground  handling,   station
operations,  pricing, scheduling, revenue accounting, revenue management,
frequent  flyer,  advertising and other passenger, aircraft  and  traffic
servicing functions in connection with the ACJet operation.
<PAGE> 8
          Delta may terminate the DL Agreement at any time if ACJet fails
to  maintain certain performance standards and, subject to certain rights
by  the  Company, may terminate without cause, effective no earlier  than
two  years after commencement of operations, by providing 180 days notice
to the Company.

           The  DL  Agreement  requires the  Company  to  obtain  Delta's
approval  if  it  chooses to enter into a code-sharing  arrangement  with
another  carrier, to list its flights under any other code, or to operate
flights  for  any other carrier, except with respect to such arrangements
with  United  or non-U.S. code-shares partners of United  or  in  certain
other  circumstances.   The DL Agreement does  not  prohibit  Delta  from
competing, or from entering into agreements with other airlines who would
compete,  on  routes  served  by  the Company.   The  DL  Agreement  also
restricts  the ability of the Company to dispose of aircraft  subject  to
the  agreement without offering Delta a right of first refusal to acquire
such  aircraft, and provides that Delta may terminate the  agreement  if,
among  other  things,  the Company merges with or  sells  its  assets  to
another  entity, is acquired by another entity or if any person  acquires
more than a specified percentage of its stock.

     Agreements with Other Airlines:

          ACA  has code-sharing agreements with Lufthansa German Airlines
("Lufthansa") and with Air Canada, which permit these airlines  to  place
their respective airline codes on certain flights operated by ACA.  As of
March  1,  2000, 16 of ACA's markets are also listed under the  Lufthansa
code  and  18  of its markets are also listed under the Air Canada  code.
Lufthansa  and  Air  Canada are members of the STAR  Alliance,  a  global
airline  alliance,  comprised of United, Lufthansa, Air  Canada,  Ansett,
SAS, Thai, Varig, and ANA. The United Express-Lufthansa agreement and the
United Express-Air Canada agreement provide 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  other
airlines'  frequent  flyer  programs receive  mileage  credit  for  these
flights.

     Fleet Description

          Fleet Expansion:    As of March 1, 2000, the Company operated a
fleet  of  24  CRJs 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, 2000, the Company had a total of 42 CRJs on firm
order from Bombardier, Inc., in addition to the 24 already delivered, and
held  options for 27 additional CRJs.  During 1999, the Company converted
17  option  aircraft to firm orders and placed new firm  orders  for  six
additional  CRJs and received 17 new aircraft options.  The Company  also
had  25 328JETs on firm order and a combination of 55 328JETs and 428JETs
on  conditional  order  from Fairchild Aerospace  Corporation,  and  held
options  for an additional 85 aircraft.  The future delivery schedule  of
the  remaining 42 firm ordered CRJ aircraft undelivered as  of  March  1,
2000  is  as  follows:  fourteen aircraft are scheduled for  delivery  in
2000,  eighteen  in  2001,  and ten in 2002.  The  25  firm  ordered  FRJ
aircraft  are  scheduled to be delivered beginning in  April  2000,  with
fourteen  being  delivered by year end, and the  remaining  eleven  being
delivered  in  2001.   The  conditional  portion  of  the  FRJ  order  is
contingent  on the Company receiving approval from United to operate  the
FRJs  as  United  Express.   The Company has  the  option  to  waive  the
condition  and  enter into commitments for firm delivery positions  under
the Fairchild agreement.
<PAGE> 9
          Fleet Composition:  The following table describes the Company's
fleet of aircraft, scheduled deliveries and options as of March 1, 2000:
<TABLE>
<CAPTION>
                                                        Future
                  Number of   Passenger    Average     Scheduled
                   Aircraft   Capacity      Age in    Deliveries
                                            Years          /
                                                        Options
<S>               <C>        <C>          <C>         <C>
Canadair Regional     24         50          1.5        42/27
  Jets
Fairchild Dornier     -          32          N/A        40/852
  328JET                                               note 1
Fairchild Dornier     -          44          N/A        40/see
  428JET                                               note 2 & 3
British Aerospace     32         29          5.2               -
  J-41
British Aerospace     28         19          10.1              -
  J-32
                      84                     5.8       122/112
</TABLE>
    1     Includes  15  conditional ordered aircraft  subject  to  United
          approval.
    2     Option aircraft can be either 328JET or 428JET aircraft.
    3     Includes  40  conditional ordered aircraft, subject  to  United
          approval.

           As previously announced, the Company is exploring alternatives
to  accelerate  the  retirement of its fleet of 28 leased  19  seat  J-32
aircraft.  The Company tentatively plans to remove as many as  six  J-32s
from  ACA's fleet during 2000 and the remainder in 2001.  As of  December
31, 1999, the Company had J-32 operating lease commitments with remaining
lease  terms  ranging  from one to six years and  related  minimum  lease
payments of approximately $43 million.  The Company has not yet finalized
its  analysis of a phase-out plan, including quantification of  any  one-
time fleet rationalization charge.

     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  1999,
the  Company had hedged the fuel price for approximately 57% of its  fuel
requirements  by entering into contracts with independent  counterparties
that reduced the Company's exposure to upward movements in the price  per
gallon of jet fuel.  Fuel price increases in the second half of 1999  and
to  date  in  2000  have  had a material impact  on  cost  of  operations
throughout the airline industry.  The Company's results will continue  to
be affected by fuel price volatility.  For 2000, the Company is currently
not  exposed  to  fuel price fluctuations for approximately  16%  of  its
estimated fuel requirements, 8% through fuel hedging activity and  8%  by
virtue  of the fact that Delta bears the risk of price movements  in  jet
fuel for the Delta Connection flying to be performed by ACJet.
<PAGE> 10
     Marketing

           ACA's advertising and promotional programs emphasize the close
affiliation with United, including coordinated flight schedules  and  the
ability  of  ACA's passengers to participate in United's  "Mileage  Plus"
frequent flyer program. ACA'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, 1999,  approximately
79%  of  ACA's passenger revenue was derived from ticket sales  generated
through travel agencies and corporate travel departments. In marketing to
travel agents, ACA relies on personal contacts and direct mail campaigns,
provides familiarization flights and hosts group presentations and  other
functions to acquaint travel agents with ACA's services.  Many  of  these
activities   are   conducted  in  cooperation   with   United   marketing
representatives. In addition, ACA and United jointly run radio and  print
advertising in markets served by the Company.

          ACA also participates in United's electronic ticketing program.
This  program  allows customers to travel on flights of  United  and  ACA
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,  1999,  55%  of the  Company's  passengers  utilized
electronic  tickets as compared to 43.5% for the year ended December  31,
1998.

           All  advertising  and  promotion of ACJet's  flights  will  be
Delta's  responsibility and at Delta's expense.  This  includes  CRS  and
travel  agency  arrangements,  and  passenger  participation  in  Delta's
SkyMiles frequent flyer program.

     Competition

          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.

           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 and Chicago-O'Hare. 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 and Delta's SkyMiles frequent flyer
programs who fly regularly to or from the markets served or to be  served
by the Company.

          During  the  first half of 1999 US Airways began to expand  its
operations at Washington-Dulles.  New service included the operations  of
mainline US Airways, MetroJet, Shuttle and US Airways Express. US Airways
operated  in  five  of  the  Company's Washington-Dulles  markets  as  of
December  31, 1998 and by September 30, 1999 increased their presence  to
21  of  the Company's markets.  Although the US Airways service generally
has  utilized fare levels similar to that implemented by the Company, two
of  the implemented markets were served by MetroJet, which offered  fares
lower than that typically offered by the Company.

          In  1999,  United also significantly increased  the  number  of
flights  it  operated at Washington-Dulles, and United  and  the  Company
revised  their  Dulles flight schedules to increase  connections  and  to
thereby  take  greater advantage of United's increased capacity.   As  of
March  1,  2000,  United  operated 113 daily departures  from  Washington
Dulles,  a 64% increase from December 31, 1998. During 1999, the  Company
and  United either increased frequencies or upgraded equipment, or  both,
in markets affected by the US Airways expansion.
<PAGE> 11
          In the first quarter of 2000, US Airways began reducing some of
its  MetroJet,  Shuttle and US Airways Express operations at  Washington-
Dulles.  Reductions were made in the operations of MetroJet, Shuttle  and
US  Airways Express.  By March 2000 US Airways ceased MetroJet service in
the  Birmingham,  AL, Columbus, OH, Milwaukee, WI and St.  Louis,  MO  to
Washington-Dulles  markets, and has announced its intention  to  withdraw
MetroJet  service between Raleigh-Durham and Washington-Dulles.  MetroJet
competed directly with the Company in the Columbus, OH and Raleigh-Durham
to  Washington-Dulles  markets.  Further, US Airways  has  announced  its
intention  to withdraw hourly Shuttle service in the Boston and LaGuardia
to  Washington-Dulles  markets and to replace  both  with  less  frequent
service  using a combination of mainline and US Airways Express  regional
jet  service.   The  Company competes directly with  US  Airways  in  the
LaGuardia-Washington-Dulles market.  By March 2000 US Airways Express had
ceased service in the Indianapolis to Washington-Dulles market - a market
the Company serves with regional jets.

     Yield Management

          The  Company  closely monitors ACA's 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  was  also
able  to  expand the number of booking classes available on ACA  flights.
These  expanded booking classes allowed the Company to broaden the number
of  fare  categories  offered  to customers,  while  simplifying  booking
procedures.  The Company experienced problems with the cut-over to  Orion
which  negatively  impacted revenue in the first and second  quarters  of
1999.   These  problems were resolved and the Company is fully  utilizing
the  capabilities of the Orion system.  Orion replaced 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.

           Congress recently passed and the President is expected to sign
into  law new federal slot rules for three of the airports served by  the
Company,  Chicago-O'Hare,  LaGuardia and Kennedy.  Slot  restrictions  at
these  airports  has limited the number of flights the  Company  and  its
competitors may offer from these airports.  Under these new rules,  which
do  not  apply at White Plains, all slot regulation will end at  Chicago-
O'Hare  after July 1, 2002 and at LaGuardia and Kennedy after January  1,
2007.   The rules also provide that, in addition to those slots currently
held  by carriers, operators of regional jet aircraft may apply for,  and
the  Secretary of Transportation must grant, additional slots at Chicago,
LaGuardia, Kennedy in order to permit the carriers to offer new  service,
increase  existing  service  or  upgrade  to  regional  jet  service   in
qualifying smaller communities.  There is no limit on the number of slots
a  carrier  may  request.   In addition, the new  rules  permit  carriers
proposing to operate aircraft larger than regional jets not serving these
airports or serving with fewer than 20 slots to apply for a total  of  20
slots  including the carrier's prior slot holdings.  The Company  expects
to apply for additional slots as permitted by the new rules.
<PAGE> 12
     Employees

            As  of March 1, 2000, the Company had 2,188 full-time and 357
part-time employees, classified as follows:
<TABLE>
<CAPTION>
           Classification               Full-    Part-
                                         Time     Time
           <S>                            <C>      <C>
           Pilots                         821        -
           Flight attendants              259        -
           Station personnel              513      317
           Maintenance personnel          247        5
           Administrative and             338       35
             clerical personnel
           Management                      10        -

           Total employees              2,188      357
</TABLE>

          The  Company's  pilots are represented by  the  Airline  Pilots
Association  ("ALPA"),  ACA's flight attendants are  represented  by  the
Association  of  Flight  Attendants  ("AFA"),  and  ACA's  mechanics  are
represented by the Aircraft Mechanics Fraternal Association ("AMFA").

           The  ALPA collective bargaining agreement became amendable  in
February  2000 and  the Company and ALPA began meetings on a new contract
in  February 2000.  The ALPA agreement covers all pilots of the  Company,
including ACJet pilots.

          ACA's collective bargaining agreement with AFA was ratified  in
October,  1998.   The agreement is for a four year duration  and  becomes
amendable in October 2002.  ACJet has reached an agreement with AFA  that
its  flight  attendants will be represented by AFA, and has  also  agreed
with  AFA  on  the terms of a five year agreement covering  ACJet  flight
attendants  on terms substantially similar to the terms of  the  contract
between ACA and AFA.

          ACA's collective bargaining agreement with AMFA was ratified in
June,  1998.   The  agreement  is for a four year  duration  and  becomes
amendable in June 2002.

          The   Company   believes   that  certain   of   the   company's
unrepresented  labor  groups are from time to time approached  by  unions
seeking  to  represent them.  However, the Company has not  received  any
official   notice  of  organizing  activity  and  there  have   been   no
representation  applications filed with the National Mediation  Board  by
any  of  these  groups.  The Company believes that  the  wage  rates  and
benefits  for non-union employee groups are comparable to similar  groups
at   other  regional  airlines.   The  Company  also  believes  that  the
incremental  costs of union agreements presently under  negotiation  will
not have a material effect on the Company's financial position or results
of its operations for the year 2000.
<PAGE> 13
          Due  to  the  ACJet  start-up, the Company's employee  staffing
needs  and recruitment efforts have increased significantly.  The Company
continues  to commit additional resources to its employee recruiting  and
retention  efforts  and  is hiring personnel to  accommodate  its  growth
plans.  However,  due  to  competitive local  labor  market  in  Northern
Virginia and normal attrition, there can be no assurance that the Company
will be able to continue to meet its hiring requirements.

     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.  The Company utilizes an Advanced Qualification  Program  to
enhance  pilot performance in both technical and Crew Resource Management
skills.

          The   Company   has  entered  into  agreements  with   Pan   Am
International Flight Academy ("PAIFA") for the Company to train CRJ, J-41
and  J-32  pilots  at PAIFA's facility near Washington-Dulles.   In  1999
PAIFA  acquired  from a third party the existing training facility  where
the  Company has been conducting J-41 and J-32 training, and added a  CRJ
simulator at the facility in December 1999.  The Company has committed to
purchase  an  annual  minimum number of CRJ and J-41  simulator  training
hours  at  agreed rates, with commitments extending ten and three  years,
respectively.  The Company's payment obligations over the next ten  years
total  approximately  $20.1  million.  FRJ training  is  presently  being
conducted in Dallas, Texas at a facility arranged in conjunction with the
acquisition  of  the aircraft.  The Company is exploring alternatives  to
have PAIFA install a 328JET simulator at its Washington-Dulles facility.

     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's  ACA  subsidiary 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 ACA 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.
<PAGE> 14
          ACJet  has been issued a certificate of public convenience  and
necessity  by  the DOT like that possessed by ACA.  The effectiveness  of
this  certificate  is conditioned upon the issuance  by  the  FAA  of  an
operating certificate to ACJet, an application for which is pending.   In
order  to  obtain FAA approval, ACJet must demonstrate that  it  has  the
necessary  organization  and  technical ability  to  safely  provide  air
transportation,  and  must  satisfy certain  environmental  requirements.
ACJet  has  targeted the commencement of revenue service for  the  second
quarter  of 2000.  There can be no assurance that all required  approvals
will be granted to ACJet by that time.

          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's  ACA  subsidiary
possesses  an  operating  certificate  issued  by  the  FAA  and  related
authorities  authorizing  it  to conduct operations  with  turboprop  and
turbojet equipment. The Company, like all carriers, requires specific FAA
authority  to  add  aircraft to its fleet.  ACA'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.

           From  time  to the time, the FAA conducts inspections  of  air
carriers  with  varying degrees of intensity.  Such  inspections  may  be
scheduled  or  unscheduled and may be triggered by specific  events.   In
addition, the FAA may require airlines to demonstrate that they have  the
capacity  to  properly  manage and safely operate increasing  numbers  of
aircraft.

          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  has  issued  a  directive
which  requires that CRJ flight data recorders be upgraded to  record  an
increased number of flight parameters.  The Company anticipates that  new
CRJs  will comply with the directives beginning with deliveries occurring
during  the  second quarter 2000, and is preparing to retrofit previously
delivered CRJs.

          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.
<PAGE> 15
          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.

          Federal Excise Taxes and Passenger Charges.  Ticketing airlines
are  obligated to collect a U.S. transportation excise tax  on  passenger
ticket  sales, which as of January 1, 2000 is calculated at 7.5%  of  the
passenger  ticket  price  plus $2.50 per flight  segment.   In  addition,
airports  may  request approval to impose passenger facility  charges  on
passengers.   The amount of these charges that airports are permitted  to
charge  each passenger per flight leg is expected to increase from  $3.00
to $4.50.  These taxes and charges are collected by the ticketing airline
and remitted to the airport.

     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.
<PAGE> 16
Item 2.        Properties

     Leased Facilities

          Airports

           The  Company  leases gate and ramp facilities at  all  of  the
airports  ACA serves and leases ticket counter and office space at  those
locations where ticketing is handled by Company personnel. Gate and  ramp
facilities  for  ACJet will be provided by Delta.   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  May  1999, the Company took occupancy of its newly constructed 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  owned  by  the
Metropolitan  Washington Airports Authority and  leased  to  the  Company
under a 15 year lease.

          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 is currently looking
for  additional  office space to accommodate its facilities  needs  as  a
result of the ACJet expansion.

          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.

           The  Company performs all maintenance functions at its  90,000
square  foot aircraft maintenance facility at Washington-Dulles  airport.
This  facility  is  comprised of 60,000 square feet of hangar  space  and
30,000  square feet of support space and includes hangar, shop and office
space  necessary  to maintain the Company's growing fleet.   The  Company
plans  to secure additional hangar facilities for the ACJet operation  at
an as yet undetermined city to perform maintenance on the 328JET fleet.


Item 3.        Legal Proceedings

           The  Company is a party to routine litigation and to FAA civil
action  proceedings,  all of which are viewed to  be  incidental  to  its
business,  and none of which the Company believes are likely  to  have  a
material effect on the Company's financial position or the 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,  1999,  to a vote of the security holders  of  the  Company
through the solicitation of proxies or otherwise.
<PAGE> 17
                                 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.

           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,  as  adjusted for a 2-for-1 stock split  payable  as  a  stock
dividend on May 15, 1998:

          1998                        High           Low
          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              $35.00          $24.25
          Second quarter             $31.00          $15.875
          Third quarter              $21.50          $17.50
          Fourth quarter             $23.75          $17.688

          2000
          First quarter              $22.688          $16.625
         (through 3/1/00)

           As  of  March 1, 2000, the closing sales price of  the  Common
Stock on Nasdaq/NM was $18.25 per share and there were approximately  243
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 subsidiaries, ACA and ACJet.
<PAGE> 18
          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.  As of March  1,
2000,  approximately  $19.8  million  principal  amount  of  Notes   were
outstanding, which were convertible into approximately 2.2 million shares
of Common Stock.  The Company may redeem the remaining notes beginning on
July  1,  2000  by calling the notes at 104% of face value declining  one
percent  per  year  until maturity on July 1, 2004,  in  which  case  the
holders  will  have  an opportunity to convert the Notes  at  their  face
amount prior to redemption.

          On April 21, 1999, the Company's Board of Directors approved  a
plan  to  purchase up to $20 million or five percent of the then  current
outstanding shares in open market or private transactions over  a  twelve
month  period.  As of March 10, 2000, the Company has purchased 1,064,000
shares of its common stock at an average price of $17.28 per share.   The
Company  has  approximately $1.6 million remaining of  the  original  $20
million authorization.


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, 1995, 1996, 1997, 1998 and  1999
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> 19
           SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
   (Dollars in thousands, except per share amounts and operating data)
<TABLE>
<CAPTION>
Consolidated Financial Data:    Years  ended December 31,

                           1995       1996       1997      1998       1999
<S>                         <C>        <C>        <C>       <C>        <C>
Operating revenues:
  Passenger revenues     $153,918   $179,370   $202,540  $285,243   $342,079

  Total operating         156,968    182,484    205,444   289,940    347,365
    revenues
Operating expenses:
  Salaries and related     40,702     44,438     49,661    68,135     84,554
    costs
  Aircraft fuel            13,303     17,124     17,766    23,978     34,072
  Aircraft maintenance     15,252     16,841     16,860    22,730     24,357
    and materials
  Aircraft rentals         25,947     29,137     29,570    36,683     45,215
  Traffic commissions      25,938     28,550     32,667    42,429     54,521
    and related fees
  Facility rent and         7,981      8,811     10,376    13,475     17,875
    landing fees
  Depreciation and          2,240      2,846      3,566     6,472      9,021
    amortization
  Other                    13,281     14,900     16,035    23,347     28,458
  Restructuring charges     (521)      (426)          -         -          -
    (reversals)
  Total operating         144,123    162,221    176,501   237,249    298,073
    expenses

Operating income           12,845     20,263     28,943    52,691     49,292


 Interest expense          (1,802)    (1,013)    (3,450)   (4,207)    (5,614)
  Interest income              66        341      1,284     4,145      3,882
  Debt conversion               -          -          -    (1,410)         -
    expense (1)
  Other income                181         17         62
   (expense), net                                             326        (85)
Total non operating        (1,555)      (655)    (2,104)   (1,146)    (1,817)
expenses

Income before income tax
  expense, extraordinary
  item and cumulative      11,290     19,608     26,839    51,545     47,475
  effect of accounting
  change
Income tax provision      (1,212)        450     12,339    21,133     18,319
(benefit)

Income before extraordinary
 item and cumulative       12,502     19,158     14,500    30,412     29,156
 effect of accounting change
Extraordinary item (2)        400          -          -         -          -
Cumulative effect of            -          -          -         -      (888)
  accounting change (3)
Net income                $12,902    $19,158    $14,500   $30,412    $28,268
</TABLE>
<PAGE> 20
     SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (continued)
   (Dollars in thousands, except per share amounts and operating data)
<TABLE>
<CAPTION>
                                Years ended December 31,
<S>                        <C>       <C>       <C>        <C>        <C>
                          1995      1996      1997       1998       1999
Income per share:
  Basic:
Income before              $0.73     $1.13     $0.93       $1.68     $1.54
  extraordinary item and
  cumulative effect
  of accounting change
Extraordinary item          0.03         -         -           -         -
Cumulative effect of           -         -         -           -     (0.05)
  accounting change
Net income per share       $0.76     $1.13     $0.93       $1.68     $1.49

  Diluted:
Income before              $0.65     $1.08     $0.80       $1.42     $1.36
  extraordinary item and
  cumulative effect
  of accounting change
Extraordinary item          0.02         -         -           -         -
Cumulative effect of           -         -         -           -     (0.04)
  accounting change
Net  income (loss) per     $0.67     $1.08     $0.80       $1.42     $1.32
  share

Weighted average  number
  of shares used
  in computation
  (in  thousands)
      Basic               16,684    16,962    15,647      18,128    18,964
      Diluted             19,742    17,840    19,512      22,186    22,015

Selected Operating Data:
 Departures              131,470   137,924   146,069    170,116   186,571
 Revenue passengers    1,423,463 1,462,241 1,666,975  2,534,077 3,234,713
    carried
 Revenue passenger       348,675   358,725   419,977    792,934 1,033,912
    miles (000s) (4)
 Available seat miles    731,109   771,068   861,222  1,410,763 1,778,984
    (000s) (5)
 Passenger load            47.7%     46.5%     48.8%       56.2%     58.1%
    factor (6)
 Breakeven passenger       43.9%     41.4%     41.8%       45.8%     49.7%
    load factor (7)
 Revenue per              $0.215    $0.237    $0.239      $0.206    $0.195
   available seat mile
 Cost per available       $0.198    $0.211    $0.205      $0.168    $0.168
   seat mile (8)
 Average yield per        $0.441    $0.500    $0.482      $0.360    $0.331
   revenue passenger mile
   (9)
 Average fare               $108      $123      $122        $113      $106
 Average passenger           245       245       252         313       320
   trip length (miles)
 Aircraft in service          54        57        65          74        84
   (end of period)
 Destinations served          41        39        43          53        51
   (end of period)

Consolidated Balance
Sheet Data:
    Working capital       $4,552   $17,782   $45,028     $68,130   $60,440
    Total assets          47,499    64,758   148,992     227,626   293,753
    Long-term debt and
     capital leases,       7,054     5,673    76,145      64,735    92,787
     less current portion
    Redeemable Series A,
     Cumulative,           3,825         -         -           -         -
     Convertible,
     Preferred Stock
    Total stockholders'   14,561    34,637    34,805     110,377   125,524
     equity
</TABLE>
<PAGE> 21
1.   In connection with the induced conversion of a portion of the 7%
  Convertible Subordinated Notes , the Company recorded a non-cash, non-
  operating charge of approximately $1.4 million in 1998.  No similar
  charges were recognized for the period from 1995 to 1997, or in 1999.

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 1995 to 1998.

3.   In 1999, the Company recorded a charge of $888,000 for the
  cumulative effect, net of income taxes, of a change in accounting for
  preoperating costs in connection with the implementation of Statement of
  Position 98-5.

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

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

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

7.   "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.

8.   "Operating cost per available seat mile" represents total operating
  expenses excluding restructuring and write-offs of intangible assets
  divided by available seat miles.

9.   "Average yield per revenue passenger mile" represents the average
  passenger revenue received for each mile a revenue passenger is carried.
<PAGE> 22
Item  7.         Management's  Discussion  and  Analysis  of  Results  of
Operations                    and Financial Condition

General

           Atlantic  Coast  Airlines  Holdings,  Inc.  ("ACAI")  operates
through  its wholly-owned subsidiaries, Atlantic Coast Airlines  ("ACA"),
and  Atlantic  Coast  Jet,  Inc.  ("ACJet")  (together  with  non-carrier
subsidiaries,  the  "Company").  ACJet has targeted the  commencement  of
revenue service for the second quarter of 2000, although there can be  no
assurance that all required approvals will be obtained by that time.   In
1999,  the Company recorded net income of $28.3 million compared to $30.4
million  for  1998,  and $14.5 million for 1997.  The  1999  net  results
include  the  cumulative effect of an accounting change,  net  of  income
taxes, of $888,000 related to the adoption of Statement of Position 98-5,
which  resulted  in the write-off of remaining unamortized  regional  jet
implementation preoperating costs.  The 1998 net results  reflect  a  one
time,  non-cash,  non-operating charge of $1.4  million  related  to  the
induced conversion of a portion of the 7% Convertible Subordinated Notes.
The decreased profitability from 1998 to 1999 is primarily the result  of
the decrease in the Company's operating margin as a result of higher fuel
expense, US Airways competition, significantly more severe weather during
1999  including  two  September hurricanes, and  complications  from  the
implementation  of the Orion yield management system  in  the  first  and
second  quarters of 1999.  For 1999, the Company's available  seat  miles
("ASM")  increased  26%  with the addition of ten Canadair  Regional  Jet
("CRJ") aircraft during the year.  Continued passenger acceptance of  the
CRJ  and  the related increase in connecting traffic to turboprop flights
resulted  in  a 28% increase in total passengers and an 30%  increase  in
revenue passenger miles ("RPM").

The Company's increased profitability from 1997 to 1998 was primarily the
result  of  the  Company's growth and operating margin improvement.   For
1998  with the addition of nine CRJs during the year, the Company's total
ASMs  increased  64%,  total passengers increased  52%,  and  total  RPMs
increased 89%.

Results of Operations

           The  Company  earned  income of $29.2 million  (excluding  the
cumulative  effect  of  an accounting change, net  of  income  taxes,  of
$888,000) or $1.36 per diluted share in 1999 compared to income of  $31.8
million  (excluding a non-cash, non-operating charge of $1.4 million)  or
$1.49  per diluted share in 1998, and $14.5 million or $0.80 per  diluted
share  in  1997.  During 1999, the Company generated operating income  of
$49.3  million compared to $52.7 million for 1998, and $28.9 million  for
1997.   Operating margins for 1999, 1998 and 1997 were 14.2%,  18.2%  and
14.1%, respectively.

           The  6.5%  decrease  in operating income  from  1998  to  1999
reflects  a  5.4% decrease in unit revenue (total revenue per  ASM)  from
$0.206  to  $0.195, while unit cost (cost per ASM) remained the  same  at
$0.168 for both years, partially offset by a 26.1% increase in ASM's.

          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.
<PAGE> 23
Fiscal Year 1998 vs. 1999

Operating Revenues

          The  Company's  operating revenues increased  19.8%  to  $347.4
million  in  1999  compared  to $289.9 million  in  1998.   The  increase
resulted from a 26.1% increase in ASMs, and an increase in load factor of
1.9 points, partially offset by an 8.0% decrease in revenue per passenger
mile  (yield).   The increase in ASMs reflects the addition  of  ten  CRJ
aircraft  in  1999 and the full year effect of adding nine  CRJ  aircraft
during 1998.  The reduction in yield was caused principally by additional
competition by US Airways at the Company's Dulles hub, complications from
the  implementation of the Orion yield management system in the first and
second  quarters  of 1999, and a 2.1% increase in the  average  passenger
stage  length  from  313 miles in 1998 to 320 miles  for  1999.   Revenue
passengers increased 27.6% in 1999 compared to 1998, which combined  with
the  increase in the average passenger stage length resulted in an  30.4%
increase in RPMs.  Operating revenues as a whole in 1999, were negatively
impacted by more severe weather during 1999 as compared to 1998 including
two  hurricanes in September 1999 that impacted air transportation in the
Eastern United States.

Operating Expenses

          The  Company's  operating expenses increased  25.6%  to  $298.1
million in 1999 compared to $237.2 million in 1998 due primarily  to  the
26.1%  increase in ASMs, the 27.6% increase in passengers,  and  a  10.6%
increase in the average price per gallon of jet fuel.

          A  summary  of operating expenses as a percentage of  operating
revenue and operating cost per ASM for the years ended December 31,  1998
and 1999 is as follows:
<TABLE>
<CAPTION>
                              Year Ended December 31,
                              1998              1999
                        Percent    Cost   Percent    Cost
                           of                of
                       Operating   Per   Operating    Per
                                   ASM                ASM
                        Revenues  (cents) Revenues  (cents)

<S>                        <C>     <C>       <C>      <C>
Salaries  and   related  23.5%     4.8     24.3%      4.8
   costs
Aircraft fuel             8.3%     1.7      9.8%      1.9
Aircraft    maintenance   7.8%     1.6      7.0%      1.4
   and materials
Aircraft rentals         12.7%     2.6     13.0%      2.5
Traffic commissions and  14.6%     3.0     15.7%      3.1
   related fees
Facility    rent    and   4.6%     1.0      5.2%      1.0
   landing fees
Depreciation        and   2.2%      .5      2.6%      .5
   amortization
Other                     8.1%     1.6      8.2%      1.6

    Total                81.8%     16.8    85.8%     16.8
</TABLE>
          Costs  per  ASM remained the same at 16.8 cents for  1999  when
compared to 1998.  Total operating expenses in absolute dollars increased
25.6% in 1999 to $298.1 million versus $237.2 million in 1998.  ASM's for
1999 increased 26.1% to 1.8 billion as compared to 1.4 billion in 1998.

          Salaries  and related costs per ASM remained the  same  at  4.8
cents  in 1999 when compared to 1998.  In absolute dollars, salaries  and
related  expenses  increased 24.1% from $68.1 million in  1998  to  $84.6
million  in 1999.  The increase primarily resulted from the net  addition
of 331 full and part time employees during 1999 to support the additional
aircraft.
<PAGE> 24
          The  cost  per ASM of aircraft fuel increased to 1.9  cents  in
1999  compared to 1.7 cents in 1998.  The total price per gallon of  fuel
increased 10.6% to 74.6 cents in 1999 compared to 67.4 cents in 1998.  In
absolute dollars, aircraft fuel expense increased 42.1% from $24  million
in  1998  to $34.1 million in 1999 reflecting the higher cost per  gallon
fuel  price,  a  9.5%  increase  in  block  hours  and  the  higher  fuel
consumption per hour of a CRJ aircraft versus a turboprop aircraft  which
results in a 17.4% increase in the system average burn rate (gallons used
per block hour flown).

          The   cost  per  ASM  of  aircraft  maintenance  and  materials
decreased  to  1.4  cents in 1999 compared to 1.6  cents  in  1998.   The
decreased  maintenance  expense  per  ASM  resulted  primarily  from  the
addition of the CRJ aircraft.  In addition to generating higher ASMs, the
CRJ aircraft are covered by manufacturer's warranty for up to three years
on  certain  components.  During the third quarter, the Company  reversed
approximately $1.5 million in life limited parts repair expense  accruals
related  to  CRJ  engines  that  was no  longer  required  based  on  the
maintenance  services  and terms contained in a  new  engine  maintenance
agreement.   The  Company has not incurred any heavy  maintenance  repair
costs  related to the CRJ aircraft in 1998 or 1999.  The CRJ 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 7.2% from $22.7 million in 1998 to  $24.4  million  in
1999.

          The  cost per ASM of aircraft rentals decreased slightly to 2.5
cents  in  1999 compared to 2.6 cents in 1998. During 1999,  the  Company
took  delivery of ten additional CRJ aircraft, eight of which were  lease
financed.   In absolute dollars, aircraft rental expense increased  23.3%
to  $45.2  million  as  compared to $36.7 million  in  1998  due  to  the
additional aircraft added to the fleet.

          The  cost  per  ASM  of traffic commissions  and  related  fees
increased  to  3.1 cents in 1999 as compared to 3.0 cents in  1998.   The
increase  does not reflect the reduced (from 8% to 5%) agency  commission
rate  for domestic travel adopted in late 1999.  Since substantially  all
passenger revenues are derived from interline sales, the Company will not
begin  to  realize the savings from this reduction until  February  2000.
Related  fees include program fees paid to United and CRS segment booking
fees  for  reservations.   In absolute dollars, traffic  commissions  and
related  fees increased 28.5% to $54.5 million in 1999 from $42.4 million
in 1998.

          The cost per ASM of facility rent and landing fees remained the
same  at  1.0 cent for 1999 when compared to 1998.  In absolute  dollars,
facility rent and landing fees increased 32.7% to $17.9 million for  1999
from  $13.5 million in 1998.  The absolute increase is the result of  the
Company's new regional terminal at Washington's Dulles airport, continued
expansion of the Company's business to new markets and increased  landing
fees due to the heavier CRJ aircraft.

          The  cost per ASM of depreciation and amortization remained the
same  at 0.5 cents for 1999 and  1998.  In absolute dollars, depreciation
and  amortization expense for 1999 increased 39.4% to $9.0  million  from
$6.5 million in 1998.  The absolute increase results from the purchase of
two  CRJ  aircraft and rotable spare parts in 1999 for approximately  $59
million  and  the  full year effect of purchasing two  CRJ  aircraft  and
rotable spare parts in 1998.
<PAGE> 25
          The  cost per ASM of other operating expenses remained the same
at  1.6  cents  for 1999 and 1998.  In absolute dollars, other  operating
expenses increased 21.9% to $28.5 million for 1999 from $23.3 million  in
1998.  This absolute increase is caused primarily by continuing increases
in  crew accommodations, training, and other costs related to the general
expansion of the Company's business.  During the fourth quarter 1998, the
Company  began  to pay for new hire training.  The Company expects  pilot
training costs to continue to increase as the remaining firm ordered  CRJ
and   Fairchild  Dornier  328JET/428JET  Feeder  Regional  Jets  ("FRJs")
aircraft are received.

          As  a  result  of the foregoing expense items, total  operating
expenses  were $298.1 million for 1999, an increase of 25.6% compared  to
$237.2  million  in  1998.  Total ASMs increased  26.1%  year  over  year
causing  the cost per ASM to remain at 16.8 cents for 1999 when  compared
to 1998.

          Interest  expense increased from $4.2 million in 1998  to  $5.6
million  in 1999. The increase is the result of the issuance of new  debt
to  acquire two new CRJ aircraft in 1999, and the full year effect of the
debt outstanding for the purchase of two CRJs and one J-41 in 1998.

          Interest  income decreased from $4.1 million in  1998  to  $3.9
million  in  1999.  This is primarily the result of the  Company's  lower
cash balances during 1999 as compared to 1998.

          From  March  20 through April 8, 1998, the Company  temporarily
reduced  the conversion price on its 7.0% Convertible Subordinated  Notes
due July 1, 2004 (the "Notes") 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  $18.3
million  for  1999,  compared to a provision for income  taxes  of  $21.1
million  in 1998.  The 1999 effective tax rate is approximately 38.6%  as
compared  to  the  1998  effective tax rate  of  approximately  41%.  The
reduction in the 1999 effective rate is the result of the application  of
one  time  state  tax credits applied in 1999.  The effective  tax  rates
reflect  non-deductible permanent differences between  taxable  and  book
income.

          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 were effective  for  1999.  The
Company  had  previously deferred certain start-up costs related  to  the
introduction of the CRJs and was amortizing such costs to expense ratably
over four years. Effective January 1, 1999, the Company recorded a charge
for  the remaining unamortized balance of approximately $888,000, net  of
$598,000   of   income   taxes,  associated  with   previously   deferred
preoperating costs.

Fiscal Year 1997 vs. 1998

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.
<PAGE> 26
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 CRJ aircraft in 1998 and the  full
year  effect  of adding five CRJs 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)Revenues   (cents)

<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 CRJ aircraft during  1998
and  the  full  year  effect of adding five CRJs 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 net  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 CRJ  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 CRJ aircraft.  In addition to generating higher ASMs, the
CRJ 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 CRJ aircraft.  The CRJ  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> 27
          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  CRJs  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.   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 CRJ 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 CRJ aircraft, a J-41 aircraft and CRJ 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 CRJs
in  the  first five months of 1999, the Company incurred new  hire  pilot
training costs of approximately $678,000 in the fourth quarter 1998.

          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.

          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 the 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 CRJs  and
one J-41 in 1998.
<PAGE> 28
          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.

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 new regional jet service , the costs of implementing
jet  service, the cost of fuel, the amount and timing of ACJet's start-up
costs,  obtaining  FAA  regulatory approval  for  ACJet  to  conduct  air
transportation  on a timely basis, the ability of the Company  to  obtain
favorable  financing terms for its aircraft, the ability of the  aircraft
manufactures  to deliver aircraft on schedule, the ability  to  identify,
implement and profitably operate new business opportunities, the  ability
to hire and retain employees, the weather, changes in and satisfaction of
regulatory   requirements  including  requirements  relating   to   fleet
expansion, and general economic and industry conditions.

           The  Company  believes  that a key element  of  the  Company's
success  is  its  experienced  management  team.   On  January  1,  2000,
President and Chief Executive Officer Kerry Skeen became Chairman of  the
Board  of  Directors while retaining his role as CEO.   C.  Edward  Acker
retired  as  Chairman  but remains a member of the Board.   Thomas  Moore
became  President on January 1, 2000 in addition to his duties  as  Chief
Operating Officer.

          The  Company  believes that the future of the regional  airline
industry  lies  in utilizing regional and feeder jets to  complement  and
feed  the  major carriers.  To this end, in addition to the  24  CRJs  in
service as of March 1, 2000, the Company has firm, conditional and option
orders  for 69 CRJs and 165 FRJs and long-term marketing agreements  with
United  Airlines, Inc. and Delta Air Lines, Inc. to fly the jet  aircraft
as  United  Express and Delta Connection, respectively.  The addition  of
these  jets will allow the Company to grow capacity as measured in ASM's,
based  on planned aircraft delivery dates, by approximately 34%  in  2000
and  41%  in  2001.   The Company also believes that  multiple  marketing
agreements  will enable the Company to reduce reliance on any  one  major
airline,  and  will  enhance and stabilize operating  results  through  a
combination of pro-rate and fee-per-departure revenue opportunities.
<PAGE> 29
          ACJet  has  targeted the commencement of revenue  service  with
FRJs  during the second quarter of 2000 and with CRJs during  the  fourth
quarter  of 2000.  ACJet is presently engaged in pre-operating activities
including   regulatory   compliance,  employee   recruitment,   training,
establishment of operating infrastructure, establishment of  third  party
contractual  arrangements,  and aircraft  proving  runs.   In  the  first
quarter of 2000 ACJet was issued a certificate of public convenience  and
necessity  by  the  DOT.   The effectiveness of the  DOT  certificate  is
conditioned  upon the issuance by the FAA of an operating certificate  to
ACJet,  an  application for which is pending.  In  order  to  obtain  FAA
approval,  ACJet must demonstrate that it has the necessary  organization
and  technical  ability  to safely provide air transportation,  and  must
satisfy  certain  environmental requirements.  ACJet will  also  need  to
satisfy regulatory requirements with respect to CRJs prior to adding this
aircraft  type to its fleet later in the year.  There can be no assurance
that  all required approvals will be granted to ACJet on a timely  basis.
ACJet has accepted delivery of an interim 328JET aircraft, which is being
utilized  for proving runs and training.  The first two permanent  328JET
aircraft   are  scheduled  for  delivery  in  late  April  2000.    ACJet
anticipates  incurring approximately $3.6 million  in  start-up  expenses
from  inception through commencement of revenue service,  which  will  be
expensed as incurred.

           A number of business and regulatory developments are affecting
the markets in which the Company competes.  During the first half of 1999
US  Airways  began  to  expand its operations at Washington-Dulles.   New
service included the operations of mainline US Airways, MetroJet, Shuttle
and  US  Airways  Express. US Airways operated in five of  the  Company's
Washington-Dulles markets as of December 31, 1998 and  by  September  30,
1999  increased their presence to 21 of the Company's markets.   Although
the US Airways service generally has utilized fare levels similar to that
implemented by the Company, two of the implemented markets were served by
MetroJet,  which offered fares lower than that typically offered  by  the
Company.

          During April and May, 1999, United significantly increased  the
number of flights it operated at Washington-Dulles. In July, 1999, United
and  the  Company  revised  their Dulles  flight  schedules  to  increase
connections  and to thereby take greater advantage of United's  increased
capacity. As of March 1, 2000, United operated 113 daily departures  from
Washington  Dulles, a 64% increase from December 31, 1998.  During  1999,
the   Company  and  United  either  increased  frequencies  or   upgraded
equipment, or both, in markets affected by the US Airways expansion.

          In the first quarter of 2000, US Airways began reducing some of
its  MetroJet,  Shuttle and US Airways Express operations at  Washington-
Dulles.  Reductions were made in the operations of MetroJet, Shuttle  and
US  Airways Express.  By March 2000 US Airways ceased MetroJet service in
the  Birmingham,  AL, Columbus, OH, Milwaukee, WI and St.  Louis,  MO  to
Washington-Dulles  markets, and has announced its intention  to  withdraw
MetroJet  service between Raleigh-Durham and Washington-Dulles.  MetroJet
competed directly with the Company in the Columbus, OH and Raleigh-Durham
to  Washington-Dulles  markets.  Further, US Airways  has  announced  its
intention  to withdraw hourly Shuttle service in the Boston and LaGuardia
to  Washington-Dulles  markets and to replace  both  with  less  frequent
service  using a combination of mainline and US Airways Express  regional
jet  service.   The  Company competes directly with  US  Airways  in  the
LaGuardia-Washington-Dulles market.  By March 2000 US Airways Express had
ceased service in the Indianapolis to Washington-Dulles market - a market
the Company serves with regional jets.
<PAGE> 30
          While increased competition in the Company's markets has had  a
negative  effect  on yields, the Company continues to  take  measures  to
reduce  the  overall effect on the Company's results of operations.   The
Company continually monitors and responds to the effects competition  has
on  its  routes, fares and frequencies, and believes it can  continue  to
compete effectively.

           Congress recently passed and the President is expected to sign
into  law  legislation  that will allow airlines  to  provide  additional
service  with  regional jet aircraft at certain slot restricted  airports
including Chicago-O'Hare and New York-LaGuardia.  Whereas previously slot
restrictions  limited the amount of service that could be  provided  from
these  airports,  the  new legislation, if and when enacted,  will  allow
substantial additional service to certain qualifying cities.  The Company
is one of several regional carriers that will be in a position to provide
additional  service  at these cities with regional  jet  aircraft.   This
legislation  adds significantly to the number of potential  regional  jet
opportunities  available to both the United Express and Delta  Connection
operations  and  to  the Company's competitors.   It  will  also  provide
increased competitive situations at these airports, the effect  of  which
cannot be determined at this time.  During 2000 the Company will continue
to assess and respond to competitive opportunities as they may develop as
a result of this legislation.

          Fuel price increases in the second half of 1999 and to date  in
2000  have  had  a material impact on cost of operations  throughout  the
airline industry.  The Company's results will continue to be affected  by
fuel  price volatility.  During 1999, the effect of fuel price  increases
on  the  Company's results was mitigated by the Company's  having  hedged
approximately  57% of its fuel requirements for the year.   These  hedges
generally settled at favorable prices relative to the market price at the
time of settlement, which resulted in a reduced fuel expense relative  to
market  rates.  For 2000, the Company entered into hedges in  late  1999,
settling in the second and third quarter of 2000, for an estimated 8%  of
its  estimated  total 2000 fuel requirements.  The Company  is  also  not
exposed  to  fuel price volatility for an additional 8% of its  estimated
2000  fuel requirements because the cost of this fuel, to be utilized  in
the  ACJet operations, will be passed through to Delta under the fee-per-
departure structure.

          The  Company's CRJ fleet is comprised of new aircraft, with  an
average age of one and one-half years.   Since maintenance expense on new
aircraft  is  lower in the early years of operation due to manufacturers'
warranties and the generally lower failure rates of major components, the
Company's  maintenance expense for CRJ aircraft will increase  in  future
periods.

          During the third quarter of 1999, the Company executed a  seven
year  engine  services  agreement with GE Engine  Services,  Inc.  ("GE")
covering  the  scheduled and unscheduled repair  of  ACA's  CF34-3B1  jet
engines operated on 43 CRJs already delivered or on order for the  United
Express operation. Under the terms of the agreement, the Company  pays  a
set  dollar amount per engine hour flown on a monthly basis to GE and  GE
assumes  the  responsibility to repair the engines when  required  at  no
additional  expense  to the Company, subject to certain  exclusions.  The
Company expenses the amount due based on the monthly rates stipulated  in
the   agreement,  as  engine  hours  are  flown.  The  Company's   future
maintenance  expense on CRJ engines covered under the new agreement  will
escalate  based  on  contractual rate increases, intended  to  match  the
timing  of actual maintenance events that are due pursuant to the  terms.
Based  on  the  contractual rates, unit maintenance costs  recognized  on
these  CRJ  engines  during  2000 will be  greater  than  those  recorded
historically.  The Company has signed a similar agreement covering up  to
55 FRJs with the FRJ engine manufacturer, and also anticipates signing  a
similar agreement for the remaining CRJ on firm order and FRJ aircraft on
conditional order.
<PAGE> 31
          In  1999,  the Company commenced a replacement project  of  its
computer  software  systems.   The Company  has  engaged  IBM  to  define
functional  requirements,  evaluate  vendor  packages,  and  select   and
implement  software solutions.  New systems will include general  ledger,
payroll,   accounts   payable,  accounts  receivable,   human   resources
administration,  and  maintenance.  Implementation  is  scheduled  to  be
completed  during  2000.  The Company anticipates spending  approximately
$7.0  million on this project, the majority of which will be  capitalized
and   amortized   over  five  years.   In  1999,  the  Company   expensed
approximately  $400,000  related to replacement  software  selection  and
capitalized $2.3 million in acquisition and implementation costs.

Liquidity and Capital Resources

          As  of  December  31,  1999,  the Company  had  cash  and  cash
equivalents  of  $57.4  million  and working  capital  of  $60.4  million
compared to $64.4 million and $68.1 million, respectively, as of December
31,  1998.   During  the  year ended December 31,  1999,  cash  and  cash
equivalents  decreased  $7  million,  reflecting  net  cash  provided  by
operating  activities  of  $49.9 million,  net  cash  used  in  investing
activities  of  $72.3  million  (related to aircraft  purchase  deposits,
purchases  of  aircraft  and  equipment  and  decreases  in  short   term
investments)  and  net  cash provided by financing  activities  of  $15.4
million.  Net cash provided by financing activities increased due to  the
issuance  of  $37.2 million of long term debt principally to acquire  two
CRJ  aircraft, partially offset by the Company's common stock  repurchase
program.

          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 $45.0 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 $25.3 million.  Net cash provided by financing
activities increased principally due to the issuance of long term debt to
acquire two CRJ and one J41 aircraft.

          Other Financing

           In  February  1999,  the Company entered into  an  asset-based
lending  agreement  with  two financial institutions  that  provided  the
Company  with  a  $15  million bridge loan for the  construction  of  the
regional terminal at Washington-Dulles and a line of credit for up to $35
million  depending on the amount of assigned ticket receivables  and  the
value  of  certain rotable spare parts. The $35 million  line  of  credit
replaces  a  previous  $20  million line of credit  and  will  expire  on
September  30, 2000, or upon termination of the United Express  marketing
agreement, whichever is sooner.  The interest rate on this line is  LIBOR
plus  .75%  to  1.75% depending on the Company's fixed  charges  coverage
ratio.  There were no borrowings on the $35 million line during 1999,  or
any 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.   The  Company
anticipates  that it will be able to renew this line of credit  prior  to
its expiration on terms at least as favorable as the current facility.

          During  1999, the Company borrowed $7.8 million on  the  bridge
loan  and  provided  funding  to  the  Metropolitan  Washington  Airports
Authority ("MWAA") for the construction of the regional terminal of $12.5
million. In May 1999, MWAA paid the Company $7.8 million, and the Company
repaid its borrowings on the bridge loan.  As of December 31, 1999  there
are  no outstanding borrowings on the bridge loan. A note receivable from
MWAA  of  $4.7  million is recorded at December 31, 1999.  No  additional
amounts  were  drawn on the bridge loan for this additional $4.7  million
funding. However, the Company may do so in the future as desired.
<PAGE> 32
          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.  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.  Interest on the Notes is payable on April 1
and  October  1 of each year. The Company may redeem the remaining  notes
beginning  on  July 1, 2000 by calling the notes at 104%  of  face  value
declining one percent per year until maturity on July 1, 2004,  in  which
case  the holders will have an opportunity to convert the Notes at  their
face amount prior to redemption.

           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 CRJs,  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.

     Other Commitments

          On April 21, 1999, the Company's Board of Directors approved  a
plan  to  purchase up to $20 million or five percent of the then  current
outstanding shares in open market or private transactions over  a  twelve
month  period.  As of March 10, 2000, the Company has purchased 1,064,000
shares of its common stock at an average price of $17.28 per share.   The
Company  has approximately $1.6 million dollars remaining on the original
$20 million authorization.

          In  August 1999, the Company entered into a series of  put  and
call  contracts having an aggregate notional amount of $23 million.   The
contracts  mature between March and May 2000. 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 three aircraft in 2000.   As  such,
effective  gains or losses realized when permanent financing is  obtained
will be amortized over the life of the related aircraft lease or will  be
depreciated as part of the aircraft acquisition cost for owned  aircraft.
The  Company  would  have  received from the  counterparty  approximately
$247,000 had these contracts settled on December 31, 1999.
<PAGE> 33
          In  October  1999,  the  Company entered  into  commodity  swap
transactions  to hedge price changes on approximately 13,300  barrels  of
crude  oil  per  month  for  the  period  April  to  June  2000,  and  on
approximately 23,300 barrels of crude oil per month for the  period  July
through September 2000.  The contracts provide for an average fixed price
equal  to  approximately 52.6 cents per gallon for the second quarter  of
2000  and 51 cents per gallon for the third quarter of 2000.  With  these
transactions and taking into account that Delta Air Lines, Inc. bears the
economic  risk  of  fuel price fluctuations for future fuel  requirements
associated  with  the Delta Connection program, the  Company  has  hedged
approximately 14% of its anticipated jet fuel requirements for the second
quarter  2000;  27% for the third quarter 2000; and 18%, for  the  fourth
quarter of 2000.  Had the commodity swap transactions settled on December
31,  1999, the Company would have recognized a reduction of approximately
$597,000 in fuel expense.

     Aircraft

          The Company has significant lease obligations for aircraft 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 one to sixteen and a half years.  The Company's  total
rent  expense in 1999 under all non-cancelable aircraft operating  leases
with  remaining  terms  of  more than one year  was  approximately  $45.2
million.   As  of December 31, 1999, the Company's minimum annual  rental
payments for 2000 under all non-cancelable aircraft operating leases with
remaining terms of more than one year were approximately $54.1 million.

          As  of  March 1, 2000, the Company had a total of  42  CRJs  on
order  from  Bombardier, Inc., and held options for 27  additional  CRJs.
During 1999, the Company converted 17 option aircraft to firm orders  and
placed  new  orders for six additional CRJs and received 17 new  aircraft
options.   The Company also placed a firm order with Fairchild  Aerospace
Corporation  for 25 Fairchild Dornier 32 seat 328JET feeder regional  jet
("328JET")   aircraft,  a  conditional order for  a  15  328JETs  and  40
Fairchild Dornier 44 seat 428JET feeder regional jet ("438JET")  aircraft
(328JET  aircraft  and 428JET aircraft are collectively  referred  to  as
"FRJs"),  and received options for 85 additional FRJs.  Of  the  67  firm
aircraft  deliveries,  28 are scheduled for 2000, 29  are  scheduled  for
2001,  and  ten  are  scheduled for 2002.  The Company  is  obligated  to
purchase  and  finance (including leveraged leases) the 67  firm  ordered
aircraft  at  an approximate capital cost of $1.1 billion.   The  Company
anticipates leasing all 28 of its year 2000 aircraft deliveries on  terms
similar  to  previously delivered CRJ aircraft.  On March  15,  2000  and
March   22,   2000,   the  Company  acquired  through   leveraged   lease
transactions,  its 25th and 26th CRJ aircraft. The lease  terms  are  for
approximately 16.8 years.

           As previously announced, the Company is exploring alternatives
to  accelerate  the  retirement of its fleet of 28 leased  19  seat  J-32
aircraft.  The Company tentatively plans to remove as many as  six  J-32s
from  ACA's fleet during 2000 and the remainder in 2001.  As of  December
31, 1999, the Company had J-32 operating lease commitments with remaining
lease  terms  ranging  from one to six years and  related  minimum  lease
payments of approximately $43 million.  The Company has not yet finalized
its  analysis of a phase-out plan, including quantification of  any  one-
time fleet rationalization charge.
<PAGE> 34
          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  has  issued  a  directive
which  requires that CRJ flight data recorders be upgraded to  record  an
increased number of flight parameters.  The Company anticipates that  new
CRJs  will comply with the directives beginning with deliveries occurring
during  the  second quarter 2000, and is preparing to retrofit previously
delivered  CRJs.   The Company estimates that the cost of  this  retrofit
will  be approximately $3.5 million and has included this amount  in  its
capital spending plan for 2000.

     Capital Equipment and Debt Service

            In   2000   the  Company  anticipates  capital  spending   of
approximately $21.5 million consisting of $15.1 million in rotable  spare
parts,  spare  engines and equipment, and $6.4 million for other  capital
assets,  and expects to finance these capital expenditures out of working
capital.

           Debt  service  for 2000 is estimated to be approximately  $6.1
million  reflecting  borrowings related  to  the  purchase  of  four  CRJ
aircraft acquired in 1998 and 1999, 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 CRJs, FRJs, spare parts and spare engines.

          The   Company  believes  that,  in  the  absence   of   unusual
circumstances,  its  cash flow from operations, the  $35  million  credit
facility as presently existing or as anticipated to be renewed, 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.

Recent Accounting Pronouncements

          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.

          In  July  1999, the FASB issued Statement No. 137,  "Accounting
for  Derivative  Instruments and Hedging Activities  -  Deferral  of  the
Effective  Date of FASB Statement No. 133, an Amendment of FASB Statement
No.  133"  which defers the effective date of Statement No.  133  by  one
year.   Therefore, the Company will adopt Statement No.  133  during  its
first  quarter of fiscal 2001 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>  35
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  2000, the Company has hedged a portion of its exposure  to
jet fuel price fluctuations by entering into commodity swap contracts for
approximately 8% of its estimated 2000 fuel requirements for  the  United
Express  program.  The swap contracts are designed to provide  protection
against sharp increases in the price of jet fuel.  In addition, Delta Air
Lines,  Inc. bears the economic risk of fuel price fluctuations  for  the
fuel  requirements of the Company's Delta connection program. Taking this
into account, based on the Company's projected fuel consumption  for
the year 2000, 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 $530,000.

          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  Bombardier  regional  jet
aircraft.   At  December 31, 1999 the Company had  three  swap  contracts
outstanding  related  to  the delivery of the next  three  CRJs.   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 $199,600.

          As  of  March  1,  2000, the Company has  firm  commitments  to
purchase  67  additional jet aircraft.  The Company  expects  to  finance
these  commitments  using  a combination of debt  and  leveraged  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> 36
Item 8.        Consolidated Financial Statements

     INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                                                   Page

Independent Auditors' Report for the years ended  December          37
31, 1997, 1998 and 1999


Consolidated  Balance Sheets as of December 31,  1998  and          38
1999

Consolidated Statements of Operations for the years ended           39
 December 31, 1997, 1998 and 1999

Consolidated  Statements of Stockholders' Equity  for  the          40
 years ended December 31, 1997, 1998 and 1999

Consolidated Statements of Cash Flows for the years ended           41
 December 31, 1997, 1998 and 1999

Notes to Consolidated Financial Statements                          42

<PAGE> 37
                      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 subsidiaries as of December  31,  1998
and   1999,  and  the  related  consolidated  statements  of  operations,
stockholders' equity, and cash flows for each of the years in the  three-
year  period  ended  December  31, 1999.   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 subsidiaries as  of  December
31,  1998  and  1999, and the results of their operations and  their  cash
flows  for each of the years in the three-year period ended December  31,
1999 in conformity with generally accepted accounting principles.

As  discussed  in  Note  1  to  the  consolidated  financial  statements,
effective  January 1, 1999, the Company changed its method  of  accounting
for preoperating costs.


                                             KPMG LLP

McLean, VA
January 26, 2000
<PAGE> 38
                                   Atlantic Coast Airlines Holdings, Inc.
                                              Consolidated Balance Sheets
(In thousands, except for share data and par values)
<TABLE>
<CAPTION>
December 31,                                      1998       1999
Assets
Current:
<S>                                                 <C>        <C>
    Cash and cash equivalents                   $64,412     $57,447
    Short term investments                           63         --
    Accounts receivable, net                     30,210     31,023
    Expendable parts and fuel inventory, net      3,377      4,114
    Prepaid expenses and other current            3,910      6,347
      assets
    Notes receivable                                 --      6,239
    Deferred tax asset                            2,534      2,850
    Total current assets                        104,506    108,020
Property and equipment at cost, net of
accumulated depreciation and amortization        89,966    133,160
Preoperating costs, net of accumulated            1,486         --
  amortization
Intangible assets, net of accumulated             2,382      2,232
  amortization
Debt issuance costs, net of accumulated           3,420      3,309
  amortization
Aircraft deposits                                19,420     38,690
Other assets                                      6,446      8,342
    Total assets                              $ 227,626  $ 293,753
Liabilities and Stockholders' Equity
Current:
    Current portion of long-term debt            $3,450     $4,758
    Current portion of capital lease              1,334      1,627
     obligations
    Accounts payable                              5,262      5,343
    Accrued liabilities                          26,330     35,852
    Total current liabilities                    36,376     47,580
Long-term debt, less current portion             63,289     87,244
Capital lease obligations, less current           1,446      5,543
  portion
Deferred tax liability, net                       6,238     12,459
Deferred credits, net                             9,900     15,403
    Total liabilities                           117,249    168,229
Stockholders' equity:
Preferred Stock: $.02 par value per share;
  shares authorized                                   -          -                     -
  5,000,000; no shares issued or outstanding
  in 1998 or 1999
Common stock: $.02 par value per share;
  shares authorized 65,000,000 in 1998 and in
  1999; shares issued 20,821,001 in 1998 and        416        421
  21,083,927 in 1999; shares outstanding
  19,348,501 in 1998 and 18,628,261 in 1999
  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                       85,215     89,126
  Less:  Common stock in treasury, at cost,
  1,472,500 shares in 1998 and 2,455,666
  shares in 1999                                (17,069)   (34,106)
Retained earnings                                41,815    70,083
Total Stockholders' Equity                      110,377    125,524
Total Liabilities and Stockholders'
  Equity                                      $ 227,626   $ 293,753
    Commitments and Contingencies
</TABLE>
      See accompanying  notes to consolidated financial statements.

<PAGE> 39
                                 Atlantic Coast Airlines Holdings, Inc.
                                  Consolidated Statements of Operations
(In thousands, except for per share data)
<TABLE>
<CAPTION>
Years ended December 31,
                                           1997       1998       1999
Operating revenues:
<S>                                           <C>       <C>       <C>
  Passenger                              $202,540  $285,243  $342,079
  Other                                     2,904     4,697     5,286
     Total operating revenues             205,444   289,940   347,365

Operating expenses:
  Salaries and related costs               49,661    68,135    84,554
  Aircraft fuel                            17,766    23,978    34,072
  Aircraft maintenance and materials       16,860    22,730    24,357
  Aircraft rentals                         29,570    36,683    45,215
  Traffic commissions and related fees     32,667    42,429    54,521
  Facility rents and landing fees          10,376    13,475    17,875
  Depreciation and amortization             3,566     6,472     9,021
  Other                                    16,035    23,347    28,458
     Total operating expenses             176,501   237,249   298,073

Operating income                           28,943    52,691    49,292
Other income (expense):
  Interest expense                         (3,450)   (4,207)   (5,614)

  Interest income                           1,284     4,145     3,882
  Debt conversion expense                       -    (1,410)       --
  Other income (expense), net                  62       326       (85)
     Total other expense, net              (2,104)   (1,146)   (1,817)
 Income before income tax provision and
   cumulative effect of acct change        26,839    51,545     47,475
 Income tax provision                      12,339    21,133     18,319
 Income before cumulative effect of        14,500    30,412     29,156
  accounting change
  Cumulative effect of accounting change,
   net of income tax                           --        --     (888)
   benefit of $598
Net income                                $14,500   $30,412   $28,268
Income per share:
Basic:
 Income before cumulative effect of         $0.93     $1.68     $1.54
accounting change
 Cumulative effect of accounting change        --        --     (.05)
Income per share                            $0.93     $1.68     $1.49
Diluted:
 Income before cumulative effect of         $0.80     $1.42     $1.36
accounting change
 Cumulative effect of accounting change        --        --     (.04)
Income per share                            $0.80     $1.42     $1.32

 Weighted average shares used in
computation:                               15,647    18,128    18,964
     Basic                                 19,512    22,186    22,015
     Diluted
</TABLE>
             See accompanying notes to consolidated financial statements.
<PAGE> 40
                                   Atlantic Coast Airlines Holdings, Inc.
                          Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>

(In thousands, exceptfor share data)
                       Common Stock   Additional  Treasury Stock    Retained
                      --------------   Paid-In   --------------     Earnings
                                      Capital                       (Deficit)
                       Shares Amount              Shares  Amount                                 l


<S>                        <C>    <C>     <C>     <C>     <C>       <C>
Balance December     8,498,910   $170  $37,689    12,500  $(125)    $(3,097)
31, 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     8,739,507    175   40,296 1,472,500  (17,069)   11,403          $
  31,1997
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    20,821,001   416   85,215  1,472,500 (17,069)   41,815
31, 1998

Exercise of common     262,926      5   1,579      -       -         -
stock options
Tax benefit of stock         -      -   1,835      -       -         -
option exercise
Purchase of treasury         -      -       -  996,500   (17,192)    -
stock
ESOP share                   -      -      60  (13,334)      155     -
contributions
Amortization of
  deferred                   -      -     437      -       -         -
compensation
Net income                   -      -       -      -       -         28,268
Balance December  $21,083,927   $421  $89,126 $2,455,666 $(34,106)  $70,083
31, 1999

</TABLE>
       See accompanying notes to consolidated financial statements
<PAGE> 41
                            Atlantic Coast Airlines Holdings, Inc.
                             Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
 (In thousands)
Years ended December 31,
                                            1997        1998      1999
<S>                                          <C>         <C>       <C>
Cash flows from operating activities:
    Net income                               $ 14,500    $ 30,412  $ 28,268
    Adjustments to reconcile net income to
net cash provided by  operating
activities:
          Depreciation and amortization         3,111       5,829     9,109
          Write-off of preoperating costs           -           -     1,486
          Amortization of intangibles and         455         690       176
            preoperating costs
          Provision for uncollectible             168         124       564
            accounts receivable
          Provision for inventory                  63          86       110
            obsolescence
          Amortization of deferred credits       (243)       (801)   (1,114)
          Amortization of debt issuance           181         465       354
            costs
          Capitalized interest, net                  -     (1,640)   (1,683)
          Deferred tax  provision               2,452       4,392     5,905
          Net loss on disposal of fixed           450         247       380
           assets
          Amortization of debt discount and        76          70        73
            finance costs
          Debt conversion expense                   -       1,410         -
          Contribution of stock to the ESOP         -           -       214
          Gain on ineffective hedge                  -           -     (211)
            position
          Gain on early termination of               -           -     (291)
            capital lease
          Amortization of deferred                  -         574       437
           compensation
    Changes in operating assets and
      liabilities:
              Accounts receivable              (5,829)     (6,077)   (3,572)
              Expendable parts and               (781)       (990)     (847)
               fuel inventory
              Prepaid expenses and                403      (2,512)   (2,660)
               other current assets
              Preoperating costs               (2,057)           -         -
              Accounts payable                    998         423     2,139
              Accrued liabilities               7,313       7,028    11,013
              Net cash provided by             21,260      39,730    49,850
                operating activities
Cash flows from investing activities:
   Purchase of property and equipment         (26,005)    (51,020)  (59,669)
   Proceeds from sales of fixed assets            -         1.318     6,608
   Maturities of short term
     investments                              (10,737)     10,677        66
   Refund of deposits                            -            120         3

   Payments for aircraft and other            (18,447)       (832)  (19,270)
     deposits
   Net cash used in                           (55,189)    (39,737)  (72,262)
     investing activities
Cash flows from financing activities:
   Proceeds from issuance of long-term         75,220      29,650    37,203
    debt
   Payments of long-term debt                  (3,241)     (2,248)   (4,189)
   Payments of capital lease                   (2,258)     (2,656)   (1,839)
     obligations
   Proceeds from receipt of deferred              809          96        37
     credits and other
   Deferred financing costs                    (3,215)     (2,069)     (157)
   Proceeds from exercise of stock              1,255       2,479     1,584
     options
   Purchase of treasury stock                 (16,944)         -    (17,192)
              Net cash provided by             51,626      25,252    15,447
     financing activities
Net increase (decrease) in cash and            17,697      25,245    (6,965)
cash equivalents
Cash and cash equivalents, beginning           21,470      39,167    64,412
of year
Cash and cash equivalents, end of year       $ 39,167    $ 64,412  $ 57,447
</TABLE>
            See accompanying  notes to consolidated financial statements.
<PAGE> 42
                                   Atlantic Coast Airlines Holdings, Inc.
                               Notes to Consolidated Financial Statements

1.   Summary of
Accounting       (a)Basis of Presentation
Policies
                    The     accompanying    consolidated    financial
                    statements include the accounts of Atlantic Coast
                    Airlines Holdings, Inc. ("ACAI") and its  wholly-
                    owned   subsidiaries,  Atlantic  Coast   Airlines
                    ("ACA")  and Atlantic Coast Jet, Inc.  ("ACJet"),
                    (together,   the   "Company").  All   significant
                    intercompany accounts and transactions have  been
                    eliminated   in  consolidation.   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.  As  of
                    December  31, 1999, the Company's ACA  subsidiary
                    provided scheduled air transportation service  as
                    United Express for passengers to destinations  in
                    states  in  the  Eastern  and  Midwestern  United
                    States.    During   1999,  the  Company's   ACJet
                    subsidiary entered into a code sharing  agreement
                    with  Delta Air Lines to become part of the Delta
                    Connection  network.  ACJet is currently  in  the
                    pre-operating   stage  with   scheduled   service
                    anticipated to begin during the second quarter of
                    2000.

                 (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.     ACA
                    participates  in United's Mileage  Plus  frequent
                    flyer program, and ACJet will participate in  the
                    Delta   SkyMiles  frequent  flyer  program.   The
                    Company  does  not  accrue for incremental  costs
                    for   mileage  accumulation  relating  to   these
                    programs because the Company believes such  costs
                    are   not  significant.   Incremental  costs  for
                    awards  redeemed  on  the Company's  flights  are
                    expensed as incurred.

<PAGE> 43
                 (d)Accounts and Notes Receivable

                    Accounts  receivable are stated net of allowances
                    for   uncollectible  accounts  of   approximately
                    $364,000  and $772,500 at December 31,  1998  and
                    1999, respectively.  Amounts charged to costs and
                    expenses for uncollectible accounts in 1997, 1998
                    and 1999 were $168,000, $124,000 and $564,500,
                    respectively.   Write-off of accounts  receivable
                    were $186,000, $29,000 and $156,000 in 1997, 1998
                    and  1999, respectively.  Accounts receivable for
                    the  years  ended  December  31,  1998  and  1999
                    included  approximately  $3.6  million  and  $2.9
                    million,  respectfully, related to  manufacturers
                    credits to be applied towards future spare  parts
                    purchases and training expenses.

                    The  note receivable balance at December 31, 1999
                    includes  a  promissory note  from  an  executive
                    officer  of the Company dated as of May 24,  1999
                    with  a  balance, including accrued interest,  of
                    $1.5  million.  The note was paid in full  during
                    the first quarter of 2000.

                 (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,  1998  and
                    1999,   accounts  receivable  from  air  carriers
                    totaled  approximately $24.4  million  and  $27.6
                    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  $20.8 million  and  $23.2  million
                    at   December  31,  1998 and 1999,  respectively,
                    were  due  from  United.  Historically,  accounts
                    receivable losses have not been significant.

<PAGE> 44        (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, frequency, 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's ACA subsidiary operates under code-
                    sharing  and  other  marketing  agreements   with
                    United,  which expire on March 31,  2009,  unless
                    earlier    terminated   by   United   (the    "UA
                    Agreements").  Prior to March  31,  2004,  United
                    may  terminate the UA Agreements at any  time  if
                    ACA   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 UA 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 UA Agreements,  ACA  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  ACA 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  UA Agreements require ACA to obtain United's
                    consent to operate service between city pairs  as
                    "United   Express".   If  ACA   experiences   net
                    operating  expenses  that  exceed  revenues   for
                    three  consecutive months on any required  route,
                    ACA  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  UA  Agreements  do  not
                    prohibit  United from competing, or from entering
                    into  agreements  with other airlines  who  would
                    compete,  on  routes served by the  Company,  but
                    state   that   United  may   terminate   the   UA
                    Agreements if ACAI and ACA enter into  a  similar
                    arrangement   with  any  other  carrier   without
                    United's  approval.   The Company  believes  that
                    its  agreement to operate ACJet as  part  of  the
                    Delta  Connection program does not provide United
                    the right to terminate the UA Agreements.
<PAGE> 45
                    The  UA Agreements limit the ability of the  ACAI
                    and  ACA 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, and  provide
                    United a right to terminate the UA Agreements  if
                    they merge with or are controlled or acquired  by
                    another  carrier.  United also  has  a  right  of
                    first  refusal with respect to issuance  by  ACAI
                    and ACA of shares of their common stock if, as  a
                    result   of  the  issuance,  certain   of   their
                    stockholders  and their permitted transferees  do
                    not  own at least 50% of their 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.

                    The  Company  has  reached a ten  year  agreement
                    with  Delta  Air Lines, Inc. to operate  regional
                    jet  aircraft  as  part of the  Delta  Connection
                    program  on a fee-per-departure basis. Under  the
                    fee-per-departure  structure,  the   Company   is
                    contractually  obligated to  operate  the  flight
                    schedule,  and Delta pays the Company  an  agreed
                    amount  per  hour flown. Delta may terminate  the
                    agreement  at  any time if the Company  fails  to
                    maintain  certain  performance  standards,   and,
                    subject  to  certain rights by the  Company,  may
                    terminate  without  cause, effective  no  earlier
                    than  two years after commencement of operations,
                    by  providing  180 days notice  to  the  Company.
                    The  Company  has  ordered  20  50-seat  Canadair
                    regional   jets  from  Bombardier  Aerospace   of
                    Montreal   and   25  328JET  feeder   jets   from
                    Fairchild for this new venture.  The Company  has
                    established  a  new  subsidiary,  Atlantic  Coast
                    Jet,  Inc.  ("ACJet"), d.b.a.  Delta  Connection,
                    which  is  now  in the application  and  approval
                    process  with the applicable federal agencies  to
                    obtain  authority to conduct scheduled  passenger
                    air   transportation  of  jet  aircraft.  Initial
                    Delta  Connection service to various destinations
                    in  the  Northeast United States is  expected  to
                    begin  during the second quarter of 2000, subject
                    to    satisfactory   resolution   of   regulatory
                    requirements  and other start-up  considerations.
                    The  Company  can  make no  assurances  that  its
                    ACJet   subsidiary  will  receive  all  necessary
                    regulatory approvals by this date.

                    The   Delta  Connection  Agreement  requires  the
                    Company  to obtain Delta's approval if it chooses
                    to  enter  into  a code-sharing arrangement  with
                    another  carrier,  lists its  flights  under  any
                    other  code,  or operate flights  for  any  other
                    carrier,    except   with   respect    to    such
                    arrangements with United or non-U.S.  code-shares
                    partners   of   United  or   in   certain   other
                    circumstances.   The  Delta Connection  Agreement
                    does  not prohibit Delta from competing, or  from
                    entering into agreements with other airlines  who
                    would  compete, on routes served by the  Company.
                    The  Delta  Connection Agreement  also  restricts
                    the   ability  of  the  Company  to  dispose   of
                    aircraft   subject   to  the  agreement   without
                    offering  Delta  a  right  of  first  refusal  to
                    acquire  such aircraft, and provides  that  Delta
                    may  terminate  the  agreement  if,  among  other
                    things,  the  Company merges with  or  sells  its
                    assets  to another entity, is acquired by another
                    entity  or  if any person acquires  more  than  a
                    specified percentage of its stock.
<PAGE> 46
                    The  Company's  pilots  are  represented  by  the
                    Airline   Pilots   Association  ("ALPA"),   ACA's
                    flight   attendants   are  represented   by   the
                    Association  of  Flight Attendants  ("AFA"),  and
                    ACA's  mechanics are represented by the  Aircraft
                    Mechanics Fraternal Association ("AMFA").

                    The  ALPA collective bargaining agreement  became
                    amendable  in February 2000 and  the Company  and
                    ALPA   began  meetings  on  a  new  contract   in
                    February  2000.   The ALPA agreement  covers  all
                    pilots  of  the Company, including ACJet  pilots.
                    As  of  December 31, 1999, approximately  31%  of
                    the Company's workforce were pilots.

                    ACA's  collective bargaining agreement  with  AFA
                    was ratified in October, 1998.  The agreement  is
                    for  a  four year duration and becomes  amendable
                    in  October 2002.  ACJet has reached an agreement
                    with  AFA  that  its  flight attendants  will  be
                    represented by AFA, and has also agreed with  AFA
                    on  the  terms of a five year agreement  covering
                    ACJet  flight  attendants on terms  substantially
                    similar to the terms of the contract between  ACA
                    and AFA.

                    ACA's  collective bargaining agreement with  AMFA
                    was  ratified  in June, 1998.  The  agreement  is
                    for  a  four year duration and becomes  amendable
                    in June 2002.

                    The   Company  believes  that  certain   of   the
                    Company's  unrepresented labor  groups  are  from
                    time  to  time  approached by unions  seeking  to
                    represent  them.   However, the Company  has  not
                    received   any  official  notice  of   organizing
                    activity  and  there have been no  representation
                    applications  filed  with the National  Mediation
                    Board   by  any  of  these  groups.  The  Company
                    believes  that  the wage rates and  benefits  for
                    non-union  employee  groups  are  comparable   to
                    similar  groups at other regional airlines.   The
                    Company also believes that the incremental  costs
                    of  union  agreements presently under negotiation
                    will  not have a material effect on the Company's
                    financial  position or results of its  operations
                    for the year 2000.


<PAGE> 47        (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  $318,000  and  $428,000  as  of
                    December   31,   1998  and  1999,   respectively.
                    Expendable  parts  and supplies  are  charged  to
                    expense  as  they are used.  Amounts  charged  to
                    costs and expenses for obsolescence in 1997, 1998
                    and  1999  were  $63,000, $86,000  and  $110,000,
                    respectively.

                 (i)Property and Equipment

                    Property  and  equipment  are  stated  at   cost.
                    Depreciation  is computed using 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.

                    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.

                    The  Company capitalizes interest related to  the
                    aircraft purchase deposits it has placed with the
                    aircraft  manufacturers.  Amounts capitalized  in
                    1998 and 1999 were $1.6 million and $1.8 million,
                    respectively.

<PAGE> 48        (j)Preoperating Costs

                    Preoperating   costs  represent   the   cost   of
                    integrating new types of aircraft. Prior to 1999,
                    such  costs,  which consist primarily  of  flight
                    crew  training  and  aircraft  ownership  related
                    costs,  were 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 ("CRJ") into the
                    Company's  fleet.   Accumulated  amortization  of
                    preoperating  costs  at  December  31,  1998  was
                    $571,000.  On January 1, 1999, the Company wrote-
                    off  the remaining unamortized preoperating costs
                    balance  of  approximately $1.5  million,  before
                    income  tax  benefit of $598,000,  in  accordance
                    with  the implementation of Statement of Position
                    98-5 ("SOP 98-5").  Also, in accordance with  SOP
                    98-5, $2.2 million of preoperating costs incurred
                    during  1999  for  the start  up  of  ACJet  were
                    expensed as incurred.

                 (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, 1998 and 1999  was  $1.3
                    million and $1.4 million, respectively.

                 (l)Maintenance

                    The Company's maintenance accounting policy is  a
                    combination  of  expensing  certain   events   as
                    incurred  and  accruing for  certain  maintenance
                    events  at  rates it estimates will be sufficient
                    to  cover maintenance cost for the aircraft.  For
                    the J32 and J41 aircraft, the Company accrues for
                    airframe component and engine repair costs  on  a
                    per  flight hour basis. For the CRJ aircraft, the
                    Company  accrued  for  the replacement  of  major
                    engine  life  limited parts on a per cycle  basis
                    until   July  1999.   The  Company  accrues   for
                    auxiliary power units ("APU") costs on a per  APU
                    hour  basis.   All  other maintenance  costs  are
                    expensed as incurred.

                    During  the  third quarter of 1999,  the  Company
                    executed  a seven year engine services  agreement
                    with GE Engine Services, Inc. ("GE") covering the
                    scheduled  and unscheduled repair of ACA's  CF34-
                    3B1  jet  engines  operated on  43  CRJs  already
                    delivered  or  on  order for the  United  Express
                    operation.  Under the terms of the agreement, the
                    Company pays a set dollar amount per engine  hour
                    flown on a monthly basis to GE and GE assumes the
                    responsibility   to  repair  the   engines   when
                    required at no additional expense to the Company,
                    subject   to  certain  exclusions.  The   Company
                    expenses  the  amount due based  on  the  monthly
                    rates  stipulated  in  the agreement,  as  engine
                    hours are flown. The Company's future maintenance
                    expense  on  CRJ engines covered  under  the  new
                    agreement will escalate based on contractual rate
                    increases, intended to match the timing of actual
                    maintenance events that are due pursuant  to  the
                    terms.    The  Company  has  reached  a   similar
                    agreement  covering  up to 55  Fairchild  Dornier
                    aircraft with the engine manufacturer.
                    <PAGE> 49
                    During  the  third quarter, the Company  reversed
                    approximately $1.5 million in life limited  parts
                    repair  expense accruals related to  CRJ  engines
                    that   are  no  longer  required  based  on   the
                    maintenance services and terms contained  in  the
                    GE engine maintenance agreement.

                 (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 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.

<PAGE> 50        (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.

                 (p)Income Per Share

                    Basic  income per share is computed  by  dividing
                    net  income  by  the weighted average  number  of
                    common  shares outstanding.  Diluted  income  per
                    share  is computed by dividing net income 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.

                   A  reconciliation of the numerator and denominator
                   used  in  computing income per share is as follows
                   (in thousands, except per share amounts):

    <TABLE>
    <CAPTION>
                             1997          1998          1999
                         Basic  Dilut  Basic  Dilut  Basic  Dilut
                                 ed            ed            ed
<S>                        <C>    <C>    <C>    <C>    <C>    <C>
Share calculation:
Average number of common
 shares outstanding      15,647  15,647 18,128  18,128   18,964  18,964
Incremental shares due
 to assumed exercise of       -     701      -     876       -      849
 options
Incremental shares due to
 assumed conversion of        -   3,164      -    3,182      -    2,202
 convertible debt
Weighted average common
 shares outstanding      15,647  19,512  18,128  22,186  18,964  22,015
       outstanding

Adjustments to net
 income:
Income before cumulative
 effect of accounting   $14,500 $14,500 $30,412 $30,412 $29,156 $29,156
 change
Interest expense on
 convertible debt,            -   1,187       -   1,202       -     831
 net of tax
Income before
 cumulative effect
 of accounting          $14,500 $15,687 $30,412 $31,614 $29,156  $29,987
 change available to
 common shareholders

Income per share
 before cumulative
 effect of accounting    $ 0.93  $ 0.80  $ 1.68  $ 1.42  $ 1.54  $ 1.36
 change
</TABLE>
<PAGE> 51


                 (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.   The effective  portions  of
                    hedging  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.   The
                    ineffective portions of hedging gains and losses
                    are recorded as incurred.

                 (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.
<PAGE> 52
<TABLE>
<CAPTION>
2.  Property     Property and equipment consist of
and              the following:
     Equipment
                 (in thousands)
                 December 31,
                                                      1998      1999
                 <S>                                   <C>       <C>
                 Owned aircraft and improvements  $ 58,912  $ 92,868
                 Improvements to leased aircraft     4,949     5,005
                 Flight equipment, primarily        29,060    41,285
                    rotable spare parts
                 Maintenance and ground equipment    5,850     7,426
                 Computer hardware and software      2,408     4,804
                 Furniture and fixtures                753       957
                 Leasehold improvements              2,144     3,191
                      Subtotal                     104,076   155,536
                 Less:  Accumulated depreciation    14,110    22,376
                    and amortization
                                                  $ 89,966 $ 133,160
</TABLE>
                   In   1999,   the  Company  commenced  a  replacement
                project  of  its  computer  software  systems.   The
                Company     anticipates    spending    approximately
                $7  million on this project, the majority  of  which
                will  be capitalized and amortized over five  years.
                In   1999,   the   Company  expensed   approximately
                $400,000  related to replacement software  selection
                and  capitalized  $2.3 million  in  acquisition  and
                implementation costs.
<TABLE>
<CAPTION>
3.  Accrued        Accrued liabilities consist of the
     Liabilities      following:

                (in thousands)
                   <S>                                 <C>       <C>
                   December 31,
                                                     1998     1999
                Payroll and employee benefits     $  9,597 $ 10,482
                Air traffic liability                  516      723
                Interest                             1,061    1,442
                Aircraft rents                       2,118    1,526
                Passenger related expenses           3,233    7,980
                Maintenance costs                    3,866    3,016
                Fuel                                 2,260    3,964
                Other                                3,679    6,719
                                                  $ 26,330 $ 35,852
</TABLE>
4.  Debt        In February 1999, the Company entered into an asset-
                based   lending   agreement  with   two   financial
                institutions that provides the Company with  a  $15
                million  bridge  loan for the construction  of  the
                regional terminal at Washington-Dulles and  a  line
                of  credit for up to $35 million depending  on  the
                amount of assigned ticket receivables and the value
                of  certain  rotable spare parts. The  $35  million
                line of credit replaces a previous $20 million line
                of credit and will expire on September 30, 2000, or
                upon  termination  of the United Express  marketing
                agreement,  whichever is sooner. The interest  rate
                on  this line is LIBOR plus .75% to 1.75% depending
                on the Company's fixed charges coverage ratio.
<PAGE> 53
                During  1999, the Company borrowed $7.8 million  on
                the   bridge  loan  and  provided  funding  to  the
                Metropolitan Washington Airports Authority ("MWAA")
                for  the  construction of the regional terminal  of
                $12.5  million. In May 1999, MWAA paid the  Company
                $7.8 million, and the Company repaid its borrowings
                on  the bridge loan.  As of December 31, 1999 there
                are no outstanding borrowings on the bridge loan. A
                note  receivable  from  MWAA  of  $4.7  million  is
                recorded   at  December  31,  1999.  No  additional
                amounts  were  drawn on the bridge  loan  for  this
                additional  $4.7  million  funding.  However,   the
                Company may do so in the future as desired.

                The  Company has pledged approximately $2.9  million
                of  the  $35 million line as collateral for  letters
                of  credit  issued  on behalf of  the  Company.   At
                December   31,   1999,   the   Company's   remaining
                available  borrowing  limit was approximately  $19.8
                million. There was no balance outstanding under  the
                line of credit at December 31, 1998 or December  31,
                1999.

                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 redeemable by the Company, in whole or  in
                part,  at any time on or after July 1, 2000,  on  at
                least  15 days notice, 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.


      <PAGE> 54
      <TABLE>
      <CAPTION>
                Long-term debt consists of the
         following:
      (in thousands)                                    1998       1999
      December 31,
      <S>                                                <C>        <C>
      Convertible subordinated notes, principal
         due July 1, 2004, interest payable in
         semi-annual installments on the             $19,820    $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            15,388     14,346
         thereafter through maturity, interest
         payable semi-annually at 7.49%
         throughout term of notes, collateralized
         by four J-41 aircraft.

      Notes payable to supplier, due December
         1999, principal and interest payable in
         monthly installments of $14,027, with           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      1,839        621
         payable monthly with interest of 6.74%
         and 7.86%, unsecured.

      Notes payable to institutional lenders, due
         between October 23, 2010 and May 15,
         2015, principal payable semiannually         25,556     53,629
         with interest ranging from 5.65% to
         7.63% through maturity, collateralized
         by four CRJ aircraft.

      Note payable to institutional lender, due
         October 2, 2006, principal payable            3,975      3,586
         semiannually with interest at 6.56%,
         collateralized by one J41 aircraft.

      Total                                           66,739     92,002
      Less:  Current Portion                           3,450      4,758
                                                     $63,289    $87,244
     </TABLE>

                As of December 31, 1999, maturities of long-term
                debt are as follows:
                (in thousands)

                2000                                    $ 4,758
                2001                                      4,344
                2002                                      4,639
                2003                                      4,900
                2004                                     24,973
                Thereafter                               48,388
                       Total                            $92,002

                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.

<PAGE> 55
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, 1998 and 1999, is $3.0 million and  $7.2
                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, 1999, the future minimum payments, by
                 year  and in the aggregate, together with the present
                 value  of  the  net  minimum lease payments,  are  as
                 follows:

                  (in thousands)
                Year Ending December 31,
                 2000                                        $  2,240
                 2001                                           2,014
                 2002                                           1,919
                 2003                                           1,723
                 2004                                             772
                 Future minimum lease payments                  8,668
                 Amount representing interest                   1,498
                 Present value of minimum lease                 7,170
                  payments
                 Less:  Current maturities                      1,627
                                                             $  5,543
<TABLE>
<CAPTION>
6.  Operating    Future  minimum  lease payments under  noncancellable
     Leases      operating leases at December 31, 1999 are as follows:

                 (in thousands)
                Year ending December 31,   Aircraft   Other     Total
                <S>                          <C>       <C>       <C>
                2000                     $54,109    $ 3,856  $ 57,965
                2001                      52,160      3,430    55,590
                2002                      51,249      3,233    54,482
                2003                      49,576      2,935    52,511
                2004                      49,248      2,872    52,120
                Thereafter               335,311     34,091   369,402
                  Total  minimum
                  lease payments        $591,653    $50,417  $642,070
 </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 $29.6
                million;  $36.7 million; and  $45.2 million  for  the
                years   ended  December  31,  1997,  1998  and  1999,
                respectively.
<PAGE> 56

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, 1997, 1998 and 1999,
                respectively.

                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  period  ranging
                from less than one year to five years.

                In  1998,  the  Company's shareholders  approved  the
                addition of one million shares to the Company's stock
                based compensation plans.

                A  summary  of  the  status of  the  Company's  stock
                options  awarded as of December 31,  1997,  1998  and
                1999  and changes during the periods ending on  those
                dates is presented below:

<TABLE>
<CAPTION>
                           1997             1998            1999
<S>                     <C>     <C>      <C>    <C>      <C>     <C>
                               Weight          Weight           Weight
                              average         average          average
                      Shares exercise Shares  exercise  Shares exercise
                               price           price            price
Options outstanding at
beginning of year   1,916,784 $3.16 2,056,922  $5.14  1,759,899  $ 7.95
Granted               684,000 $8.91   539,000 $19.42    735,000  $22.88
Exercised             481,194 $2.60   572,023  $4.33    241,389  $ 6.69
Canceled               62,668 $5.45   264,000 $17.25     93,767  $20.60
Options outstanding 2,056,922 $5.14 1,759,899  $7.95  2,159,743  $12.63
 at end of year

Options exercisable   916,568 $2.27   872,878  $3.88  1,160,206  $ 6.05
 at year-end
Options available   1,028,182         653,182            27,334
 for granting at
 at year-end
Weighted-average fair
  value of options      $6.49          $11.88            $14.57
  granted during the
  year
</TABLE>
<PAGE> 57
                The  Company  awarded a total of  100,000  shares  of
                restricted  stock to certain employees  during  1998.
                These  shares  vest  over three  years.  The  Company
                recognized  $281,000  and  $343,000  in  compensation
                expense  for  1998 and 1999 respectively,  associated
                with  these restricted stock awards and $293,000  and
                $94,000  for  1998 and 1999 respectively,  associated
                with  stock  option  awards.   No  such  expense  was
                recognized in the year ended 1997.

                The  following  table  summarizes  information  about
                stock options outstanding at December 31, 1999:
<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         12/31/99  contract    price   12/31/99    price
                              ual life
                               (years)
<S>                      <C>        <C>       <C>       <C>       <C>
$0.00  -  $3.23      484,300        2.9  $  1. 14   484,300   $  1.14
$3.23  -  $6.45      229,764        6.4   $  5.22   229,764   $  5.22
$6.45  -  $9.68      311,905        7.2   $  7.57   187,571   $  7.62
$9.68  - $12.90      197,607        7.8   $11. 10   116,938    $11.12
$12.90 - $16.13       85,000        8.7    $14.43    83,333    $14.41
$16.13 - $19.35       54,667        8.1    $17.25    25,200    $17.25
$19.35 - $22.58      265,000        9.6    $20.07         -         -
$22.58 - $25.80      448,500        9.1    $24.45    17,500    $24.35
$25.80 - $32.25       83,000        8.4    $30.19    15,600    $30.21
                   2,159,743        7.0    $12.63 1,160,206   $  6.05

</TABLE>

                The  Company uses the Black-Scholes option  model  to
                estimate  the  fair  value of  options.  A  risk-free
                interest rate of 5.8%, 4.73% and 6.61% for 1997, 1998
                and 1999, respectively, a volatility rate of 50%, 55%
                and  65% for 1997, 1998 and 1999, respectively,  with
                an expected life of 7.5 years for 1997, 6.5 years for
                1998,   and  6.7  years  for  1999  was  assumed   in
                estimating  the  fair value.  No  dividend  rate  was
                assumed for any of the years.

                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>
                      1997            1998              1999
                  As      Pro     As       Pro      As      Pro
               Reported   Forma  Reported   Forma  Reported   Forma
     <S>         <C>       <C>     <C>      <C>     <C>      <C>
 Net Income  $ 14,500  $ 13,436 $ 30,412 $ 27,201 $ 28,268  $ 23,931

 Basic earnings
  per share     $ 0.93    $ 0.86   $ 1.68    $ 1.50   $ 1.49    $ 1.26


 Diluted earnings
  per share     $ 0.80    $ 0.75   $ 1.42    $ 1.28   $ 1.32    $ 1.12


</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.
               Shares  of  common  stock acquired  by  the  ESOP  were
               allocated  to  each  employee based on  the  employee's
               annual compensation.

               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. In preparing  for  the
               final distribution of ESOP shares to participants,  it
               was  determined  that a misallocation  of  shares  had
               occurred  in  years  1993 through  1997  resulting  in
               certain  eligible participants not receiving  some  of
               their  entitled  shares. The Company  contributed  the
               required  number  of  additional shares  to  the  ESOP
               during the second and third quarters of 1999 when  the
               final   calculation  was  determined  and   recognized
               approximately  $250,000 in expense.  The  Company  has
               filed  a request for a compliance statement under  the
               IRS's  Voluntary  Compliance  Resolution  Program   to
               obtain  Service approval of the Company's response  to
               the  share misallocation issue. In September 1999, the
               ESOP   trustee   distributed  the  ESOP   assets   per
               participant's direction. The ESOP will continue  until
               all  participants are located and any remaining assets
               are   properly  distributed.   The  number  of  shares
               remaining  in  the  Plan as of December  31,  1999  is
               32,650.
               <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 of up to  15%  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 plan limits the
               Company's contributions for the pilots to 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   $445,000,
               $552,000,  and  $640,000  for  1997,  1998  and  1999,
               respectively.

               Effective  June 1, 1995, April 1, 1997, 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,  respectively,
               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  $133,000,  $235,000   and
               $303,000 for 1997, 1998 and 1999, respectively.

               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  $3.6  million, $3.9  million,  and  $4.5
               million in 1997, 1998 and 1999, respectively.
   <PAGE> 60
   9.  Income   The  provision (benefit) for income taxes includes the
       Taxes         following components:

                (in thousands)
 <TABLE>
 <CAPTION>
                Year Ended December 31,
                                            1997     1998        1999
                Federal:
                <S>                          <C>      <C>          <C>
                     Current             $ 7,342   $ 13,580   $ 10,420
                     Deferred              1,907      3,591      5,602
                Total federal provision    9,249     17,171     16,022
                State:
                     Current               2,545      3,161      1,993
                     Deferred                545        801        304
                Total state provision      3,090      3,962      2,297
                Total provision on
                 income   before
                 accounting change        12,339     21,133     18,319
                Income tax benefit
                 due to change in
                 accounting method             -         -        (598)
                Total provision         $ 12,339   $ 21,133   $ 17,721
</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,
                                            1997       1998      1999
                <S>                          <C>        <C>       <C>
                Income tax expense
                    at statutory rate    $ 9,394     $18,041   $16,616
                Increase (decrease)
                in tax expense due to:
                   Permanent differences     937        517        89
                     and other
                   State income taxes,
                     net of federal        2,008      2,575     1,614
                     benefit
                Income tax expense       $12,339    $21,133   $18,319
 </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.

                The  following is a summary of the Company's  deferred
                income taxes as of December 31, 1998, and 1999:
<PAGE> 61
<TABLE>
<CAPTION>
                 (in thousands)
                 December 31,
                                                      1998       1999
                 <S>                                   <C>        <C>
                 Deferred tax assets:
                      Engine maintenance        $   1,268     $   751
                       accrual
                      Intangible assets               934         900
                      Air traffic liability           503         564
                      Allowance for bad debts         146         369
                      Deferred aircraft rent          530         323
                      Deferred credits              2,335       3,166
                      Accrued vacation                534         716
                      Other                           582       1,278
                   Total deferred tax assets        6,832       8,067

                 Deferred tax liabilities:
                     Depreciation and              (9,756)    (17,595)
                     amortization
                     Preoperating costs              (596)           -
                     Other                           (184)        (81)
                   Total deferred tax             (10,536)    (17,676)
                       liabilities
                 Net deferred income tax
                 assets (liabilities)            $ (3,704)   $ (9,609)
 </TABLE>
                 No  valuation  allowance was established  in  either
                 1998  or  1999 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 years ended December 31, 1998 and 1999.
                 An   AMT   tax  credit  carryover  of  approximately
                 $564,000 was fully utilized in 1997.

10.              Aircraft
   Commitments
   and
                 The  Company has firm orders for 42 CRJs in addition
   Contingencie  to  the  24 previously delivered as of December  31,
   s             1999,  and  options for an additional 27  CRJs.  The
                 delivery  schedule  for the 42  firm  orders  is  as
                 follows:  14 in 2000, 18 in 2001, and ten  in  2002.
                 Twenty-two of the 42 firm ordered CRJs are  for  the
                 United  Express operation, and 20 are for the  Delta
                 Connection  operation. The Company is  obligated  to
                 purchase  and  finance (including leveraged  leases)
                 the  42  firm  ordered aircraft  at  an  approximate
                 capital cost of $775 million.

                 The  Company  also has a firm order  for  25  328JET
                 feeder  jet aircraft and a conditional order for  15
                 328JET  and  40  428JET  feeder  jet  aircraft,  and
                 options  for  an additional 85 feeder jet  aircraft,
                 from  Fairchild Aerospace Corporation. The  delivery
                 schedule  for  the  25  firm orders  for  the  Delta
                 Connection operation is as follows: fourteen in 2000
                 and  eleven  in 2001. The value of the  aircraft  on
                 firm  order  is approximately $275 million  and  the
                 value  of  the  aircraft  in the  conditional  order
                 (excluding  the  option aircraft)  is  approximately
                 $700 million. The Company requires United's approval
                 to  operate  more  than 46 jet  aircraft  as  United
                 Express.  The  conditional portion of the  Fairchild
                 order   is   contingent  on  the  Company  receiving
                 United's  approval  to operate the  feeder  jets  as
                 United Express. The Company at its option may  waive
                 the  condition and enter into commitments  for  firm
                 delivery positions under the Fairchild agreement.

                 As  previously announced, the Company  is  exploring
                 alternatives  to  accelerate the retirement  of  its
                 fleet  of  28  leased  19 seat J-32  aircraft.   The
                 Company tentatively plans to remove as many as   six
                 J-32s from ACA's fleet during 2000 and the remainder
                 in  2001.  As of December 31, 1999, the Company  had
                 J-32  operating  lease  commitments  with  remaining
                 lease  terms  ranging  from one  to  six  years  and
                 related minimum lease payments of approximately  $43
                 million.   The  Company has not  yet  finalized  its
                 analysis    of    a   phase-out   plan,    including
                 quantification of any one-time fleet rationalization
                 charge.
                 <PAGE> 62
                 Training

                 The Company has entered into agreements with Pan  Am
                 International  Flight  Academy  ("PAIFA")  for   the
                 Company  to  train  CRJ, J-41  and  J-32  pilots  at
                 PAIFA's  facility near Washington-Dulles.   In  1999
                 PAIFA  acquired the existing training facility where
                 the  Company  has  been  conducting  J-41  and  J-32
                 training, and added a CRJ simulator at the  facility
                 in  December  1999.  The Company  has  committed  to
                 purchase  an annual minimum number of CRJ  and  J-41
                 simulator  training  hours  at  agreed  rates,  with
                 commitments   extending   ten   and   three   years,
                 respectively.

                 At  December 31, 1999, the Company's minimum payment
                 obligations  under  the  PAIFA  agreements  are   as
                 follows:

                 (in thousands)
                 Year ended December 31,
                 2000                         $4,028
                 2001                          3,611
                 2002                          3,631
                 2003                          1,371
                 2004                          1,391
                 Thereafter                    6,066
                                            $ 20,098

                 Derivative Financial Instruments

                 The  Company has periodically entered into a  series
                 of  put and call contracts as an interest rate hedge
                 designed  to  limit its exposure  to  interest  rate
                 changes  on  the anticipated issuance  of  permanent
                 financing  relating  to  the  delivery  of  the  CRJ
                 aircraft.  During 1998 and 1999, the Company settled
                 eight  and  seven hedge transactions,  respectively,
                 paying  the  counterparty $3.0 million in  1998  and
                 receiving  $119,000 in 1999.  In 1999,  the  Company
                 recognized a gain of $211,000  on  the settlement of
                 one contract representing the ineffective portion of
                 a hedge.  At December 31, 1999 the Company
                 had three interest rate swap  contracts
                 open  with  an  aggregate  notional  amount  of  $23
                 million to hedge its exposure by approximately  44%,
                 to  interest rate changes until permanent  financing
                 for  three  CRJ aircraft scheduled for  delivery  in
                 March,  April and May 2000, is secured. The  Company
                 would    have   received   from   the   counterparty
                 approximately $247,000 had the three swap  contracts
                 settled on December 31, 1999.
                 <PAGE> 63
                 In  October 1999, the Company entered into commodity
                 swap   transactions  to  hedge  price   changes   on
                 approximately 13,300 barrels of crude oil per  month
                 for   the  period  April  to  June  2000,   and   on
                 approximately 23,300 barrels of crude oil per  month
                 for  the  period July through September  2000.   The
                 contracts  provide for an average fixed price  equal
                 to  approximately  52.6 cents  per  gallon  for  the
                 second  quarter of 2000 and 51 cents per gallon  for
                 the  third quarter of 2000.  With these transactions
                 and  taking into account that Delta Air Lines,  Inc.
                 bears  the  economic risk of fuel price fluctuations
                 for  future  fuel requirements associated  with  the
                 Delta  Connection  program, the Company  has  hedged
                 approximately  14%  of  its  anticipated  jet   fuel
                 requirements  for the second quarter 2000;  27%  for
                 the  third  quarter 2000; and 18%,  for  the  fourth
                 quarter   of   2000.    Had   the   commodity   swap
                 transactions  settled  on  December  31,  1999,  the
                 Company   would  have  recognized  a  reduction   of
                 approximately $597,000 in fuel expense.

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

 12.  Financial  Statement  of  Financial  Accounting  Standards  No.
                 107,   "Disclosure  of  Fair  Value   of   Financial
   Instruments   Instruments"  requires the disclosure  of  the  fair
                 value   of  financial  instruments.  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, when available,  or
                 by  discounted  expected  future  cash  flows  using
                 current  rates offered to the Company for debt  with
                 similar maturities.
  <PAGE> 64
                  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            December 31, 1998  December 31, 1999
                  thousands)
                                          Estimated CarryingEstimated
                                 Carrying Fair      Amount  Fair
                                          Value             Value
                                 Amount
                 <S>               <C>       <C>     <C>       <C>
                 Cash and cash
                   equivalents   $64,412  $ 64,412 $ 57,447  $ 57,447
                 Short-term
                   investments        63        63        -         -
                  Accounts        30,210    30,210   32,518    32,518
                  receivable
                  Accounts        (5,262)   (5,262)  (5,343)   (5,343)
                  payable
                  Long-term debt (66,739) (101,975) (92,002) (124,484)

</TABLE>
                  See note 10 for information regarding the fair value of
                  derivative financial instruments.
<TABLE>
<CAPTION>
13.               Supplemental disclosures of cash flow
   Supplemental   information:
   Cash Flow                          Year ended
   Information                       December 31,
                                    (in thousands)
                                           1997     1998       1999
                  <S>                      <C>       <C>        <C>
                   Cash paid during the
                     period for:
                        - Interest       $1,778    $3,665     $4,532
                        - Income taxes    5,767    15,426      8,193
                                                                                    15,426
</TABLE>
                  The  following  non  cash investing  and  financial
                  activities took place in 1997, 1998 and 1999:

                  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.

                  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.

                  In   September  and  December  1998,  the   Company
                  received  $352,000 of manufacturers  credits  which
                  were applied against the purchase price of two CRJs
   <PAGE> 65      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.

                  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  CRJ  aircraft.  The promissory  notes
                  mature  on   March  29,  2015  and  May  19,   2015
                  respectively,  and are collateralized  by  the  CRJ
                  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 $1.6 million  in
                  interest  related to a $15 million deposit  with  a
                  manufacturer.

                  During  1999,  the  Company  received  $755,000  of
                  manufacturers  credits which were  applied  against
                  the  purchase  price of the two CRJs  purchased  in
                  1999  from the manufacturer.  The credits  will  be
                  utilized primarily through the purchase of  rotable
                  parts and other fixed assets, expendable parts, and
                  pilot training.

                  On   April  23,  and  October 5, 1999  the  Company
                  issued long-term promissory notes for $14.7 million
                  and $14.8 million respectively, for the acquisition
                  of  two  new  CRJ  aircraft.  The promissory  notes
                  mature  on   October 23, 2010 and October  5,  2011
                  respectively,  and are collateralized  by  the  CRJ
                  aircraft delivered with principal and interest,  at
                  rates  of  6.62% and 7.63%, payable on a semiannual
                  basis through maturity.

                  In  1999,  the Company capitalized $1.8 million  in
                  interest  related to $38.7 million on deposit  with
                  aircraft manufacturers.

   <PAGE> 66
   14.  Recent    In  June  1998, the FASB issued Statement  No.  133,
   Accounting     "Accounting  for Derivative Instruments and  Hedging
   Pronouncements 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.

                  In  July  1999, the FASB issued Statement  No.  137,
                  "Accounting  for Derivative Instruments and  Hedging
                  Activities - Deferral of the Effective Date of  FASB
                  Statement  No.  133, an Amendment of FASB  Statement
                  No.   133"  which  defers  the  effective  date   of
                  Statement  No.  133  by  one year.   Therefore,  the
                  Company  will  adopt Statement No.  133  during  its
                  first  quarter  of  fiscal  2001  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> 67
<TABLE>
<CAPTION>

15.  Selected     (in thousands, except per share amounts)
   Quarterly
   Financial
   Data
   (Unaudited)
                                     Quarter Ended
                       March 31,    June 30,   September December 31,
                            1999        1999         30,         1999
                                                    1999
   <S>                       <C>         <C>         <C>          <C>
   Operating revenues    $73,004     $92,397     $91,022      $90,943
   Operating income        5,677      18,501      14,531       10,583
   Net income              2,875 1    11,068       8,351        5,974
   Net income per share
      Basic             $   0.15    $   0.58    $   0.45     $   0.32
      Diluted           $   0.14    $   0.51    $   0.40     $   0.29
   Weighted average
   shares outstanding
      Basic               19,445      19,177      18,655       18,593
      Diluted             22,613      22,224      21,632       21,577


                                     Quarter Ended
                     March 31,     June 30,    September 30,  December 31,
                        1998         1998          1998          1998
   Operating revenue   $58,055     $75,759        $78,100      $78,026
   Operating income      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 2     $   0.49     $   0.36
   Weighted average
   shares outstanding
      Basic             15,162      18,805         19,198       19,288
      Diluted           22,034      22,246         22,244       22,289

   1 Includes the $888,000, net of income taxes, charge for the
   cumulative effect of an accounting change.  Without this charge,
   basic and diluted income per share would have been $0.19 and
   $0.18, respectively.
   2 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 shares distributed upon conversion
</TABLE>
<PAGE> 68
Item 9.   Changes in and Disagreements with Accountants on Accounting and
     Financial Disclosure

           None to report.



                                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 6)    Restated Certificate of Incorporation of the Company.
3.2  (note 6)    Restated By-laws of the Company.
4.1  (note 4)    Specimen Common Stock Certificate.
4.2  (note 11)   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 11)   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 11)   Form of amendment to the Stockholders Registration
                 Rights Agreement.
<PAGE> 69
4.17  (note 8)   Indenture, dated as of July 2, 1997, between the Company
                 and First Union National Bank of Virginia.
4.18  (note 9)   Registration Rights Agreement, dated as of July 2, 1997,
                 by and among the Company, Alex. Brown & Sons
                 Incorporated and the Robinson-Humphrey Company, Inc.
4.19 (note 5)    Rights Agreement between Atlantic Coast Airlines
                 Holdings, Inc. and Continental Stock Transfer & Trust
                 Company dated as of January 27, 1999.
10.1  (note 11)  Atlantic Coast Airlines, Inc. 1992 Stock Option Plan.
10.2  (note 9)   Restated Atlantic Coast Airlines, Inc. Employee Stock
                 Ownership Plan, effective October 11, 1991, as amended
                 through December 31, 1996.
10.4  (note 9)   Restated Atlantic Coast Airlines 401(k) Plan, as amended
                 through February 3, 1997.
10.4(a) (note 7) Amendment to the Atlantic Coast Airlines 401(k) Plan
                 effective May 1, 1997
10.6 (notes 11 & 12)                                            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 7) Third Amendment to United Express Agreement, dated March
                 3, 1998, among United Airlines, Inc., Atlantic Coast
                 Airlines and the Company.
10.6(b) (notes 4 & 12)                                          Fourth
                 Amendment to the United Express Agreement, dated
                 December 11, 1998, among United Airlines, Inc., Atlantic
                 Coast Airlines and the Company.
10.7 (notes 11 & 12)                                            Agreement
                 to Lease British Aerospace Jetstream-41 Aircraft, dated
                 December 23, 1992, between British Aerospace, Inc. and
                 Atlantic Coast Airlines.
10.8 (notes 2 & 13)                                             Delta
                 Connection Agreement, dated as of September 9, 1999
                 among Delta Air Lines, Inc., Atlantic Coast Airlines
                 Holdings, Inc. and Atlantic Coast Jet, Inc.
10.12(a)  (notes 1 & 14)                                        Amended
                 and Restated Severance Agreement, dated as of December
                 28, 1999, between the Company and Kerry B. Skeen.
10.12(b) (notes 1 & 14)                                         Amended
                 and Restated Severance Agreement, dated as of December
                 28, 1999, between the Company and Thomas J. Moore.
10.12(c) (notes 1 & 14)  Form of Severance Agreement substantially similar
                 to agreements with Richard J. Surratt and with Michael
                 S. Davis, both restated as of December 28, 1999.
10.12(d) (notes 3 & 14)  Executive Officer Note.
10.13(a)  (note 9)                                              Form of
                 Indemnity Agreement. The Company has entered into
                 substantially identical agreements with the individual
                 members of its Board of Directors.
10.21  (note 10) 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 9)                                              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 4)  Amended and Restated Loan and Security Agreement dated
                 February 8, 1999 between Atlantic Coast Airlines and
                 Fleet Capital Corporation.
10.24  (note 4)  Stock Incentive Plan of 1995, as amended as of May 5,
                 1998.
10.25(a)  (note 4)                                              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.
<PAGE> 70
10.25(b)  (notes 4 & 14)                                        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) (notes 4 & 14)                                         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) (notes 4 & 14)                                         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.
10.25(e) (notes 4 & 14)                                         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  (notes 1 & 14)                                           Form of
                 Split Dollar Agreement and Agreement of Assignment of
                 Life Insurance Death Benefit as Collateral.  The Company
                 has entered into substantially identical agreements with
                 Kerry B. Skeen, Thomas J. Moore, Michael S. Davis and
                 Richard J. Surratt.
10.31  (note 14) Summary
                 of Senior Management Incentive Plan. The Company has
                 adopted a plan as described in this exhibit for 2000 and
                 for the three previous years.
10.32  (note 14) Summary
                 of Management Incentive Plan and Share the Success
                 Program.  The Company has adopted plans as described in
                 this exhibit for 2000 and for the three previous years.
10.40A (notes 4 & 12)                                           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.
10.40A(1) (notes 2 & 13)                                        Contract
                 Change Orders No. 13, 14, and 15, dated April 28, 1999,
                 July 29, 1999, and September 24, 1999, respectively,
                 amending the Purchase Agreement between Bombardier Inc.
                 and Atlantic Coast Airlines relating to the purchase of
                 Canadair Regional Jet Aircraft dated January 8, 1997.
10.41 (notes 2 & 13)                                            Purchase
                 Agreement between Bombardier Inc. and Atlantic Coast
                 Airlines relating to the Purchase of Canadair Regional
                 Jet Aircraft dated July 29, 1999, as amended through
                 September 30, 1999.
10.45 (note 3)   Aircraft Purchase Agreement between Dornier Luftfahrt
                 GmbH and Atlantic Coast Airlines dated effective March
                 31, 1999.
10.45(1) (note 2)First Amendment dated effective September 10, 1999, to
                 the Aircraft Purchase Agreement between Dornier
                 Luftfahrt GmbH and Atlantic Coast Airlines dated
                 effective March 31, 1999.
10.50(a) (note 7)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 7)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 7)Form of Pass Through Trust Certificate.
<PAGE> 71
10.50(d) (note 7)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 7)Guarantee, dated as of September 30, 1997, from the
                 Company.
10.80 (note 7)   Ground Lease Agreement Between The Metropolitan
                 Washington Airports Authority And Atlantic Coast
                 Airlines dated as of June 23, 1997.
10.85 (note 4)   Lease Agreement Between The Metropolitan Washington
                 Airports Authority and Atlantic Coast Airlines, with
                 amendments as of  January 1, 1999.
10.90 (notes 7 & 12)                                            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).
21.1             Subsidiaries of the Company.
23.1             Consent of KPMG LLP.
27.1             Financial Data Schedule.


Notes

(1)    To be filed by amendment as an Exhibit to this Annual Report on
       Form 10-K for  the fiscal year ended December 31, 1999.
(2)    Filed  as  Exhibit to the Quarterly Report on Form  10-Q  for  the
       three month period ended September 30, 1999.
(3)    Filed  as  Exhibit to the Quarterly Report on Form  10-Q  for  the
       three month period ended June 30, 1999.
(4)    Filed  as  an  Exhibit to the Annual Report on Form 10-K  for  the
       fiscal year ended December 31, 1998.
(5)    Filed   as   Exhibit  99.1  to  Form  8-A  (File  No.  000-21976),
       incorporated herein by reference.
(6)    Filed  as  Exhibit to the Quarterly Report on Form  10-Q  for  the
       three month period ended June 30, 1998.
(7)    Filed  as an Amendment to the Annual Report on Form 10-K  for  the
       fiscal  year  ended  December  31, 1997,  incorporated  herein  by
       reference.
(8)    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.
(9)    Filed  as an Amendment to the Annual Report on Form 10-K  for  the
       fiscal  year  ended  December  31, 1996,  incorporated  herein  by
       reference.
(10)   Filed  as  an  Exhibit to the Annual Report on Form 10-K  for  the
       fiscal  year  ended  December  31, 1994,  incorporated  herein  by
       reference.
(11)   Filed  as  an  Exhibit  to  Form S-1, Registration  No.  33-62206,
       effective July 20, 1993, incorporated herein by reference.
(12)   Portions of this document have been omitted pursuant to a  request
       for confidential treatment that has been granted.
(13)   Portions of this document have been omitted pursuant to a  request
       for confidential treatment that is pending.
(14)   This  documents is a management contract or compensatory  plan  or
       arrangement..


(b)  Reports on Form 8-K.

       None.

<PAGE> 72
                               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 27, 2000.

                                   ATLANTIC COAST AIRLINES HOLDINGS, INC.

                                                     By        /S/
                                                      :
                                     /                     Kerry B. Skeen
                                                    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 27, 2000.

Name                            Title


           /S/                  Chairman of the Board of
                                Directors
Kerry B. Skeen                  and Chief Executive Officer
                                (principal executive officer)

           /S/                  Director, President and
Thomas J. Moore                 Chief Operating Officer


           /S/                  Senior Vice President, Treasurer
                                and
Richard J. Surratt              Chief Financial Officer
                                (principal financial officer)

           /S/                  Vice President, Financial
                                Planning and Controller
David W. Asai                   (principal accounting officer)


           /S/
C. Edward Acker                 Robert E. Buchanan
Director                        Director

           /S/                                /S/
Susan MacGregor Coughlin        James J. Kerley
Director                        Director

           /S/                                /S/
Daniel L. McGinnis              James C. Miller III
Director                        Director

           /S/                                /S/
Judy Shelton                    John M. Sullivan
Director                        Director