Atlantic Coast Airlines Holdings, Inc. , parent of Atlantic Coast Airlines
(ACA), today announced the pricing of its offering of $125 million of 6%
Convertible Notes due 2034 to qualified institutional buyers pursuant to
Rule 144A under the Securities Act of 1933. The sale of the notes is
expected to close on February 25, 2004. These notes are convertible into
Atlantic Coast Airlines Holdings, Inc., common stock at a conversion rate
of 90.2690 shares per $1,000 principal amount of notes (equal to an
initial conversion price of approximately $11.08 per share), subject to
adjustment in certain circumstances. Holders of the notes may convert
their notes only if: (i) the price of the Atlantic Coast Airlines
Holdings, Inc.‘s common stock reaches a specified threshold; (ii) the
trading price for the notes falls below certain thresholds; (iii) the
notes have been called for redemption; or (iv) specified corporate
transactions occur. Atlantic Coast Airlines Holdings, Inc., may redeem all or some of the
notes for cash at any time on or after February 20, 2007, at specified
redemption prices plus accrued and unpaid interest, if any, to the
redemption date. Holders may require Atlantic Coast Airlines Holdings,
Inc., to repurchase the notes on February 15 of 2009, 2014, 2019, 2024 and
2029 at a repurchase price equal to the principal amount plus accrued and
unpaid interest, if any, to the repurchase date. The Company has granted
the initial purchaser of the notes a 30-day option to purchase up to an
additional $25 million principal amount of the notes. The company intends
to use the net proceeds of this offering for working capital and general
corporate purposes, including, without limitation, for purchasing
aircraft, financing the acquisition of aircraft, paying security deposits
and pre-payment obligations on aircraft.

This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities and shall not constitute an
offer, solicitation or sale in any jurisdiction in which such offer,
solicitation or sale is unlawful. The notes and the common stock issuable
upon conversion of the notes have not been registered under the Securities
Act of 1933 or applicable state securities laws and, unless so registered,
may not be offered or sold in the United States except pursuant to an
exemption from the registration requirements of the Securities Act and
applicable state securities laws.

ACA currently operates as Delta Connection and United Express in the
Eastern and Midwestern United States as well as Canada. On July 28, 2003,
ACA announced plans to establish a new, independent low-fare airline to be
based at Washington Dulles International Airport—to be called
Independence Air. The company has a fleet of 144 aircraft—including a
total of 120 regional jets—and offers 800 daily departures, serving 80
destinations. ACA employs approximately 4,100 aviation professionals.
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