Kansas City, MO—Vanguard Airlines, Inc. (“Vanguard” or the “Company”) (NasdaqSC: VNGD) announced second quarter 2000 results today.

The Company’s net loss in the second quarter of 2000 was approximately $2.7 million or basic and diluted loss per share of $0.16 in the second quarter of 2000, compared to a net profit of approximately $2.0 million or basic earnings per share of $0.11 and diluted earnings per share of $0.10 in 1999, as restated for a one-for-five reverse stock split effective May 20, 1999.

Revenue Passenger Miles (RPMs) for the second quarter of 2000 increased approximately 22% to 271.6 million compared to 222.7 million RPMs in the second quarter of 1999. Available Seat Miles (ASMs) increased 40% in the second quarter to 441.4 million compared to 315.5 million ASMs in the second quarter of 1999. Total operating revenues in the second quarter of 2000 increased approximately 12% to $37.6 million from $33.6 million in second quarter 1999. Total operating expenses for the quarter increased approximately 27% to $40.1 million from $31.6 million in the second quarter of 1999.

Jeff Potter, CEO and President of Vanguard Airlines, said, “Although the second quarter did not result in a profit, significant improvements were realized during the quarter on various fronts. On a unit cost basis, the second quarter of 2000 saw a 9.2 percent decrease in operating cost per available seat mile (CASM) from 10.0 cents in the second quarter of 1999 to 9.1 cents in 2000. Excluding fuel, the second quarter CASM decreased 18.6 percent from 8.5 cents in the second quarter of 1999 to 6.9 cents in 2000.

“We have made several changes to the upper management within the Company during the quarter and believe that we have the team in place to lead Vanguard back toward profitability. We instituted systemwide pricing changes during the first part of the summer, and our focus for the balance of the summer and fall season is the review of our capacity allocation and pricing philosophy. Service to our newest market, New Orleans, will begin August 1, providing the only nonstop service between the two cities.”

Kansas City-based Vanguard Airlines, which began service in December 1994, is a low-fare, 100% ticketless passenger airline providing convenient and frequent, scheduled jet services to the following ten cities: Atlanta, Buffalo/Niagara Falls, Chicago-Midway, Dallas/Ft. Worth, Denver, Kansas City, Minneapolis/St. Paul, Myrtle Beach, New Orleans (beginning August 1, 2000) and Pittsburgh. The Company employs approximately 950 full-time equivalent Employees and currently operates a fleet of 15 Boeing 737s. For more information on Vanguard or to book a reservation online, please visit the Company’s Web site at www.FlyVanguard.com.

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