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AirTran Airways Agrees to Acquire Assets

AirTran Airways, a
subsidiary of AirTran Holdings, Inc. , announced today that the airline
has agreed, subject to certain conditions, to assume the Chicago Midway
Airport gate leases and acquire certain other related assets including
takeoff and landing slots at New York’s LaGuardia and Washington’s Ronald
Reagan National airports of ATA Airlines, a unit of ATA Holdings Corp. ,
for approximately $87.5 million. ATA Holdings Corp., and certain of its
subsidiaries, have filed for relief under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of
Indiana. Under the agreement with ATA Airlines, AirTran Airways would assume ATA’s
leases on up to 14 gates at Chicago’s Midway Airport, 19 time-controlled
take-off and landing slots at New York’s LaGuardia Airport and 8 such
slots at Washington’s Reagan National Airport. The deal must receive
various approvals, including approval of the Bankruptcy Court in ATA’s
Chapter 11 proceeding. In the interim, ATA Airlines is to continue
operating flights and business as usual at Chicago’s Midway Airport.

AirTran Airways plans to introduce its fuel efficient, all new Boeing
fleet on the routes from Chicago Midway, and intends to enter into a
marketing agreement with ATA Airlines which is currently contemplated to
include a code-share, frequent traveler program and other programs to
benefit both carriers’ customers. In conjunction with the code-share
arrangement, the carriers, also intend to enter into an agreement to
outsource certain flying during the transition of service from ATA
Airlines to AirTran Airways at Chicago’s Midway Airport.

“This proposal offers a great opportunity for both AirTran Airways and the
City of Chicago as well as significantly aiding ATA in its
reorganization,” said Joe Leonard, chairman and chief executive officer of
AirTran Airways.

“Adding a hub in Chicago is an important strategic expansion for AirTran
Airways’ growing network,” stated Robert L. Fornaro, president and chief
operating officer. “A Midwest hub complements AirTran Airways’ strong East
Coast network and will capitalize on a number of synergies in the cities
we serve across the country. This addition will give AirTran Airways a
true national presence. We look forward to increasing our service for the
Chicago business and leisure travelers.”