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Delta Reaches Agreement With Republic

Delta Air Lines has reached
agreement with Republic Airlines, a subsidiary of Republic Airways
Holdings, Inc., for the operation of 16 new 70-passenger Embraer 170
aircraft in the Delta Connection route system. Eight aircraft will be
delivered to Republic in 2005, with eight additional aircraft joining the
fleet in 2006. The Embraer 170s scheduled for 2005 will replace eight
50-seat ERJ 145 aircraft previously scheduled for delivery to Republic
Airways’ Chautauqua Airlines subsidiary. The agreement is subject to execution of the final definitive codeshare
agreement with Republic Airlines and will be substantially similar to the
existing codeshare agreement with Chautauqua. In connection with the new
agreement, Republic Airways Holdings will issue warrants to Delta allowing
for the purchase of up to 960,000 of its common shares at an exercise
price equal to the closing price of RJET common stock, as reported by
NASDAQ, on Dec. 22, 2004. The warrant is subject to a number of conditions
including the number of aircraft delivered and the continued performance
of Delta over the duration of the service agreement.

“Chautauqua continues to be a reliable and cost-efficient provider of
regional jet service to Delta,” said Fred Buttrell, president and CEO,
Delta Connection, Inc. “We are pleased to replace existing orders for
50-seat aircraft with roomy and customer-friendly Embraer 170s, which
better fit our growth plans for 2005 and 2006 and allow us to promptly
respond to changing market conditions. The Embraer 170’s extended range
and enhanced customer amenities will play an important role in fulfilling
network requirements not currently met by Delta Connection carriers’
existing fleet of regional jet aircraft.”

Republic Airlines will acquire the 16 new aircraft directly from Embraer,
requiring no capital investment from Delta. Additionally, Delta and
Republic Airways Holdings have reached agreement on an amended contract
that will reduce Delta’s costs associated with existing flying by
Chautauqua Airlines. In connection with these reduced costs, Delta and
Republic have agreed to a cancellation of 2,025,000 existing warrants, or
45 percent of the warrants previously granted to Delta by RJET.

Delta plans to deploy the new jets in its domestic route system on routes
that cannot be served economically with mainline aircraft or on routes
currently served by 50-seat jets that require additional capacity.

“We are very pleased we were able to take a proactive stance towards
working with Delta in their successful restructuring efforts. In doing so
we were able to provide Delta long-term savings in our existing business
and also provide a cost-effective solution for new 70-seat Embraer 170
regional jets,” said Bryan Bedford, chairman, president and chief
executive officer of Republic Airways Holdings. “Our company has an
excellent tradition of delivering safe, reliable and cost effective
service to our partners - including our proven operation of the Embraer
170. We are excited to add the Embraer 170 to the Delta Connection


Embraer 170s in the Delta Connection configuration will feature 70 seats,
including a six-seat first-class cabin that offers customers two-and-one
seating with 36-inch seat pitch. The coach cabin will include 64 seats in
a two-by-two configuration with 32-inch seat pitch. The aircraft’s unique
cross- section provides superior passenger comfort in the form of a larger
cabin with maximized cabin width at shoulder level, a wider aisle, larger
seats, higher baggage capacity, improved personal space and increased leg
room. The Embraer 170 is powered by twin, under-wing mounted General
Electric CF34-8E engines.

Delta Connection carriers include Delta’s wholly owned subsidiaries
Atlantic Southeast Airlines and Comair, additional regional carriers
Chautauqua Airlines and SkyWest Airlines, and codeshare partner American
Eagle (in California). Delta Connection carriers operate more than 400
regional jets throughout North America.