ASSET ACQUISITION AGREEMENT among SOUTHWEST AIRLINES CO.,

Asset Purchase Agreement

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Title: ASSET ACQUISITION AGREEMENT among SOUTHWEST AIRLINES CO.,
Governing Law: New York Date: 3/31/2005
Industry: Airline Law Firm: Bell, Boyd & Lloyd LLC

Exhibit 10.18

ASSET ACQUISITION AGREEMENT

among

SOUTHWEST AIRLINES CO.,

as Purchaser and Assignee,

and

ATA HOLDINGS CORP.

and

ATA AIRLINES, INC.,

as Sellers

December 22, 2004

<PAGE>

TABLE OF CONTENTS

RECITALS 1

ARTICLE I DEFINITIONS..........................................................1

Section 1.1 Definitions... .............................................1

Section 1.2 Disclosure Schedules .......................................1

ARTICLE II ACQUISITION OF ASSETS...............................................2

Section 2.1 Acquisition of Transferred Assets...........................2

Section 2.2 [This Section Reserved.]....................................2

Section 2.3 [This Section Reserved.]....................................2

Section 2.4 Excluded Assets.............................................2

ARTICLE III ASSUMPTION OF LIABILITIES..........................................2

Section 3.1 Assumed Liabilities .......................................2

Section 3.2 Retained Liabilities........................................3

ARTICLE IV ACQUISITION PRICE...................................................4

Section 4.1 Acquisition Price...........................................4

Section 4.2 Allocation of Acquisition Price.............................4

Section 4.3 Adjustments to Acquisition Price............................4

Section 4.4 Prorations..................................................5

Section 4.5 Transfer Taxes..............................................5

Section 4.6 Offsets to Acquisition Price................................6

ARTICLE V CLOSING. ............................................................6

Section 5.1 Closing.....................................................6

Section 5.2 Deliveries at Closing.......................................6

Section 5.3 Delivery of Transferred Assets..............................8

Section 5.4 Conditions Precedent to Obligations of Southwest............8

Section 5.5 Conditions Precedent to Obligations of Sellers.............10

ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLERS. ........................11

Section 6.1 Organization and Good Standing.............................11

Section 6.2 Authorization and Effect of Agreement......................11

Section 6.3 No Conflicts...............................................12

Section 6.4 [This Section Reserved.]...................................12

Section 6.5 Data.......................................................12

Section 6.6 Consents and Approvals.....................................12

Section 6.7 Permits; Compliance with Law...............................13

Section 6.8 [This Section Reserved.]...................................13

Section 6.9 Title to and Condition of Assets...........................13

Section 6.10 U.S. Citizen; Air Carrier..................................13

Section 6.11 Assumed Contracts..........................................13

Section 6.12 [This Section Reserved.]...................................14

Section 6.13 No Casualty...............................................14

Section 6.14 [This Section Reserved.]...................................14

Section 6.15 Midway Gates; Midway Gate Property; Midway Hangar;

Midway Hangar Property ..................................................14

Section 6.16 Environmental Matters......................................15

Section 6.17 Taxes......................................................17

Section 6.18 [This Section Reserved.]...................................17

Section 6.19 [This Section Reserved.]...................................17

Section 6.20 Real Property..............................................17

Section 6.21 Disclosure.................................................19

ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER.......................19

Section 7.1 Corporate Organization.....................................19

Section 7.2 Authorization and Effect of Agreement......................19

Section 7.3 No Conflicts...............................................19

Section 7.4 Litigation.................................................20

Section 7.5 Southwest `34 Act Reports..................................20

ARTICLE VIII PRE-CLOSING COVENANTS............................................20

Section 8.1 Access.....................................................20

Section 8.2 Conduct of Business........................................21

Section 8.3 Notification...............................................22

Section 8.4 No Inconsistent Action.....................................22

Section 8.5 Satisfaction of Conditions.................................22

Section 8.6 [This Section Reserved.]...................................22

Section 8.7 [This Section Reserved.]...................................22

Section 8.8 Filings....................................................22

Section 8.9 All Reasonable Efforts.....................................24

Section 8.10 Further Assurances.........................................24

Section 8.11 Publicity..................................................24

Section 8.12 [This Section Reserved.]...................................24

Section 8.13 Bankruptcy Court Approval..................................24

Section 8.14 Specific Enforcement of Covenants..........................25

Section 8.15 Due Diligence..............................................25

Section 8.16 [This Section Reserved.]...................................25

Section 8.17 [This Section Reserved.]...................................25

Section 8.18 [This Section Reserved.]...................................25

Section 8.19 Codeshare Alliance Agreement...............................26

Section 8.20 [This Section Reserved.]...................................26

Section 8.21 Midway Ticket Sales........................................26

Section 8.22 [This Section Reserved.]...................................27

Section 8.23 Assurances Regarding Renegotiation of Assumed Contracts....27

Section 8.24 [This Section Reserved.]...................................27

ARTICLE IX POST-CLOSING COVENANTS.............................................27

Section 9.1 Maintenance of Books and Records...........................27

Section 9.2 Confidentiality............................................27

Section 9.3 Exit Credit Facility.......................................28

Section 9.4 Transition Operations......................................28

Section 9.5 Plan of Reorganization.....................................28

Section 9.6 Equity Investment..........................................29

ARTICLE X EMPLOYEE MATTERS....................................................29

ARTICLE XI RISK OF LOSS.......................................................29

Section 11.1 Risk of Loss on Sellers....................................29

ARTICLE XII FURTHER AGREEMENTS AND TERMINATION................................30

Section 12.1 [This Section Reserved.]...................................30

Section 12.2 [This Section Reserved.]...................................30

Section 12.3 Termination................................................30

Section 12.4 Procedure and Effect of Termination........................32

ARTICLE XIII MISCELLANEOUS PROVISIONS.........................................32

Section 13.1 Notices....................................................32

Section 13.2 Actions by Sellers.........................................33

Section 13.3 Expenses...................................................34

Section 13.4 Successors and Assigns.....................................34

Section 13.5 Waiver.....................................................34

Section 13.6 Entire Agreement; Disclosure Schedules.....................34

Section 13.7 Amendments, Supplements, Etc...............................34

Section 13.8 Rights of the Parties......................................34

Section 13.9 Applicable Law.............................................34

Section 13.10 Execution in Counterparts..................................35

Section 13.11 Titles and Headings........................................35

Section 13.12 Invalid Provisions.........................................35

Section 13.13 Transfers..................................................35

Section 13.14 Brokers....................................................35

Section 13.15 Exculpation................................................35

Section 13.16 Principles of Interpretation...............................35

Section 13.17 Survival...................................................36

Section 13.18 Sellers Agreement to Indemnify.............................36

Section 13.19 Southwest Agreement to Indemnify...........................36

Section 13.20 Setoff.....................................................37

List of Schedules:

Schedule 4.2 Allocation of Acquisition Price

Schedule 6.7 Permits

Schedule 6.11 Assumed Contract Consents

Schedule 6.13 Casualty

Schedule 6.15(a) Midway Gates and Midway Hangar Property

Schedule 6.15(b) Leases

Schedule 6.15(c) Midway Property Leases

Schedule 6.15(f) Midway Gates, Midway Gate Property, Midway Hangar and Midway

Hangar Property Not in Good Operating Condition

Schedule 6.15(i) Deferred Maintenance for Midway Gates, Midway Gate Property,

Midway Hangar and Midway Hangar Property/Construction Defects

Schedule 6.16(a) Environmental Compliance

Schedule 6.16(b) Environmental Claims

Schedule 6.16(c) Environmental Allegations

Schedule 6.16(d) Environmental Sites

Schedule 6.17 Taxes

Schedule 6.20(a) Midway Property Leases

Schedule 6.20(e) Impaired Midway Property Leases

<PAGE>

List of Exhibits:

Exhibit A - Definitions

Exhibit B - Disclosure and Other Schedules

Exhibit C - Assignment of Facilities Lease

Exhibit D - Assignment of Hangar Lease

Exhibit E - Approval Order

Exhibit F - Bid Proposal

<PAGE>

ASSET ACQUISITION AGREEMENT

This ASSET ACQUISITION AGREEMENT (this "Agreement") is made and entered

into as of December 22, 2004 (the "Execution Date"), by and among Southwest

Airlines Co., a Texas corporation ("Southwest"), and ATA Holdings Corp., an

Indiana corporation ("Holdings") and its wholly-owned subsidiary ATA Airlines,

Inc., an Indiana corporation ("ATA") (Holdings and ATA as debtors and debtors in

possession are collectively referred to as "Sellers" and each individually is

referred to as "Seller").

RECITALS

WHEREAS, Sellers desire to sell, assign and transfer to Southwest, and

Southwest desires to purchase and acquire from Sellers, certain assets, rights,

interests and properties of Sellers as herein described, all on the terms and

subject to the conditions set forth in this Agreement;

WHEREAS, Sellers have filed voluntary petitions for reorganization pursuant

to chapter 11 of title 11 of the United States Code, 11 U.S.C. Sections 101 et

seq. (the "Bankruptcy Code") in the United States Bankruptcy Court for the

Southern District of Indiana (the "Bankruptcy Court"), and in connection with

such filings intend to seek the entry of an order of the Bankruptcy Court

approving this Agreement and authorizing Sellers to consummate the transactions

contemplated hereby;

NOW, THEREFORE, in consideration of the mutual covenants, representations,

warranties and agreements herein contained, Holdings and ATA, jointly and

severally, hereby agree with Southwest as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. As used in this Agreement, unless the context

otherwise requires, capitalized terms used in this Agreement shall have the

meanings set forth in Exhibit A hereto.

Section 1.2 Disclosure Schedules. References to "Schedules" shall mean the

disclosure schedules delivered by Southwest and Sellers as of the Execution Date

that are specifically made part of this Agreement. Any Schedule not delivered as

of the Execution Date shall be completed by the party designated on Exhibit B,

delivered to the non-preparing party in accordance with Section 13.1 on or by

the date set forth on Exhibit B and, upon acceptance by the non-preparing party

(which acceptance shall not be unreasonably withheld or delayed), shall be made

a part of this Agreement as if such Schedule were originally attached hereto as

of the Execution Date (unless the context requires otherwise).

<PAGE>

ARTICLE II

ACQUISITION OF ASSETS

Section 2.1 Acquisition of Transferred Assets. On the terms and subject to

the conditions set forth herein, at one or more Closings as described in Article

V, Sellers shall:

(i) assign and transfer to Southwest, and Southwest shall assume,

acquire and accept the assignment and transfer of, (a) Sellers' right,

title and interest in and to that certain "Chicago Midway Airport Amended

and Restated Airport Use Agreement and Facilities Lease" dated with an

effective date of January 1, 1997, as amended and supplemented as of the

Execution Date (the "Facilities Lease"), solely with respect to all of

Sellers' right, title and interest thereunder in and to the six (6) gates

identified on Schedule 6.15(a), including such gates' associated ramp space

and service facilities at Midway Airport (the "Midway Gates") and (b) all

of Sellers' right, title and interest in and to that certain "Lease of

Hangar Facilities at Midway Airport" between the City of Chicago and

American Trans Air, Inc., dated September 1, 1995, as amended and

supplemented as of the Execution Date (the "Hangar Lease"), including with

respect to all of Sellers' right, title and interest thereunder in and to

facilities, fixtures, improvements and appurtenances associated therewith

(the "Midway Hangar"), and

(ii) sell, transfer, convey, assign and deliver to Southwest, and

Southwest shall purchase, acquire and accept the assignment and transfer

of, the following assets, properties and rights: (a) the Midway Gate

Property, and (b) the Midway Hangar Property.

All of the rights, interests, assets and property, real and personal, tangible

and intangible, referenced in clauses (i) and (ii) above of this Section 2.1,

together with all substitutions therefor and all accessions thereto and

replacements and renewals thereof (collectively, the "Transferred Assets"),

shall be free and clear of all Liens except Permitted Liens.

Section 2.2 [This Section Reserved.]

Section 2.3 [This Section Reserved.]

Section 2.4 Excluded Assets. All rights, properties and assets of Sellers

and their Affiliates other than those included in Transferred Assets shall be

deemed excluded assets hereunder (collectively, the "Excluded Assets") and shall

not be included in the Transferred Assets.

<PAGE>

ARTICLE III

ASSUMPTION OF LIABILITIES

Section 3.1 Assumed Liabilities. Southwest shall assume and thereafter in

due course pay and fully satisfy only the following liabilities and obligations

of Sellers (collectively the "Assumed Liabilities") and no other such

liabilities or obligations:

(i) the liabilities and obligations of the lessee under the Hangar

Lease and the Facilities Lease transferred to and assumed by Southwest

hereunder; and

(ii) [This Section Reserved.]

(iii) the liabilities and obligations of Sellers under any other

Assumed Contracts;

but in each such case only those accruing or arising solely from or with respect

to the period after the Closing.

Except as set forth above, Southwest shall not assume or be liable for any

other obligations or liabilities of Sellers or either Seller whatsoever

(including, without limitation, any cure or other amounts payable to other

parties under the Assumed Contracts accruing or arising with respect to any

period prior to Closing); provided, however, that Southwest shall have the

right, upon prior written notice to the Sellers, to pay any such cure amounts

and offset such amounts against the Acquisition Price or any other amount due to

one or more of the Sellers by Southwest.

Section 3.2 Retained Liabilities. Notwithstanding anything contained in

this Agreement to the contrary, Southwest does not assume or agree to pay,

satisfy, discharge or perform, and shall not be deemed by virtue of the

execution and delivery of this Agreement or any document delivered at the

Closing pursuant to this Agreement, or as a result of the consummation of the

transactions contemplated by this Agreement, to have assumed, or to have agreed

to pay, satisfy, discharge or perform, any liability, obligation or indebtedness

whatsoever of either Seller, or any other Person whether primary or secondary,

direct or indirect, contingent or guaranteed, other than solely the Assumed

Liabilities. Sellers shall retain and, except to the extent excused or

prohibited by the applicable provisions of the Bankruptcy Code, pay, satisfy,

discharge and perform in accordance with the terms thereof, all liabilities and

obligations other than the Assumed Liabilities, including, without limitation,

those set forth below (all such liabilities and obligations retained by Seller

being referred to herein as the "Retained Liabilities"):

(a) all obligations or liabilities of Sellers or any predecessor(s) or

Affiliate(s) of Sellers that relate to any assets other than Transferred

Assets or that relate to the Transferred Assets which are not Assumed

Liabilities;

(b) all obligations or liabilities of Sellers or any predecessor(s) or

Affiliate(s) of Sellers relating to Taxes with respect to the Transferred

Assets or otherwise, for all periods, or portions thereof, on or prior to

the Closing Date;

investment banking, brokerage or similar fees or expenses incurred by

either Seller in connection with, resulting from or attributable to the

transactions contemplated by this Agreement; and

(d) all liabilities and obligations of Sellers or any predecessor(s)

or Affiliate(s) of Sellers' resulting from, caused by or arising out of,

directly or indirectly, the conduct of their respective businesses or

ownership or lease of any of their properties or assets or any properties

<PAGE>

or assets previously used by either Seller (including without limitation

the Transferred Assets) at any time prior to or on the Closing, including

without limitation such of the foregoing (i) as constitute, may constitute

or are alleged to constitute a tort, breach of contract or violation of

requirement of any Law, or (ii) that relate to, result in or arise out of

the existence or imposition of any liability or obligation to remediate or

contribute or otherwise pay any amount under or in respect of any

environmental, superfund or other environmental cleanup or remedial Laws,

occupational safety and health Laws or other Laws.

Neither of Sellers nor Southwest has granted to the other any covenant of

non-competition and nothing in this Agreement shall be deemed to preclude either

party from competing with any business or schedule flight services of the other.

ARTICLE IV

ACQUISITION PRICE

Section 4.1 Acquisition Price. In consideration of the assignment, transfer

and conveyance to Southwest of all right, title and interest in and to the

Transferred Assets and the other rights assigned, granted or transferred to

Southwest pursuant hereto, and subject to the conditions and in accordance with

the terms hereof, Southwest shall (a) assume at one or more Closings the Assumed

Liabilities, and (b) pay to or on behalf of Sellers as and when hereinafter

provided an aggregate of $40,000,000, subject to adjustments as provided in

Section 4.3, prorations as provided in Section 4.4 and any offsets to the

Acquisition Price pursuant to Section 4.6 (collectively, the Assumed Liabilities

assumed pursuant to clause (a) above and the amount referenced in clause (b)

above, as adjusted, prorated and/or setoff, the "Acquisition Price"). The

portion of the Acquisition Price referenced in clause (b) above shall be paid as

follows: $40,000,000 in the aggregate to Sellers in cash at one or more Closings

(plus or minus the adjustments described above).

Section 4.2 Allocation of Acquisition Price. Southwest shall, within 120

days after the Closing Date, prepare and deliver to Sellers for their consent

(which consent shall not be unreasonably withheld, conditioned or delayed) a

schedule allocating the Acquisition Price among the Transferred Assets in

accordance with Treasury Regulation 1.1060-1T (or any comparable provisions of

state or local tax law) or any successor provision. If Sellers do not give their

consent, Southwest and Sellers will negotiate in good faith to resolve such

objections. Southwest and Sellers shall report and file all Tax Returns

(including amended Tax Returns and claims for refund) consistent with the

allocation, if any, consented to, or required to be consented to, by Sellers,

and shall take no position contrary thereto or inconsistent therewith

(including, without limitation, in any audits or examinations by any taxing

authority or any other proceedings). Southwest and Sellers and each Affiliate of

Sellers shall cooperate in the filing of any forms (including Form 8594) with

respect to such allocation, including any amendments to such forms required with

respect to any adjustment to the Acquisition Price, pursuant to this Agreement.

If and to the extent the parties are unable to agree on such allocation, each

shall be free to make its own allocation for tax purposes. Notwithstanding any

other provisions of this Agreement, the foregoing agreement shall survive the

Closing Date without limitation.

Section 4.3 Adjustments to Acquisition Price.

<PAGE>

(a) In the event that, as a result of the operation of Section 11.1,

any Transferred Asset that would be otherwise purchased or acquired at the

Closing is not purchased or acquired at the Closing (or in the event that

any tangible Transferred Asset has been damaged as described in Section

11.1, but such damage has not been fully repaired), then the Acquisition

Price shall be reduced to the extent and as provided in Section 11.1,

except as otherwise set forth in paragraph (b) below; and

(b) With respect to any Midway Gate, Midway Gate Property, Midway

Hangar, Midway Hangar Property, or any other Transferred Asset that is not

transferred to Southwest at the Closing for any reason, the portion of the

Acquisition Price allocated to each such item (and, accordingly, the

Acquisition Price as a whole) shall be reduced by an amount mutually agreed

to by the parties hereto. Southwest and Sellers hereby agree that Southwest

shall hold back $6,000,000 until the Closing for the Midway Hangar and

Midway Hangar Property. Southwest and Sellers agree that such $6,000,000 is

the negotiated amount to be held back pursuant to this Section 4.3(b) and

paid in the event that a Closing occurs with respect to the Midway Hangar

and Midway Hangar Property, and that, in the event the Closing with respect

to such Midway Hangar and Midway Hangar Property occurs, the portion of the

Acquisition Price allocable to such assets pursuant to Section 4.2, may be

more or less than $6,000,000.

(d) [This Section Reserved.]

Section 4.4 Prorations. Sellers shall bear all personal property and ad

valorem tax liability with respect to the Transferred Assets if the lien or

assessment date arises or relates to any period prior to the Closing Date

irrespective of the reporting and payment dates of such Taxes. All other

property Taxes, ad valorem Taxes and similar recurring Taxes and fees and

charges on or with respect to the Transferred Assets, and all lease payments or

similar recurring payments under lease agreements that are Assumed Contracts,

shall be pro rated between Southwest and the applicable Seller as of 12:01 a.m.

Indianapolis time on the Closing Date. All payments to be made by Southwest or

either Seller in accordance with this Section 4.4 shall be made, to the extent

then determinable, by way of adjustments to the cash portion of the Acquisition

Price to be paid to Sellers by Southwest at the Closing. Southwest shall have

the right of reasonable review and approval of each Seller's property tax

returns and assessments and the right to contest any assessment for which

Southwest bears any economic responsibility. Sellers shall reasonably cooperate

with Southwest to advance any contest.

Section 4.5 Transfer Taxes. Any sales, use, transfer, recording or similar

taxes due as a result of the transactions provided for herein shall be paid by

Sellers. Notwithstanding the foregoing, the Approval Order shall contain a

provision that the Sellers' sale, transfer, assignment and conveyance of the

Transferred Assets to Southwest hereunder shall be entitled to the protections

afforded under Section 1146(c) of the Bankruptcy Code (but the failure of the

Approval Order to contain such provisions shall not relieve Seller of their

obligation to pay the items specified in the first sentence of this Section

4.5). Southwest will cooperate reasonably with reasonable written requests of

Sellers to minimize any such Taxes, including with respect to delivery location.

<PAGE>

Section 4.6 Offsets to Acquisition Price. The Acquisition Price payable by

Southwest to Sellers at the Closing shall be offset by crediting Southwest with

the following amounts (collectively, the "Acquisition Price Offset Amount"):

(a) Sellers' payment obligation to Southwest under Section 8.8; and

(b) such other amounts, if any, owed by Sellers to Southwest or

required hereby to be paid by Sellers to third parties under this Agreement

with respect to the Transferred Assets or otherwise that are unpaid and

outstanding as of the Closing Date.

ARTICLE V

CLOSING

Section 5.1 Closing. The consummation of the purchase, assignment and

transfer of all right, title and interest in and to the Transferred Assets

contemplated hereby (the "Closing") shall take place at the offices of Baker &

Daniels, 300 North Meridian Street, Suite 2700, Indianapolis, Indiana subject to

the satisfaction or waiver of the conditions set forth in Section 5.4 and

Section 5.5, as soon as practicable after the Execution Date and in any event

not later than the Scheduled Closing Date, or at such other time and place and

on such other date as Southwest and Sellers shall agree (the "Closing Date"). In

the event the conditions set forth in Section 5.4 and Section 5.5 have been met

with respect to some but not all of the Transferred Assets as of a given date,

Southwest and Sellers may consummate the purchase, assignment and transfer of

the Transferred Assets at multiple Closings on multiple Closing Dates; provided,

that all of the terms and conditions set forth in this Agreement shall apply

equally at each such Closing except that the terms "Transferred Assets" and

"Assumed Liabilities" shall mean only the Transferred Assets and Assumed

Liabilities, respectively, subject to such Closing and the term "Acquisition

Price" shall mean only such portions of the $40,000,000 and the Assumed

Liabilities as are applicable and allocable to the Transferred Assets subject to

such Closing. Anything to the contrary in this Agreement notwithstanding, in no

event shall the cash portion of the Acquisition Price for all assets being

transferred by Sellers to Southwest be in excess of $40,000,000. It shall not be

deemed a default by any party to this Agreement if this Agreement terminates in

accordance with Section 12.3(b)(iii) solely as a result of the failure of the

City of Chicago to grant any required consent with respect to any Transferred

Assets; provided, however, that no party hereby waives any claim or right

against a breaching party to the extent that such termination results from the

breach by a party hereto of any of its representations, warranties, covenants or

agreements set forth in this Agreement.

Section 5.2 Deliveries at Closing: At the Closing:

(a) Sellers shall deliver to Southwest the items described in clauses

(i) through (iv) below, to the extent applicable with respect to the

Closing:

(i) an assignment of the Facilities Lease containing the terms

and conditions agreed between Southwest and the City of Chicago as set

forth in Exhibit C, which assignment shall be in form and substance

satisfactory to Southwest and pursuant to which Sellers will assign

all right, title and interest of Sellers in and to the Facilities

Lease with respect to the Midway Gates

<PAGE>

(the "Facilities Lease Assignment"), an assignment of the Hangar Lease

containing the terms and conditions agreed between Southwest and the

City of Chicago as set forth in Exhibit D, which assignment shall be

in form and substance satisfactory to Southwest and pursuant to which

Sellers will assign all right, title and interest of Sellers in and to

the Hangar Lease (the "Hangar Lease Assignment") and a general bill of

sale and assignment, in form and substance reasonably satisfactory to

Southwest (the "Bill of Sale"), in each case with respect to the

Transferred Assets to be conveyed by Sellers at the Closing together

with any other documents reasonably requested by Southwest so as to

assign, transfer and convey to Southwest good and valid title, free

and clear of all Liens (other than Permitted Liens), to all right,

title and interest in and to the Transferred Assets, each executed by

ATA;

(ii) the officers' certificates referenced in Section 5.4(c);

(iii) the agreements referred to in Section 9.4; and

(iv) all other agreements, documents, certificates, instruments

or writings contemplated or described herein or as reasonably

requested by Southwest in connection herewith.

(b) Sellers shall use their best efforts to effect, by appropriate

transfer documents satisfactory in form and substance to Southwest, the

transfer at Closing to Southwest of Sellers' interests in the Assumed

Contracts, as Southwest may request. In the event, despite Sellers' best

reasonable efforts, Sellers are unable to assign or transfer any such

leases or agreements, such failure shall not be a default by Sellers under

this Agreement or a basis for termination of this Agreement by Southwest,

but, in such event, Sellers shall cooperate fully with Southwest, by such

alternative arrangements as may be reasonably available, to provide

Southwest with the benefit of such leases or agreements;

respect to the Closing, the items described in clauses (i) through (iv)

below:

(i) the portion of the Acquisition Price to be paid at Closing

(less amounts as provided in Section 4.1), by wire transfer of

immediately available funds to the account or accounts designated by

Sellers;

(ii) one or more assumption agreements pursuant to which

Southwest assumes at the Closing the Assumed Liabilities being assumed

at the Closing, in form and substance reasonably satisfactory to

Sellers (collectively, the "Assumption Agreement"), each duly executed

and delivered by Southwest;

(iii) the officer's certificate referenced in Section 5.5(c); and

(iv) all other agreements, documents, certificates, instruments

or writings contemplated or described herein or as reasonably

requested by Sellers in connection herewith.

<PAGE>

Section 5.3 Delivery of Transferred Assets. At Closing, Sellers shall

assign, transfer and convey to, and place Southwest in full possession and

control of, the Transferred Assets to be acquired by Southwest at the Closing.

Section 5.4 Conditions Precedent to Obligations of Southwest. The

obligations of Southwest under this Agreement to consummate the transactions

contemplated hereby to be consummated at the Closing shall be subject to the

satisfaction, at or prior to the Closing, of all of the following conditions,

any one or more of which may be waived in writing at the option of Southwest:

(a) All representations and warranties of Sellers in this Agreement or in

any exhibit, schedule or document delivered pursuant hereto shall be true and

correct in all respects (with respect to representations and warranties

qualified or limited by materiality or Material Adverse Effect) or in all

material respects (with respect to representations and warranties not so

qualified or limited), in each case when made and on and as of the Closing Date

as if made on and as of that date (other than any such representations or

warranties that expressly speak only as of an earlier date).

(b) All of the terms, covenants and conditions to be complied with and

performed by Sellers on or prior to the Closing Date shall have been complied

with or performed in all material respects.

of the Closing Date, executed on behalf of Sellers, each by an authorized

executive officer thereof, certifying in such detail as Southwest may reasonably

request that the conditions specified in Section 5.4(a) and Section 5.4(b)

hereof have been fulfilled.

(d) The waiting period under any applicable competition, merger, control,

Antitrust Law or similar Law shall have expired or terminated, and the FAA, DOT

and any other Governmental Authorities whose consent is or may be required for

consummation of the transactions contemplated hereby shall have issued all

approvals required for the transactions contemplated hereby, and no condition or

requirement unacceptable to Southwest in its sole discretion shall be imposed on

or required of Southwest or any of its Affiliates as a result of or as a

condition to any of the foregoing.

(e) All Consents described or referred to in Section 6.6 and otherwise

required to consummate the Closing hereunder and to enter into the agreements

described herein shall have been obtained (without any limitation, restriction

or condition not otherwise applicable to the applicable Seller being imposed on

Southwest or its ownership or use of any Transferred Assets).

(f) No action, suit or proceeding (including, without limitation, any

proceeding over which the Bankruptcy Court has jurisdiction under 28 U.S.C.

ss.157(b) and (c)) shall be pending or overtly threatened by or before any

Governmental Authority or pending or overtly threatened by any other Person to

enjoin, restrain, prohibit or obtain substantial damages or significant

equitable relief in respect of or related to any of the transactions

contemplated by this Agreement, or that would be reasonably likely to prevent or

make illegal the consummation

<PAGE>

of any transactions contemplated by this Agreement or that, if adversely

determined, could be materially adverse to the operation or use of the

Transferred Assets, and any such actions, suits or proceedings that have

theretofore been brought and determined shall have become Final Orders without

having any of the foregoing and without the imposition of any condition or

requirement on Southwest.

(g) There shall not be in effect any Law of any Governmental Authority of

competent jurisdiction restraining, enjoining or otherwise preventing,

materially adversely affecting, or prohibiting consummation of the transactions

contemplated by this Agreement.

(h) No loss of or damage to any Transferred Asset(s) shall have occurred

since the Execution Date, except for (i) damage that has already been fully

repaired or is addressed in Section 11.1, (ii) losses that have been replaced

with assets of comparable or higher quality with the reasonable approval of

Southwest, or (iii) uninsured losses or damage to the Midway Gate Property or

Midway Hangar Property which Southwest, acting reasonably and in good faith,

considers immaterial.

(i) No loss or modification of or limitation on any Assumed Contract shall

have occurred since the Execution Date without the written consent of Southwest

in its sole discretion, including without limitation any forfeiture, expiration

without renewal, termination or other loss thereof, other than modifications or

limitations which Southwest, acting reasonably and in good faith, considers

immaterial.

(j) [This Section Reserved.]

(k) The Approval Order shall have been entered and shall be enforceable.

(l) [This Section Reserved.]

(m) No event, events or circumstance shall have occurred since the

Execution Date which, independently or together with any other event, events or

circumstance that have occurred or are in Southwest's opinion reasonably likely

to occur, have or in Southwest's opinion are reasonably likely to have a

Material Adverse Effect.

(n) The agreements referred to in Section 8.19 and Section 9.4, together

with all other agreements required to be entered into by the terms hereof, shall

have been duly and validly executed and delivered by the parties.

(o) The City of Chicago shall have given its consent to the assignment and

transfer of the Facilities Lease with respect to the Midway Gates and the Hangar

Lease to Southwest, and shall have waived any default which now or hereafter may

exist by reason of any default under any other agreement with Sellers (it being

acknowledged that the consent of the City of Chicago may include gate

utilization covenants with which Southwest must comply, but Sellers and

Southwest agree that such utilization covenants must be satisfactory to

Southwest in its sole and absolute discretion) and shall have confirmed that the

unpaid amounts due under the Chicago Construction Loan Indebtedness, and any

other amounts necessary to satisfy any other obligations as to which the failure

to perform or cure would constitute a default or an event of default under the

Facilities Lease, the Hangar Lease or the Chicago Construction Loan, is less

than $7,000,000.

<PAGE>

(p) [This Section Reserved.]

Section 5.5 Conditions Precedent to Obligations of Sellers. The obligations

of Sellers to consummate the transactions contemplated hereby to be consummated

at the Closing shall be subject to the satisfaction, at or prior to the Closing,

of all the following conditions, any one or more of which may be waived in

writing at the option of Sellers:

(a) All representations and warranties of Southwest made in this Agreement

or in any exhibit, schedule or document delivered pursuant hereto shall be true

and correct in all respects (with respect to representations and warranties

qualified or limited by materiality) or in all material respects (with respect

to representations and warranties not so qualified or limited), in each case

when made and as of the Closing Date as if made on and as of that date (other

than such representations or warranties that expressly speak only as of an

earlier date).

(b) All of the terms, covenants and conditions to be complied with and

performed by Southwest on or prior to the Closing Date shall have been complied

with or performed in all material respects.

Date, executed on behalf of Southwest by an authorized executive officer

thereof, certifying in such detail as Sellers may reasonably request that the

conditions specified in Section 5.5(a) and Section 5.5(b) have been fulfilled.

(d) The waiting period under any applicable competition, merger, control,

Antitrust Law or similar Law shall have expired or terminated, and the FAA, DOT,

City of Chicago, Chicago City Council and any other Governmental Authorities

whose consent is required for consummation of the transactions contemplated

hereby shall have issued all approvals required for the transactions

contemplated hereby.

(e) There shall not be in effect any Law of any Governmental Authority of

competent jurisdiction restraining, enjoining or otherwise preventing or

prohibiting consummation of the transactions contemplated by this Agreement.

(f) The agreements referred to in Section 8.19 and Section 9.4, together

with all other agreements required to be entered into by the terms hereof, shall

have been duly and validly executed and delivered by the parties. (g) The

Approval Order shall have been entered and shall be enforceable.

(h) The City of Chicago shall have given its consent to the assignment and

transfer of the Facilities Lease with respect to the Midway Gates and the Hangar

to Southwest and waived any and all cross defaults under the Facilities Lease

and the Hangar Lease that now or hereafter exists by reason of any other

agreement between the City of Chicago and Sellers.

<PAGE>

(i) No action, suit or proceeding (including, without limitation, any

proceeding over which the Bankruptcy Court has jurisdiction under 28 U.S.C. ss.

157(b) and (c)) shall be pending or overtly threatened by or before any

Governmental Authority or pending or overtly threatened by any other Person to

enjoin, restrain, prohibit or obtain substantial damages or significant

equitable relief in respect of or related to any of the transactions

contemplated by this Agreement, or that would be reasonably likely to prevent or

make illegal the consummation of any transactions contemplated by this

Agreement, and any such actions, suits or proceedings that have theretofore been

brought and determined shall have become Final Orders without having any of the

foregoing and without the imposition of any condition or requirement on Sellers.

(j) Southwest shall have provided the Sellers a Debtor-in-Possession credit

facility in accordance with the terms and subject to the conditions described in

Exhibit F hereto.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF SELLERS

Subject to any exceptions set forth in the Schedules delivered by Sellers

pursuant to Section 1.2, each of the Sellers makes the following representations

and warranties to Southwest with respect to itself and each other Seller, as

applicable, each of which shall be true and correct as of the Execution Date and

as of the Closing Date (except to the extent expressly relating solely to a

specific date, in which event it shall be true and correct as of such date) and

shall be unaffected by any investigation heretofore or hereafter made by or on

behalf of Southwest or its Affiliates.

Section 6.1 Organization and Good Standing. Each Seller is a corporation

duly organized and validly existing under the laws of its respective

jurisdiction of organization and has the requisite corporate or other

organizational power and authority to own, lease or otherwise hold its

properties and assets and carry on its business as presently conducted. Each

Seller is qualified or licensed to do business as a foreign corporation and is

in good standing in every jurisdiction where the nature of the business

conducted by it or the properties owned or leased by it requires qualification,

except where the failure to be so qualified, licensed or in good standing would

not reasonably be expected to have a Material Adverse Effect.

Section 6.2 Authorization and Effect of Agreement. Each Seller has the

requisite corporate power and authority (a) to execute and to deliver this

Agreement and the Ancillary Agreements to which it will be a party and (b) in

the event Approval Order are entered by the Bankruptcy Court, to perform its

obligations hereunder and under any such Ancillary Agreements. The execution and

delivery by each Seller of the Ancillary Agreements to which it will be a party

have been (or will be at the time of execution thereof) duly authorized by all

necessary corporate or other organizational action on the part of such Seller.

The execution and delivery of this Agreement and the Ancillary Agreements by

Sellers, and subject to clause (b) above, the performance by Sellers of their

obligations hereunder and thereunder and the consummation by Sellers of the

transactions contemplated hereby and thereby, have been duly authorized by their

Boards of Directors and no other corporate action on the part of Sellers is

necessary to authorize the execution and delivery of this Agreement, the

Ancillary Agreements or the consummation of the transactions contemplated hereby

or thereby. The execution and delivery by each Seller of the Ancillary

Agreements to which it will be a party have been (or will be at the time of

execution thereof) duly authorized by all necessary corporate or other

organizational action on the part of such Seller.

<PAGE>

This Agreement has been duly

and validly executed and delivered by Sellers and constitute valid and binding

obligations of Sellers, enforceable against Sellers in accordance with its

terms, subject (a) to applicable bankruptcy, insolvency, fraudulent conveyance,

reorganization, moratorium and similar laws affecting creditors' rights and

remedies generally, including, without limitation, for purposes of the

representation and warranty being made as of the Closing Date, the discretion of

the Bankruptcy Court for so long as the Bankruptcy Court retains jurisdiction

over the Chapter 11 Cases, and (b) as to enforceability, to general principles

of equity, including principles of commercial reasonableness, good faith and

fair dealing (regardless of whether enforcement is sought in a proceeding at law

or in equity), and (c) entry of the Approval Order as described in Section

8.13(a). Each of the Ancillary Agreements, executed and delivered by Sellers or

any Seller, or any of their Affiliates, as applicable, at the Closing, shall

constitute a valid and binding agreement of Sellers or such Seller, or

Affiliate, enforceable against Sellers or such Seller or Affiliate in accordance

with its terms, subject (a) to applicable bankruptcy, insolvency, fraudulent

conveyance, reorganization, moratorium and similar laws affecting creditors'

rights and remedies generally, including, without limitation, the discretion of

the Bankruptcy Court for so long as the Bankruptcy Court retains jurisdiction

over the Chapter 11 Cases, and (b) as to enforceability, to general principles

of equity, including principles of commercial reasonableness, good faith and

fair dealing (regardless of whether enforcement is sought in a proceeding at law

or in equity).

Section 6.3 No Conflicts. The execution and delivery by Sellers of this

Agreement and any Ancillary Agreements to which they or either of them will be a

party and the execution and delivery by each Affiliate of either of the Sellers

of each Ancillary Agreement to which such Affiliate will be a party do not and

will not, as applicable, and, in the event the Approval Order is entered by the

Bankruptcy Court and shall become a Final Order and the requisite consents are

obtained as contemplated by Section 6.6, the performance by each Seller of the

transactions contemplated by this Agreement or such Ancillary Agreements, as

applicable, will not, (a) affect the ability of Southwest to own, use or operate

the Transferred Assets following the Closing in substantially the same manner as

the Transferred Assets are presently owned, used or operated by either Seller,

(b) create any Lien on or any right of any third party to purchase, use or

operate any of the Transferred Assets or (c) accelerate or trigger any right or

obligation of any party under any Assumed Contract.

Section 6.4 [This Section Reserved.]

Section 6.5 Data. All Data are true and correct in all material respects

(other than FAA maintenance records, which are true and correct in all respects)

and are accurately extracted from the books and records of Sellers.

Section 6.6 Consents and Approvals. Other than in connection with the entry

of the Approval Order, the execution and delivery by Sellers of this Agreement

and any Ancillary Agreements to which it will be a party does not and will not,

and the consummation by Sellers of the transactions contemplated hereby and

thereby will not, require any Consent, except (a) as disclosed on Schedule 6.11,

(b) as required by the FAA, (c) as required by the DOT, and (d) as required by

the City of Chicago.

<PAGE>

Section 6.7 Permits; Compliance with Law. Schedule 6.7 sets forth a true,

correct and complete list of all Permits. Sellers possess all Permits necessary

for the operation and ownership of the Transferred Assets. All Permits issued to

either Seller are in full force and effect. No outstanding violations are or

have been recorded in respect of any of the Permits. The use and operation by

either Seller of the Transferred Assets and the conduct of its business comply

with all Laws and the requirements and conditions of all Permits, including

without limitation all applicable operating certificates and authorities, common

carrier obligations, airworthiness directives, and all other rules, regulations,

directives and policies of the FAA, DOT, City of Chicago, Chicago City Council

and all other Governmental Authorities having jurisdiction over the Transferred

Assets and the business conducted by Sellers. No proceeding is pending or, to

either Seller's knowledge, threatened to revoke, withdraw or limit any such

Permit, and there is no fact, error or admission relevant to any Permit that

would permit the violation of or revocation, withdrawal or limitation or result

in the threatened violation of or revocation, withdrawal or limitation of any

such Permit. Except as set forth on Schedule 6.7, on or immediately after the

Closing, each Permit will continue in full force and effect and accrue to the

benefit of Southwest without any consent, approval or modification required by

or from any Governmental Authority.

Section 6.8 [This Section Reserved.]

Section 6.9 Title to and Condition of Assets. Upon entry of the Approval

Order, the applicable Seller has, and at the Closing, such Seller shall convey

to Southwest, good, valid and indefeasible title to the Transferred Assets

(other than the Leased Assets), free and clear of all Liens other than Permitted

Liens. With respect to any Leased Assets, the applicable Seller has a valid

leasehold interest therein for the term specified in Schedule 6.15(c). The

Transferred Assets constituting tangible property, taken as a whole, are in good

operating condition and repair, subject to normal wear, are usable in the

regular and ordinary course of business and to the knowledge of Sellers conform

in all material respects to applicable Laws.

Section 6.10 U.S. Citizen; Air Carrier. Holdings and ATA are each a

"citizen of the United States" as defined in the Federal Aviation Act, and ATA

is an "air carrier" within the meaning of such Act operating under certificates

issued pursuant to such Act (49 U.S.C. Sections 41101-41112).

Section 6.11 Assumed Contracts. The Assumed Contracts are valid and

enforceable in accordance with their terms, subject to applicable bankruptcy,

reorganization, moratorium, and similar laws affecting creditors' rights and

remedies generally and subject, as to enforceability, to general principles of

equity. No Seller is, and to Sellers' knowledge, no other party thereto is, in

material default in the performance, observance or fulfillment of any obligation

under any Assumed Contract (other than payments or amounts due thereunder, which

shall be paid or discharged by Sellers at or prior to the Closing), and, to

Sellers' knowledge, no event has occurred, which with or without the giving of

notice or lapse of time, or both, would constitute a material default

thereunder, except for the commencement of the Chapter 11 Cases and Sellers'

insolvency. Other than in connection with the commencement of the Chapter 11

Cases, entry of the Approval Order and as set forth on Schedule 6.11 hereto,

none of the Assumed Contracts requires the Consent of any party to its

assignment in connection with the transactions contemplated hereby. True and

complete copies of all Assumed Contracts have been delivered to Southwest.

<PAGE>

Section 6.12 [This Section Reserved.]

Section 6.13 No Casualty. Except as set forth on Schedule 6.13, since June

30, 2004, the Transferred Assets have not been affected by any fire, explosion,

accident, drought, storm, hail, earthquake, embargo, act of God, act of

terrorism or of any public enemy or other casualty (whether or not covered by

insurance).

Section 6.14 [This Section Reserved.]

Section 6.15 Midway Gates; Midway Gate Property; Midway Hangar; Midway

Hangar Property.

(a) Schedule 6.15(a) sets forth (i) a true, correct and complete list of

all Midway Gates included in the Transferred Assets, including the gate number

and the terminal or concourse location of each such Midway Gate, (ii) the total

amount of airline fees and charges paid and payable (if different) by Sellers to

the City of Chicago under the Facilities Lease with respect to calendar year

2003, (iii) a true, correct and complete list of all Midway Hangar Property

included in the Transferred Assets, (iv) the total amount of fees and charges

paid and payable (if different) by Sellers to the City of Chicago under the

Hangar Lease with respect to calendar year 2003.

(b) Schedule 6.15(b) sets forth a true, correct and complete list of all

the use agreements, licenses, permits, certificates or other documents or

agreements under which either Seller leases, occupies or otherwise has the right

to use, the Midway Gates (other than the Facilities Lease) or the Midway Hangar

(other than the Hangar Lease), and, in each case, all amendments thereto.

set forth on Schedule 6.15(c), there are no leases, subleases, use agreements,

licenses, permits, certificates or other documents or agreements, or any

amendments to any of the foregoing, under which any Seller leases, occupies or

otherwise has the right to use any Midway Gate Property or Midway Hangar

Property. Schedule 6.15(c) includes the identification of the applicable Seller

and the agreement expiration date.

(d) [This Section Reserved.]

(e) Neither Holdings or ATA own any Midway Gate Property or Midway Hangar

Property.

(f) Except as set forth in Schedule 6.15(f) identifying the specific

equipment and specific condition or non-compliance, the Midway Gates, the Midway

Gate Property, the Midway Hangar and the Midway Hangar Property, are all in good

operating condition and repair, subject to normal wear, are usable in the

regular and ordinary course of business and, to Sellers knowledge, conform in

all material respects to applicable Laws. The cost to make the repairs to the

Midway Hangar doors, as identified on Schedule 6.15(f) will not exceed $50,000.

<PAGE>

(g) The Assumed Contracts are in full force and effect, and except by

reason of the filing of the Chapter 11 Cases or the insolvency of Sellers,

Sellers have no knowledge of any material default under the Assumed Contracts or

of any condition or event which has occurred which with notice or the passage of

time or both would constitute a material default, by either Seller under the

Assumed Contracts.

(h) Sellers have not received any notice that any portion of the Midway

Gates, the Midway Gate Property, the Midway Hangar or the Midway Hangar Property

is or will be subject to, or affected by, any condemnation, eminent domain or

similar proceeding and there are no material violations of record or otherwise

known to Sellers against any portion of the Midway Gates, the Midway Gate

Property, the Midway Hangar or the Midway Hangar Property.

(i) To Sellers' knowledge, except as set forth in Schedule 6.15(i) hereto,

the Midway Gates, the Midway Gate Property, the Midway Hangar and the Midway

Hangar Property, as applicable, have been constructed in good and workmanlike

manner, are structurally sound and free from material defects and all building

systems, including without limitation, the heat, ventilation and air

conditioning, plumbing, electrical, elevator, sewage and other systems and

systems related to the specific uses thereof (as, for example, passenger

terminal facilities, office space, cargo facilities, and ground support

equipment maintenance spaces, and aircraft maintenance space) are free from

material defects. The Midway Gate Property and the Midway Hangar Property, as

applicable, are in good working order, subject to reasonable wear and tear.

Except as set forth in Schedule 6.15(i), neither Seller has deferred any

material maintenance or repair obligations under the Assumed Contracts.

(j) [This Section Reserved.]

(k) [This Section Reserved.]

Section 6.16 Environmental Matters.

(a) Except as set forth on Schedule 6.16(a) hereto, to Sellers' knowledge

after reasonable inquiry, the use and operation of the Transferred Assets is and

has been in full compliance with all applicable Environmental Laws, and

consistent with the consummation of the transactions contemplated hereby or

Southwest's ability to own, use or operate the Transferred Assets in

substantially the same manner as the Transferred Assets are presently owned,

used or operated by Seller. Except as set forth on Schedule 6.16(a), neither

Seller has received any written communication from any Person that alleges that

such Seller is not in such full compliance, the subject matter of which written

communication has not been fully resolved and satisfied, and, to such Sellers'

knowledge after reasonable inquiry, there are no circumstances (other than

changes in existing, or future requirements of, Environmental Laws) that would

reasonably be expected to prevent or interfere with such full compliance in the

future. Schedule 6.16(a) sets forth a true, correct and complete list of all

orders, decrees or other agreements relating to the

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