AirTran Airways Files Complaints With U.S. Department of Transportation; Requests Slot Reallocations Regardless of Fate of Mega Airline Mergers.

Business Editors

ORLANDO, Fla.--(BUSINESS WIRE)--Feb. 21, 2001

AirTran Airways (AMEX: AAI) today filed formal complaints with the U.S. Department of Transportation (DOT) and asked the agency to take prompt and firm measures to prevent a United Airlines-American Airlines monopolization of the business market at Washington, D.C.'s Reagan National Airport. In the complaints, AirTran Airways proposed that the DOT use its broad, Congressionally-granted powers to stop anti-competitive practices in their nascence - no matter what the outcome of pending airline mergers -- by ordering the reallocation of slots at National Airport to new-entrant or limited incumbent carriers.

Without government intervention, the mergers of United Airlines-US Airways and American Airlines-Trans World Airlines would result in market control of 66% at National Airport (DCA) and 80% at Dulles Washington International Airport (IAD), including all of the existing US Airways Shuttle flights to New York and Boston for the next 20 years.

"American and United have undertaken a plan to jointly monopolize the air transportation market to and from the Washington area for time-sensitive business passengers," said Joseph Leonard, AirTran Airways Chairman and Chief Executive Officer. "AirTran Airways' complaints ask DOT to take prompt action now to stop this unfair method of competition. Unless DOT acts now, United will not only continue to control more than 8 out of 10 flights at IAD, as it does today, but, together with American, will jointly control more than two-thirds of the current US Airways Shuttle flights between Washington, New York and Boston.

"Joint monopolization of the business traffic markets to and from the Washington area will mean that every time-sensitive passenger will be forced to pay supra-competitive fares to the duopolists to justify the extraordinary premium they are paying for US Airways' stock and assets," Leonard stated. "Congress has provided DOT with the power to prevent air carriers from engaging in attempted monopolization of airports. Moreover, the DOT, like the Federal Trade Commission (FTC), has broad power to stop such practices `in their incipiency,' before they become full blown and cause actual harm to the traveling public. This proposed enforcement action gives DOT the vehicle through which to take this vital action, which is necessary to ensure that low-fare competition can survive in the midst of such unprecedented airline industry consolidation."

In its third-party complaint against three airlines -- American, United and US Airways -- AirTran Airways asked for the prompt launch of a formal enforcement proceeding. If that proceeding concludes that the three airlines are engaging in unfair methods of competition, AirTran Airways asked that the airlines be enjoined from holding any of the 222 landing and takeoff slots at National Airport, which were designated by United for transfer to DC Air under the United-US Airways merger agreement. AirTran Airways also requested that, in the event that the Department of Justice approves the proposed mergers, those slots be made available to new-entrant carriers or limited incumbents in numbers sufficient to create a low-fare network.

AirTran Airways proposed that total compensation for the slots not exceed $140 million, which was the amount that United was prepared to charge DC Air.

In its petitions to DOT for enforcement action, AirTran Airways cited existing DOT authority as well as precedents set by the FTC that required companies attempting to monopolize a market to free up public assets in order to restore effective competition, including price competition.

AirTran Airways filed a similar petition requesting an enforcement proceeding in the American-TWA acquisition that calls for slots at Washington National to be withdrawn and re-allocated.

Systemwide, AirTran Airways operates 310 daily departures to 34 cities. Offering the convenience of easy, same concourse connections in Atlanta, AirTran Airways operates 137 daily departures from Hartsfield Atlanta International Airport, the world's busiest airport.

AirTran Airways provides everyday, affordable air travel throughout the eastern United States and, unlike other airlines, never requires a roundtrip purchase or Saturday night stay. AirTran Airways is the launch customer for the Boeing 717, today's newest, most innovative and most environmentally friendly commercial aircraft. AirTran Airways is a subsidiary of AirTran Holdings, Inc. (AMEX: AAI).

For more information and reservations, visit AirTran Airways' Web site at www.airtran.com, call your travel agent or call AirTran Airways at 800-AIRTRAN (800-247-8726) or 770-994-8258 (in Atlanta). AOL Keyword: AirTran.

Attention Media: For a copy of the DOT complaints and executives summaries, please contact Jennifer Antonini at 312-616-2595 or [e-mail].