SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, DC 20549

                                FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                               ACT OF 1934

For the fiscal year ended December 31, 2001

Commission file number 0-21976

                 ATLANTIC COAST AIRLINES HOLDINGS, INC.
         (Exact name of registrant as specified in its charter)

          Delaware                           13-3621051
         (State of incorporation)            (IRS Employer
                                             Identification No.)


          45200 Business Court, Dulles, Virginia          20166
         (Address of principal executive offices)       (Zip Code)


Registrant's telephone number, including area code:  (703) 650-6000

Securities registered pursuant to Section 12(b) of the Act:


          Common Stock par value $ .02          NASDAQ National Market
          (Title of Class)                      (Name of each exchange
                                                 on which registered)


Indicate  by check mark whether the registrant (1) has filed all  reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934
during  the  preceding  12 months (or for such shorter  period  that  the
registrant  was required to file such reports), and (2) has been  subject
to such filing requirements for the past 90 days.
                    Yes   X           No__

Indicate  by  check mark if disclosure of delinquent filers  pursuant  to
Item  405  of  Regulation S-K is not contained herein, and  will  not  be
contained, to the best of registrant's knowledge, in definitive proxy  or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.   ____

The  aggregate market value of voting stock held by nonaffiliates of  the
registrant as of March 1, 2002 was approximately $1.2 billion.

As  of March 1, 2002 there were 50,054,000 shares of common stock of  the
registrant issued and 45,007,668 shares of common stock were outstanding.

                   Documents Incorporated by Reference

Certain  portions of the document listed below have been incorporated  by
reference into the indicated part of this Form 10-K.

Document Incorporated                               Part of Form 10-K
Proxy Statement for 2002 Annual Meeting             Part III, Items 10-13
  of Shareholders




 2
                                 PART I

Item 1.        Business

     Forward Looking Statements

          This  Annual  Report  on  Form  10-K  contains  forward-looking
statements.   Statements in the Business and Management's Discussion  and
Analysis  of Operations and Financial Condition sections of this  filing,
together  with other statements beginning with such words as  "believes",
"intends", "plans", and "expects" include forward-looking statements that
are based on management's expectations given facts as currently known  by
management  on  the  date this Form 10-K was first filed  with  the  SEC.
Actual  results  may  differ materially.  Factors that  could  cause  the
Company's  future  results  to differ materially  from  the  expectations
described  here include the costs and other effects of enhanced  security
measures   and   other  possible  government  orders;  changes   in   and
satisfaction  of regulatory requirements including requirements  relating
to fleet expansion; changes in levels of service agreed to by the Company
with  its  code share partners due to market conditions; the  ability  of
these partners to manage their operations and cash flow; the ability  and
willingness  of  these  partners  to continue  to  deploy  the  Company's
aircraft  and  to utilize and pay for scheduled service at agreed  rates;
increased cost and reduced availability of insurance; changes in existing
service;  final  calculation  and auditing  of  government  compensation;
unexpected costs or delays in the implementation of new service;  adverse
weather  conditions; satisfactory resolution of union contracts  becoming
amendable during 2002 with the Company's aviation maintenance technicians
and   ground  service  equipment  mechanics,  and  the  Company's  flight
attendants; ability to hire and retain employees; availability  and  cost
of  funds for financing new aircraft; the ability of Fairchild Dornier to
fulfill its contractual obligations to the Company, and of Bombardier and
Fairchild  Dornier to deliver aircraft on schedule; airport and  airspace
congestion;  ability  to successfully retire turboprop  aircraft;  flight
reallocations and potential service disruptions due to labor  actions  by
employees  of  Delta Air Lines or United Airlines; general  economic  and
industry conditions; and additional acts of war.  The statements in  this
Annual Report are made as of March 29, 2002 and the Company undertakes no
obligation  to update any of the forward-looking information included  in
this  release,  whether  as a result of new information,  future  events,
changes in expectations or otherwise.

     General

           Atlantic Coast Airlines Holdings, Inc. ("ACAI"), is a  holding
company  with  its  primary  subsidiary  being  Atlantic  Coast  Airlines
("ACA"), a regional airline serving 64 destinations in 28 states  in  the
Eastern and Midwestern United States and Canada as of March 1, 2002  with
760  scheduled non-stop flights system-wide every weekday.   On  July  1,
2001,  ACAI  combined  the  operations of its Atlantic  Coast  Jet,  Inc.
("ACJet")  subsidiary into the operations of ACA.  As a result,  ACA  now
operates under its marketing agreements as both a United Express  carrier
with  United Air Lines, Inc. ("United") and as a Delta Connection carrier
with  Delta  Air  Lines, Inc. ("Delta").  United Express  operations  are
conducted  throughout the Eastern and Central United States, while  Delta
Connection  operations are conducted predominately  in  the  Northeastern
United  States  and Canada.  Unless the context indicates otherwise,  the
terms  "the Company", "we", "us", or "our" refer herein to Atlantic Coast
Airlines  Holdings,  Inc.  As of March 1, 2002, the  Company  operated  a
fleet of 124 aircraft (93 regional jets and 31 turboprop aircraft) having
an average age of approximately three years.

 3
     Recent Developments

           On  September 11, 2001, two United airplanes and two  American
Airlines,  Inc. airplanes were hijacked and used in terrorist attacks  on
the  United States.  As a result of these terrorist attacks, the  Federal
Aviation  Administration ("FAA") issued a federal ground stop order  that
required  the immediate suspension of all commercial airline  flights  on
the  morning  of  September  11, 2001.  The  Company  recommenced  flight
operations  on  September 14 at reduced levels from its pre-September  11
schedule.  The events of September 11, together with the slowing  economy
throughout  2001,  has significantly affected the U.S. airline  industry.
These events have resulted in changed government regulation, declines and
shifts  in passenger demand, higher insurance rates and tightened  credit
markets  which continue to affect the operations and financial  condition
of  participants in the U.S. airline industry and may affect the  Company
in  ways  that  it is not currently able to predict.  See,  for  example,
"Business  -  Insurance,"  "Business  -  Regulation,"  and  "Management's
Discussion   and  Analysis  of  Results  of  Operations   and   Financial
Condition," below.

     Marketing Agreements

          The  Company derives substantially all of its revenues  through
its marketing agreements with United and Delta.

     United Express:

          The  Company's  United  Express  Agreements  ("UA  Agreements")
define  the  Company's relationship with United.  In November  2000,  the
Company  and  United amended and restated the UA Agreements,  effectively
changing   from  a  prorated  fare  arrangement  to  a  fee-per-departure
arrangement.  Under the UA Agreements in effect prior to  November  2000,
the  Company  was responsible for scheduling, marketing and  pricing  its
flights, in coordination with United's operations, and paid a portion  of
fares  it  received to United.  Under the fee-per-departure structure  in
effect as of December 1, 2000, the Company is contractually obligated  to
operate a flight schedule designated by United, for which United pays the
Company  an  agreed  amount per departure regardless  of  the  number  of
passengers   carried,  with  incentive  payments  based  on   operational
performance.   The  Company  thereby assumes the  risks  associated  with
operating  the flight schedule and United assumes the risk of scheduling,
marketing,  and selling seats to the traveling public.  The  restated  UA
Agreements are for a term of ten years.  The restated UA Agreements  give
ACA  the  authority  to operate 128 regional jets in the  United  Express
operation.  By operating under the UA Agreements, the Company is able  to
use  United's  "UA"  flight  designator code to  identify  the  Company's
flights  and  fares  in  the major airline Computer Reservation  Systems,
including  United's "Apollo" reservation system, and to  use  the  United
Express logo and exterior aircraft paint schemes and uniforms similar  to
those of United.

          Pursuant  to  the restated UA Agreements, United,  at  its  own
expense,  provides a number of additional services to ACA. These  include
customer  reservations,  customer service, pricing,  scheduling,  revenue
accounting,    revenue   management,   frequent   flyer   administration,
advertising, provision of ground support services at most of the airports
served  by both United and ACA, provision of ticket handling services  at
United's  ticketing  locations,  and  provision  of  airport  signage  at
airports   where  both  ACA  and  United  operate.   Under  the  restated
agreement, the Company remains responsible for fees associated  with  the
major  airline  Computer Reservation Systems. The UA  Agreements  do  not
prohibit United from serving, or from entering into agreements with other
airlines  who would serve, routes served by the Company, but  state  that
United  may  terminate the UA Agreements if ACAI  or  ACA  enter  into  a
similar  arrangement  with  any  other carrier  other  than  Delta  or  a
replacement  for Delta without United's prior written approval.   The  UA
Agreements  limit  the  ability of ACAI and ACA  to  merge  with  another
company or dispose of certain assets or aircraft without offering  United
a  right  of  first  refusal to acquire the Company  or  such  assets  or
aircraft,  and  provide United a right to terminate the UA Agreements  if
ACAI  or ACA merge with or are controlled or acquired by another carrier.
The UA agreements provide United with the right to assume ACA's ownership
or  leasehold  interest  in certain aircraft in the  event  ACA  breaches
specified  provisions of the UA agreements, or fails  to  meet  specified
performance standards.
 4

          The  UA  Agreements call for the resetting of fee-for-departure
rates annually based on the Company's planned level of operations for the
upcoming year. On December 31, 2001, the Company and United agreed on fee-
per-departure rates to be utilized during 2002.  Under the terms of  this
agreement  the  Company and United settled prior contract issues,  agreed
that  there would be no adjustment for utilization changes in the  fourth
quarter  of  2001,  agreed to aggressively contain  costs  in  2002,  and
committed to a J-41 retirement plan.

     Delta Connection:

          In  September  1999,  the Company reached a ten-year  agreement
with  Delta  to  operate  regional jet aircraft  as  part  of  the  Delta
Connection program on a fee-per-block hour basis. The Company began Delta
Connection  revenue  service  on August 1,  2000.   The  Company's  Delta
Connection  Agreement ("DL Agreement") defines the Company's relationship
with  Delta. The Company is compensated by Delta on a fee-per-block  hour
basis.    Under  the  fee-per-block  hour  structure,  the   Company   is
contractually obligated to operate a flight schedule designated by Delta,
for  which  Delta pays the Company an agreed amount per block hour  flown
regardless  of the number of passengers carried, with incentive  payments
based  on operational performance.  The Company thereby assumes the risks
associated with operating the flight schedule and Delta assumes the risks
of  scheduling, marketing, and selling seats to the traveling public.  By
operating as part of the Delta Connection program, the Company is able to
use Delta's "DL" flight designator to identify ACA's flights and fares in
the  major  Computer Reservation Systems, including Delta's  "Deltamatic"
reservation  system, and to use the Delta Connection  logo  and  exterior
aircraft paint schemes and uniforms similar to those of Delta.

          Pursuant to the DL Agreement, Delta, at its expense, provides a
number  of support services to ACA.  These include customer reservations,
customer   service,   ground  handling,  station   operations,   pricing,
scheduling,  revenue  accounting,  revenue  management,  frequent   flyer
administration,  advertising and other passenger,  aircraft  and  traffic
servicing  functions  in connection with the ACA  operation.   Delta  may
terminate  the DL Agreement at any time if the Company fails to  maintain
certain  performance  standards and, subject to  certain  rights  of  the
Company  and  by providing 180 days notice to the Company, may  terminate
without  cause.   If Delta terminates the Delta agreement  without  cause
prior to March 2010, the Company has the right to sell all or some of the
Delta Connection aircraft to Delta.  In January 2001, the Company reached
an  agreement with United and Delta to place 20 CRJ's originally  ordered
for  the Delta Connection program in the United Express program.  The  DL
Agreement  requires the Company to obtain Delta's approval if it  chooses
to  enter into a code-sharing arrangement with another carrier other than
a replacement for United, to list its flights under any other code, or to
operate  flights  for  any other carrier, except  with  respect  to  such
arrangements with United or non-U.S. code-share partners of United or  in
certain  other  circumstances.  The DL Agreement does not prohibit  Delta
from  serving, or from entering into agreements with other  airlines  who
would  serve,  routes  flown  by  the Company.   The  DL  Agreement  also
restricts  the ability of the Company to dispose of aircraft  subject  to
the  agreement without offering Delta a right of first refusal to acquire
such  aircraft,  and  provides that Delta may  extend  or  terminate  the
agreement  if, among other things, the Company merges with or  sells  its
assets  to another entity, is acquired by another entity or if any person
acquires more than a specified percentage of its stock.
 5
          Due  to  the  rapid  increase in fleet size  during  2001,  the
Company  and Delta agreed to compensation for 2001 utilizing a cost  plus
formula  based  on  reimbursement  of fixed  amounts  for  initial  pilot
training  expenses  and  for  all other  costs,  based  on  actual  costs
incurred,  plus a contracted margin, and incentive compensation  tied  to
operating performance.  The Company and Delta have agreed to return to  a
fee-per-block hour rate arrangement for 2002.  The Company and Delta  are
currently  setting these rates based on the Company's  planned  level  of
operations  for  the  upcoming year.   The Company  does  not  anticipate
material  differences on a per-block-hour basis for its 2002 revenues  as
compared  to  2001  revenues due to the reversion to a fee-per-block-hour
rate.

     Agreements with Other Airlines:

          As  of  March  1, 2002 the Company has implemented code-sharing
arrangements  with Lufthansa German Airlines ("Lufthansa"),  Air  Canada,
and Scandinavian Airlines involving certain United Express flights.  Such
international code-sharing arrangements permit these foreign air carriers
to  place  their respective airline codes on certain flights operated  by
ACA,  and  provide  a  wide  range of benefits for  passengers  including
schedule    coordination,   through   ticketing   and   frequent    flyer
participation.  The  revenue benefits from these arrangements  inures  to
United,  and  any  such arrangements as may be made in  the  future  with
respect  to the Company's Delta Connection flights would inure to  Delta,
due  to  the nature of the Company's agreements with these two  airlines.
Thus  the  Company's primary role under these arrangements is  to  obtain
regulatory approvals for the relationships and to operate the flights.

     Charter Operations

          The  Company established a charter operation in February  2002.
The Company is presently providing regular private shuttle service to two
destinations  pursuant  to  an agreement with  a  major  corporation  and
performing  ad  hoc  charter services secured through brokers  and  other
means.   The  charter business is solicited and managed  by  a  dedicated
management  team  separate  from those involved  in  airline  operations,
utilizing the Company's operations and maintenance services.  The Company
has ordered three 328JETs for its charter business, one of which has been
delivered  and  the others of which are scheduled to be delivered  during
the second quarter of 2002.

     Markets

            The  Company's  United Express operation is  centered  around
Washington's Dulles and Chicago's O'Hare airports.  During 2001 and 2002,
the  Company has greatly increased its Chicago operation such that as  of
March 2002, 55% of the Company's United Express capacity (as measured  in
available  seat  miles) is flown to/from Chicago's O'Hare  airport.   The
growth  in  Chicago results from the combination of adding  complementary
service  to  United mainline service in 14 markets and  replacing  United
mainline service completely in 11 markets during 2001.
 6
          The  Delta  Connection  operation  is  focused  at  New  York's
LaGuardia  airport,  Boston's  Logan  airport  and  Cincinnati   Northern
Kentucky  International airport.  As of March 2002, 42% of the  Company's
Delta  Connection capacity (as measured in available seat miles)  was  at
LaGuardia, 31% was at Boston, and 27% was at Cincinnati.
 7
          The  following tables set forth the destinations served by  the
Company as of March 1, 2002:


                         United Express Service
                       Washington-Dulles (To/From)
                  (Regional Jet and Turboprop Service)
                                                
Albany, NY                           Louisville, KY
Allentown, PA                        Manchester, NH
Binghamton, NY                       Nashville, TN
Birmingham, AL                       Newburgh, NY
Buffalo, NY                          New York, NY
                                      (Kennedy)
Burlington, VT                       New York, NY
                                      (LaGuardia)
Charleston, SC                       Newark, NJ
Charleston, WV                       Norfolk, VA
Charlottesville, VA                  Philadelphia, PA
Cleveland, OH                        Pittsburgh, PA
Columbia, SC                         Portland, ME
Columbus, OH                         Providence, RI
Dayton, OH                           Raleigh-Durham, NC
Detroit, MI                          Richmond, VA
Greensboro, NC                       Roanoke, VA
Greenville/Spartanburg, SC           Rochester, NY
Harrisburg, PA                       Savannah, GA
Hartford, CT/Springfield, MA         State College, PA
Indianapolis, IN                     Syracuse, NY
Jacksonville, FL                     White Plains, NY
Knoxville, TN
                        Chicago-O'Hare (To/From)
                         (Regional Jet Service)
Akron/Canton, OH                     Lansing, MI
Albany, NY                           Lexington, KY
Allentown, PA                        Memphis, TN
Buffalo, NY                          Madison, WI
Cedar Rapid/Iowa City, IA            Nashville, TN
Charleston, SC                       Norfolk/Virginia Beach, VA
Charleston, WV                       Oklahoma City, OK
Charlotte, NC                        Omaha, NE
Cleveland, OH                        Peoria, IL
Columbia, SC                         Portland, ME
Dayton, OH                           Raleigh/Durham, NC
Des Moines, IA                       Roanoke, VA
Detroit, MI                          Rochester, NY
Fargo, ND                            Saginaw, MI
Grand Rapids, MI                     Savannah, GA
Greenville/Spartanburg, SC           Sioux Falls, SD
Greensboro/High Point, NC            South Bend, IN
Hartford, CT/Springfield, MA         Springfield/Branson, MO
Indianapolis, IN                     Syracuse, NY
Jacksonville, FL                     Tulsa, OK
Kansas City, MO                      White Plains, NY
Knoxville, TN                        Wilkes-Barre/Scranton, PA


 8


                        Delta Connection Service
                      New York LaGuardia (To/From)
                         (Regional Jet Service)
             

Columbia, SC                         Greenville/Spartanburg, SC
Columbus, OH                         Indianapolis, IN
Charleston, SC                       Nashville, TN
Cincinnati, OH                       Portland, ME
Dayton, OH                           Raleigh-Durham, NC
Greensboro/High Point, NC            Richmond, VA

                         Boston Logan (To/From)
                         (Regional Jet Service)
Bangor, ME                           Newark, NJ
Burlington, VT                       Philadelphia, PA
Cincinnati, OH                       Portland, ME
Montreal, Quebec Canada              Raleigh-Durham, NC
New York, NY (Kennedy)               Washington-Dulles, DC

                 Cincinnati-Northern Kentucky (To/From)
                         (Regional Jet Service)
Birmingham, AL                       Columbia, SC
Boston, MA                           Greensboro/High Point, NC
Bristol, TN                          Greenville/Spartanburg, SC
Burlington, VT                       Nashville, TN
Charleston, SC                       New York, NY
                                        (LaGuardia)
Charlotte, NC                        Raleigh-Durham, NC


     Fleet Description

          Fleet Expansion:    As of March 1, 2002, the Company operated a
fleet  of  60  Canadair Regional Jets ("CRJs"), 33 Fairchild Dornier  328
regional jets ("328JET"), and 31 British Aerospace Jetstream-41 ("J-41s")
turboprop  aircraft.    Thirty  328JETs  are  operated  under  the  Delta
Connection program, 59 CRJs, two 328JETs and 31 J-41's are operated under
the  United  Express program, and one 328JET and one  CRJ  are  currently
dedicated to charter operations.

          As of March 1, 2002, the Company had a total of 36 CRJs on firm
order from Bombardier, Inc., in addition to the 60 already delivered, and
held options for 80 additional CRJs.  The Company also had 32 328JETs  on
firm  order  from  Fairchild-Dornier,  in  addition  to  the  33  already
delivered,  and held options for an additional 81 aircraft.   In  January
2001, the Company reached an agreement with United and Delta to place  20
CRJs  originally ordered for the Delta Connection program in  the  United
Express  Program.  The future delivery schedule of the remaining 68  firm
ordered  regional  jet aircraft undelivered as of March  1,  2002  is  as
follows:  16 CRJs for delivery during the remainder of 2002 and  20  CRJs
for delivery in 2003, and 10 328JETs for delivery during the remainder of
2002 and 22 328JETs in 2003.

 9
          Fleet Composition:  The following table describes the Company's
fleet  of aircraft, scheduled firm deliveries and options as of March  1,
2002:


               Total   Number  Number
               Number   of       of               Average
                 of   Aircraft Aircraft Passenger  Age in Firm
             Aircraft  Leased   Owned   Capacity   Years  Orders  Options




                                                   
Canadair          60      56     4        50        2.1      36      80
 Regional Jets
Fairchild         33      32     1        32        1.0      32      81
 Dornier 328JET
British           31      26     5        29        7.2      -       -
 Aerospace J-41
                 124     114    10                  3.1      68     161


           Turboprop Retirement:  During the fourth quarter of 2001,  the
Company  recorded  an aircraft early retirement charge of  $23.5  million
($14.0  million  after  tax)  for the early  retirement  of  nine  leased
Jetstream-41 turboprop aircraft, which the Company plans to  remove  from
service   prior  to  year-end  2002.   The  Company  anticipates   taking
additional  charges  during  2002 of approximately  $48  million  pre-tax
($28.4  million  after-tax) for the retirement of its  remaining  29-seat
Jetstream-41  turboprop  aircraft.  Fairchild  Dornier  GMBH  ("Fairchild
Dornier"), the manufacturer of the 328JETS, is contractually obligated to
make the Company whole for any difference between lease payments, if any,
received from remarketing the 26 J-41 aircraft leased by the Company  and
the   lease  payment  obligations  of  the  Company  on  those  aircraft.
Fairchild  Dornier  also has agreed to purchase the  five  J-41  aircraft
owned  by  the Company at their net book value at the time of retirement.
See  "Management's Discussion and Analysis of Results of  Operations  and
Financial  Condition - Outlook and Business Risks" below.  In  2001,  the
Company completed the early retirement of the 19 seat J-32 turboprop fleet
and  reversed approximately $500,000 of excess aircraft early  retirement
charges that had been expensed in 2000.

          In  March  2001, the Company reached agreement with the  lessor
for the early return and lease termination of the 28 19-seat Jetstream-32
turboprop  aircraft  formerly utilized in the  Company's  United  Express
operations.   Under this agreement, the Company paid a lease  termination
fee, which consisted of $19.1 million in cash and the application of $5.2
million in credits due from the lessor.  The Company completed the  early
retirement of these aircraft from its fleet and returned the aircraft  to
the  lessor during 2001. The Company is in the process of completing  the
disposal  of  spare  parts  and has certain  oversight  obligations  with
respect  to seven aircraft until July 2003, but does not expect to  incur
any additional charges against earnings for the early retirement of the J-
32 fleet.
 10
     Fuel

          The   Company  has  not  experienced  difficulties  with   fuel
availability  and expects to be able to obtain fuel at prevailing  prices
in  quantities  sufficient to meet its future  requirements.   Delta  Air
Lines,  Inc. bears the economic risk of fuel price fluctuations  for  the
fuel  requirements of the Company's Delta Connection program, and  United
Airlines  bears such risk for the Company's United Express  program.   As
such, the Company reasonably expects that its results of operations  with
United and Delta will not be directly affected by fuel price volatility.

     Insurance

          Following  the  September 11 terrorist  attacks,  the  aviation
insurance  industry  imposed a worldwide surcharge on aviation  insurance
rates  as  well as a reduction in coverage for certain war  risks.     In
response to the reduction in coverage, the Air Transportation Safety  and
System  Stabilization Act provided U.S. air carriers with the  option  to
purchase  certain  war risk liability insurance from  the  United  States
government  on  an  interim basis at rates that are more  favorable  than
those available from the private market.   The Company has purchased this
coverage through May 19, 2002 and anticipates renewing it for as long  as
the  coverage  is available from the U.S. government.  The  airlines  and
insurance   industry,  together  with  the  United   States   and   other
governments,  are continuing to evaluate both the cost  and  options  for
providing  coverage  of  aviation insurance.  Recently,  an  industry-led
group  announced a proposal to create a mutual insurance company,  to  be
called  Equitime,  to  cover  war risk and terrorism  risk,  which  would
initially  seek  support through government guarantees.   Equitime  would
provide  a  competitive alternative to insurance  being  offered  by  the
traditional insurance market, which opposes this initiative.   Equitime's
organizers project that it may be available to provide insurance as early
as May 2002 to up to 70 U.S. carriers.  The Company has not been actively
involved in the formation of Equitime and is unable to anticipate whether
this  source of insurance will be made available and, if so,  whether  it
will  offer  competitive  rates.  The Company anticipates  that  it  will
follow industry practices with respect to sources of insurance.

     Competition

          Under  the  Company's fee arrangements with United  and  Delta,
United  and  Delta  are  responsible  for  establishing  routes  and  fee
structure, and the Company's revenue is not directly related to passenger
revenue  earned by United or Delta on its flights.  However, the  overall
system benefit to those airlines is likely to affect the Company in  such
areas as future growth opportunities.

     Slots

           Slots  are reservations for takeoffs and landings at specified
times  and are required by governmental authorities to operate at certain
airports.   The  Company has rights to and utilizes takeoff  and  landing
slots at Chicago-O'Hare and LaGuardia, Kennedy and White Plains, New York
airports.  The Company also uses slot exemptions at Chicago-O'Hare, which
differ  from  slots in that they allow service only to designated  cities
and  are not transferable to other airlines without the approval  of  the
U.S. Department of Transportation ("DOT").  Airlines may acquire slots by
governmental grant, by lease or purchase from other airlines, or by  loan
when   another  airline  does  not  use  a  slot  but  desires  to  avoid
governmental  reallocation of a slot for lack of  use.   All  leased  and
loaned  slots  are subject to renewal and termination provisions.   Under
rules  presently in effect, all slot regulation is scheduled  to  end  at
Chicago-O'Hare  after  July 1, 2002 and at LaGuardia  and  Kennedy  after
January 1, 2007.  The rules also provide that, in addition to those slots
currently held by carriers, operators of regional jet aircraft may  apply
for, and the Secretary of Transportation must grant, additional slots  at
Chicago, LaGuardia, and Kennedy in order to permit the carriers to  offer
new service, increase existing service or upgrade to regional jet service
in  qualifying smaller communities.  There is no limit on the  number  of
slots a carrier may request.
 11
          The  ability of regional carriers to obtain slots at  LaGuardia
in  large  numbers led to an increase in flight activity at  the  airport
that  exceeded  the capacity of LaGuardia.  As a result,  and  to  reduce
airport congestion and delays, the FAA implemented a slot lottery  system
resulting  in a decrease in the operation of new regional jet service  to
and  from LaGuardia including ACA services operated for Delta.   The  FAA
has  stated that the slot lottery is a temporary measure, and that it  is
considering   implementing  a  long-term  solution  that  could   involve
increasing  landing and other fees to discourage operations  during  peak
hours.   To  the  extent  other  airports experience  significant  flight
delays,  the FAA or local airport operators could seek to impose  similar
peak  period  pricing systems or other demand-reducing strategies,  which
could  impede the Company's ability to serve or increase service  at  any
such impacted airport.

     Employees

            As  of March 1, 2002, the Company had 3,601 full-time and 391
part-time employees, classified as follows:


           Classification               Full-    Part-
                                         Time     Time
           
                                              
           Pilots                       1,221        1
           Flight attendants              517        -
           Station personnel              898      349
           Maintenance personnel          480        8
           Management,
           administrative and
             clerical personnel           485       33

           Total employees              3,601      391


          The  Company's  pilots are represented by  the  Airline  Pilots
Association   ("ALPA"),  flight  attendants  are   represented   by   the
Association  of  Flight  Attendants  ("AFA"),  and  aviation  maintenance
technicians and ground service equipment mechanics are represented by the
Aircraft Mechanics Fraternal Association ("AMFA").

           In  January  2001, the Company agreed to a new four-and-a-half
year  contract  with its pilot union that was subsequently  ratified  and
became   effective  on  February  9,  2001.   The  collective  bargaining
agreement  covers pilots flying for the United Express, Delta Connection,
and  charter  operations.   The new agreement  provides  for  substantial
increases  in pilot compensation and improvements in benefits,  training,
and  other  matters, which the Company believes are consistent  with  the
regional airline industry.

          ACA's collective bargaining agreement with AFA was ratified  in
October  1998.   The  agreement is for a four-year duration  and  becomes
amendable  in October 2002.  This agreement covers all flight  attendants
working  for the Company.  The collective bargaining agreement with  AMFA
was ratified in June 1998.  The agreement is for a four-year duration and
becomes  amendable  in June 2002.   This agreement  covers  all  aviation
maintenance  technicians and ground service equipment  mechanics  working
for the Company.
 12
          The   Company   believes   that  certain   of   the   Company's
unrepresented  labor  groups are from time to time approached  by  unions
seeking to represent them.  However, as of March 1, 2002, the Company has
not  received any official notice of organizing activity and  there  have
been  no  representation applications filed with the  National  Mediation
Board  by any of these groups.  The Company believes that the wage  rates
and  benefits  for  non-union employee groups are comparable  to  similar
groups at other regional airlines.

          The  Company  continues  to emphasize employee  recruiting  and
retention efforts and to hire personnel to accommodate its growth  plans.
Recently the Company has benefited from a decline in attrition due to the
softening  of  the  national economy.  However, due  to  fluctuations  in
industry  hiring  demands, a competitive local labor market  in  Northern
Virginia and the potential for the resumption of normal attrition,  there
can be no assurance that the Company will be able to continue to meet its
hiring requirements.

     Pilot Training

          The   Company   has  entered  into  agreements  with   Pan   Am
International Flight Academy ("PAIFA"), which allow the Company to  train
CRJ,  J-41  and 328JET pilots at PAIFA's facility near Washington-Dulles.
In  2001,  PAIFA  relocated its Washington-Dulles  operations  to  a  new
training facility housing two CRJ simulators, a 328JET simulator, and a J-
41  simulator  near  the Company's Washington-Dulles  headquarters.   The
Company has agreements to purchase an annual minimum number of CRJ and J-
41  simulator training hours at agreed rates, through 2010 for  the  CRJ,
and 2002 for the J-41.  The Company's payment obligations for CRJ and  J-
41  simulator  usage  over the remaining years of  the  agreements  total
approximately $12.5 million.

          In  2001,  a simulator provision and service agreement  between
PAIFA,  CAE  Schreiner and the Company was executed and  328JET  training
commenced  at the PAIFA facility.  Under this agreement, the Company  has
committed  to  purchase all of its 328JET simulator time  from  PAIFA  at
agreed  upon rates, with no minimum number of simulator hours guaranteed.
A second 328JET simulator is scheduled for installation at the Washington-
Dulles PAIFA simulator facility in July 2002.

     Regulation

          Economic.    The  Department  of  Transportation  ("DOT")   has
extensive authority to issue certificates authorizing carriers to  engage
in   air   transportation,  establish  consumer  protection  regulations,
prohibit  certain  unfair or anti-competitive pricing practices,  mandate
conditions  of  carriage and make ongoing determinations of  a  carrier's
fitness, willingness and ability to provide air transportation.  The  DOT
can  bring  proceedings  for the enforcement  of  its  regulations  under
applicable  federal  statutes,  which proceedings  may  result  in  civil
penalties, revocation of operating authority or criminal sanctions.

          The  Company's  ACA  subsidiary holds a certificate  of  public
convenience  and  necessity, issued by the DOT,  that  authorizes  it  to
conduct scheduled and charter air transportation of persons, property and
mail  between  all  points  in  the United States,  its  territories  and
possessions.  In addition, ACA may conduct charters to points outside the
United  States,  subject to obtaining any necessary  authority  from  any
foreign  country  to be so served.  This certificate  requires  that  ACA
maintain  DOT-prescribed  minimum levels of insurance,  comply  with  all
applicable  statutes  and regulations and remain  continuously  "fit"  to
engage  in  air  transportation.  In addition to this authority,  ACA  is
authorized to engage in air transportation between the United States  and
Canada.
 13
          The  Company's  ACJet subsidiary also holds  a  certificate  of
public  convenience and necessity, issued by the DOT, that authorizes  it
to  conduct scheduled and charter air transportation of persons, property
and  mail  between all points in the United States, its  territories  and
possessions.  On July 1, 2001, the Company combined the operations of its
ACJet  subsidiary into the operations of Atlantic Coast Airlines.   ACJet
is  now a dormant company with its only assets being its DOT and FAA  air
carrier  operating certificates.  The certificates issued  to  ACJet  are
subject to revocation for dormancy as of July 1, 2001.

          Based  on  conditions  in  the industry,  or  as  a  result  of
Congressional directives or statutes, the DOT from time to time  proposes
and adopts new regulations or amends existing regulations that may impose
additional  regulatory burdens and costs on the Company.    In  addition,
air  carriers  may volunteer to impose new or additional requirements  on
themselves to address Congressional concerns or concerns expressed by the
public, such as passenger rights initiatives.  Imposition of new laws and
regulations  on air carriers or agreement on voluntary initiatives  could
increase   the  cost  of  operation  and  or  limit  carrier   management
discretion.

          Safety.   The  FAA  extensively  regulates  the  safety-related
activities  of  air  carriers.   The Company  is  subject  to  the  FAA's
jurisdiction  with  respect  to  aircraft  maintenance  and   operations,
equipment, ground facilities, flight dispatch, communications,  training,
weather   observation,   flight   personnel,   airport   security,    the
transportation  of  hazardous materials and other matters  affecting  air
safety.  To ensure compliance with its regulations, the FAA requires that
airlines  under  its  jurisdiction obtain an  operating  certificate  and
operations  specifications  for  the particular  aircraft  and  types  of
operations  conducted  by  such airlines.  The Company's  ACA  subsidiary
possesses an operating certificate and related authorities issued by  the
FAA  authorizing  it  to conduct operations with turboprop  and  turbojet
equipment.   The  Company,  like  all  carriers,  requires  specific  FAA
authority  to  add  aircraft to its fleet.  ACA's  authority  to  conduct
operations  is  subject  to suspension, modification  or  revocation  for
cause.   The  FAA  has  authority to bring  proceedings  to  enforce  its
regulations, which proceedings may result in civil or criminal  penalties
or revocation of operating authority.

          The  Company's  ACJet  subsidiary was  issued  by  the  FAA  an
operating  certificate and related authorities authorizing it to  conduct
operations  with  turbojet  equipment.  On  July  1,  2001,  the  Company
combined  the  operations of its ACJet subsidiary into the operations  of
Atlantic Coast Airlines.

           From  time  to the time and with varying degrees of intensity,
the  FAA conducts inspections of air carriers.  Such inspections  may  be
scheduled  or  unscheduled  and  may  be  triggered  by  specific  events
involving  either  the  specific carrier being  inspected  or  other  air
carriers.  In addition, the FAA may require airlines to demonstrate  that
they  have  the  capacity to properly manage growth  and  safely  operate
increasing numbers of aircraft.
 14
          In  order  to  ensure  the  highest  level  of  safety  in  air
transportation, the FAA has authority to issue maintenance directives and
other  mandatory  orders.   These relate  to,  among  other  things,  the
inspection of aircraft and the mandatory removal and replacement of parts
or  structures.   In  addition, the FAA from  time  to  time  amends  its
regulations and such amended regulations may impose additional regulatory
burdens  on the Company, such as the required installation of new safety-
related  items.  Depending upon the scope of the FAA's orders and amended
regulations,   these  requirements  may  cause  the  Company   to   incur
substantial,  unanticipated expenses that may not be  reimbursable  under
the  Company's  marketing  agreements. The FAA enforces  its  maintenance
regulations  by  the  imposition  of  civil  penalties,  which   can   be
substantial.

          On November 19, 2001 the President signed into law the Aviation
and  Transportation Security Act (the "Security Act").  The Security  Act
requires heightened passenger, baggage and cargo security measures to  be
adopted  as  well as enhanced airport security procedures.  The  Security
Act  created the Transportation Security Administration ("TSA") that  has
taken  over the responsibility for conducting the screening of passengers
and  their baggage at the nation's airports as of February 17, 2002.  The
activities  of the TSA are to be funded in part by the application  of  a
$2.50  per  passenger enplanement security fee (subject to a  maximum  of
$5.00  per one way trip) and payment by all passenger carriers of  a  sum
not  exceeding  each  carrier's  passenger  and  baggage  screening  cost
incurred in calendar year 2000.  The TSA is charged to have equipment  in
operation  by  the  end of 2002 to be able to electronically  screen  all
checked passenger baggage with explosive detection systems.  The  TSA  is
also  required to deploy federal air marshals on an increased  number  of
passenger flights.

          The Security Act imposes new and increased requirements for air
carrier  employee background checks and additional security  training  of
flight  and  cabin crew personnel.  These additional and new requirements
may increase the security related costs of the Company.  The Security Act
also   mandates  and  the  FAA  has  adopted  new  rules  requiring   the
strengthening  of  cockpit  doors, some of the  costs  of  which  may  be
reimbursed by the FAA.  The Company has completed level one fortification
of its cockpit doors on all of its aircraft as of November 15, 2001.  The
FAA  has mandated additional cockpit door modifications that will  result
in  additional costs.  The Company intends to apply for reimbursement  of
these costs and other security costs for which the FAA has established  a
cost  reimbursement program. There is no guarantee that the Company  will
be  reimbursed in full for the cost of these modifications. New passenger
and baggage screening requirements have caused disruptions in the flow of
passengers through airports and in some cases delayed airline operations.
The  Company  may experience security-related disruptions in the  future,
including reduced passenger demand for air travel, but believes that  its
exposure  to  such disruptions is not greater than that  faced  by  other
providers of regional air carrier services.

          Although the TSA has taken over the former responsibilities  of
the air carriers for the screening of all passengers and baggage, the FAA
continues  to  require  air  carriers to  adopt  and  enforce  procedures
designed  to  safeguard  property, and ensure  airport  and  aircraft  to
protect  against  terrorist acts.  The FAA, from time  to  time,  imposes
additional  security requirements on air carriers and airport authorities
based  on  specific threats or world conditions or as otherwise required.
The  FAA  has  issued  a  number  of security  directives  following  the
September 11 terrorist attacks, and the Company has adjusted its security
procedures  on  numerous occasions in response to these directives.   The
Company  incurs  substantial expense in complying with  current  security
requirements  and it cannot predict what additional security requirements
may  be  imposed  in  the  future or the  cost  of  complying  with  such
requirements.
 15
          Associated  with  the  FAA's  security  responsibility  is  its
program to ensure compliance with rules regulating the transportation  of
hazardous   materials.   The  Company  has  policies  against   accepting
hazardous   materials  or  other  dangerous  goods  for   transportation.
Employees  of  the  Company are trained in the recognition  of  hazardous
materials  and  dangerous goods through an FAA approved training  course.
The  Company  may  ship aircraft and other parts and equipment,  some  of
which  may  be classified as hazardous materials, using the  services  of
third party carriers, both ground and air.  In acting in the capacity  of
a shipper of hazardous materials, the Company must comply with applicable
regulations.  The FAA enforces its hazardous material regulations by  the
imposition of civil penalties, which can be substantial.

          Other Regulation.  In the maintenance of its aircraft fleet and
ground  equipment, the Company handles and uses many materials  that  are
classified as hazardous.  The Environmental Protection Agency and similar
local  agencies  have jurisdiction over the handling  and  processing  of
these  materials.   The Company is also subject to the oversight  of  the
Occupational Safety and Health Administration concerning employee  safety
and health matters.  The Company is subject to the Federal Communications
Commission's jurisdiction regarding the use of radio frequencies.

          Federal  law  establishes maximum aircraft noise and  emissions
limits.  At the present time, all of the aircraft operated by the Company
comply  with  all  applicable  federal noise and  emissions  regulations.
Federal law generally preempts airports from imposing unreasonable  local
noise rules that restrict air carrier operations.  However, under certain
circumstances   airport   operators   may   implement   reasonable    and
nondiscriminatory  local  noise abatement  procedures,  which  procedures
could  impact  the  ability  of the Company to  serve  certain  airports,
particularly in off-peak hours.

     Seasonality

           Seasonal factors such as winter snowstorms, thunderstorms, and
hurricanes   have  the  ability  to  affect  the  Company's   departures,
completion  factor, profitability and cash generation.  As a  whole,  the
Company's  principal  geographic areas of operations  usually  experience
more  adverse  weather during the year as compared to other  geographical
regions,  causing  a  greater  percentage  of  the  Company's  and  other
airlines' flights to be canceled.

Item 2.        Properties

     Leased Facilities

          Airports

           The  Company leases gate and ramp facilities at  most  of  the
airports  ACA serves and leases ticket counter and office space at  those
locations  where ticketing is handled by Company personnel.  Payments  to
airport authorities for ground facilities are generally based on a number
of  factors,  including space occupied as well as  flight  and  passenger
volume.  The Company occupies a 69,000 square foot passenger concourse at
Washington-Dulles dedicated solely to regional airline  operations.   The
36-gate  concourse,  designed  to support the  Company's  United  Express
operation, is owned by the Metropolitan Washington Airports Authority and
leased to the Company under a 15-year lease.
 16
          Corporate Offices

           In  December 2000, the Company moved into a newly built three-
story  office building encompassing 77,000 square feet of space  under  a
ten  year  operating  lease.   This new facility  houses  the  executive,
administrative and system control departments.  The Company's  previously
leased  headquarters facility, comprised of 79,000 square feet, has  been
transformed  into an employee training and services center.  The  Company
renegotiated  this  lease for a new seven-year term expiring  in  January
2008.    Together,  these  two  properties  will  provide  the  necessary
facilities for the Company's continued growth.

          Maintenance Facilities

           The  FAA's safety regulations mandate periodic inspection  and
maintenance  of  commercial  aircraft.  The Company  performs  most  line
maintenance,  service and inspection of its aircraft and engines  at  its
maintenance facilities using its own personnel.

           The  Company  performs maintenance functions  at  its  112,000
square  foot aircraft maintenance facility at Washington-Dulles  airport,
and  at  its  34,000  square foot hangar facility in Columbia,  SC.   The
Washington-Dulles facility is comprised of 60,000 square feet  of  hangar
space  and 52,000 square feet of support space and includes hangar,  shop
and  office space necessary to maintain the Company's fleet.  In addition
to  these  facilities,  the  company performs maintenance  functions  and
maintains  leased hangar space at LaGuardia Airport in  New  York,  Logan
Airport   in  Boston,  O'Hare  International  Airport  in  Chicago,   and
Cincinnati Northern Kentucky International Airport.

Item 3.        Legal Proceedings

           The  Company is a party to routine litigation and to FAA civil
action  proceedings,  all of which are viewed to  be  incidental  to  its
business,  and none of which the Company believes are likely  to  have  a
material effect on the Company's financial position or the results of its
operations.

Item 4.        Submission of Matters to a Vote of Security Holders

          No matter was submitted during the fiscal quarter ended
December 31, 2001, to a vote of the security holders of the Company
through the solicitation of proxies or otherwise.

                                 PART II

Item   5.         Market  for  Registrant's  Common  Equity  and  Related
Stockholder Matters

           The  Company's  common stock, par value $.02  per  share  (the
"Common  Stock"),  is traded on the NASDAQ National Market  ("NASDAQ/NM")
under  the symbol "ACAI".  Trading of the Common Stock commenced on  July
21, 1993.
 17
           The  following  table  sets forth the reported  high  and  low
closing  sale prices of the Common Stock on the NASDAQ/NM for the periods
indicated:


                                                        
     2000                                 High                  Low
     First  quarter                      $12.97                $8.31
     Second quarter                      $16.00               $11.99
     Third quarter                       $18.49               $13.00
     Fourth quarter                      $21.38               $13.53

     2001
     First quarter                       $23.50               $18.25
     Second quarter                      $29.99               $20.75
     Third quarter                       $29.16               $10.03
     Fourth quarter                      $24.94               $13.61

     2002
     First quarter                       $29.21               $23.05
         (through March 1, 2002)


           As  of  March 1, 2002, the closing sales price of  the  Common
Stock on NASDAQ/NM was $27.25 per share and there were approximately  166
holders of record of Common Stock.

          The Company has not paid any cash dividends on its Common Stock
and  does  not anticipate paying any Common Stock cash dividends  in  the
foreseeable  future.  The Company intends to retain earnings  to  finance
the growth of its operations.  The payment of Common Stock cash dividends
in  the  future will depend upon such factors as earnings levels, capital
requirements, the Company's financial condition, the applicability of any
restrictions  imposed upon the Company subsidiaries  by  certain  of  its
financing  agreements, the dividend restrictions imposed by the Company's
line  of  credit,  and  other factors deemed relevant  by  the  Board  of
Directors.   In  addition,  ACAI  is  a  holding  company  and  its  only
significant asset is its investment in its subsidiary, ACA.

          The  Company's Board of Directors has approved the purchase  of
up  to  $40  million of the Company's outstanding common  stock  in  open
market  or  private transactions.  As of March 1, 2002, the  Company  has
purchased  2,128,000 shares of its common stock at an  average  price  of
$8.64  per  share.  The Company has approximately $21.6 million remaining
of  the $40 million authorization.  The Company did not repurchase shares
of its common stock during fiscal 2001.

Item 6.        Selected Financial Data

           The  following  selected  financial data  under  the  captions
"Consolidated  Financial  Data"  and "Consolidated  Balance  Sheet  Data"
relating to the years ended December 31, 1997, 1998, 1999, 2000 and  2001
have  been  derived from the Company's consolidated financial statements.
The  following  selected  operating  data  under  the  caption  "Selected
Operating Data" have been derived from Company records.  The data  should
be  read  in  conjunction with "Management's Discussion and  Analysis  of
Results  of  Operations  and Financial Condition"  and  the  Consolidated
Financial Statements and Notes thereto included elsewhere in this  Annual
Report on Form 10-K.
 18
                   SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
                     (Dollars in thousands, except per share amounts and
                             operating data)


Consolidated Financial Data:          Years  ended December 31,

                                     
                                                       
                                 1997    1998   1999      2000     2001

Operating revenues:
  Passenger revenues        $202,540 $285,243 $342,079 $442,695 $577,604
  Other revenues               2,904    4,697    5,286    9,831    5,812
  Total operating revenues   205,444  289,940  347,365  452,526  583,416
Operating expenses:
  Salaries and related costs  49,661   68,135   84,554  107,831  164,446
  Aircraft fuel               17,766   23,978   34,072   64,433   88,308
  Aircraft maintenance and    16,860   22,730   24,357   36,750   48,478
    materials
  Aircraft rentals            29,570   36,683   45,215   59,792   90,323
  Traffic commissions and     32,667   42,429   54,521   56,623   15,589
    related fees
  Facility rents and landing  10,376   13,475   17,875   20,284   32,025
    fees
  Depreciation and             3,566    6,472    9,021   11,193   15,353
    amortization
  Other                       16,035   23,347   28,458   42,537   61,674
  Aircraft early retirement      -       -        -      28,996   23,026
    charges  (1)
  Total operating expenses   176,501  237,249  298,073  428,439  539,222
Operating income              28,943   52,691   49,292   24,087   44,194
Other income (expense):
 Interest expense            (3,450)  (4,207)  (5,614)  (6,030)  (4,832)
  Interest income              1,284    4,145    3,882    5,033    7,500
  Debt conversion expense (2)     -   (1,410)      -         -        -

  Government compensation (3)     -       -        -         -     9,710
  Other income (expense), net     62      326     (85)    (278)      263
Total other expense, net     (2,104)  (1,146)  (1,817)  (1,275)   12,641

Income before income tax
expense and cumulative
   effect of accounting       26,839   51,545   47,475   22,812   56,835
   change
Income tax provision          12,339   21,133   18,319    7,657   22,513

Income before cumulative
effect of accounting change   14,500   30,412   29,156   15,155   34,322

Cumulative effect of             -       -       (888)       -        -
  accounting change, net (4)
Net income                   $14,500  $30,412  $28,268  $15,155  $34,322


 19
     SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (continued)
   (Dollars in thousands, except per share amounts and operating data)


                                    Years ended December 31,
                                                           
                            1997        1998       1999        2000       2001
Income per share:
  Basic:
    Income before           $0.47       $.84       $.77        $.38       $.79
      cumulative effect of
      accounting change
    Cumulative effect of        -          -     (0.02)           -          -
      accounting change
  Net income per share (5)  $0.47       $.84       $.75        $.38       $.79

  Diluted:
    Income before           $0.40       $.71       $.68        $.36       $.76
      cumulative effect of
      accounting change
    Cumulative effect of        -          -     (0.02)           -          -
      accounting change
  Net income per share (5)  $0.40       $.71       $.66        $.36       $.76

Weighted average number
   of shares used
   in computation  (in     31,294     36,256     37,928      40,150     43,434
   thousands) (5)          39,024     44,372     44,030      43,638     45,210
      Basic
      Diluted

Selected Operating Data:
    Departures            146,069    170,116    186,571     199,050    235,794
    Revenue passengers  1,666,975  2,534,077  3,234,713   3,778,811  4,937,208
      carried
    Revenue passenger     419,977    792,934  1,033,912   1,271,273  1,895,152
      miles (000s) (6)
    Available seat miles  861,222  1,410,763  1,778,984   2,203,839  3,292,798
      (000s) (7)
    Passenger load          48.8%      56.2%      58.1%       57.7%      57.6%
      factor (8)
    Revenue per            $0.239     $0.206     $0.195      $0.205     $0.177
      available seat mile
    Cost per available     $0.205     $0.168     $0.168      $0.181     $0.157
      seat mile (9)
    Average yield per      $0.482     $0.360     $0.331      $0.348     $0.305
      revenue passenger mile
      (10)
    Average passenger         252        313        320         336        384
      trip length (miles)
    Aircraft in service        65         74         84         105        117
      (end of period)
    Destinations served        43         53         51          53         64
      (end of period)

Consolidated Balance
Sheet Data:
    Working capital       $45,028    $68,130    $60,440      $72,018  $138,659
    Total assets          148,992    227,626    293,753      382,700   452,425
    Long-term debt and
    capital leases, less   76,145     64,735     92,787       67,089    60,643
      current portion
    Total stockholders'    34,805    110,377    125,524      168,173   221,300
      equity

 20
1.   In 2001, the Company recorded an operating charge of $23,537,000
  ($14,005,000 net of income tax benefits) for the non-discounted value of
  future lease and other costs associated with the early retirement of nine
  J-41 turboprop aircraft.  In 2000, the Company recorded an operating
  charge of $28,996,000 ($17,398,000 net of income tax benefits) for the
  present value of future lease and other costs associated with the early
  retirement of 28 J-32 turboprop aircraft.  Upon completion of the J-32
  retirement plan in 2001, the Company reversed $500,000 of the original
  2000 operating charge in 2001.

2.   In connection with the induced conversion of a portion of the 7%
  Convertible Subordinated Notes, the Company recorded a non-cash, non-
  operating charge of approximately $1.4 million in 1998.

3.   In 2001, the Company recognized $9.7 million as non-operating income
  under the Air Transportation Safety and System Stabilization Act, signed
  into law by President Bush on September 22, 2001.

4.   In 1999, the Company recorded a charge of $888,000 for the
  cumulative effect, net of income taxes, of a change in accounting for
  preoperating costs in connection with the implementation of Statement of
  Position 98-5.

5.   All per share calculations have been restated to reflect 2-for-1
  common stock splits effected as dividends distributed on May 15, 1998 and
  February 23, 2001.

6.   "Revenue passenger miles" or "RPMs" represent the number of miles
  flown by revenue passengers.

7.   "Available seat miles" or "ASMs" represent the number of seats
  available for passengers multiplied by the number of scheduled miles the
  seats are flown.

8.   "Passenger load factor" represents the percentage of seats filled by
  revenue passengers and is calculated by dividing revenue passenger miles
  by available seat miles.

9.   "Operating cost per available seat mile" or "CASM" represents total
  operating expenses, excluding aircraft early retirement charges, divided
  by available seat miles.

10.  "Average yield per revenue passenger mile" represents the average
  passenger revenue received for each mile a revenue passenger is carried.

 21
Item  7.         Management's  Discussion  and  Analysis  of  Results  of
Operations                    and Financial Condition

General

           Atlantic  Coast  Airlines  Holdings,  Inc.  ("ACAI")  operates
through its wholly owned subsidiary, Atlantic Coast Airlines ("ACA").  In
2001,  the Company recorded net income of $34.3 million compared to $15.2
million for 2000, and $28.3 million for 1999.  The 2001 results include a
restructuring  charge of $13.7 million, net of income taxes,  related  to
the  planned  early  retirement  of nine leased  29-seat  J-41  turboprop
aircraft   and   $5.8  million,  net  of  income  taxes,  in   government
compensation  received  pursuant to the  Air  Transportation  Safety  and
System Stabilization Act ("Stabilization Act") signed by the President of
the  United  States  in  September 2001.   The  2000  results  include  a
restructuring  charge of $17.4 million, net of income taxes,  related  to
the early retirement of 28 leased 19-seat J-32 turboprop aircraft and non-
recurring tax credits of $1.4 million.  The 1999 net results include  the
cumulative  effect  of  an accounting change, net  of  income  taxes,  of
$888,000  related  to the adoption of Statement of Position  98-5,  which
resulted   in  the  write-off  of  remaining  unamortized  regional   jet
implementation  costs.   Excluding these unusual items,  net  income  for
2001,  2000  and 1999 would have been $42.2 million, $31.1  million,  and
$29.2  million,  respectively.  For 2001, the  Company's  available  seat
miles ("ASM") increased 49% with the addition of 19 Canadair Regional Jet
("CRJ") aircraft and 15 Fairchild Dornier 328JET ("328JET") aircraft, net
of  the  reduction of 21 J-32 turboprop aircraft during  the  year.   The
number  of  total  passengers increased 31%, and revenue passenger  miles
("RPM") increased 49%.

Results of Operations

           The  Company's net income was $34.3 million (including a $23.0
million pre-tax operating charge related to the early retirement of  nine
J-41 turboprop aircraft and $9.7 million in pre-tax income for government
compensation) or $.76 per diluted share in 2001 compared to $15.2 million
(including a $29.0 million pre-tax operating charge related to the  early
retirement  of 28 J-32 turboprop aircraft) or $.36 per diluted  share  in
2000,  and $28.3 million or $.66 per diluted share in 1999.  During 2001,
the  Company generated operating income of $44.2 million (including a $23
million  operating charge related to the early retirement  of  nine  J-41
turboprop aircraft), compared to $24.1 million for 2000 (including a  $29
million pre-tax operating charge related to the early retirement of 28 J-
32  turboprop  aircraft)  and  $49.3 million  for  1999.   Excluding  the
aircraft early retirement charges in 2001 and 2000, operating margins for
2001, 2000 and 1999 were 11.5%, 11.7% and 14.2% respectively.

          Results   for   2001   include   special   pre-tax   government
compensation  of  $9.7 million arising from the Stabilization  Act.   The
Stabilization  Act  provides cash grants to commercial  air  carriers  as
compensation for direct and incremental losses resulting from the attacks
of  September  11, 2001 and incurred from that date through December  31,
2001.

           The 83.5% increase in operating income from 2000 to 2001 is  a
reflection of the 49.4% increase in available seat miles coupled  with  a
13.7% decrease in revenue per available seat mile and a 13.3% decrease in
the  cost per available seat mile.  Additionally, the 2001 aircraft early
retirement  charge of $23 million was $6 million less than  the  aircraft
early  retirement  charge in 2000.  Revenue and cost per  available  seat
mile have decreased as the turboprop aircraft are retired and the Company
utilizes more regional jets.
 22
          The  51.1% decrease in operating income from 1999 to 2000 is  a
reflection of the J-32 retirement charge of $29 million.  Excluding  this
charge,  operating income increased 7.7%, which reflects a 5.1%  increase
in  unit  revenue  (total  revenue per ASM) from  $0.195  to  $0.205,  an
increase of 7.7% in unit costs (cost per ASM) from $0.168 to $.181 and  a
23.9% increase in ASM's.

Fiscal Year 2000 vs. 2001

     Operating Revenues

          The  Company's  operating revenues increased  28.9%  to  $583.4
million  in  2001  compared  to $452.5 million  in  2000.   The  increase
resulted primarily from a 49.4% increase in ASMs to 3.3 billion  as  well
as  a  9.9% increase in revenue per departure to $2,452.  Revenue in 2001
was recognized primarily under fee-for-service agreements as compared  to
a  combination  of  a proration-of-fare agreement and  a  fee-for-service
agreement  in  2000.  Revenue for 2001 also included an  additional  $3.8
million attributable to routine subsequent period sampling adjustments to
prior   billed  tickets  under  the  Company's  former  proration-of-fare
arrangement.   The  Company believes that it will  no  longer  experience
revenue   adjustments   attributable  to  its  former   proration-of-fare
arrangements.   The  increase in ASMs reflects the  addition  of  19  CRJ
aircraft and 15 328JET aircraft in 2001, and the full year effect in 2001
of  adding 14 CRJ aircraft and 14 328JET aircraft during 2000, offset  by
the  removal  of  21  J-32  aircraft  during  2001.   Revenue  passengers
increased  30.7%  in  2001  compared to 2000,  which  combined  with  the
increase  in  the  average passenger stage length  resulted  in  a  49.1%
increase in RPMs.

          The 40.8% decrease in other revenues year over year reflects  a
$1.8  million  decrease in revenue from package and mail delivery  and  a
$1.4  million  decrease in United employee ticket revenue.  The  decrease
reflects the fact that these revenues are no longer earned by the Company
as  a  result  of the restatement of the United Express agreement,  which
went into effect on December 1, 2000.

     Operating Expenses

          Excluding  the  $23  million  and $29  million  aircraft  early
retirement charge in 2001 and 2000, respectively, the Company's operating
expenses  increased  29.2% to $516.2 million in 2001 compared  to  $399.4
million in 2000.  This increase was due primarily to: a 52.5% increase in
total  salary  costs,  a  51.1% increase in  aircraft  rentals,  a  57.9%
increase in facility rents and landing fees and a 49.4% increase in ASMs.
These increases reflect the addition of 34 regional jet aircraft in 2001,
and the retirement of 21 J-32s during 2001.
 23
          A  summary  of operating expenses as a percentage of  operating
revenue and operating cost per ASM for the years ended December 31,  2000
and 2001 is as follows:


                              Year Ended December 31,
                              2000              2001

                                         
                        Percent   Cost     Percent   Cost
                          of                  of
                       Operating  Per ASM  Operating Per ASM
                        Revenues  (cents)  Revenues  (cents)

Salaries  and   related  23.8%      4.9     28.2%      5.0
  costs
Aircraft fuel            14.2%      2.9     15.1%      2.7

Aircraft    maintenance   8.1%      1.7      8.3%      1.5
  and materials
Aircraft rentals         13.2%      2.7     15.5%      2.7

Traffic commissions and  12.5%      2.6      2.7%       .5
  related fees
Facility   rents and      4.5%       .9      5.5%      1.0
  landing fees
Depreciation and          2.5%       .5      2.6%       .4
  amortization
Other                     9.5%      1.9     10.6%      1.9
Aircraft  early           6.4%      1.3      3.9%       .7
retirement charge

    Total                94.7%     19.4     92.4%     16.4


          Costs per ASM decreased 15.5% to 16.4 cents in 2001 compared to
19.4  cents for 2000.  The main factors contributing to the decrease were
a  49.4%  increase  in  ASMs and a 72.5% decrease in  the  year-over-year
traffic   commissions  and  related  fees.   The  decrease   in   traffic
commissions  and related fees reflects the fact that many of  these  fees
are  no longer borne by the Company as a result of the restatement of the
United  Express  agreement, which went into effect on December  1,  2000.
Excluding  the  aircraft early retirement charge in both 2001  and  2000,
costs per ASM decreased 13.3% to 15.7 cents during 2001 compared to  18.1
cents for 2000.

          Salaries and related costs per ASM increased 2.0% to 5.0  cents
in 2001 compared to 4.9 cents in 2000.  In absolute dollars, salaries and
related  expenses increased 52.5% from $107.8 million in 2000  to  $164.4
million  in 2001.  The increase primarily resulted from the net  addition
of  557  full  and  part time employees during 2001  to  support  the  34
regional  jet  aircraft  added during 2001, an accrual  of  $2.9  million
recorded  in  2001  reflecting  estimated costs  for  additional  company
contributions which may be made to the Company's 401(k) plan  to  address
operational  defects  found in the plan, and $1.8  million  in  executive
compensation related to deferred compensation benefits being provided  to
senior executive officers.

          The  cost  per ASM of aircraft fuel decreased to 2.7  cents  in
2001  compared to 2.9 cents in 2000.  The total average price per  gallon
of  fuel  decreased 11.7% to 98 cents in 2001 compared to $1.11 in  2000.
In  absolute  dollars, aircraft fuel expense increased 37.1%  from  $64.4
million in 2000 to $88.3 million in 2001, reflecting a 27.3% increase  in
block  hours  and  the higher fuel consumption per hour of  regional  jet
aircraft versus turboprop aircraft which resulted in a 21.6% increase  in
the system average burn rate (gallons used per block hour flown).

          The   cost  per  ASM  of  aircraft  maintenance  and  materials
decreased  to  1.5  cents in 2001 compared to  1.7  cents  in  2000.   In
absolute  dollars,  aircraft maintenance and materials expense  increased
31.9% from $36.8 million in 2000 to $48.5 million in 2001.  The increased
expense  resulted from the increase in the size of the total  fleet,  the
continual increase in the average age of the J-41 turboprop fleet and the
gradual expiration of manufacturer's warranties on the CRJs.
 24
          The  cost per ASM of aircraft rentals remained the same at  2.7
cents  in  2001  and 2000. During 2001, the Company took delivery  of  34
additional  regional jet aircraft, all of which were lease financed.   In
absolute  dollars,  aircraft  rental expense  increased  51.1%  to  $90.3
million  as  compared  to $59.8 million in 2000  due  to  the  additional
regional jet aircraft added to the fleet.

          The  cost  per  ASM  of traffic commissions  and  related  fees
decreased  to  .5  cents in 2001 as compared to 2.6 cents  in  2000.   In
absolute dollars, traffic commissions and related fees decreased 72.5% to
$15.6  million in 2001 from $56.6 million in 2000. The decrease  reflects
the fact that many of these fees are no longer borne by the Company as  a
result  of  the restatement of the United Express agreement,  which  went
into  effect  on  December  1, 2000.  Under the restated  agreement,  the
Company  is  now  only  responsible for fees associated  with  the  major
airline Computer Reservation Systems.

          The cost per ASM of facility rent and landing fees increased to
1.0 cents for 2001 from .9 cents for 2000.  In absolute dollars, facility
rent  and landing fees increased 57.9% to $32 million for 2001 from $20.3
million in 2000.  The increase in absolute dollars for facility rent  and
landing  fees  is  a  result  of  an 18.5%  increase  in  the  number  of
departures, the heavier landing weight of the regional jets and the lease
of  the  Company's  new  corporate headquarters  building  commencing  on
December 1, 2000.

          The  cost  per  ASM of depreciation and amortization  decreased
slightly  to  0.4  cents for 2001 from 0.5 cents in  2000.   In  absolute
dollars,  depreciation and amortization expense for 2001 increased  37.2%
to  $15.4  million  from  $11.2 million in 2000.  The  absolute  increase
results  in  part from additional expenditures for rotable  spare  parts,
engines and aircraft improvements.

          The  cost per ASM of other operating expenses remained the same
at  1.9  cents  for 2001 and 2000.  In absolute dollars, other  operating
expenses  increased 45% to $61.7 million for 2001 from $42.5  million  in
2000.   The increased costs result primarily from a 200% increase in  the
cost  of  passenger  insurance, a 96.4% increase  in  the  cost  of  hull
insurance, and the 30.7% increase in revenue passengers which resulted in
higher passenger handling costs, training expenses and crew accommodation
costs  for  new flight crews to support additional aircraft and stations.
The  Company  expects  pilot  training and crew  accommodation  costs  to
continue  to  increase  as  the remaining firm  ordered  CRJ  and  328JET
aircraft  are  received.  Under  the Stabilization  Act,  the  government
subsequently  authorized  air  carriers to apply  for  reimbursement  for
increased insurance costs incurred during the period October 1,  2001  to
October 30, 2001, and the Company applied for, received, and recorded  as
a  reduction to insurance expense $652,000 in such reimbursements.   This
amount  was  based  on  costs incurred during the period,  and  no  other
insurance reimbursements are anticipated.

          In  2001, the Company recorded an operating charge of 0.7 cents
per  ASM  for  costs associated with the early retirement  of  nine  J-41
turboprop  aircraft, as compared to 1.3 cents per ASM in 2000  for  costs
associated  with the early retirement of 28 J-32 turboprop aircraft.   In
absolute  dollars,  the  amount of the charge was  $23  million  in  2001
compared to $29 million in 2000.    The retirement of the J-32 fleet  was
completed by December 31, 2001 and the Company reversed $500,000  of  the
2000  charge.   Nine of the J-41 turboprop aircraft are  expected  to  be
retired in 2002, with the remaining 22 aircraft to be retired by December
31, 2003.
 25
     Other Income (Expense)

          Interest  expense decreased from $6 million  in  2000  to  $4.8
million  in 2001. The decrease is the result of the full year  effect  of
the impact of the conversion of the Company's 7% notes into equity during
the first half of 2000.

          Interest  income  increased from $5 million  in  2000  to  $7.5
million  in  2001.   This  is  primarily  the  result  of  the  Company's
significantly higher cash balances during 2001 as compared to 2000 offset
partially by lower rate of return on short-term investments in 2001.

          On  September  22,  2001, President Bush signed  into  law  the
Stabilization  Act.   The  Stabilization  Act  provides  cash  grants  to
commercial  air  carriers as compensation for (1) direct losses  incurred
beginning with the terrorist attacks on September 11, 2001 as a result of
any   FAA  mandated  ground  stop  order  issued  by  the  Secretary   of
Transportation  (and for any subsequent order which continues  or  renews
such  a  stoppage), and (2) incremental losses incurred during the period
beginning  September 11, 2001 and ending December 31, 2001  as  a  direct
result  of such attacks.  The Company is entitled to receive cash  grants
under  these  provisions.  The exact amount of the Company's compensation
will  be  based  on the lesser of actual losses incurred or  a  statutory
limit  based on the total amount allocable to all airlines.   This  total
amount is not yet determinable because the statutory limit is subject  to
information not yet released by the government.  The Company has received
$9.7  million  in  government compensation,  which  is  the  government's
estimate  of  approximately  85%  of the Company's  allocation  based  on
preliminary  data.  The Company has received $9.7 million in cash  grants
under   these   provisions  recognized  as  non-operating  income   under
"government compensation" for the third and fourth quarters  2001.   This
amount  was the government's estimate of approximately 85% of amount  due
to  the  Company  based on preliminary data.  The  exact  amount  of  the
Company's  compensation  will be based on the  lesser  of  actual  losses
incurred or a statutory limit based on the total amount allocable to  all
airlines.   This  exact  amount  is  not  yet  determinable  because  the
statutory limit is subject to information not yet released by the federal
government.  As such, the Company is unsure if it will be entitled to any
further government compensation under this program and will recognize any
remaining  payments  as  non-operating income during  the  period  it  is
determined  the  Company  is  entitled to such  amounts.     All  amounts
received  as government compensation are subject to audit and  adjustment
by the federal government.

          The  Company  recorded a provision for income  taxes  of  $22.5
million  for  2001,  compared to a provision for  income  taxes  of  $7.7
million in 2000.  The 2001 effective tax rate was approximately 39.6%  as
compared  to  the 2000 effective tax rate of approximately  33.6%.   This
increase is primarily due to a favorable state income tax ruling in  2000
resulting  in  the  application of one time state tax  credits,  and  the
realization of certain tax benefits that were previously reserved,  which
together  reduced  income tax expense by approximately $1.4  million  for
2000.    The   effective  tax  rates  reflect  non-deductible   permanent
differences between taxable and book income.
 26
Fiscal Year 1999 vs. 2000

     Operating Revenues

          The  Company's  operating revenues increased  30.3%  to  $452.5
million  in  2000  compared  to $347.4 million  in  1999.   The  increase
resulted  from  a 23.9% increase in ASMs, together with  an  increase  in
revenue per ASMs of 5.1%.  The increase in ASMs reflects the addition  of
fourteen CRJ aircraft and fourteen 328JET aircraft in 2000, and the  full
year effect in 2000 of adding ten CRJ aircraft during 1999, offset by the
removal of seven J-32 aircraft during 2000.  Revenue passengers increased
16.8%  in 2000 compared to 1999, which combined with the increase in  the
average passenger stage length resulted in a 23% increase in RPMs.

          The  86%  increase  in other revenues year over  year  includes
amounts paid by Delta Air Lines related to certain pilot training for the
Delta Connection operation.

     Operating Expenses

          Excluding  the $29.0 million aircraft early retirement  charge,
the  Company's  operating expenses increased 34.0% to $399.4  million  in
2000 compared to $298.1 million in 1999.  This increase was due primarily
to: an 89% increase in total fuel costs as a result of a 49% increase  in
the average price per gallon of jet fuel, coupled with a 20% increase  in
the  average fuel burn rate to 222 gallons per hour; a 23.9% increase  in
ASMs;  and  expenses  for the certification and start  up  of  the  ACJet
operation.  The increase in ASMs, passengers and burn rates reflects  the
addition  of  fourteen CRJs and fourteen 328JETs into scheduled  service,
net of the retirement of seven J-32s during 2000.

          A  summary  of operating expenses as a percentage of  operating
revenue and operating cost per ASM for the years ended December 31,  1999
and 2000 is as follows:


                                Year Ended December 31,
                                1999                2000
                                             
                        Percent of  Cost     Percent of   Cost
                        Operating  per ASM   Operating   per ASM
                         Revenues  (cents)   Revenues    (cents)

Salaries  and   related    24.3%     4.8     23.8%          4.9
  costs
Aircraft fuel               9.8%     1.9     14.2%          2.9
Aircraft    maintenance     7.0%     1.4      8.1%          1.7
  and materials
Aircraft rentals           13.0%     2.5     13.2%          2.7
Traffic commissions and    15.7%     3.1     12.5%          2.6
  related fees
Facility   rents and        5.2%     1.0      4.5%           .9
  landing fees
Depreciation and            2.6%      .5      2.5%           .5
  amortization
Other                       8.2%     1.6      9.5%          1.9
Aircraft early                 -      -       6.4%          1.3
  retirement charge

    Total                  85.8%     16.8    94.7%         19.4

          Costs per ASM increased 15.5% to 19.4 cents in 2000 compared to
16.8  cents for 1999.  The main factors contributing to the increase were
a  49%  increase in the year over year price per gallon of jet fuel,  the
expenses associated with the certification and start-up of ACJet,  flight
crew training costs, and the aircraft early retirement charge.  Excluding
the  aircraft  early retirement charge, costs per ASM increased  7.7%  to
18.1 cents during 2000 compared to 16.8 cents for 1999.
 27
          Salaries and related costs per ASM increased 2.1% to 4.9  cents
in 2000 compared to 4.8 cents in 1999.  In absolute dollars, salaries and
related  expenses increased 27.5% from $84.6 million in  1999  to  $107.8
million  in 2000.  The increase primarily resulted from the net  addition
of  780  full  and  part time employees during 2000  to  support  the  28
regional jet aircraft added during 2000.

          The  cost  per ASM of aircraft fuel increased to 2.9  cents  in
2000  compared to 1.9 cents in 1999.  The total price per gallon of  fuel
increased  48.9%  to $1.11 in 2000 compared to 74.6 cents  in  1999.   In
absolute  dollars,  aircraft  fuel expense  increased  89.1%  from  $34.1
million in 1999 to $64.4 million in 2000, reflecting the higher cost  per
gallon  fuel  price, a 5.8% increase in block hours and the  higher  fuel
consumption per hour of regional jet aircraft versus a turboprop aircraft
which resulted in a 20% increase in the system average burn rate (gallons
used per block hour flown).

          The   cost  per  ASM  of  aircraft  maintenance  and  materials
increased  to  1.7  cents in 2000 compared to  1.4  cents  in  1999.   In
absolute  dollars,  aircraft maintenance and materials expense  increased
50.9% from $24.4 million in 1999 to $36.8 million in 2000.  The increased
expense  resulted from the increase in the size of the total  fleet,  the
continual  increase  in  the  average age of the  turboprop  fleets,  the
gradual  expiration of manufacturer's warranties on  the  CRJs,  and  the
reversal  in  1999  of approximately $1.5 million in life  limited  parts
repair  expense  accruals  related to CRJ engines  that  were  no  longer
required based on the introduction of a maintenance contract covering the
GE engines operating on the CRJ fleet.

          The  cost per ASM of aircraft rentals increased slightly to 2.7
cents  in  2000 compared to 2.5 cents in 1999.  During 2000, the  Company
took  delivery of 28 additional regional jet aircraft, all of which  were
lease  financed.  In absolute dollars, aircraft rental expense  increased
32.2%  to $59.8 million as compared to $45.2 million in 1999 due  to  the
additional aircraft added to the fleet.

          The  cost  per  ASM  of traffic commissions  and  related  fees
decreased to 2.6 cents in 2000 as compared to 3.1 cents in 1999.    Delta
is  responsible  for  travel  agent  commissions  and  related  fees  and
effective  December  1,  2000,  United is responsible  for  travel  agent
commissions  and  program  fee expense as a result  of  the  restated  UA
agreement.   In  absolute dollars, traffic commissions and  related  fees
increased 3.9% to $56.6 million in 2000 from $54.5 million in 1999.   The
increase  resulted from an increase in passenger revenues  and  passenger
volumes, offset by a reduction in the commission rates payable to  travel
agents.

          The  cost  per ASM of facility rents and landing fees decreased
to  .9  cents  for  2000  from 1.0 cent for 1999.  In  absolute  dollars,
facility rent and landing fees increased 13.5% to $20.3 million for  2000
from  $17.9  million  in  1999.  The increase  in  absolute  dollars  for
facility  rent  and landing fees is a result of a 6.7%  increase  in  the
number  of  departures, and the heavier landing weight  of  the  regional
jets.

          The  cost per ASM of depreciation and amortization remained the
same  at  0.5 cents for 2000 and 1999.  In absolute dollars, depreciation
and  amortization expense for 2000 increased 24.1% to $11.2 million  from
$9  million in 1999.  The absolute increase results in part from the full
year  effect  of purchasing two CRJ aircraft and rotable spare  parts  in
1999 for approximately $59 million.
 28
          The  cost per ASM of other operating expenses increased to  1.9
cents  for  2000  from  1.6  cents in 1999.  In absolute  dollars,  other
operating  expenses increased 49.5% to $42.5 million for 2000 from  $28.5
million  in  1999.  The increased costs result primarily from  the  16.8%
increase  in  revenue  passengers  which  resulted  in  higher  passenger
handling costs, training expenses for new flight crews, and expenses  for
ACJet pre-operating activities.

          In  2000, the Company recorded an operating charge of 1.3 cents
per  ASM  for  costs  associated with the early  retirement  of  28  J-32
turboprop  aircraft.  In absolute dollars, the amount of the  charge  was
$29  million.  The  charge  included the estimated  cost  of  contractual
obligations  to  meet  aircraft return conditions  as  well  as  a  lease
termination  fee.   The  retirement of the J-32 fleet  was  completed  on
December 31, 2001.

          Other Income (Expense)

          Interest  expense increased from $5.6 million  in  1999  to  $6
million  in 2000. The increase is the result of the full year  effect  of
the  debt  outstanding  for the purchase of two CRJs  in  1999  partially
offset  by  the impact of the conversion of the Company's 7%  notes  into
equity during the first half of 2000.

          Interest  income  increased from $3.9 million  in  1999  to  $5
million  in  2000.   This  is  primarily  the  result  of  the  Company's
significantly higher cash balances during 2000 as compared to 1999.

          The  Company  recorded  a provision for income  taxes  of  $7.7
million  for  2000,  compared to a provision for income  taxes  of  $18.3
million  in 1999.  The 2000 effective tax rate is approximately 33.6%  as
compared  to  the  1999 effective tax rate of approximately  38.6%.  This
decrease is due to a favorable state income tax ruling resulting  in  the
application of one time state tax credits, and the realization of certain
tax benefits that were previously reserved, which together reduced income
tax  expense  by approximately $1.4 million for 2000.  The effective  tax
rates  reflect non-deductible permanent differences between  taxable  and
book income.

          The  American Institute of Certified Public Accountants  issued
Statement  of  Position 98-5 on accounting for start-up costs,  including
preoperating  costs  related to the introduction of new  fleet  types  by
airlines.   The new accounting guidelines were effective for  1999.   The
Company  had  previously deferred certain start-up costs related  to  the
introduction of the CRJs and was amortizing such costs to expense ratably
over  four  years.   Effective January 1, 1999, the  Company  recorded  a
charge  for the remaining unamortized balance of approximately  $888,000,
net  of  $598,000  of  income taxes, associated with previously  deferred
preoperating costs.
 29
Outlook and Business Risks

          This  Outlook and Business Risks section and the Liquidity  and
Capital Resources section below contain forward-looking statements.   The
Company's actual results may differ materially.  Factors that could cause
the  Company's future results to differ materially from the  expectations
described  here include the costs and other effects of enhanced  security
measures   and   other  possible  government  orders;  changes   in   and
satisfaction  of regulatory requirements including requirements  relating
to fleet expansion; changes in levels of service agreed to by the Company
with  its  code share partners due to market conditions; the  ability  of
these partners to manage their operations and cash flow; the ability  and
willingness  of  these  partners  to continue  to  deploy  the  Company's
aircraft  and  to utilize and pay for scheduled service at agreed  rates;
the  ability of these partners to force changes in rates; increased  cost
and reduced availability of insurance; changes in existing service; final
calculation and auditing of government compensation; unexpected costs  or
delays  in the implementation of new service; adverse weather conditions;
satisfactory resolution of union contracts becoming amendable during 2002
with  the  Company's aviation maintenance technicians and ground  service
equipment mechanics, and the Company's flight attendants; ability to hire
and  retain  employees; availability and cost of funds for financing  new
aircraft;  the  ability of Fairchild Dornier to fulfill  its  contractual
obligations  to the Company, and of Bombardier and Fairchild  Dornier  to
deliver aircraft on schedule; airport and airspace congestion; ability to
successfully   retire  turboprop  aircraft;  flight   reallocations   and
potential service disruptions due to labor actions by employees of  Delta
Air  Lines  or United Airlines; general economic and industry conditions;
and  additional  acts of war.  The statements in this Annual  Report  are
made  as  of  March 29, 2002 and the Company undertakes no obligation  to
update  any of the forward-looking information included in this  release,
whether  as  a  result  of  new information, future  events,  changes  in
expectations or otherwise.

          The  events of September 11, together with the slowing  economy
throughout  2001, have significantly affected the U.S. airline  industry.
These events have resulted in changed government regulation, declines and
shifts  in  passenger  demand, increased insurance  costs  and  tightened
credit  markets  which  continue to affect the operations  and  financial
condition  of  participants  in the industry  including  the Company, its
code share partners, and aircraft manufactures. These circumstances  have
raised  substantial  risks and  uncertainties, including  those discussed
 below,  which  may impact the  Company, its  code  share  partners,  and
aircraft manufacturers, in ways that the Company is not currently able to
predict.

          The Company provides service for its Delta Connection operations
exclusively with regional jets and is  continuing its  transformation of
its existing United Express  operation to an all regional jet fleet.   In
addition  to the 60 CRJs and 33 328JETs in service as of March  1,  2002,
the  Company  has  firm orders for an additional 36 CRJs from  Bombardier
Inc.  and  32 328JETs from Fairchild Dornier, with option orders  for  80
CRJs  and 81 328JETs, and long-term marketing agreements with United  and
Delta  to  fly the firm ordered jet aircraft in United Express and  Delta
Connection service.  Under these agreements, the Company is dependent  on
United  and Delta for substantially all of its revenue and for  providing
support  services necessary to operate its aircraft, and is dependent  on
Bombardier  and Fairchild for providing aircraft expected to support  the
Company's future growth and for other support described in this report on
Form  10-K.  Business or operational difficulties, liquidity problems  or
bankruptcy of any of these entities could materially impact the Company's
operations and financial condition.

          The  slowing  economy  in  2001 and the  terrorist  attacks  of
September  11  have resulted in both United and Delta  changing  how  the
Company's regional jet aircraft are utilized.  In the past, regional jets
were primarily deployed to open new long, thin routes and to replace some
turboprop  service in higher traffic markets.  With the fleet  reductions
of  older,  higher  cost narrow body aircraft by United  and  Delta,  the
Company has been replacing mainline service to select United markets from
Chicago  and  added  mainline complementary  service  on  numerous  other
routes.  For Delta, the Company is currently operating hubs at New York's
LaGuardia  airport, Boston's Logan airport, and Cincinnati  and  Northern
Kentucky International Airport.
 30
          UAL  Corporation,  the  parent of United,  has  disclosed  that
during the fourth quarter 2001 it began implementing a financial recovery
plan  that  includes four planks:  reducing the size of the  airline  and
cutting  capital  and  operating spending in line  with  that  reduction,
generating as much revenue as possible from each flight, working with its
unions  and  other  employee  groups to find further  labor  savings  and
implementing a financing plan to support it through the execution of  its
financial  recovery  plan.  UAL Corporation further  disclosed  that  the
impact  of the events of September 11, 2001 on United and the sufficiency
of  its  financial  resources to absorb that impact are  dependent  on  a
number  of  factors,  including  United's  success  in  implementing  its
financial recovery plan.

          Following  September  11,  United requested  that  the  Company
propose  measures  that  it could take to assist  in  improving  United's
financial  situation.  The Company believes that United  made  a  similar
request  to  other  suppliers and vendors.  On  December  31,  2001,  the
Company  and  United  agreed on fee-per-departure rates  to  be  utilized
during 2002.  In addition, in the context of reaching this agreement, the
Company  agreed to certain concessions that would benefit United  by  (1)
settling various existing contract issues, (2) agreeing that United would
not  have  to pay increased rates to reflect utilization changes  in  the
fourth  quarter  of  2001,  (3)  agreeing  to  2002  rates  that  require
aggressive cost containment, and (4) reaffirming its commitment to retire
the Company's J-41 turboprop aircraft.  The Company determined that these
concessions,  which  were  favorable  to  United  as  compared  to  prior
contractual  arrangements  and were designed  to  assist  United  in  its
financial  recovery plan, were appropriate in light of the  circumstances
at the time.

          In  late  March  2002,  United informed  the  Company  that  an
essential  component  of its financial recovery plan  includes  obtaining
cost  reductions  from its employees, suppliers and  partners,  and  that
United  is seeking the Company's assistance in decreasing the cost of the
Company's product and achieving cash flow improvements for United over the
next 24 months.  The  Company  has  commenced  discussions  with United
regarding opportunities  for  reducing its costs or creating  value to
address United's financial situation.  The basis  for,  nature,  timing
and extent of any such actions has  not  been agreed.   While the Company
has expressed its willingness  to  work  with United  to  find  mutually
acceptable opportunities, the Company  believes that it is not
contractually obligated to make any such changes under the United
Express  Agreements  or  the  December  31,  2001  rate  setting
agreement.

          The   Company's  Delta  Connection  service  commenced  revenue
service  with  328JETs during the third quarter of 2000  and  added  CRJs
during  the fourth quarter of 2000.  Approximately $7.8 million in start-
up  expenses from inception through commencement of revenue service  were
incurred,  which  were expensed as incurred.  Delta  is  reimbursing  the
Company  for  $5.2  million of these costs, and  the  amounts  are  being
recorded  as revenue ratably through July 2003.  As of December 31,  2001
the Company has recorded $2.0 million of this revenue.
 31
          The  chairman  of  Fairchild Dornier, the manufacturer  of  the
328JET,  recently stated that it has an immediate and critical  need  for
additional funding, and that it is in discussions with several  potential
strategic partners regarding proposed investments.  The Company is unable
to  predict  whether  Fairchild Dornier will  be  successful  in  finding
additional  capital  or  in  otherwise restructuring  its  finances,  but
believes  that  Fairchild  Dornier  may  be  forced  to  seek  bankruptcy
protection  if  it is unsuccessful in its efforts.  In  the  event  of  a
Fairchild  Dornier  bankruptcy,  Fairchild  Dornier  could  either  sell,
liquidate  or reorganize some or all of its businesses, and in the  event
of  a  reorganization or sale of its businesses would have the  right  to
assume  or  reject  future  contractual  obligations.   Should  Fairchild
Dornier  be unable to deliver ordered 328JETS, the Company would reassess
available alternatives in pursuing its growth strategy and possibly delay
the   Company's  turboprop  retirement  plans,  and  adjust  other  plans
discussed elsewhere in this Form 10-K relating to its 328JET aircraft.

          Fairchild  Dornier  has significant future obligations  to  the
Company  in connection with the order of 328JET aircraft.  These  include
obligations:  to deliver 32 firm ordered 328JETs and 81 additional option
328JETs with certain financing support; to pay the Company any difference
between the lease payments, if any, received from the remarketing the  of
26  J-41 aircraft leased by the Company and the lease payment obligations
of the Company on those aircraft; to purchase five J-41 aircraft owned by
the Company at their net book value at the time of retirement;  to assume
certain   crew   training  costs;  and,  to  provide  spares,   warranty,
engineering,  and  related support.  Fairchild Dornier  has  delayed  the
delivery of one 328JET that was scheduled to be delivered to the  Company
during  the  week  of  March  25, 2002 for  reasons  connected  with  its
financing.   The  Company  believes it has secured  rights  to  Fairchild
Dornier's  equity interest in the delivered 328JETs that it  may  proceed
against  in the event that Fairchild Dornier fails to fulfill certain  of
these obligations.

          During the fourth quarter of 2001, the Company recorded a  pre-
tax  aircraft  early  retirement charge of $23.5 million  for  the  early
retirement  of  nine  leased Jetstream-41 turboprop aircraft,  which  the
Company plans to remove from service prior to year-end 2002.  The Company
anticipates taking additional charges during 2002 of approximately  $48.0
million  pre-tax for the retirement of its remaining 29-seat Jetstream-41
turboprop aircraft.  The undiscounted remaining lease obligations (net of
the  Company's estimate of the future sublease rentals) on the J-41 fleet
after  planned  retirement dates in 2002 and 2003 are  approximately  $55
million and continue through 2010 and the book value of the five owned J-
41  aircraft  as of March 1, 2002 is $18.1 million.  To the  extent  that
Fairchild  Dornier fulfills its contractual obligations, the majority  of
the  aircraft  early  retirement charge will  not  adversely  affect  the
Company's  cash  position, with the payments by Fairchild  Dornier  being
recorded as an aircraft purchase inducement on the 328JET aircraft.   The
Company  would remain liable for the  lease payments on its J-41 aircraft
and thus be required to pay the remaining lease payments if, and to the
extent that, Fairchild Dornier were to default on its obligation.

          As  of December 31, 2001, the Company has received $9.7 million
in   cash   grants  under  the  loss  compensation  provisions   of   the
Stabilization  Act,  which amount was recognized as non-operating  income
under "government compensation" in its financial results for 2001.   This
amount  was the government's estimate of approximately 85% of amount  due
to  the  Company  based on preliminary data.  The  exact  amount  of  the
Company's  compensation  will be based on the  lesser  of  actual  losses
incurred or a statutory limit based on the total amount allocable to  all
airlines.   This  exact  amount  is  not  yet  determinable  because  the
statutory limit is subject to information not yet released by the federal
government.  As such, the Company is unsure if it will be entitled to any
further government compensation under this program and will recognize any
remaining  payments  as  non-operating income during  the  period  it  is
determined  the  Company  is  entitled to such  amounts.     All  amounts
received  as government compensation are subject to audit and  adjustment
by the federal government.
 32
          In   addition   to  the  compensation  described   above,   the
Stabilization  Act, among other things, provides U.S. air  carriers  with
the  option  to  purchase certain war risk liability insurance  from  the
United  States  government on an interim basis at  rates  that  are  more
favorable  than  those available from the private market; authorizes  the
federal  government to reimburse air carriers for the increased  cost  of
war risk insurance premiums for a limited but undetermined period of time
as  a  result  of  the  terrorist attacks of  September  11,  2001;  and,
authorizes  the  federal  government, pursuant  to  new  regulations,  to
provide  loan guarantees to air carriers  in  the  aggregate   amount  of
$10 billion.  Since September 11, the Company has purchased hull war risk
coverage through the private insurance market through September 24, 2002,
and  has  purchased liability war risk coverage from the U.S.  government
through  May  19, 2002 and anticipates renewing the government  insurance
for  as  long  as the coverage is available.  The government subsequently
authorized   air   carriers   to  apply  for  reimbursement   under   the
Stabilization  Act  for  increased insurance costs  incurred  during  the
period October 1, 2001 to October 30, 2001, and the Company applied  for,
received,  and recorded as a reduction in insurance expense, $652,000  in
such  reimbursements.  The airlines and insurance industry, together with
the  United States and other governments, are continuing to evaluate both
the  cost  and  options  for providing coverage  of  aviation  insurance.
Recently, an industry-led group announced a proposal to create  a  mutual
insurance company, to be called Equitime, to cover war risk and terrorism
risk,  which  would initially seek support through government guarantees.
Equitime  would  provide  a competitive alternative  to  insurance  being
offered   by  the  traditional  insurance  market,  which  opposes   this
initiative.   Equitime's organizers project that it may be  available  to
provide  insurance as early as May 2002 to up to 70 U.S.  carriers.   The
Company  has not been actively involved in the formation of Equitime  and
is  unable  to anticipate whether this source of insurance will  be  made
available  and,  if  so,  whether it will offer competitive  rates.   The
Company  anticipates that it will follow industry practices with  respect
to sources of insurance.

          The  Company  continues to evaluate the  terms  and  conditions
being  imposed by the government with respect to federal loan guarantees,
and  has  not  yet determined whether to make application  for  any  such
facility.

          Collective  bargaining  agreements  are  negotiated  under  the
Railway  Labor  Act, which governs labor relations in the  transportation
industry, and typically do not contain an expiration date.  Instead, they
specify  a  date  called the amendable date, by which  either  party  may
notify the other of its desire to amend the agreement.  Upon reaching the
amendable  date, the contract is considered "open for amendment."   Prior
to   the   amendable  date,  neither  party  is  required  to  agree   to
modifications   to  the  bargaining  agreement.   Nevertheless,   nothing
prevents the parties from agreeing to start negotiations or to modify the
agreement  in advance of the amendable date.  Contracts remain in  effect
while new agreements are negotiated.  During the negotiating period, both
the Company and the negotiating union are required to maintain the status
quo.

          ACA's collective bargaining agreement with AFA was ratified  in
October  1998.   The  agreement is for a four-year duration  and  becomes
amendable  in October 2002.  This agreement covers all flight  attendants
working  for the Company.  The collective bargaining agreement with  AMFA
was ratified in June 1998.  The agreement is for a four-year duration and
becomes  amendable  in June 2002.   This agreement  covers  all  aviation
maintenance  technicians and ground service equipment  mechanics  working
for  the  Company.  Although there can be no assurances as to the outcome
of  these  negotiations,  the Company anticipates  being  able  to  reach
agreement  with  both unions on mutually satisfactory contracts  with  no
material effect on its results of operations or financial position.
  33
Liquidity and Capital Resources

          As   of   December  31,  2001,  the  Company  had  cash,   cash
equivalents,  and  short-term investments of  $181  million  and  working
capital  of  $138.7 million compared to $121.2 million and  $72  million,
respectively,  as of December 31, 2000.  During the year  ended  December
31,  2001,  cash and cash equivalents increased $87.6 million, reflecting
net  cash provided by operating activities of $88 million, net cash  used
in  investing  activities  of  $5.7 million  (primarily  the  results  of
increased purchases of property and equipment of $34.9 million offset  by
the  net  reduction in short term investments of $27.8 million)  and  net
cash provided by financing activities of $5.2 million.  Net cash provided
by  financing activities was mainly related to proceeds from exercise  of
stock options.

          As   of   December  31,  2000,  the  Company  had  cash,   cash
equivalents,  and  short-term investments of $121.2 million  and  working
capital  of  $72  million compared to $57.4 million  and  $60.4  million,
respectively,  as of December 31, 1999.  During the year  ended  December
31,  2000,  cash and cash equivalents increased $46.2 million, reflecting
net cash provided by operating activities of $93.9 million, net cash used
in  investing  activities of $43.8 million (related to aircraft  purchase
deposits, purchases of aircraft and equipment and increases in short term
investments)  and net cash used in financing activities of $3.9  million.
The increase in cash provided by operating activities is primarily due to
the  restated  UA Agreements, effective December 1, 2000,  in  which  the
Company is now paid weekly in advance for monthly revenue as compared  to
receiving  monthly revenue 30 to 60 days after the end of a  month.   Net
cash used in financing activities was mainly related to payments of long-
term debt and capital lease obligations and purchases of treasury stock.

     Capital Commitments
          The  Company's  business is very capital  intensive,  requiring
significant  amounts  of  capital  to fund  the  acquisition  of  assets,
particularly   aircraft.   The  Company  has  historically   funded   the
acquisition of its aircraft by entering into off-balance sheet  financing
arrangements  known as leveraged leases, in which third  parties  provide
equity  and  debt  financing to purchase the aircraft and  simultaneously
enter  into  long-term agreements to lease the aircraft to  the  Company.
Similarly, the Company often enters into long-term lease commitments with
airports  to  ensure  access to terminal, cargo,  maintenance  and  other
similar  facilities.   As can be seen in the table  below  setting  forth
information  as  of December 31, 2001, these operating lease  commitments
are significant.


 (In thousands)         2002     2003    2004    2005   Thereafter   Total
                                               
Long term debt       $ 4,639  $ 4,900 $ 5,153 $ 6,019  $ 42,369  $  63,080
Capital lease          1,584    1,565     772       -         -      3,921
  obligations
Guaranteed simulator   3,631    1,371   1,391   1,178     4,929     12,500
usage commitments
Operating lease      128,150  120,138 124,243 122,653 1,106,225  1,601,409
  commitments
Aircraft purchase    524,000  664,000       -       -         -  1,188,000
  commitments
Total contractual    662,004  791,974 131,559 129,850 1,153,523  2,868,910
  cash obligations
  
See  Note  4  "Debt", Note 5 "Obligations Under Capital Leases",  Note  6
"Operating  Leases", and Note 10 "Commitments and Contingencies"  in  the
Notes  to Consolidated Financial Statements for additional discussion  of
these  items.   The  Company  also  has  a  variety  of  other  long-term
contractual  commitments  that  are of a nature  that,  under  accounting
principles  generally accepted in the United States, are not required  to
be  reflected on the Company's balance sheet, and that are not  generally
viewed as "off-balance sheet financing arrangements," such as commitments
for major overhaul maintenance on the Company's aircraft.  See "Liquidity
and  Capital Resources - Other Commitments" below and "Business  -  Pilot
Training"  above,  and  Note  1 "Summary of  Accounting  Policies  -  (l)
Maintenance"  and Note 10 "Commitments and Contingencies -  Training"  in
the  Notes to Consolidated Financial Statements for additional discussion
of these items.
 34
          The   Company  believes  that,  in  the  absence   of   unusual
circumstances,  its cash flow from operations, the expected  availability
of  operating  lease  financing, and other available equipment  financing
will  be sufficient to meet its working capital needs, expected operating
lease  financing  commitments, aircraft acquisitions  and  other  capital
expenditures, and debt service requirements for the next twelve months.

     Other Financing

           On September 28, 2001, the Company entered into an asset-based
lending  agreement with a financial institution that provided the Company
with  a  line of credit for up to $25 million.  The new line  of  credit,
which  will  expire on October 15, 2003, replaced a previous $35  million
line  of  credit.  The interest rate on this line is LIBOR plus .875%  to
1.375%  depending on the Company's fixed charges coverage ratio.   As  of
December 31, 2001, the Company's interest rate on its line of credit  was
3.0%.   The  Company has pledged $15.3 million of this line of credit  as
collateral  for letters of credit issued on behalf of the  Company  by  a
financial institution.  The available borrowing under the line of  credit
is  limited  to  the value of the bond letter of credit on the  Company's
Dulles, Virginia hangar facility plus the value of 60% of the book  value
of  certain rotable spare parts.  As of December 31, 2001 the  amount  of
available  credit under the line was $9.7 million.  As  of  December  31,
2001  there  were  no outstanding borrowings on the $25 million  line  of
credit.

           In  September 1997, approximately $112 million of pass through
certificates were issued in a private placement by separate pass  through
trusts,   which  purchased  with  the  proceeds,  equipment  notes   (the
"Equipment  Notes")  issued  in  connection  with  (i)  leveraged   lease
transactions  relating  to four J-41s and six CRJs,  all  of  which  were
leased to the Company (the "Leased Aircraft"), and (ii) the financing  of
four  J-41s  owned by the Company (the "Owned Aircraft").  The  Equipment
Notes issued with respect to the Owned Aircraft are direct obligations of
ACA,  guaranteed  by  ACAI and are included as debt  obligations  in  the
accompanying  consolidated financial statements and in the  table  above.
The  Equipment Notes issued with respect to the Leased Aircraft  are  not
obligations of ACA or guaranteed by ACAI.

     Aircraft

          The Company has significant lease obligations for aircraft that
are  classified  as operating leases and therefore are not  reflected  as
liabilities on the Company's balance sheet.  The remaining terms of  such
leases range from one to sixteen and three quarters years.  The Company's
total  rent  expense in 2001 under all non-cancelable aircraft  operating
leases  was  approximately $90.3 million.  As of December 31,  2001,  the
Company's  minimum  annual  rental  payments  for  2002  under  all  non-
cancelable  aircraft operating leases with remaining terms of  more  than
one  year  were approximately $120.9 million.  In order to  minimize  the
total  aircraft  rental  expense over the  entire  life  of  the  related
aircraft  leveraged lease transactions, the Company has uneven semiannual
lease  payment  dates  of January 1 and July 1 for  its  CRJ  and  328JET
aircraft.   Currently, approximately 56.7% of the Company's annual  lease
payments for its CRJ and 328JET aircraft are due in January and 28.4% are
due  in  July.   The Company made lease payments for its CRJ  and  328JET
aircraft totaling $59.9 million on January 2, 2002.
 35
          As  of  March 1, 2002, the Company had a total of  36  CRJs  on
order  from  Bombardier, Inc., and held options for 80  additional  CRJs.
The  Company also has a firm order with Fairchild Dornier for  32  328JET
aircraft, and options for 81 additional 328JETs.  Of the 68 firm  ordered
aircraft  deliveries, 26 are scheduled for the remainder of 2002  and  42
are  scheduled for 2003.  The addition of the firm ordered regional jets,
net  of  the removal from service of all of the turboprop aircraft,  will
allow the Company to grow capacity as measured in ASM's, based on planned
aircraft delivery dates, by approximately 34% in 2002 and 25% in 2003. As
of March 2002, the Company's ASM capacity was split 82% in United Express
service and 18% in Delta Connection service.  The Company is obligated to
purchase  and  finance (including leveraged leases) the 68  firm  ordered
aircraft  at  an approximate capital cost of $1.1 billion.   The  Company
anticipates  leasing  all of its year 2002 aircraft deliveries  on  terms
similar to previously delivered regional jet aircraft, except that  three
328JETs  to be utilized for charter operations will be purchased  by  the
Company.   One  of these, which has already been acquired, was  purchased
through  the  application  of  certain deposits  previously  placed  with
Fairchild  Dornier,  and the others will be financed through  debt,  with
repayment  over approximately ten years.  Aircraft orders are subject  to
price  escalation formulas based on certain indices designed  to  reflect
increased costs in the production of the aircraft.  During 2001 the  rate
of  escalation increased, and such increases will be reflected in  future
aircraft cost or lease rates.  During the first quarter of 2002, the rate
of escalation has remained constant.

          The  Company has financed its aircraft through leveraged  lease
transactions, which include requiring equity and debt investors for  each
aircraft.   For  the  CRJs, the Company has firm commitments  for  equity
financing for 19 future aircraft and for debt financing for one aircraft,
and  anticipates finalizing arrangements with Canada's export development
agency  during the second quarter 2002 for debt financing  for  at  least
nine  additional  aircraft.   For  the  328JETs,  the  manufacturer   has
committed to find debt financing for all undelivered aircraft, to provide
equity financing for the next 8 aircraft and to find equity financing for
the remaining undelivered aircraft (for recent developments regarding
Fairchild Dornier, see Outlook).   From  time  to time  the Company seeks
investors  to  participate in its leveraged leases, with  equity  sources
normally  consisting of domestic banks and industrial  credit  investors,
and  debt  sources including export credit agencies and  European  banks.
Commitments  are normally sought during the first and second  quarter  of
each  year for funding for aircraft to be delivered throughout the  year.
Following  the  terrorist attacks, it has been the  Company's  experience
that  sources of funding have decreased and the cost of available funding
has  increased.  The Company believes that it will able to  find  funding
for  its  future  lease requirements, but the outcome, and  the  cost  of
funds,  is  subject  to market conditions in a volatile  lease  financing
market.

     Capital Equipment and Debt Service

            In   2002   the  Company  anticipates  capital  spending   of
approximately  $56 million consisting of approximately  $30  million  for
aircraft,  $15.5  million  for  rotable spare  parts,  $4.8  million  for
equipment,  and  $5.7 million for other capital assets,  and  expects  to
finance these capital expenditures out of working capital.

           Principal payments on long term debt for 2002 are estimated to
be  approximately  $4.6  million reflecting  borrowings  related  to  the
purchase  of four CRJs acquired in 1998 and 1999 and five J-41s  acquired
in  1997 and 1998.  The foregoing amount does not include additional debt
that  may be required for the financing of new CRJs, 328JETs, spare parts
and spare engines.
  36
     Other Commitments

          The  Company's regional jet fleet is comprised of new  aircraft
with  an  average age of less than two years.   Since maintenance expense
on  new  aircraft  is  lower  in the early  years  of  operation  due  to
manufacturers' warranties and the generally lower failure rates of  major
components,  the Company's maintenance expense for regional jet  aircraft
will increase in future periods.

          In  2000,  the  Company executed a seven-year  engine  services
agreement with GE Engine Services, Inc. ("GE") covering the scheduled and
unscheduled  repair of ACA's CRJ jet engines, operated  on  the  43  CRJs
already  delivered  or on order for the United Express  operation.   This
agreement  was amended in July 2000 to cover 23 additional CRJ  aircraft,
bringing the total number of CRJ aircraft covered under the agreement  to
66.   Under  the terms of the agreement, the Company pays  a  set  dollar
amount per engine hour flown on a monthly basis to GE and GE assumes  the
responsibility  to  repair  the engines when required  at  no  additional
expense  to  the  Company,  subject to certain exclusions.   The  Company
expenses  the amount paid to GE based on the monthly rates stipulated  in
the   agreement,  as  engine  hours  are  flown.   The  Company's  future
maintenance  expense on CRJ engines covered under the new agreement  will
escalate  based  on  contractual rate increases, intended  to  match  the
timing  of actual maintenance events that are due pursuant to the  terms.
The  Company is presently negotiating with GE for an adjustment in rates.
The  Company believes that it has the right to remove any or all  engines
from  this  agreement at any time, and that it may remove  engines  if  a
favorable adjustment cannot be agreed.  GE has expressed the view that it
does not agree that the Company has the right to remove all engines,  but
nevertheless  is  participating in rate  discussions.   The  Company  has
signed  an  hourly maintenance agreement covering engines for  up  to  80
328JETs  with  Pratt & Whitney, and also anticipates  signing  a  similar
agreement for the remaining regional jets on order.

         Effective  September 2001, the Company entered  a  sixteen  year
maintenance  agreement with Air Canada covering maintenance,  repair  and
overhaul services for airframe components on its CRJ aircraft.  Under the
terms  of  this agreement, the Company pays a varying amount  per  flight
hour  each month, based on the age of the aircraft.  The Company expenses
the  amount  paid  to  Air Canada based on the rates  stipulated  in  the
agreement and the hours flown each month.  In February 2002, the  Company
entered into a five-year agreement with Air Canada covering the scheduled
airframe C-check overhaul of its CRJ aircraft.  The Company expenses this
cost as the overhaul is completed.

         Effective  January 2001, the Company entered into  an  agreement
with  BAE Systems Holdings, Inc. covering repair and overhaul of airframe
rotable  parts  on  the  Company's J-41 aircraft  through  the  remaining
service  life of the J-41 fleet.  Under the terms of this agreement,  the
Company  pays  a  fixed amount per flight hour each month.   The  Company
expenses the amount paid to BAE Systems Holdings, Inc. based on the rates
stipulated in the agreement and the hours flown each month.

          The   Company   has  entered  into  agreements  with   Pan   Am
International Flight Academy ("PAIFA"), which allow the Company to  train
CRJ,  J-41  and 328JET pilots at PAIFA's facility near Washington-Dulles.
In  2001,  PAIFA  relocated its Washington-Dulles  operations  to  a  new
training facility housing two CRJ simulators, a 328JET simulator, and a J-
41  simulator  near  the Company's Washington-Dulles  headquarters.   The
Company has agreements to purchase an annual minimum number of CRJ and J-
41  simulator training hours at agreed rates, through 2010 for  the  CRJ,
and 2002 for the J-41.  The Company's payment obligations for CRJ and  J-
41  simulator  usage  over the remaining years of  the  agreements  total
approximately $12.5 million.
 37
          In  2001,  a simulator provision and service agreement  between
PAIFA,  CAE  Schreiner and the Company was executed and  328JET  training
commenced  at the PAIFA facility.  Under this agreement, the Company  has
committed  to  purchase all of its 328JET simulator time  from  PAIFA  at
agreed  upon rates, with no minimum number of simulator hours guaranteed.
A second 328JET simulator is scheduled for installation at the Washington-
Dulles PAIFA simulator facility in July 2002.

          The  Company  has  committed to provide  its  senior  executive
officers  a  deferred compensation plan which utilizes split dollar  life
insurance polices, and for a certain officer, a make-whole provision  for
income  taxes,  post retirement salary based on ending salary,  and  post
retirement benefits based on benefits similar to those currently provided
to  the executive while actively employed.  The Company has estimated the
cost of the deferred compensation and tax gross up feature, future salary
and future benefits and is accruing this cost over the remaining required
service  time  of the executive officers.  In 2001, the Company  expensed
approximately $1.8 million as the current year's cost of these  benefits.
The  company  expects  to  recognize  similar  costs  annually  over  the
remaining required service life of the senior executives.

          In  1999,  the Company commenced a replacement project  of  its
computer    software   systems.    The   Company   anticipates   spending
approximately $11 million on this project, the majority of which will  be
capitalized  and  amortized  over seven  years.   In  1999,  the  Company
expensed approximately $400,000 related to replacement software selection
and capitalized $2.3 million in acquisition and implementation costs.  In
2000  and  2001, the Company capitalized an additional $5.2  million  and
$2.8   million  of  costs  incurred,  respectively,  bringing  the  total
capitalized costs to date to $10.3 million.  In October 2001, the Company
implemented a new Payroll/Human Resource system as part of this  project.
The Company anticipates completing the remainder of this project in 2002.

          The  Company's Board of Directors has approved the purchase  of
up  to  $40  million of the Company's outstanding common  stock  in  open
market  or  private transactions.  As of March 1, 2002, the  Company  has
purchased  2,128,000 shares of its common stock at an  average  price  of
$8.64  per  share.  The Company has approximately $21.6 million remaining
of the $40 million authorization.  The Company has not repurchased shares
of its common stock since February 2, 2000.

     Inflation

           Inflation  has  not  had a material effect  on  the  Company's
operations.

Critical Accounting Policies and Estimates

          The  preparation  of  the  Company's  financial  statements  in
conformity with generally accepted accounting principles requires Company
management  to  make estimates and assumptions that affect  the  reported
amounts  of  assets and liabilities, revenues and expenses,  and  related
disclosures  of  contingent assets and liabilities  in  the  consolidated
financial  statements and accompanying notes.  The  U.S.  Securities  and
Exchange  Commission  has  defined a company's most  critical  accounting
policies  as  the  ones that are most important to the portrayal  of  the
Company's financial condition and results, and which require the  company
to make its most difficult and subjective judgments, often as a result of
the  need  to  make  estimates of matters that are inherently  uncertain.
Based  on  this  definition,  the Company  has  identified  its  critical
accounting policies as including those addressed below.  The Company also
has  other  key accounting policies, which involve the use of  estimates,
judgments and assumptions.  See Note 1 "Summary of Accounting Policies  "
in   the  Notes  to  Consolidated  Financial  Statements  for  additional
discussion  of  these items.  Management believes that its estimates  and
assumptions  are reasonable, based upon information presently  available;
however,  actual results may differ from these estimates under  different
assumptions or conditions.
  38
          Revenue Recognition: Under the proration-of-fare arrangement in
effect  with  United  until  November of  2000,  the  Company  recognized
passenger  revenue  when a flight was completed.  This  required  various
estimates  about passenger fares and other factors that were  subject  to
subsequent  adjustment  and settlement with United  and  other  carriers.
Following certain changes in estimates, which resulted in adjustments  in
2001,  as,  described in "Results of Operations", the  Company  does  not
expect  any  further adjustments attributable to the former proration-of-
fare  arrangement.   Under the fee-per-departure and fee-per-block hour
contracts  currently  in  place  with  United  and Delta, respectively,
revenue  is the  product of the  agreed  upon  rate  and  the  number of
departures or the number of block hours  flown.  Rates  are  generally
agreed to on  an  annual  basis  and  are  subject  to  adjustments upon
certain specified events.  In certain circumstances, the Company may  be
required to estimate these rates until final  rates  are agreed to by
either United or Delta.

          Major  maintenance  costs:  The Company has executed  long-term
agreements  with  the  engine manufacturers and other  service  providers
covering  the  repair and overhaul of its engines, airframe and  avionics
components,  and  landing  gear.   These  agreements  generally   include
escalating  rates  per flight hour over the term of the  agreement.   The
escalating   rates  are  intended  to  reflect  the  approximate   actual
maintenance  cost  increases as the aircraft age.  The  Company  expenses
costs based upon the current rate per hour and the number of aircraft and
engines  hours  for the period.  As a result, maintenance costs  for  the
Company's  existing  aircraft fleet are expected to  increase  in  future
years.

          Aircraft  leases:  The majority of the Company's  aircraft  are
leased   from   third   parties.  In  order  to  determine   the   proper
classification  of  a lease as either an operating  lease  or  a  capital
lease,  the Company must make certain estimates at the inception  of  the
lease relating to the economic useful life and the fair value of an asset
as  well as select an appropriate discount rate to be used in discounting
future  lease  payments.  These estimates are utilized by  management  in
making  computations  as required by existing accounting  standards  that
determine  whether  the lease is classified as an operating  lease  or  a
capital  lease.  Substantially all of the Company's aircraft leases  have
been  classified  as operating leases, which results in  rental  payments
being   charged  to  expense  over  the  terms  of  the  related  leases.
Additionally, operating leases are not reflected in the balance sheet and
accordingly,  neither a lease asset nor an obligation  for  future  lease
payments are reflected in the Company's consolidated balance sheet.

          Aircraft  Early Retirement Costs:  In determining the  cost  of
the  early  retirement of leased aircraft (and thus  in  determining  the
amount  of  the  aircraft  early retirement  charge),  the  Company  must
estimate,  among  other  things,  market lease  rates,  future  sub-lease
income,  the  cost of maintenance return provisions and the duration  and
cost of aircraft storage.  The Company generally does not accrue for  the
costs  of retiring leased aircraft more than one year before the  planned
date  of  removal from service, considering the potential for changes  in
plans  and  associated costs. As the associated leases  may  extend  over
several years, these costs estimates are subject to change.
 39
Recent Accounting Pronouncements

          On  July  5,  2001,  the Financial Accounting  Standards  Board
issued  Statement  of Financial Accounting Standard No.  141,   "Business
Combinations",  and Statement of Financial Accounting Standard  No.  142,
"Goodwill and Other Intangible Assets".  Statement No. 141 addresses  the
accounting   for  acquisitions  of  businesses  and  is   effective   for
acquisitions  occurring  on or after July 1,  2001.   Statement  No.  142
includes  requirements  to test goodwill and indefinite  life  intangible
assets  for impairment rather than amortize them. Statement No. 142  will
be  effective  for fiscal years beginning after December 15,  2001.   The
Company  will adopt Statement No. 142 beginning in the first  quarter  of
2002.  The Company anticipates that implementation of SFAS 141  and  SFAS
142  will  have  minimal  impact on the Company's financial  position  or
results of operations.

          On  October  3, 2001, the Financial Accounting Standards  Board
issued  FASB Statement No. 144, Accounting for the Impairment or Disposal
of  Long-Lived Assets, which addresses financial accounting and reporting
for  the impairment or disposal of long-lived assets.  Statement No.  144
supersedes FASB Statement No. 121, Accounting for the Impairment of Long-
Lived  Assets and for Long-Lived Assets to Be Disposed Of and APB Opinion
No.  30,  Reporting the Results of Operations-Reporting  the  Effects  of
Disposal  of  a  Segment  of a Business, and Extraordinary,  Unusual  and
Infrequently  Occurring  Events  and  Transactions.   Statement  No.  144
includes requirements related to the classification of assets as held for
sale,  including the establishment of six criteria that must be satisfied
prior  to  this classification.  Statement No. 144 also includes guidance
related to the recognition and calculation of impairment losses for long-
lived  assets.   Statement  No. 144 will be effective  for  fiscal  years
beginning after December 15, 2001.  The Company will adopt Statement  No.
144 beginning in the first quarter of 2002.  The Company anticipates that
implementation  of  Statement No. 144 will have  minimal  impact  on  the
Company's financial position or results of operations.

Item 7A.       Quantitative and Qualitative Disclosures about Market Risk

          The  Company's  principal market risk  results  in  changes  in
interest rates.

          The  Company's exposure to market risk associated with  changes
in interest rates relates to the Company's commitment to acquire regional
jets.   From  time  to time the Company has entered  into  put  and  call
contracts  designed  to  limit the Company's exposure  to  interest  rate
changes  until  permanent  financing is  secured  upon  delivery  of  the
Bombardier  regional  jet aircraft. During 1999  and  2000,  the  Company
settled  seven  and  eight  hedge transactions,  respectively,  receiving
$119,000 in 1999 and paying the counterparty $379,000 in 2000.  In  1999,
the  Company  recognized  a gain of $211,000 on  the  settlement  of  one
contract,  representing the ineffective portion of a hedge.  At  December
31, 2000 the Company had one interest rate hedge transaction open with  a
notional  value  of $8.5 million.  The Company settled this  contract  on
January 3, 2001 by paying the counterparty $722,000.  The Company had  no
open hedge transactions at December 31, 2001.

          As  of  March  1,  2002, the Company had  firm  commitments  to
purchase  68  additional jet aircraft.  The Company  expects  to  finance
these  commitments  using  a combination of debt  and  leveraged  leases.
Changes in interest rates will impact the actual cost to the Company  for
these transactions.  Aircraft orders are also subject to price escalation
formulas based on certain indices designed to reflect increased costs  in
the  production  of  the aircraft.  During 2001 the  rate  of  escalation
increased,  and such increases will be reflected in future aircraft  cost
or lease rates.  During the first quarter of 2002, the rate of escalation
has remained constant.
 40
          The  Company  does  not have significant exposure  to  changing
interest  rates on its long-term debt as the interest rates on such  debt
are fixed.  The Company's interest rate on its $25 million line of credit
is  dependent  on  LIBOR plus a percentage ranging from .875%  to  1.375%
depending  on  the Company's fixed charges coverage ratio.   The  Company
does  not hold long-term interest sensitive assets and therefore  is  not
exposed  to  interest rate fluctuations for its assets. The Company  does
not  purchase  or hold any derivative financial instruments  for  trading
purposes.
 41
Item 8.        Consolidated Financial Statements

     INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                                             Page

Independent Auditors' Report                                  42


Consolidated Balance Sheets as of December 31, 2000 and 2001  43

Consolidated Statements of Operations for the years ended     44
 December 31, 1999, 2000 and 2001

Consolidated Statements of Stockholders' Equity for the       45
 years ended December 31, 1999, 2000 and 2001

Consolidated Statements of Cash Flows for the years ended     46
 December 31, 1999, 2000 and 2001

Notes to Consolidated Financial Statements                    47

 42
                      Independent Auditors' Report


The Board of Directors and Stockholders Atlantic Coast Airlines Holdings,
Inc.:

We  have audited the accompanying consolidated balance sheets of Atlantic
Coast  Airlines Holdings, Inc. and subsidiaries as of December  31,  2000
and   2001,  and  the  related  consolidated  statements  of  operations,
stockholders' equity, and cash flows for each of the years in the  three-
year  period  ended  December  31, 2001.   These  consolidated  financial
statements  are  the  responsibility of the  Company's  management.   Our
responsibility  is to express an opinion on these consolidated  financial
statements based on our audits.

We  conducted our audits in accordance with auditing standards  generally
accepted  in the United States of America.  Those standards require  that
we  plan  and  perform  the  audit to obtain reasonable  assurance  about
whether  the financial statements are free of material misstatement.   An
audit  includes  examining,  on  a test basis,  evidence  supporting  the
amounts  and  disclosures  in the financial statements.   An  audit  also
includes   assessing  the  accounting  principles  used  and  significant
estimates made by management, as well as evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable
basis for our opinion.

In  our opinion, the consolidated financial statements referred to  above
present  fairly,  in  all material respects, the  financial  position  of
Atlantic  Coast Airlines Holdings, Inc. and subsidiaries as  of  December
31,  2000  and 2001, and the results of their operations and  their  cash
flows  for each of the years in the three-year period ended December  31,
2001, in conformity with accounting principles generally accepted in  the
United States of America.

As  discussed  in  Note  1  to  the  consolidated  financial  statements,
effective  January 1, 1999, the Company changed its method of  accounting
for preoperating costs.


                                             KPMG LLP

McLean, VA
January 30, 2002, except as to Notes 1(f) and 13,
which are as of March 29, 2002
 43


 (In thousands, except for share data and par values)
December 31,                                       2000        2001

                                                        
Assets
Current:
    Cash and cash equivalents                  $  86,117   $ 173,669
    Short term investments                        35,100       7,300
    Accounts receivable, net                      29,052       8,933
    Expendable parts and fuel inventory,net        6,188      10,565
    Prepaid expenses and other current assets      8,055      19,365
    Deferred tax asset                            13,973       6,806
    Total current assets                         178,485     226,638
Property and equipment at cost, net of
  accumulated depreciation and amortization      142,840     171,528
Intangible assets, net of accumulated              2,045       1,941
  amortization
Debt issuance costs, net of accumulated            2,912       3,415
  amortization
Aircraft deposits                                 46,420      44,810
Other assets                                       9,998       4,093
    Total assets                               $ 382,700   $ 452,425
Liabilities and Stockholders' Equity
Current:
    Current portion of long-term debt        $     4,344     $ 4,639
    Current portion of capital lease               1,512       1,359
     obligations
    Accounts payable                              19,724      21,750
    Accrued liabilities                           53,044      55,570
  Accrued aircraft early retirement charge        27,843       4,661
    Total current liabilities                    106,467      87,979
Long-term debt, less current portion              63,080      58,441
Capital lease obligations, less current portion    4,009       2,202
Deferred tax liability                            18,934      17,448
Deferred credits, net                             22,037      45,063
Accrued aircraft early retirement charge,              -      19,226
   less current portion
Other long-term liabilities                            -         766
    Total liabilities                            214,527     231,125
Stockholders' equity:
Preferred Stock: $.02 par value per share;
  shares authorized                                    -           -
  5,000,000; no shares issued or
  outstanding in 2000 or 2001
  Common stock: $.02 par value per share;
  shares authorized 130,000,000; shares
  issued 47,704,720 in 2000 and 49,229,202
  in 2001; shares outstanding 42,658,388 in
  2000 and 44,182,870 in 2001                        954         985
Class A common stock: nonvoting; no par
  value; $.02 stated value per share; shares           -           -
  authorized 6,000,000; no shares issued or
  outstanding
Additional paid-in capital                       117,284     136,058
Less:  Common stock in treasury, at cost,
  5,046,332 shares in 2000 and 2001             (35,303)    (35,303)
Retained earnings                                 85,238     119,560
Total stockholders' equity                       168,173     221,300
    Total liabilities and stockholders'         $382,700    $452,425
      equity
    Commitments and Contingencies
See accompanying notes to consolidated financial statements

 44


(In thousands, except for per share
data)
Years ended December 31,                    1999      2000       2001

                                                     
Operating revenues:
  Passenger                            $ 342,079 $ 442,695  $ 577,604
  Other                                    5,286     9,831      5,812
     Total operating revenues            347,365   452,526    583,416
Operating expenses:
  Salaries and related costs              84,554   107,831    164,446
  Aircraft fuel                           34,072    64,433     88,308
  Aircraft maintenance and materials      24,357    36,750     48,478
  Aircraft rentals                        45,215    59,792     90,323
  Traffic commissions and related fees    54,521    56,623     15,589
  Facility rents and landing fees         17,875    20,284     32,025
  Depreciation and amortization            9,021    11,193     15,353
  Other                                   28,458    42,537     61,674
  Aircraft early retirement charge             -    28,996     23,026
     Total operating expenses            298,073   428,439    539,222
Operating income                          49,292    24,087     44,194
Other income (expense):
  Interest expense                       (5,614)   (6,030)    (4,832)
  Interest income                          3,882     5,033      7,500
  Government compensation                      -         -      9,710
  Other income (expense), net               (85)     (278)        263
     Total other (expense) income, net   (1,817)   (1,275)     12,641
Income before income tax provision and
  cumulative effect of accounting change  47,475    22,812     56,835
Income tax provision                      18,319     7,657     22,513
Income before cumulative effect of        29,156    15,155     34,322
  accounting change
Cumulative effect of accounting
  change, net of income tax                (888)         -          -
    benefit of $598
Net income                              $ 28,268  $ 15,155   $ 34,322
Income per share:
Basic:
 Income before cumulative effect of         $.77      $.38       $.79
   accounting change
 Cumulative effect of accounting change    (.02)         -          -
Net income                                  $.75      $.38       $.79
Diluted:
 Income before cumulative effect of         $.68      $.36       $.76
   accounting change
 Cumulative effect of accounting change    (.02)         -          -
Net income                                  $.66      $.36       $.76

 Weighted average shares used in
   computation:                           37,928    40,150     43,434
     Basic                                44,030    43,638     45,210
     Diluted
              See accompanying notes to consolidated financial statements

 45


(In thousands, except
for share data)         Common Stock    Additional  Treasury Stock   Retained
                                        Paid- In                     Earnings
                        ------------    Capital    -------------
                       Shares   Amount            Shares    Amount

                                                    
Balance December 31,  41,642,002 $ 833  $84,798  2,945,000 $(17,069)  $41,815
  1998
  Exercise of common     525,852    10    1,574          -       -          -
  stock options
Tax benefit of stock          -     -     1,835          -       -          -
 option exercise
Purchase of treasury          -     -       -    1,993,000  (17,192)        -
  stock
ESOP share                    -     -        60    (26,668)     155         -
contributions
Amortization of               -     -       437          -       -          -
  deferred compensation
Net income                    -     -       -            -       -     28,268
Balance December 31,  42,167,854 $ 843  $88,704  4,911,332 $(34,106)  $70,083
   1999
Exercise of common     1,132,432    23    3,919          -       -          -
  stock options
Tax benefit of stock          -     -     4,952          -       -          -
  option exercise
Purchase of treasury          -     -      -       135,000   (1,197)        -
  stock
Conversion of debt     4,404,434    88   19,261          -       -          -
Amortization of               -     -       448          -       -          -
 deferred compensation
Net income                    -     -      -             -       -     15,155
Balance December 31,  47,704,720  $954 $117,284  5,046,332 $(35,303)  $85,238
   2000
Exercise of common     1,524,482    31    8,145          -       -          -
  stock options
Tax benefit of stock          -     -     9,010          -       -          -
  option exercise
Amortization of               -     -     1,619          -       -          -
  deferred compensation
Net income                    -     -      -             -       -     34,322
Balance December 31,  49,229,202  $985 $136,058  5,046,332 $(35,303) $119,560
  2001

      See accompanying notes to consolidated financial statements.



 46


 (In thousands)
Years ended December 31,                1999        2000      2001
Cash flows from operating activities:
    
                                                       
    Net income                         $ 28,268    $ 15,155  $ 34,322
Adjustments to reconcile net income
   to net cash provided by operating
   activities:
  Depreciation and amortization           9,109      11,544    16,179
  Write-off of preoperating costs         1,486           -         -
  Amortization of intangibles and           176         183       193
      preoperating costs
  Provision for uncollectible               564         503       227
      accounts receivable
  Provision for inventory                   110         237       578
      obsolescence
  Amortization of deferred credits      (1,114)     (1,599)   (3,662)
  Amortization of debt issuance             354         297       293
      costs
  Capitalized interest, net             (1,683)     (2,554)   (1,835)
  Deferred tax provision (benefit)        5,905     (4,648)     5,681
  Net loss on disposal of fixed             380           -       198
      assets
  Amortization of debt discount and          73          56        61
      finance costs
  Contribution of stock to the ESOP         214           -         -
  Gain on ineffective hedge position      (211)           -         -
  Gain on early termination of            (291)         (3)         -
      capital lease
  Amortization of deferred                  437         469     1,619
      compensation
Changes in operating assets and
    liabilities:
  Accounts receivable                   (3,572)       6,564    25,148
  Expendable parts and                    (847)     (2,310)   (4,956)
    fuel inventory
  Prepaid expenses and
    other current assets                (2,660)     (1,866)   (5,376)
  Accounts payable                        2,139      22,300     9,275
  Accrued liabilities                    11,013      49,601    10,100
  Net cash provided by                   49,850      93,929    88,045
    operating activities

Cash flows from investing activities:
  Purchases of property and equipment  (59,669)    (19,146)  (34,903)
  Proceeds from sales of fixed assets     6,608         585         -
  Purchases of short term investments  (17,550)    (74,705)  (76,715)
  Sales of short term investments            66      57,155   104,515
  Refund of deposits                          3       4,600    11,100
  Payments for aircraft and other      (19,270)    (12,330)   (9,701)
    deposits
 Net cash used in                      (89,812)    (43,841)   (5,704)
    investing activities
Cash flows from financing activities:
   Proceeds from issuance of long-term   37,203           -         -
     debt
   Payments of long-term debt           (4,189)     (4,758)   (4,344)
   Payments of capital lease            (1,839)     (1,647)   (1,959)
     obligations
   Proceeds from receipt of deferred         37         173     4,286
     credits and other
   Deferred financing costs               (157)       (381)     (948)
   Proceeds from exercise of stock        1,584       3,942     8,176
     options
   Purchase of treasury stock          (17,192)     (1,197)         -
 Net cash provided by                    15,447     (3,868)     5,211
(used in) financing activities
Net increase (decrease) in cash and    (24,515)      46,220    87,552
   cash equivalents
Cash and cash equivalents, beginning     64,412      39,897    86,117
   of year
Cash and cash equivalents, end of year $ 39,897    $ 86,117 $ 173,669
              See accompanying notes to consolidated financial statements

                                                                        .
 47
1.   Summary of
Accounting
Policies         (a)Basis of Presentation

                    The     accompanying    consolidated    financial
                    statements include the accounts of Atlantic Coast
                    Airlines  Holdings, Inc. ("ACAI") and its  wholly
                    owned    subsidiaries,  Atlantic  Coast  Airlines
                    ("ACA")  and Atlantic Coast Jet, Inc.  ("ACJet"),
                    (together, the "Company"). On July 1, 2001,  ACAI
                    combined  the operations of its ACJet  subsidiary
                    into  the  operations  of ACA.   All  significant
                    intercompany accounts and transactions have  been
                    eliminated   in  consolidation.   The   Company's
                    flights   are   operated   under   code   sharing
                    agreements  with United Airlines, Inc. ("United")
                    and  Delta  Airlines ("Delta") and are identified
                    as United Express and Delta Connection flights in
                    computer reservation systems.  As of December 31,
                    2001,   the   Company  provided   scheduled   air
                    transportation  service  as  United  Express  for
                    passengers  to  destinations  in  states  in  the
                    Eastern   and  Midwestern  United  States.    The
                    Company  provides  scheduled  air  transportation
                    service    as   Delta   Connection   to   various
                    destinations  in  the Eastern United  States  and
                    Canada.

                 (b)Cash, Cash Equivalents and Short-Term Investments

                    The   Company  considers  investments   with   an
                    original  maturity of three months or  less  when
                    purchased  to  be cash equivalents.   Investments
                    with  an  original  maturity greater  than  three
                    months  and  less  than one year  are  considered
                    short-term investments. In addition, the  Company
                    holds  investments in tax-free Industrial Revenue
                    Bonds ("IRB") having initial maturities up to  30
                    years.   The  IRB's  are secured  by  letters  of
                    credit  or insured and come up for auction  on  a
                    weekly  or  monthly basis.  As such, the  Company
                    considers  securities of this type to  be  short-
                    term  investments.   All  short-term  investments
                    are considered to be available for sale.  Due  to
                    the   short   maturities  associated   with   the
                    Company's   investments,   the   amortized   cost
                    approximates fair market value.  Accordingly,  no
                    adjustment  has  been made to  record  unrealized
                    holding gains and losses.
 48
                 (c)Airline Revenues

                    Passenger  revenues  are  recorded  as  operating
                    revenues  at the time transportation is provided.
                    Under  the Company's fee-per-departure  and  fee-
                    per-block  hour  agreements,  transportation   is
                    considered  provided  when the  flight  has  been
                    completed.    Under   the   proration   of   fare
                    agreement  in  effect  with  United  for  periods
                    prior    to    and    through   November    2000,
                    transportation was considered provided  when  the
                    passenger  flew.   All of the  passenger  tickets
                    used  by  the  Company's revenue  passengers  are
                    sold by other air carriers.

                    ACA   participates  in  United's   Mileage   Plus
                    frequent  flyer program and in the Delta SkyMiles
                    frequent  flyer  program.  The Company  does  not
                    accrue   for   incremental  costs   for   mileage
                    accumulation  or  redemption  relating  to  these
                    programs  because  the  Company  operates   under
                    agreements with United and Delta, which  are  not
                    affected  by  the number of miles earned  by  its
                    passengers  or  number  of  passengers   on   its
                    flights redeeming miles.

                 (d)Accounts and Notes Receivable

                    Accounts  receivable are stated net of allowances
                    for   uncollectible  accounts  of   approximately
                    $755,000  and $595,000 at December 31,  2000  and
                    2001,  respectively.  Amounts charged to expenses
                    for uncollectible accounts in 1999, 2000 and 2001
                    were    $564,000,    $503,000    and    $227,000,
                    respectively.   Write-off of accounts  receivable
                    were  $156,000,  $521,000 and $386,000  in  1999,
                    2000 and 2001, respectively.  Accounts receivable
                    as  of December 31, 2000 and 2001 included ticket
                    receivables  of  $18.6 million and  $1.3  million
                    respectively, and approximately $5.6 million  and
                    $4.4    million,   respectively,    related    to
                    manufacturers  credits  to  be  applied   towards
                    future   spare   parts  purchases  and   training
                    expenses.   The   large   decrease   in    ticket
                    receivables  is due to the change in  the  United
                    Express   agreement   from  a   proration-of-fare
                    arrangement to a fee-per-departure arrangement as
                    described herein.

                 (e)Concentrations of Credit Risk

                    Substantially  all  of  the  Company's  passenger
                    tickets are sold by other air carriers.  Prior to
                    the change from a proration of fare agreement  to
                    a  fee-per-departure agreement, the Company had a
                    significant   concentration   of   its   accounts
                    receivable  with  other  air  carriers  with   no
                    collateral.   At  December  31,  2000  and  2001,
                    accounts  receivable  from air  carriers  totaled
                    approximately   $18.6   million   and   $929,000,
                    respectively.  Of the total amount, approximately
                    $13.3  million and $240,000 at December 31,  2000
                    and  2001,  respectively, were due  from  United.
                    Under   the  fee-per-departure  agreements,   the
                    Company  receives  payment in advance  from  both
                    United   and   Delta.    Historically,   accounts
                    receivable losses have not been significant.

 49
                 (f)Risks and Uncertainties

                    The events  of  September 11,  together with  the
                    slowing economy throughout 2001, have significantly
                    affected the U.S. airline industry.  These events
                    have resulted in changed government   regulation,
                    declines and shifts in passenger demand, increased
                    insurance costs and tightened credit markets which
                    continue to  affect  the operations  and financial
                    condition of participants in the industry including
                    the Company, its code share partners, and aircraft
                    manufacturers.   These  circumstances have raised
                    substantial  risks and   uncertainties, including
                    those discussed below, which may inpact the Company,
                    its code share partners, and aircraft manufacturers,
                    in ways that the Company is not currently able to
                    predict.

                    United Express:

                    The  Company's  United  Express  Agreements  ("UA
                    Agreements")  define  the Company's  relationship
                    with  United.   The UA Agreements  authorize  the
                    Company  to  use United's "UA" flight  designator
                    code  to identify the Company's flights and fares
                    in   the   major  airline  Computer   Reservation
                    Systems,  including United's "Apollo" reservation
                    system,  to use the United Express logo,  to  use
                    United's exterior aircraft paint schemes, and  to
                    use uniforms similar to those of United.

                    In   November  2000,  the  Company   and   United
                    restated  the UA Agreements, effectively changing
                    from  a  prorated fare arrangement to a  fee-per-
                    departure   arrangement.   Under   the   fee-per-
                    departure     structure,    the    Company     is
                    contractually  obligated to  operate  the  flight
                    schedule,  for which United pays the  Company  an
                    agreed  amount  per departure regardless  of  the
                    number  of  passengers  carried,  with  incentive
                    payments  based on operational performance.   The
                    Company  thereby  assumes  the  risks  associated
                    with  operating  the flight schedule  and  United
                    assumes  the  risk of scheduling, marketing,  and
                    selling  seats  to  the  traveling  public.   The
                    restated  UA  Agreements are for a  term  of  ten
                    years.   The restated UA Agreements give ACA  the
                    authority  to operate 128 regional  jets  in  the
                    United   Express  operation.   Pursuant  to   the
                    restated UA Agreements, United provides a  number
                    of  additional services to ACA at no cost.  These
                    include  customer reservations, customer service,
                    pricing, scheduling, revenue accounting,  revenue
                    management,    frequent   flyer   administration,
                    advertising,   provision   of   ground    support
                    services at most of the airports served  by  both
                    United  and  ACA,  provision of  ticket  handling
                    services  at  United's ticketing  locations,  and
                    provision  of  airport signage at airports  where
                    both  ACA  and United operate.  The UA Agreements
                    do  not  prohibit  United from serving,  or  from
                    entering into agreements with other airlines  who
                    would  serve,  routes served by the Company,  but
                    state   that   United  may   terminate   the   UA
                    Agreements  if ACAI or ACA enter into  a  similar
                    arrangement  with  any other carrier  other  than
                    Delta   or   a  replacement  for  Delta   without
                    United's   prior   written  approval.    The   UA
                    Agreements limit the ability of ACAI and  ACA  to
                    merge  with another company or dispose of certain
                    assets  or  aircraft without  offering  United  a
                    right of first refusal to acquire the Company  or
                    such  assets  or aircraft, and provide  United  a
                    right  to terminate the UA Agreements if ACAI  or
                    ACA  merge with or are controlled or acquired  by
                    another   carrier.  The  UA  agreements   provide
                    United  with the right to assume ACA's  ownership
                    or  leasehold interest in certain aircraft in the
                    event  ACA breaches specified provisions  of  the
                    UA   agreements,  or  fails  to  meet   specified
                    performance  standards.  The UA  Agreements  call
                    for  the  resetting  of  fee-for-departure  rates
                    annually based on the Company's planned level  of
                    operations for the upcoming year.
 50
                    UAL   Corporation,  the  parent  of  United,  has
                    disclosed that during the fourth quarter 2001  it
                    began  implementing  a  financial  recovery  plan
                    that includes four planks:  reducing the size  of
                    the  airline  and cutting capital  and  operating
                    spending  in line with that reduction, generating
                    as  much  revenue as possible from  each  flight,
                    working   with  its  unions  and  other  employee
                    groups   to   find  further  labor  savings   and
                    implementing  a  financing  plan  to  support  it
                    through  the execution of its financial  recovery
                    plan.   UAL  Corporation further  disclosed  that
                    the  impact of the events of September  11,  2001
                    on  United  and the sufficiency of its  financial
                    resources to absorb that impact are dependent  on
                    a  number of factors, including United's  success
                    in implementing its financial recovery plan.

                    Following  September  11, United  requested  that
                    the  Company propose measures that it could  take
                    to   assist   in  improving  United's   financial
                    situation.   The  Company  believes  that  United
                    made  a  similar request to other  suppliers  and
                    vendors.   On December 31, 2001, the Company  and
                    United  agreed on fee-per-departure rates  to  be
                    utilized  during  2002.   In  addition,  in   the
                    context  of reaching this agreement, the  Company
                    agreed  to certain concessions that would benefit
                    United  by (1) settling various existing contract
                    issues,  (2) agreeing that United would not  have
                    to  pay  increased  rates to reflect  utilization
                    changes  in  the  fourth  quarter  of  2001,  (3)
                    agreeing  to  2002 rates that require  aggressive
                    cost   containment,  and  (4)   reaffirming   its
                    commitment   to   retire   the   Company's   J-41
                    turboprop aircraft.  The Company determined  that
                    these   concessions,  which  were  favorable   to
                    United   as   compared   to   prior   contractual
                    arrangements  and were designed to assist  United
                    in  its financial recovery plan, were appropriate
                    in light of the circumstances at the time.

                    In  late  March 2002, United informed the Company
                    that  an  essential component  of  its  financial
                    recovery  plan includes obtaining cost reductions
                    from  its employees, suppliers and partners,  and
                    that   United  is seeking the Company's assistance
                    in decreasing the cost of the Company's product
                    and  achieving  cash  flow   improvements
                    for United  over  the  next  24  months.   The
                    Company  has  commenced discussions  with  United
                    regarding  opportunities for reducing  its  costs
                    or  creating value to address United's  financial
                    situation.   The  basis for, nature,  timing  and
                    extent  of any such actions has not been  agreed.
                    While  the  Company has expressed its willingness
                    to  work  with United to find mutually acceptable
                    opportunities, the Company believes  that  it  is
                    not  contractually obligated  to  make  any  such
                    changes  under  the United Express Agreements  or
                    the  December  31,  2001 rate setting  agreement.

 51
                    Delta Connection:

                    In  September  1999, the Company reached  a  ten-
                    year  agreement  with Delta to  operate  regional
                    jet  aircraft  as  part of the  Delta  Connection
                    program  on  a  fee-per-block  hour  basis.   The
                    Company  began  Delta Connection revenue  service
                    on   August   1,   2000.   The  Company's   Delta
                    Connection  Agreement  ("DL  Agreement")  defines
                    the   Company's  relationship  with  Delta.   The
                    Company   is   compensated   by   Delta   on    a
                    fee-per-block  hour  basis.  Under  the  fee-per-
                    block    hour    structure,   the   Company    is
                    contractually  obligated to  operate  the  flight
                    schedule,  for  which Delta pays the  Company  an
                    agreed amount per block hour flown regardless  of
                    passenger   revenue  with  additional   incentive
                    payments  based on operational performance.   The
                    Company  thereby  assumes  the  risks  associated
                    with  operating  the  flight schedule  and  Delta
                    assumes  the risks of scheduling, marketing,  and
                    selling  seats  to  the  traveling  public.    By
                    operating   as  part  of  the  Delta   Connection
                    program, the Company is able to use Delta's  "DL"
                    flight  designator to identify ACA's flights  and
                    fares  in the major Computer Reservation Systems,
                    including    Delta's   "Deltamatic"   reservation
                    system, and to use the Delta Connection logo  and
                    exterior  aircraft  paint  schemes  and  uniforms
                    similar to those of Delta.

                    Due  to  the rapid increase in fleet size  during
                    2001,   the   Company   and   Delta   agreed   to
                    compensation  based on a cost plus formula  based
                    on  reimbursement  of fixed amounts  for  initial
                    pilot  training expenses and for all other costs,
                    based   on   actual   costs  incurred,   plus   a
                    contracted  margin,  and  incentive  compensation
                    tied  to operating performance.  The Company  and
                    Delta  have  agreed to return to a  fee-per-block
                    hour rate arrangement for 2002.  The Company  and
                    Delta are currently setting these rates based  on
                    the  Company's  planned level of  operations  for
                    the   upcoming  year.    The  Company  does   not
                    anticipate  material differences on a  per-block-
                    hour  basis for its 2002 revenues as compared  to
                    2001  revenues due to the reversion to a fee-per-
                    block-hour rate.
 52
                    Pursuant  to  the  DL Agreement,  Delta,  at  its
                    expense,  provides a number of  support  services
                    to  ACA.   These  include customer  reservations,
                    customer   service,   ground  handling,   station
                    operations,    pricing,    scheduling,    revenue
                    accounting,  revenue management,  frequent  flyer
                    administration, advertising and other  passenger,
                    aircraft  and  traffic  servicing  functions   in
                    connection  with  the ACA operation.   Delta  may
                    terminate  the DL Agreement at any  time  if  the
                    Company  fails  to  maintain certain  performance
                    standards and, subject to certain rights  of  the
                    Company and by providing 180 days notice  to  the
                    Company,  may terminate without cause,  effective
                    no   earlier  than  August  1,  2002.   If  Delta
                    terminates  the  Delta  agreement  without  cause
                    prior  to  March 2010, the Company has the  right
                    to  put  all  or  some  of the  Delta  Connection
                    aircraft to Delta.  In January 2001, the  Company
                    reached  an  agreement with United and  Delta  to
                    place   20  Bombardier  Canadair  Regional   Jets
                    ("CRJ's")   originally  ordered  for  the   Delta
                    Connection   program   in  the   United   Express
                    program.   The DL Agreement requires the  Company
                    to  obtain  Delta's approval  if  it  chooses  to
                    enter   into  a  code-sharing  arrangement   with
                    another  carrier  other than  a  replacement  for
                    United,  to  list  its flights  under  any  other
                    code,   or  to  operate  flights  for  any  other
                    carrier,    except   with   respect    to    such
                    arrangements  with United or non-U.S.  code-share
                    partners   of   United  or   in   certain   other
                    circumstances.    The  DL  Agreement   does   not
                    prohibit  Delta  from serving, or  from  entering
                    into  agreements  with other airlines  who  would
                    serve,  routes  flown  by the  Company.   The  DL
                    Agreement  also  restricts  the  ability  of  the
                    Company  to  dispose of aircraft subject  to  the
                    agreement  without  offering  Delta  a  right  of
                    first  refusal  to  acquire  such  aircraft,  and
                    provides  that Delta may extend or terminate  the
                    agreement  if,  among other things,  the  Company
                    merges  with  or  sells  its  assets  to  another
                    entity, is acquired by another entity or  if  any
                    person  acquires more than a specified percentage
                    of its stock.

                    At  December  31, 2001 54 CRJs,  and  31  British
                    Aerospace  J-41's ("J-41's") were operated  under
                    the  United  Express program  and  29  Fairchild-
                    Dornier  328  Jets ("328JET's")  and  three  CRJs
                    were   operated   under  the   Delta   Connection
                    program.   For the year ended December 31,  2001,
                    82%  of  consolidated revenues were derived  from
                    the   United   Express   program   and   18%   of
                    consolidated  revenues  were  derived  from   the
                    Delta   Connection   program.    Following    the
                    terrorist  attacks  on September  11,  2001,  the
                    major  U.S.  airlines  have suffered  substantial
                    losses  and  continued losses are expected  until
                    passenger  traffic levels substantially  recover.
                    Notwithstanding that the terms of  the  Company's
                    agreements with its major U.S. airline  partners,
                    as  described  above, extend several  years  into
                    the  future, the near term loss of either of  the
                    Company's  code  share  agreements would, unless
                    replaced  by a  similar agreement  with another
                    carrier, likely have  a  material adverse impact
                    on  the  Company financial position and operating
                    results.
 53
                    Fairchild Dornier Purchase Agreement:

                    Fairchild  Dornier,  the  manufacturer   of   the
                    328JET,  recently stated that it has an immediate
                    and  critical  need for additional  funding,  and
                    that  it is in discussions with several potential
                    strategic     partners     regarding     proposed
                    investments.   The Company is unable  to  predict
                    whether  Fairchild Dornier will be successful  in
                    finding   additional  capital  or  in   otherwise
                    restructuring  its  finances, but  believes  that
                    Fairchild   Dornier  may  be   forced   to   seek
                    bankruptcy  protection if it is  unsuccessful  in
                    its   efforts.   In  the  event  of  a  Fairchild
                    Dornier   bankruptcy,  Fairchild  Dornier   could
                    either sell, liquidate or reorganize some or  all
                    of  its  businesses,  and  in  the  event  of   a
                    reorganization  or sale of its  businesses  would
                    have   the  right  to  assume  or  reject  future
                    contractual   obligations.    Should    Fairchild
                    Dornier  be  unable to deliver  ordered  328JETS,
                    the     Company    would    reassess    available
                    alternatives in pursuing its growth strategy  and
                    possibly    delay    the   Company's    turboprop
                    retirement   plans,   and  adjust   other   plans
                    discussed  elsewhere in this Form  10-K  relating
                    to its 328JET aircraft.

                    Fairchild   Dornier   has   significant    future
                    obligations  to  the Company in  connection  with
                    the  order  of  328JET aircraft.   These  include
                    obligations:  to deliver 32 firm ordered  328JETs
                    and  81  additional option 328JETs  with  certain
                    financing   support;  to  pay  the  Company   any
                    difference  between the lease payments,  if  any,
                    received   from   remarketing   the   26  J-41
                    aircraft  leased  by the Company  and  the  lease
                    payment  obligations  of  the  Company  on  those
                    aircraft;  to  purchase five J-41 aircraft  owned
                    by  the  Company at their net book value  at  the
                    time   of  retirement;  to  assume  certain  crew
                    training   costs;   and,   to   provide   spares,
                    warranty,   engineering,  and  related   support.
                    Fairchild  Dornier has delayed  the  delivery  of
                    one 328JET that was scheduled to be delivered  to
                    the  Company  during the week of March  25,  2002
                    for  reasons  connected with its financing.   The
                    Company   believes  it  has  secured  rights   to
                    Fairchild  Dornier's  equity  interest   in   the
                    delivered 328JETs that it may proceed against  in
                    the   event  that  Fairchild  Dornier  fails   to
                    fulfill certain of these obligations.

                    During  the  fourth quarter of 2001, the  Company
                    recorded  a  pre-tax  aircraft  early  retirement
                    charge  of $23.5 million for the early retirement
                    of  nine  leased Jetstream-41 turboprop aircraft,
                    which  the  Company plans to remove from  service
                    prior  to year-end 2002.  The Company anticipates
                    taking   additional  charges   during   2002   of
                    approximately  $48.0  million  pre-tax  for   the
                    retirement  of its remaining 29-seat Jetstream-41
                    turboprop  aircraft.  The undiscounted  remaining
                    lease  obligations (net of the Company's estimate
                    of  the  future  sublease rentals)  on  the  J-41
                    fleet after planned retirement dates in 2002  and
                    2003  are  approximately $55 million and continue
                    through  2010  and  the book value  of  the  five
                    owned  J-41 aircraft as of March 1, 2002 is $18.1
                    million.   To  the extent that Fairchild  Dornier
                    fulfills   its   contractual   obligations,   the
                    majority of the aircraft early retirement  charge
                    will  not  adversely  affect the  Company's  cash
                    position, with the payments by Fairchild  Dornier
                    being    recorded   as   an   aircraft   purchase
                    inducement  on the 328JET aircraft.  The  Company
                    would remain liable for the lease payments on its
                    J-41 aircraft  and  thus  be  required to pay the
                    remaining lease  payments if,  and  to the extent
                    that,  Fairchild  Dornier were to default on its
                    obligation.
 54
                    Collective Bargaining Agreements:

                    The Company's pilots are represented by the
                    Airline Pilots Association ("ALPA"), flight
                    attendants are represented by the Association of
                    Flight Attendants ("AFA"), and aviation
                    maintenance technicians and ground service
                    equipment mechanics are represented by the
                    Aircraft Mechanics Fraternal Association
                    ("AMFA").

                    The  ALPA collective bargaining agreement  became
                    amendable  in  February 2000 and in  early  2001,
                    the  Company's pilots ratified a new  four-and-a-
                    half  year agreement in effect until August 2005.
                    This  agreement provides for improvements in  pay
                    rates,  benefits, training and other areas.   The
                    collective  bargaining  agreement  covers  pilots
                    flying    for    both    the    Atlantic    Coast
                    Airlines/United  Express operation,  as  well  as
                    the   Atlantic  Coast  Airlines/Delta  Connection
                    operation.    The  new  agreement  provides   for
                    substantial   increases  in  pilot  compensation,
                    which  the  Company believes are consistent  with
                    regional airline industry trends.

                    ACA's  collective bargaining agreement  with  AFA
                    was  ratified in October 1998.  The agreement  is
                    for  a  four-year duration and becomes  amendable
                    in October 2002.

                    The  collective  bargaining agreement  with  AMFA
                    was  ratified in June 1998.  The agreement is for
                    a  four-year  duration and becomes  amendable  in
                    June  2002.   This agreement covers all  aviation
                    maintenance   technicians  and   ground   service
                    equipment mechanics working for the Company.
 55
                    Aviation Insurance

                    Following  the  September 11  terrorist  attacks,
                    the   aviation  insurance  industry   imposed   a
                    worldwide  surcharge on aviation insurance  rates
                    as  well  as a reduction in coverage for  certain
                    war  risks.   In  response to  the  reduction  in
                    coverage,  the  Air  Transportation  Safety   and
                    System   Stabilization  Act  provided  U.S.   air
                    carriers with the option to purchase certain  war
                    risk  liability insurance from the United  States
                    government on an interim basis at rates that  are
                    more  favorable  than those  available  from  the
                    private market.   Prior to September 11,  it  was
                    not  customary for independent regional  airlines
                    to  carry  general  war  risk  insurance.   Since
                    September 11, the Company has purchased hull  war
                    risk   coverage  through  the  private  insurance
                    market  through  September  24,  2002,  and   has
                    purchased  liability war risk coverage  from  the
                    U.S.   government  through  May  19,   2002   and
                    anticipates  renewing  the  government  insurance
                    for  as  long as the coverage is available.   The
                    airlines  and  insurance industry, together  with
                    the  United  States  and other  governments,  are
                    continuing to evaluate both the cost and  options
                    for  providing  coverage of  aviation  insurance.
                    Recently,  an  industry-led  group  announced   a
                    proposal  to  create a mutual insurance  company,
                    to  be  called  Equitime, to cover war  risk  and
                    terrorism   risk,  which  would  initially   seek
                    support  through government guarantees.  Equitime
                    would   provide  a  competitive  alternative   to
                    insurance   being  offered  by  the   traditional
                    insurance  market, which opposes this initiative.
                    Equitime's  organizers project  that  it  may  be
                    available  to provide insurance as early  as  May
                    2002 to up to 70 U.S. carriers.  The Company  has
                    not  been  actively involved in the formation  of
                    Equitime  and  is  unable to  anticipate  whether
                    this  source of insurance will be made  available
                    and,  if  so,  whether it will offer  competitive
                    rates.   The  Company anticipates  that  it  will
                    follow   industry  practices  with   respect   to
                    sources of insurance.

                 (g)Use of Estimates

                    The   preparation  of  financial  statements   in
                    accordance  with accounting principles  generally
                    accepted in the United States of America requires
                    management   to   make  certain   estimates   and
                    assumptions   regarding  valuation   of   assets,
                    recognition  of  liabilities for  costs  such  as
                    aircraft  maintenance, differences in  timing  of
                    air   traffic  billings  from  United  and  other
                    airlines, operating revenues and expenses  during
                    the  period  and disclosure of contingent  assets
                    and  liabilities at the date of the  consolidated
                    financial   statements.   Actual  results   could
                    differ from those estimated.

                 (h)Expendable Parts

                    Expendable parts and supplies are stated  at  the
                    lower  of  cost or market, less an allowance  for
                    obsolescence of $665,000 and $1.2 million  as  of
                    December   31,   2000  and  2001,   respectively.
                    Expendable  parts  and supplies  are  charged  to
                    expense  as  they are used.  Amounts  charged  to
                    costs and expenses for obsolescence in 1999, 2000
                    and  2001  were $110,000, $237,000 and  $578,000,
                    respectively.

 56
                 (i)Property and Equipment

                    Property  and  equipment  are  stated  at   cost.
                    Depreciation  is computed using the straight-line
                    method  over  the estimated useful lives  of  the
                    related  assets that range from five  to  sixteen
                    and one half years.  Capital leases and leasehold
                    improvements  are amortized over the  shorter  of
                    the  estimated life or the remaining term of  the
                    lease.

                    Amortization  of  capital  leases  and  leasehold
                    improvements is included in depreciation expense.

                    The Company periodically evaluates whether events
                    and  circumstances have occurred which may impact
                    the   remaining  estimated  useful  life  or  the
                    recoverability of the remaining carrying value of
                    its   long-lived  assets.   If  such  events   or
                    circumstances were to indicate that the  carrying
                    amount  of these assets would not be recoverable,
                    the  Company would estimate the future cash flows
                    expected to result from the use of the assets and
                    their  eventual disposition.  If the sum  of  the
                    expected  future  cash  flows  (undiscounted  and
                    without  interest  charges)  is  less  than   the
                    carrying amount of the asset, an impairment  loss
                    would be recognized by the Company.

                 (j)Preoperating Costs

                    Preoperating   costs  represent   the   cost   of
                    integrating new types of aircraft. Prior to 1999,
                    such  costs,  which consist primarily  of  flight
                    crew  training  and  aircraft  ownership  related
                    costs,  were deferred and amortized over a period
                    of  four  years  on a straight-line  basis.   The
                    American    Institute   of    Certified    Public
                    Accountants  issued Statement  of  Position  98-5
                    ("SOP  98-5")  on accounting for start-up  costs,
                    including  preoperating  costs  related  to   the
                    introduction of new fleet types by airlines.

                    During 1997 the Company capitalized approximately
                    $2.1  million  of  these  costs  related  to  the
                    introduction of the regional jet ("CRJ") into the
                    Company's  fleet.   Accumulated  amortization  of
                    preoperating  costs  at  December  31,  1998  was
                    $571,000.  On January 1, 1999, the Company wrote-
                    off  the remaining unamortized preoperating costs
                    balance  of  approximately $1.5  million,  before
                    income  tax  benefit of $598,000,  in  accordance
                    with  the  implementation of SOP 98-5.  Also,  in
                    accordance  with  SOP  98-5,  approximately  $2.2
                    million  of  preoperating costs  incurred  during
                    1999   and   approximately   $5.6   million    of
                    preoperating costs incurred during 2000  for  the
                    start up of ACJet were expensed as incurred.
 57
                 (k)Intangible Assets

                    Goodwill    of   approximately   $3.2    million,
                    representing  the excess of cost  over  the  fair
                    value  of  net assets acquired in the acquisition
                    of  ACA,  is being amortized by the straight-line
                    method  over  twenty  years.  Costs  incurred  to
                    acquire slots are being amortized by the straight-
                    line  method  over  twenty years.    The  primary
                    financial indicator used by the Company to assess
                    the  recoverability of its intangible  assets  is
                    undiscounted  future cash flows from  operations.
                    The  amount  of impairment, if any,  is  measured
                    based  on  projected future cash  flows  using  a
                    discount  rate  reflecting the Company's  average
                    cost   of  funds.  Accumulated  amortization   of
                    intangible assets at December 31, 2000  and  2001
                    was $1.6 million and $1.8 million, respectively.

                    In   accordance  with  Statement   of   Financial
                    Accounting Standards No. 142, (see Footnote  16),
                    which  the  Company will adopt as of  January  1,
                    2002,   the  Company  will  no  longer  recognize
                    amortization of its goodwill and slots  for  2002
                    and future years.

                 (l)Maintenance

                    The  Company  has  executed long term  agreements
                    with  the engine manufacturers and other  service
                    providers  covering repair and  overhaul  of  its
                    engines,  airframe and avionics  components,  and
                    landing  gear.   These  agreements  call  for  an
                    escalating rate per hour flown over the  life  of
                    the   agreement.    The   Company's   maintenance
                    accounting policy is to expense amounts based  on
                    the  current  rate  as  the aircraft  are  flown.
                    Prior   to   the  execution  of  these  long-term
                    maintenance agreements, the Company's maintenance
                    policy  was  a  combination of expensing  certain
                    events  as  incurred  and  accruing  for  certain
                    maintenance events at rates it estimated would be
                    sufficient  to  cover maintenance  cost  for  the
                    aircraft.

                    In   2000,  the  Company  executed  a  seven-year
                    engine   services  agreement   with   GE   Engine
                    Services, Inc. ("GE") covering the scheduled  and
                    unscheduled  repair  of ACA's  CRJ  jet  engines,
                    operated on the 43 CRJs already delivered  or  on
                    order  for  the  United Express operation.   This
                    agreement  was amended in July 2000 to  cover  23
                    additional  CRJ  aircraft,  bringing  the   total
                    number   of   CRJ  aircraft  covered  under   the
                    agreement  to  66.   Under  the  terms   of   the
                    agreement,  the Company pays a set dollar  amount
                    per  engine hour flown on a monthly basis  to  GE
                    and  GE assumes the responsibility to repair  the
                    engines  when  required at no additional  expense
                    to  the  Company, subject to certain  exclusions.
                    The  Company expenses the amount paid to GE based
                    on   the   monthly   rates  stipulated   in   the
                    agreement,  as  engine  hours  are  flown.    The
                    Company's  future  maintenance  expense  on   CRJ
                    engines  covered  under the  new  agreement  will
                    escalate  based  on contractual  rate  increases,
                    intended   to   match  the   timing   of   actual
                    maintenance events that are due pursuant  to  the
                    terms.    The  Company  has  signed   a   similar
                    agreement  covering engines for up to 80  328JETs
                    with Pratt & Whitney.
 58
                    Effective  September 2001, the Company entered  a
                    sixteen  year  maintenance  agreement  with   Air
                    Canada  covering maintenance, repair and overhaul
                    services  for  airframe  components  on  its  CRJ
                    aircraft.   Under  the terms of  this  agreement,
                    the  Company  pays  a varying amount  per  flight
                    hour  each  month,  based  on  the  age  of   the
                    aircraft.   The Company expenses the amount  paid
                    to  Air  Canada based on the rates stipulated  in
                    the agreement and the hours flown each month.

                    Effective January 2001, the Company entered  into
                    an  agreement  with  BAE Systems  Holdings,  Inc.
                    covering repair and overhaul of airframe  rotable
                    parts on the Company's J-41 aircraft through  the
                    remaining service life of the J-41 fleet.   Under
                    the  terms of this agreement, the Company pays  a
                    fixed  amount  per flight hour each  month.   The
                    Company  expenses the amount paid to BAE  Systems
                    Holdings,  Inc. based on the rates stipulated  in
                    the agreement and the hours flown each month.

                    During  the  third quarter of 1999,  the  Company
                    reversed  approximately  $1.5  million  in   life
                    limited parts repair expense accruals related  to
                    CRJ engines that are no longer required based  on
                    the  maintenance services and terms contained  in
                    the GE engine maintenance agreement.

                 (m)Deferred Credits

                    The  Company accounts for incentives provided  by
                    the  aircraft  manufacturers as deferred  credits
                    for leased aircraft.  These credits are amortized
                    on  a straight-line basis as a reduction to lease
                    expense  over  the respective  lease  term.   The
                    incentives  are  credits  that  may  be  used  to
                    purchase  spare parts, pay for training expenses,
                    or be applied against future rental payments.

                 (n)Income Taxes

                    The  Company accounts for income taxes using  the
                    asset and liability method.  Under the asset  and
                    liability   method,  deferred  tax   assets   and
                    liabilities  are recognized for  the  future  tax
                    consequences attributable to differences  between
                    the  financial  statement  carrying  amounts  for
                    existing   assets  and  liabilities   and   their
                    respective  tax bases.  Deferred tax  assets  and
                    liabilities are measured using enacted tax  rates
                    expected  to  apply to taxable income  in  future
                    years  in  which those temporary differences  are
                    expected to be recovered or settled.
 59
                 (o)Stock-Based Compensation

                    The   Company   accounts  for   its   stock-based
                    compensation  plans  using  the  intrinsic  value
                    method  prescribed  under  Accounting  Principles
                    Board (APB) No. 25.  As such, the Company records
                    compensation expense for stock options and awards
                    only  if the exercise price is less than the fair
                    market  value  of  the stock on  the  measurement
                    date.

                 (p)Income Per Share

                    Basic  income per share is computed  by  dividing
                    net  income  by  the weighted average  number  of
                    common  shares outstanding.  Diluted  income  per
                    share  is computed by dividing net income by  the
                    weighted   average   number  of   common   shares
                    outstanding  and common stock equivalents,  which
                    consist   of  shares  subject  to  stock  options
                    computed  using  the treasury stock  method.   In
                    addition,  dilutive  convertible  securities  are
                    included  in  the denominator while  interest  on
                    convertible  debt, net of tax, is added  back  to
                    the  numerator.  On January 25, 2001, the Company
                    announced  a  2-for-1 common stock split  payable
                    as  a  stock  dividend on February  23,  2001  to
                    shareholders of record on February 9, 2001.   All
                    share  and income per share information has  been
                    adjusted  for all years presented to reflect  the
                    stock split.

 60
                   A  reconciliation of the numerator and denominator
                   used  in  computing income per share is as follows
                   (in thousands, except per share amounts):

    
    
                            1999            2000            2001
                        Basic  Diluted  Basic  Diluted  Basic  Diluted


                                                 
Share calculation:
Average number of common
    shares              37,928  37,928  40,150  40,150  43,434  43,434
     Outstanding
         Incremental
    shares due to            -   1,698       -   1,616      -    1,776
    assumed exercise of
    options
  Incremental shares
    due to assumed           -   4,404       -   1,872      -      -
    conversion of
    convertible debt
  Weighted average
    common shares       37,928  44,030  40,150  43,638  43,434  45,210
       Outstanding

Adjustments to net
    income:
Income before cumulative
    effect
     of accounting     $29,156 $29,156 $15,155 $15,155 $34,322 $34,322
    change
    Cumulative effect
    of accounting        (888)      -      -        -       -       -
    change, net of
    income tax
    Interest expense on
    convertible debt,        -     831      -      416      -       -
         net of tax
  Net Income           $28,268 $29,987 $15,155 $15,571 $34,322 $34,322


  Net Income per share  $ .75    $ .66   $ .38   $ .36   $ .79   $ .76



              (q)   Reclassifications

                    Certain  prior year amounts as previously reported
                    have  been reclassified to conform to the  current
                    year presentation.

              (r)   Interest Rate Hedges


                    The  Company has periodically used swaps to  hedge
                    the  effects  of  fluctuations in  interest  rates
                    associated   with   aircraft   financings.   These
                    transactions  meet  the requirements  for  current
                    hedge  accounting.   The  effective  portions   of
                    hedging  gains  and  losses  resulting  from   the
                    interest  rate  swap contracts are deferred  until
                    the  contracts are settled and then amortized over
                    the aircraft lease term or capitalized as part  of
                    acquisition  cost, if purchased,  and  depreciated
                    over  the  life of the aircraft.  The  ineffective
                    portions  of hedging gains and losses are recorded
                    as incurred.

              (s)   Segment Information

                    The    Company   has   adopted   SFAS   No.   131,
                    "Disclosures  About Segments of an Enterprise  and
                    Related   Information."   The  statement  requires
                    disclosures  related to components  of  a  company
                    for   which  separate  financial  information   is
                    available  that  is  evaluated  regularly   by   a
                    company's  chief  operating  decision   maker   in
                    deciding   the   allocation   of   resources   and
                    assessing  performance.   The Company  is  engaged
                    in   one  line  of  business,  the  scheduled  and
                    chartered  transportation  of  passengers,   which
                    constitutes nearly all of its operating revenues.
 61
2.  Property     Property and equipment consist of
and              the following:
     Equipment


                 (in thousands)
                 December 31,
                                                      2000      2001
                                                      
                 Owned aircraft and improvements  $ 92,931  $ 92,562
                 Improvements to leased aircraft     5,771     6,782
                 Flight equipment, primarily        51,199    82,372
                    rotable spare parts
                 Maintenance and ground equipment    9,310    10,971
                 Computer hardware and software     11,345    14,314
                 Furniture and fixtures              1,329     2,120
                 Leasehold improvements              4,282     7,887
                                                   176,167   217,008
                 Less:  Accumulated depreciation    33,327    45,480
                    and amortization
                                                 $ 142,840 $ 171,528

                   In   1999,   the  Company  commenced  a  replacement
                project  of  its  computer  software  systems.   The
                Company   anticipates  spending  approximately   $11
                million on this project, the majority of which  will
                be  capitalized and amortized over seven years.   In
                1999,  the  Company expensed approximately  $400,000
                related   to  replacement  software  selection   and
                capitalized   $2.3   million  in   acquisition   and
                implementation  costs.   In  2000  and   2001,   the
                Company  capitalized an additional $5.2 million  and
                $2.8   million   of  costs  incurred,  respectively,
                bringing  the  total capitalized costs  to  date  to
                $10.3 million.

 62
3.  Accrued        Accrued liabilities consist of the
     Liabilities      following:

                (in thousands)


                   December 31,
                                                    2000     2001
                                                     
                Payroll and employee benefits     $ 13,038 $ 20,385
                Air traffic liability                3,075    2,534
                Interest                             1,021      949
                Aircraft rents                       8,109    6,765
                Passenger related expenses           9,692    6,075
                Maintenance costs                    2,880    1,266
                Fuel                                 7,049    4,595
                Other                                8,180   13,001
                                                  $ 53,044 $ 55,570

4.  Debt        On  September 28, 2001, the Company entered into  an
                asset-based  lending  agreement  with  a   financial
                institution  that provided the Company with  a  line
                of  credit for up to $25 million.  The new  line  of
                credit,  which  will  expire on  October  15,  2003,
                replaced  a  previous $35 million  line  of  credit.
                The  interest rate on this line is LIBOR plus  .875%
                to  1.375% depending on the Company's fixed  charges
                coverage  ratio.   As  of  December  31,  2001,  the
                Company's  interest rate on its line of  credit  was
                3.0%.   The  Company has pledged  $15.3  million  of
                this  line  of credit as collateral for  letters  of
                credit  issued  on  behalf  of  the  Company  by   a
                financial   institution.   The  available  borrowing
                under the line of credit is limited to the value  of
                the  bond letter of credit on the Company's  Dulles,
                Virginia  hangar facility plus the value of  60%  of
                the  book value of certain rotable spare parts.   As
                of  December 31, 2001 the amount of available credit
                under  the  line was $9.7 million.  As  of  December
                31,  2001  there were no outstanding  borrowings  on
                the $25 million line of credit.

                In  July  1997,  the Company issued  $57.5  million
                aggregate   principal  amount  of  7%   Convertible
                Subordinated Notes due July 1, 2004 ("the  Notes").
                The  Notes  were convertible into shares of  Common
                Stock unless previously redeemed or repurchased, at
                a  conversion price of $4.50 per share, subject  to
                certain  adjustments.  During  1998,  approximately
                $37.7  million  of  the notes were  converted  into
                approximately  8.5 million shares of common  stock.
                Interest  on the Notes was payable on April  1  and
                October  1  of  each year.  On May  15,  2000,  the
                Company   called   the  remaining   $19.8   million
                principal   amount   of  Notes   outstanding,   for
                redemption at 104% of face value effective July  3,
                2000.   The Noteholders elected to convert  all  of
                the  Notes into common stock and approximately  4.4
                million  shares  were issued in  exchange  for  the
                Notes  during the period May 25, 2000  to  June  6,
                2000,  resulting in an addition to paid in  capital
                of  approximately $19.8 million partially offset by
                a  reduction  of  approximately  $471,000  for  the
                unamortized  debt issuance costs  relating  to  the
                Notes in connection with their conversion.
                 63
                In  September 1997, approximately $112  million  of
                pass  through certificates were issued in a private
                placement  by  separate pass through trusts,  which
                purchased  with the proceeds, equipment notes  (the
                "Equipment  Notes") issued in connection  with  (i)
                leveraged lease transactions relating to four J-41s
                and  six  CRJs,  all of which were  leased  to  the
                Company  (the  "Leased  Aircraft"),  and  (ii)  the
                financing  of four J-41s owned by the Company  (the
                "Owned Aircraft").  The Equipment Notes issued with
                respect   to   the   Owned  Aircraft   are   direct
                obligations  of  ACA, guaranteed by  ACAI  and  are
                included  as  debt obligations in the  accompanying
                consolidated  financial statements.  The  Equipment
                Notes  issued  with respect to the Leased  Aircraft
                are not obligations of ACA or guaranteed by ACAI.



                 Long-term debt consists of the
          following:
       (in thousands)                                   2000       2001
       December 31,
                                                           
       Equipment Notes associated with Pass
          Through Trust Certificates, due
                January 1, 2008 and January 1,
          2010, principal payable annually
          through January 1, 2006 and semi-           13,304     12,262
          annually thereafter through maturity,
          interest payable semi-annually at 7.49%
          throughout term of notes,
          collateralized by four J-41 aircraft.

       Notes payable to institutional lenders,
          due between October 23, 2010 and May
          15, 2015, principal payable                 50,952     48,096
          semiannually with interest ranging from
          5.65% to 7.63% through maturity,
          collateralized by four CRJ aircraft.

       Note payable to institutional lender, due
          October 2, 2006, principal payable           3,168      2,722
          semiannually with interest at 6.56%,
          collateralized by one J-41 aircraft.

       Total                                          67,424     63,080
       Less:  Current Portion                          4,344      4,639
                                                     $63,080    $58,441

 64


                As of December 31, 2001, maturities of long-term
                debt are as follows:
                (in thousands)
                                                     
                2002                                    $ 4,639
                2003                                      4,900
                2004                                      5,153
                2005                                      6,019
                2006                                      5,936
                Thereafter                               36,433
                                                        $63,080

                The    Company   has   various   financial   covenant
                requirements  associated with  its  debt  and  United
                marketing  agreements.  These covenants  require  the
                Company  to  meet  certain  financial  ratio   tests,
                including  tangible net worth, net earnings,  current
                ratio and debt service levels.

5.  Obligations The    Company    leases   certain   equipment    for
     Under      noncancellable terms of more than one year.  The  net
Capital         book  value of the equipment under capital leases  at
      Leases    December  31, 2000 and 2001 is $5.5 million and  $3.6
                million,  respectively.  The leases were  capitalized
                at  the  present  value of the lease  payments.   The
                weighted  average interest rate for these  leases  is
                approximately 7.6 %.

                 At December 31, 2001, the future minimum payments, by
                 year  and in the aggregate, together with the present
                 value  of  the  net  minimum lease payments,  are  as
                 follows:

                  (in thousands)
                Year Ending December 31,


                                                          
                 2002                                        $  1,584
                 2003                                           1,565
                 2004                                             772
                 Total future minimum lease                     3,921
                    payments
                 Amount representing interest                     360
                 Present value of minimum lease                 3,561
                    payments
                 Less:  Current maturities                      1,359
                                                             $  2,202


 65
6.  Operating    Future  minimum  lease payments under  noncancellable
      Leases     operating leases at December 31, 2001 are as follows:



                 (in thousands)
         Year ending December 31,    Aircraft  Other        Total
                                                 
                2002               $ 120,914  $ 7,236  $  128,150
                2003                 112,841    7,297     120,138
                2004                 116,945    7,297     124,242
                2005                 115,559    7,094     122,653
                2006                 113,565    7,042     120,607
                Thereafter           940,188   45,431     985,619
                  Total  minimum
                  lease payments  $1,520,012 $ 81,397  $1,601,409


                 Certain  of the Company's leases require aircraft  to
                 be  in  a  specified maintenance condition  at  lease
                 termination or upon return of the aircraft.

                 The Company's lease agreements generally provide that
                the  Company  pays taxes, maintenance, insurance  and
                other operating expenses applicable to leased assets.
                Operating  lease  expense was  $56.2  million,  $70.8
                million,  and  $107.4  million for  the  years  ended
                December 31, 1999, 2000, and 2001, respectively.

7.  Stockholders'  Stock Splits
       Equity
                On  January 25, 2001, the Company announced a 2-for-1
                common  stock  split payable as a stock  dividend  on
                February  23,  2001  to  shareholders  of  record  on
                February 9, 2001.  The effect of this stock split  is
                reflected  in the accompanying financial  statements,
                calculation  of  income per share, and  stock  option
                table  presented below as of and for the years  ended
                December 31, 1999, 2000 and 2001.

                Stock Option Plans

                The  Company's 1992 Stock Option Plan has 3.0 million
                shares of which a majority had been granted by  1995.
                The  Company's  1995  Stock Incentive  Plan  has  5.0
                million shares of which the majority had been granted
                by   year-end   1999.    In   2000,   the   Company's
                shareholders approved a new 2000 Stock Incentive Plan
                for  4.0  million  shares.  These  three  shareholder
                approved  plans provide for the issuance of incentive
                stock  and  non qualified stock options  to  purchase
                common  stock  of  the Company and  restricted  stock
                awards  to  certain employees and  directors  of  the
                Company. In addition, during 2000 the Company's Board
                of  Directors approved stock option programs  for  an
                additional  2.4  million shares. The  Board  approved
                programs  provide  for the issuance of  non-qualified
                stock options to purchase common stock of the Company
                and  restricted  stock awards to  certain  employees.
                Executive  officers and directors of the Company  are
                not  eligible to participate in the Board  authorized
                stock option programs.  Under the plans and programs,
                options are granted by the Chief Executive Officer of
                the  Company  with  approval  from  the  Compensation
                Committee of the Board of Directors and vest  over  a
                period ranging from three to five years.


 66
                A summary of the status of the Company's stock option
                plan awards, including restricted stock awards as  of
                December 31, 1999, 2000, and 2001 and changes  during
                the periods ending on those dates is presented below:



                               1999             2000            2001
                              Weighted        Weighted         Weighted
                              average         average          average
                              exercise        exercise         exercise
                      Shares   price   Shares  price    Shares  price
                                               
Options outstanding at
beginning of year    3,719,798  $ 3.76 4,445,642 $ 6.14 4,576,994  $ 8.57
Granted              1,470,000  $11.44 1,341,000 $12.51 2,202,826  $14.74
Exercised              525,852  $ 3.07 1,132,432 $ 3.46 1,524,482  $ 5.35
Canceled               218,304  $ 8.85    77,216 $10.84    60,700  $14.90
Options outstanding  4,445,642  $ 6.14 4,576,994 $ 8.58 5,194,638  $12.07
at end of year

Options exercisable  2,320,412  $ 3.03 2,132,823 $ 5.02 1,408,608  $ 7.88
at year-end
Options available for   54,668         5,190,884        3,048,758
granting at year end

Weighted-average fair
value of options         $6.57             $7.45            $8.77
granted during the
year


                The  Company  awarded  a total of  55,900  shares  of
                restricted  stock to certain employees  during  2001.
                These  shares  vest  over  four  years  and  have   a
                provision  for  accelerated vesting  tied  to  a  25%
                increase in any 2002 quarter's operating results over
                the  prior  years  quarter.  The  Company  recognized
                $218,000 in compensation expense in 2001 due to these
                restricted stock awards.  The Company awarded a total
                of  67,000  shares  of restricted  stock  to  certain
                employees during 2000.  These shares vest over  three
                years and had a provision for accelerated vesting  if
                the  Company's stock price appreciated by 25%  during
                the  first  year of vesting.  In February  2001,  the
                Company's   stock   price  met  the   threshold   for
                accelerated vesting and as a result, these restricted
                shares  vested  100%  in  April  2001.   The  Company
                recognized  $1.1 million and $78,000 in  compensation
                expense in 2001 and 2000, respectively, due to  these
                restricted  stock  awards and  as  a  result  of  the
                accelerated  vesting schedule.  In 1998, the  Company
                awarded a total of 200,000 shares of restricted stock
                to  certain employees.  These shares vest over  three
                to  five  years.   The  Company recognized  $343,000,
                $301,000  and  $241,000 in compensation  expense  for
                1999, 2000 and 2001 respectively, associated with the
                1998 restricted stock awards and $94,000, $90,000 and
                $57,000   for   1999,  2000  and  2001  respectively,
                associated with stock option awards.
 67
                The  following  table  summarizes  information  about
                stock options outstanding at December 31, 2001:


                         Options Outstanding       Options Exercisable
                              Weighted-
                    Number    average     Weighted-  Number    Weighted-
                  outstanding remaining   average  exercisable   average
Range of exercise     at     contractual  exercise             exercise
      price         12/31/01 life  price  price     12/31/01     price
                              (years)

                                                  
$0.00  - $2.79       421,588        2.7    $  .42   310,302    $  .58
$2.80 - $5.59        198,776        5.0   $  3.72   198,776   $  3.72
$5.60 - $8.39        134,992        6.0   $  6.12   134,992   $  6.12
$8.40 - $11.19       593,866        7.5     $9.85   221,516     $9.67
$11.20 - $13.99    3,195,730        8.9    $13.43   404,386    $12.55
$14.00 - $16.79      351,786        7.8    $15.67   135,136    $15.35
$16.80 - $19.59       13,000        9.0    $17.70     2,000    $17.13
$19.60 - $22.39      188,000        9.2    $20.56     1,500    $20.95
$22.40 - $25.19       16,500        9.3    $23.49         -         -
$25.20 - $27.99       80,400        9.6    $26.90         -         -
                   5,194,638        8.0    $12.07 1,408,608   $  7.88



                The  Company uses the Black-Scholes option  model  to
                estimate  the  fair  value of  options.  A  risk-free
                interest  rate of 6.6%, 6.0% and 4.5% for 1999,  2000
                and 2001, respectively, a volatility rate of 65%, 65%
                and 73.4% for 1999, 2000 and 2001, respectively, with
                an expected life of 6.7 years for 1999, 4.0 years for
                2000   and  4.0  years  for  2001  were  assumed   in
                estimating  the  fair value.  No  dividend  rate  was
                assumed for any of the years.

                The   following  summarizes  the  pro  forma  effects
                assuming  compensation  for  such  awards  had   been
                recorded  based  upon the estimated fair  value.  The
                proforma information disclosed below does not include
                the  impact of awards made prior to January  1,  1995
                (in thousands, except per share data):

 68


                      1999            2000              2001
                   As      Pro     As      Pro     As       Pro
                Reported   Forma  Reported Forma  Reported  Forma

                                         
   Net income   $28,268  $23,931 $15,155  $12,009 $34,322  $29,038

   Basic
   earnings     $ .75    $  .63  $ .38    $ .30   $ .79    $ .67
    per share

   Diluted
   earnings     $ .66    $  .56  $ .36    $ .28   $  .76   $ .64
   per share
 
                Preferred Stock

                The  Board  of Directors of the Company is  authorized
                to   provide  for  the  issuance  by  the  Company  of
                preferred stock in one or more series and to  fix  the
                rights,   preferences,   privileges,   qualifications,
                limitations   and  restrictions  thereof,   including,
                without  limitation, dividend rights, dividend  rates,
                conversion  rights, voting rights, terms of redemption
                or   repurchase,  redemption  or  repurchase   prices,
                limitations   or  restrictions  thereon,   liquidation
                preferences and the number of shares constituting  any
                series or the designation of such series, without  any
                further vote or action by the stockholders.

8.  Employee    Employee Stock Ownership Plan
    Benefit
    Plans       The  Company  established an Employee Stock  Ownership
                Plan   (the   "ESOP")   covering   substantially   all
                employees.  For each of the years 1992  through  1995,
                the  Company made contributions to the ESOP that  were
                used  in  part  to  make loan and  interest  payments.
                Shares  of  common  stock acquired by  the  ESOP  were
                allocated  to  each employee based on  the  employee's
                annual compensation.

                Effective June 1, 1998, the Board of Directors of the
                Company  voted to terminate the Plan.  On  March  15,
                1999,   the   Internal  Revenue  Service   issued   a
                determination letter notifying the Company  that  the
                termination of the Plan does not adversely affect the
                Plan's  qualification for federal tax purposes.  Upon
                termination  of the Plan, a participant becomes  100%
                vested  in his or her account. In preparing  for  the
                final distribution of ESOP shares to participants, it
                was  determined that a misallocation  of  shares  had
                occurred  in  years  1993 through 1997  resulting  in
                certain  eligible participants not receiving some  of
                their  entitled  shares. The Company contributed  the
                required  number  of additional shares  to  the  ESOP
                during the second and third quarters of 1999 when the
                final   calculation  was  determined  and  recognized
                approximately $250,000 in expense. The Company  filed
                a  request for a compliance statement under the IRS's
                Voluntary  Compliance Resolution  Program  to  obtain
                Service  approval of the Company's  response  to  the
                share  misallocation  issue. In September  1999,  the
                ESOP  trustee began distribution of the  ESOP  assets
                per   participant's  direction.  In  2000  and  2001,
                additional   ESOP   shares   were   distributed,   as
                participants  were located.  The ESOP  will  continue
                until  all participants are located and any remaining
                assets  are  properly  distributed.   The  number  of
                shares remaining in the Plan as of December 31,  2000
                and 2001 were 29,074 and 14,537, respectively.
                 69
                401K Plan

                Effective  January  1,  1992, the  Company  adopted  a
                401(k)    Plan   (the   "Plan").   The   Plan   covers
                substantially  all full-time employees  who  meet  the
                Plan's  eligibility requirements. Employees may  elect
                a  salary reduction contribution of up to 15% of their
                annual  compensation not to exceed the maximum  amount
                allowed by the Internal Revenue Service.

                Effective  October 1, 1994, the Plan was  amended  to
                require the Company to make contributions to the Plan
                for   eligible   pilots  in  exchange   for   certain
                concessions.   These contributions are in  excess  of
                any  discretionary contributions made for the  pilots
                under   the  original  terms  of  the  Plan.    These
                contributions are 100% vested and equal to 3% of  the
                first  $15,000 of each eligible pilot's  compensation
                plus  2%  of  compensation in excess of $15,000.  The
                Plan  limits  the  Company's  contributions  for  the
                pilots  to  15% of the Company's adjusted net  income
                before  extraordinary items for such plan  year.  The
                Company's  obligations  to  make  contributions  with
                respect  to  all  plan  years in  the  aggregate  are
                limited  to  $2.5 million.  The employer's  aggregate
                contribution as of December 31, 1999 was $2,500,000.

                The  Plan  allows  the Company to  make  discretionary
                matching   contributions  for   non-union   employees,
                mechanics,  and  certain flight attendants,  equal  to
                25%   of  salary  contributions  up  to  4%  of  total
                compensation.  Effective with the ratification of  the
                pilot's  new union agreement on February 9, 2001,  the
                Company's match for pilots is variable depending  upon
                the  pilot's  length  of  service  and  the  Company's
                operational   performance.   The  Company's   matching
                percentage  for a pilot can range from  one  to  seven
                percent  of  eligible  contributions.   The  Company's
                matching contribution for all qualified employees,  if
                any,  vests  ratably  over five  years.   Contribution
                expense was approximately $303,000, $374,000 and  $3.9
                million  for  1999, 2000 and 2001, respectively.   The
                Company's   contribution  expense  in  2001   includes
                estimated   costs  of  $2.9  million  for   additional
                contributions to correct operational defects found  in
                the  Company's 401(k) plan in addition to  $1  million
                in discretionary matching contributions.

                Profit Sharing Programs

                The  Company  has profit sharing programs that  result
                in   periodic  payments  to  all  eligible  employees.
                Profit   sharing  compensation,  which  is  based   on
                attainment   of  certain  performance  and   financial
                goals,  was approximately $4.5 million, $4.5  million,
                and   $6.3   million   in   1999,   2000   and   2001,
                respectively.
  70
 9.Income       The provision (benefit) for income taxes includes the
   Taxes        following components: (in thousands)
 
 
                Year Ended December 31,
                                           1999      2000        2001
                                                     
                Federal:
                     Current            $ 10,420   $ 11,295   $ 15,392
                     Deferred              5,602    (4,267)      4,437
                Total federal             16,022      7,028     19,829
                       provision
                State:
                     Current               1,993      1,010      2,207
                     Deferred                304      (381)        477
                Total state provision      2,297        629      2,684
                Total provision on
                 income   before
                 accounting change        18,319      7,657     22,513
                Income tax benefit
                 due to change in          (598)
                 accounting method                        -          -
                Total provision         $ 17,721    $ 7,657   $ 22,513


                A   reconciliation  of  income  tax  expense  at   the
                applicable  federal statutory income tax rate  of  35%
                to the tax provision recorded is as follows:


                (in thousands)
                Year   ended  December
                31,                         1999       2000      2001
                
                                                        
                Income tax expense
                    at statutory rate    $16,616     $7,984   $19,892
                Increase    (decrease)
                in tax
                  expense due to:
                Permanent differences         89      (487)       877
                       and other
                State   income
                  taxes, net               1,614        160     1,744
                  of federal benefit

                Income tax expense       $18,319     $7,657   $22,513
 
                Deferred    income   taxes   result   from   temporary
                differences which are the result of provisions of  the
                tax  laws that either require or permit certain  items
                of  income or expense to be reported for tax  purposes
                in  different  periods  than for  financial  reporting
                purposes.  The Company's 2000 effective tax  rate  was
                positively  affected  by the receipt  of  a  favorable
                ruling  request  which allowed the Company  to  obtain
                additional  tax credits to offset income tax  as  well
                as  the realization of certain tax benefits that  were
                previously reserved which together reduced income  tax
                expense by approximately $1.4 million.
 71
                The  following is a summary of the Company's  deferred
                income taxes as of December 31, 2000 and 2001:


                 (in thousands)
                 December 31,
                                                      2000       2001

                                                        
                 Deferred tax assets:
                      Engine maintenance          $   679     $   411
                          accrual
                      Intangible assets               735         569
                      Air traffic liability           672         942
                      Allowance for bad debts         302         238
                      Deferred aircraft rent        1,737       2,363
                      Deferred credits              2,830       2,241
                      Accrued compensation            944       1,557
                      Accrued aircraft early       11,599       9,555
                          retirement charge
                      Start up and                  2,204       1,702
                          organizational costs
                      Other                           867       3,735
                         Total deferred tax        22,569      23,313
                              assets

                 Deferred tax liabilities:
                      Depreciation and           (26,534)    (32,717)
                         amortization
                      Accrued expenses and          (996)     (1,238)
                         other
                          Total deferred tax     (27,530)    (33,955)
                              liabilities
                 Net deferred income tax
                 (liabilities)                  $ (4,961)  $ (10,642)
 
                 No  valuation  allowance was established  in  either
                 2000  or  2001, as the Company believes it  is  more
                 likely than not that the deferred tax assets will be
                 realized.


 72
   10.           Aircraft
   Commitments
   and           As  of December 31, 2001, the Company had a total of
                 39  Canadair  Regional Jets ("CRJs") on  order  from
   Contingencies Bombardier,   Inc.,   and  held   options   for   80
                 additional CRJs.  The Company also had a firm  order
                 with  Fairchild Dornier for 36 Fairchild Dornier  32
                 seat  regional jets ("328JET") aircraft, and options
                 for  81 additional 328JETs.  Of the 75 firm aircraft
                 deliveries,  33 are scheduled for 2002  and  42  are
                 scheduled  for  2003.  The Company is  obligated  to
                 purchase  and  finance (including leveraged  leases)
                 the  75  firm  ordered aircraft  at  an  approximate
                 capital   cost   of  $1.2  billion.    The   Company
                 anticipates  leasing the majority of its  year  2002
                 aircraft  deliveries on terms similar to  previously
                 delivered regional jet aircraft.

                 Post Retirement Benefits

                 The  Company  has  committed to  provide  its senior
                 executive  officers a  deferred  compensation   plan
                 which utilizes split dollar life insurance policies,
                 and for a certain officer, a make-whole provision for
                 taxes, post retirement salary based on ending salary,
                 and post retirement benefits based on benefits similar
                 to  those currently provided to the executive  while
                 actively  employed.  The Company has  estimated  the
                 cost  of the deferred compensation and tax gross  up
                 feature,  future salary and future benefits  and  is
                 accruing  this  cost  over  the  remaining  required
                 service  time  of the executive officers.   In  2001,
                 the  Company expensed approximately $1.8 million  as
                 the  current  year's  cost of these  benefits.   The
                 company  expects to recognize similar costs annually
                 over  the  remaining  service  life  of  the  senior
                 executives.



                 Training

                 The Company has entered into agreements with Pan  Am
                 International Flight Academy ("PAIFA"), which  allow
                 the Company to train CRJ, J-41 and 328JET pilots  at
                 PAIFA's  facility near Washington-Dulles.  In  2001,
                 PAIFA relocated its Washington-Dulles operations  to
                 a  new training facility housing two CRJ simulators,
                 a  328JET  simulator, and a J-41 simulator near  the
                 Company's   Washington-Dulles   headquarters.    The
                 Company   has  agreements  to  purchase  an   annual
                 minimum  number  of CRJ and J-41 simulator  training
                 hours  at  agreed rates, through 2010 for  the  CRJ,
                 and  2002  for  the  J-41.   The  Company's  payment
                 obligations  for CRJ and J-41 simulator  usage  over
                 the   remaining   years  of  the  agreements   total
                 approximately $12.5 million.
                  73
                 In   2001,   a   simulator  provision  and   service
                 agreement  between  PAIFA,  CAE  Schreiner  and  the
                 Company  was executed and 328JET training  commenced
                 at  the  PAIFA facility.  Under this agreement,  the
                 Company has committed to purchase all of its  328JET
                 simulator  time  from PAIFA at  agreed  upon  rates,
                 with   no   minimum   number  of   simulator   hours
                 guaranteed.  A second 328JET simulator is  scheduled
                 for  installation  at  the  Washington-Dulles  PAIFA
                 simulator facility in July 2002.

                 At  December 31, 2001, the Company's minimum payment
                 obligations under the PAIFA agreements for  the  CRJ
                 and J-41 simulators are as follows:

                 (in thousands)
                 Year ended December 31,
                 2002                   $3,631
                 2003                    1,371
                 2004                    1,391
                 2005                    1,178
                 2006                    1,195
                 Thereafter              3,692
                                      $ 12,458

                 Derivative Financial Instruments

                 The  Company has periodically entered into a  series
                 of  put and call contracts as an interest rate hedge
                 designed  to  limit its exposure  to  interest  rate
                 changes  on  the anticipated issuance  of  permanent
                 financing  relating  to  the  delivery  of  the  CRJ
                 aircraft.   During 1999, 2000 and 2001, the  Company
                 settled  seven,  eight and one  hedge  transactions,
                 respectively,    receiving   $119,000    from    the
                 counterparty   in  1999,  paying  the   counterparty
                 $379,000   in   2000  and  paying  the  counterparty
                 $722,000  in 2001.  In 1999, the Company  recognized
                 a   gain  of  $211,000  on  the  settlement  of  one
                 contract, representing the ineffective portion of  a
                 hedge.   At  December 31, 2000 the Company  had  one
                 interest   rate  hedge  transaction  open   with   a
                 notional  value  of  $8.5 million.   It  settled  on
                 January  3,  2001 resulting in the  payment  to  the
                 counterparty referenced above.

                 In  October 1999, the Company entered into commodity
                 swap   transactions  to  hedge  price   changes   on
                 approximately 13,300 barrels of crude oil per  month
                 for   the  period  April  to  June  2000,   and   on
                 approximately 23,300 barrels of crude oil per  month
                 for  the  period July through September  2000.   The
                 contracts provided for an average fixed price  equal
                 to  approximately  52.6 cents  per  gallon  for  the
                 second  quarter of 2000 and 51 cents per gallon  for
                 the third quarter of 2000.    Effective December  1,
                 2000,  under  the  United Air Lines  agreements  and
                 since  inception of the Delta Air Lines  agreements,
                 the  Company  no  longer bears the  risk  associated
                 with  fuel  price  volatility  for  its  operations.
                 Accordingly,  no  fuel  hedging  transactions   were
                 entered  for  2001, and there were no  fuel  hedging
                 transactions open as of December 31, 2001 and 2000.
 74
11.  Aircraft    During  the  fourth  quarter of  2001,  the  Company
   Early         recorded  an  aircraft  early retirement  charge  of
   Retirement    $23.5  million  ($14.0 million after  tax)  for  the
   Charge        early   retirement   of  nine  leased   Jetstream-41
                 turboprop   aircraft  that  will  be  removed   from
                 service   prior  to  year-end  2002.   The   Company
                 anticipates  taking additional charges  during  2002
                 of  approximately $48 million pre-tax ($28.4 million
                 after-tax)  for the retirement of its remaining  29-
                 seat   Jetstream-41  turboprop  aircraft  in   2003.
                 Fairchild Dornier, the manufacturer of the  328JETs,
                 is  contractually  obligated  to  make  the  Company
                 whole for any difference between lease payments,  if
                 any,  received from remarketing the 26 J-41 aircraft
                 leased   by  the  Company  and  the  lease   payment
                 obligations  of the Company on those  aircraft.   To
                 the  extent  that  Fairchild  Dornier  fulfills  its
                 contractual   obligations,  the  majority   of   the
                 aircraft  early retirement charge will not adversely
                 affect   the  Company's  cash  position,  with   the
                 payments by Fairchild Dornier being recorded  as  an
                 aircraft   purchase   inducement   on   the   328JET
                 aircraft.      The   undiscounted  remaining   lease
                 obligations  (net  of  the  Company's  estimate   of
                 future  sublease  rentals) on the J-41  fleet  after
                 planned  retirement  dates  in  2002  and  2003  are
                 approximately  $55  million  and  continue   through
                 2010.   The  Company would remain liable  for  these
                 lease  payments in the event that Fairchild  Dornier
                 defaults  on  its obligation.  No  asset  impairment
                 charges were included in the aircraft early retirement
                 charge.

                 During  2000,  the Company recorded  aircraft  early
                 retirement  operating charges totaling  $29  million
                 ($17.4  million  net of income tax)  for  the  early
                 lease  termination  of its 28 19-seat  Jetstream  32
                 turboprop aircraft, which were removed from  service
                 prior  to  December 31, 2001.  The  charge  included
                 the  estimated  cost of contractual  obligations  to
                 meet  aircraft return conditions, as well as a lease
                 termination fee, which fee was calculated  including
                 such  factors as the discounted present  value  cost
                 of  future lease obligations from the planned out of
                 service  date  to  the lease termination  date,  and
                 miscellaneous costs and benefits of early return  to
                 the  lessor.    As a result of completing  the  J-32
                 early  retirement during the fourth quarter of 2001,
                 the  Company reversed approximately $500,000 of  the
                 original  $29  million  charge  which  will  not  be
                 required,  and recorded this amount as  a  reduction
                 to  the  aircraft early retirement charge  taken  in
                 2001.



 75
12.  Air          On  September 22, 2001, President Bush signed  into
   Transportation law   the  Air  Transportation  Safety  and  System
   Safety and     Stabilization  Act (the "Act").  The  Act  provided
   System         cash   grants   to  commercial  air   carriers   as
   Stabilization  compensation  for direct losses incurred  beginning
   Act/Aviation   with  the  terrorist attacks on September 11,  2001
   and            as  a  result of the FAA mandated ground stop order
   Transportation issued by the Secretary of Transportation, and  for
   Security Act   incremental  losses  incurred  during  the   period
                  beginning  September 11, 2001 and  ending  December
                  31,  2001 as a direct result of such attacks.   The
                  Company  has  received $9.7 million in cash  grants
                  under  these provisions recognized as non-operating
                  income  under  "government  compensation"  for  the
                  third  and  fourth quarters 2001.  This amount  was
                  the  government's estimate of approximately 85%  of
                  amount  due  to  the Company based  on  preliminary
                  data.    The   exact   amount  of   the   Company's
                  compensation will be based on the lesser of  actual
                  losses  incurred or a statutory limit based on  the
                  total  amount  allocable  to  all  airlines.   This
                  exact  amount is not yet determinable  because  the
                  statutory limit is subject to information  not  yet
                  released  by the federal government.  As such,  the
                  Company  is  unsure if it will be entitled  to  any
                  further  government compensation under this program
                  and  will recognize any remaining payments as  non-
                  operating   income   during  the   period   it   is
                  determined   the  Company  is  entitled   to   such
                  amounts.     All  amounts  received  as  government
                  compensation  are subject to audit  and  adjustment
                  by the federal government.

                  In  addition  to the Compensation described  above,
                  the  Act:  provides  U.S.  air  carriers  with  the
                  option  to  purchase  certain  war  risk  liability
                  insurance from the United States government  on  an
                  interim  basis  at  rates that are  more  favorable
                  than  those  available  from  the  private  market;
                  authorizes the federal government to reimburse  air
                  carriers  for  the  increased  cost  of  war   risk
                  insurance  premiums for a limited but  undetermined
                  period  of  time  as  a  result  of  the  terrorist
                  attacks of September 11, 2001; and, authorizes  the
                  federal  government, pursuant to  new  regulations,
                  to  provide  loan  guarantees to air  carriers   in
                  the     aggregate    amount   of    $10    billion.
                  Subsequently   the   government   authorized    air
                  carriers to apply for reimbursement under  the  Act
                  for  increased insurance costs incurred during  the
                  period  October 1, 2001 to October  30,  2001,  and
                  the  Company applied for received, and booked as  a
                  reduction  to  insurance expense $652,000  in  such
                  reimbursements.   This amount was  based  on  costs
                  incurred  during the period, and no other insurance
                  reimbursements  are  anticipated.   Finally,   with
                  respect  to  federal loan guarantees,  the  Company
                  continues  to  evaluate the  terms  and  conditions
                  being  imposed by the government, and has  not  yet
                  determined  whether  to make  application  for  any
                  such facility.

                  Following  the September 11 terrorist attacks,  the
                  aviation  insurance  industry imposed  a  worldwide
                  surcharge on aviation insurance rates as well as  a
                  reduction in coverage for certain war risks.     In
                  response  to  the  reduction in coverage,  the  Air
                  Transportation Safety and System Stabilization  Act
                  provided  U.S.  air  carriers with  the  option  to
                  purchase certain war risk liability insurance  from
                  the  United  States government on an interim  basis
                  at   rates  that  are  more  favorable  than  those
                  available  from the private market.    The  Company
                  has  purchased this coverage through May  19,  2002
                  and  anticipates renewing it for  as  long  as  the
                  coverage  is  available from the  U.S.  government.
                  The  airlines and insurance industry, together with
                  the   United  States  and  other  governments,  are
                  continuing  to evaluate both the cost  and  options
                  for   providing  coverage  of  aviation  insurance.
                  Recently,   an  industry-led  group   announced   a
                  proposal  to create a mutual insurance company,  to
                  be   called  Equitime,  to  cover  war   risk   and
                  terrorism risk, which would initially seek  support
                  through  government  guarantees.   Equitime   would
                  provide  a  competitive  alternative  to  insurance
                  being  offered by the traditional insurance market,
                  which    opposes   this   initiative.    Equitime's
                  organizers  project  that it may  be  available  to
                  provide insurance as early as May 2002 to up to  70
                  U.S.  carriers.  The Company has not been  actively
                  involved  in  the  formation  of  Equitime  and  is
                  unable   to  anticipate  whether  this  source   of
                  insurance  will  be  made  available  and,  if  so,
                  whether  it  will  offer  competitive  rates.   The
                  Company  anticipates that it will  follow  industry
                  practices with respect to sources of insurance.

                  On  November 19, 2001 the President signed into law
                  the  Aviation and Transportation Security Act  (the
                  "Security   Act").   The  Security   Act   requires
                  heightened  passenger, baggage and  cargo  security
                  measures  be  adopted as well as  enhanced  airport
                  security procedures.  The Security Act created  the
                  Transportation   Security  Administration   ("TSA")
                  that  has  taken  over from the  air  carriers  the
                  reasonability  for  conducting  the  screening   of
                  passengers  and  their baggage.   The  TSA  assumed
                  both   of   the   Company's   passenger   screening
                  contracts  on  February  17,  2002.   Air  carriers
                  continue   to  have  responsibility  for   aircraft
                  security, employee background checks, the  security
                  of   air  carrier  airport  facilities  and   other
                  security related functions.
                   77
                  The  activities of the TSA are to be funded in part
                  by   the  application  of  a  $2.50  per  passenger
                  enplanement security fee (subject to a  maximum  of
                  $5.00  per  one  way  trip)  and  payment  by   all
                  passenger  carriers  of a sum  not  exceeding  each
                  carrier's  passenger  and  baggage  screening  cost
                  incurred  in  calendar  year  2000.   The  TSA   is
                  charged  to have equipment in operation by the  end
                  of  2002  to  be able to electronically screen  all
                  checked  passenger baggage with explosive detection
                  systems.   The  TSA  is  also  required  to  deploy
                  federal  air  marshals on an  increased  number  of
                  passenger  flights.  The Security Act  imposes  new
                  and   increased   requirements  for   air   carrier
                  employee  background checks and additional security
                  training   of  flight  and  cabin  crew  personnel.
                  These  additional and new requirements may increase
                  the  security  related costs of the  Company.   The
                  Security Act also mandated and the FAA has  adopted
                  new  rules  requiring the strengthening of  cockpit
                  doors,   some  of  the  costs  of  which   may   be
                  reimbursed  by the FAA.  The Company has  completed
                  level  one  fortification if its cockpit  doors  on
                  all  of its aircraft as of November 15, 2001.   The
                  FAA    has   mandated   additional   cockpit   door
                  modifications   that  will  result  in   additional
                  costs.    The   Company  intends   to   apply   for
                  reimbursement  of  these costs and  other  security
                  costs  for  which  the FAA has established  a  cost
                  reimbursement  program. There is no guarantee  that
                  the  Company  will be reimbursed in  full  for  the
                  cost  of  these  modifications. New  passenger  and
                  baggage   screening   requirements   have    caused
                  disruptions  in  the  flow  of  passengers  through
                  airports   and   in  some  cases  delayed   airline
                  operations.   The Company may experience  security-
                  related   disruptions  in  the  future,   including
                  reduced  passenger  demand  for  air  travel,   but
                  believes  that its exposure to such disruptions  is
                  not  greater than that faced by other providers  of
                  regional air carrier services.


13.  Subsequent  In  the  first quarter of 2002, the Company expanded
   Events        its  charter operations by ordering three additional
                 328JET  aircraft  from Fairchild  Dornier.   One  of
                 these,   which   has  already  been  acquired,   was
                 purchased   through  the  application   of   certain
                 deposits  previously placed with Fairchild  Dornier,
                 and  the others will be financed through debt,  with
                 repayment over approximately ten years.



 14.  Litigation The Company is a party to routine litigation and  to
                 FAA  civil  action  proceedings, all  of  which  are
                 incidental  to its business, and none of  which  the
                 Company  believes  are likely  to  have  a  material
                 effect  on the Company's financial position  or  the
                 results of its operations.


 15.  Financial  Statement  of  Financial  Accounting  Standards  No.
                 107,   "Disclosure  of  Fair  Value   of   Financial
   Instruments   Instruments"  requires the disclosure  of  the  fair
                 value   of  financial  instruments.  Some   of   the
                 information   used  to  determine  fair   value   is
                 subjective  and  judgmental  in  nature;  therefore,
                 fair    value   estimates,   especially   for   less
                 marketable   securities,  may  vary.   The   amounts
                 actually   realized  or  paid  upon  settlement   or
                 maturity could be significantly different.

                 Unless quoted market price indicates otherwise,  the
                 fair  values  of  cash and cash equivalents,  short-
                 term  investments, accounts receivable and  accounts
                 payable generally approximate market because of  the
                 short  maturity  of these instruments.  The  Company
                 has  estimated  the  fair value of  long  term  debt
                 based  on  quoted market prices, when available,  or
                 by  discounted  expected  future  cash  flows  using
                 current  rates offered to the Company for debt  with
                 similar maturities.
 78
                  The   estimated   fair  values  of  the   Company's
                  financial instruments, none of which are  held  for
                  trading   purposes,  are  summarized   as   follows
                  (brackets denote liability):
 
 
             (in thousands)  December 31, 2000      December 31, 2001
                               Carrying Estimated  Carrying Estimated
                                Amount    Fair      Amount    Fair
                                         Value               Value
                                                
                 Cash and cash
                   Equivalents  $86,117  $86,117  $173,669  $173,669
                 Short-term      35,100   35,100     7,300     7,300
                    investments
                 Accounts        29,052   29,052     8,933     8,933
                  receivable
                 Accounts       (19,724) (19,724)  (21,750)  (21,750)
                  payable
                 Long-term debt (67,424) (68,061)  (63,080)  (63,856)


                  See note 10 for information regarding the fair value of
                  derivative financial instruments.

16.               Supplemental disclosures of cash flow
   Supplemental   information:
   Cash Flow                          Year ended
   Information                       December 31,
                                    (in thousands)


                                          1999      2000     2001

                                                   
                   Cash paid during the
                     period for:
                        - Interest      $4,532    $6,410    $5,352
                        - Income taxes   8,193     8,944     7,837


                  The  following  non  cash investing  and  financial
                  activities took place in 1999, 2000 and 2001:

                  During  1999,  the  Company  received  $755,000  of
                  manufacturers credits that were applied against the
                  purchase  price of the two CRJs purchased  in  1999
                  from   the  manufacturer.   The  credits  will   be
                  utilized primarily through the purchase of  rotable
                  parts and other fixed assets, expendable parts, and
                  pilot training.

                  In  1999,  the Company capitalized $1.8 million  in
                  interest  related to $38.7 million on deposit  with
                  aircraft manufacturers.

                  In  2000,  the Company capitalized $2.7 million  in
                  interest  related to $46.4 million on deposit  with
                  aircraft manufacturers.

                  In  2000,  the  remaining $19.8  million  principal
                  amount  of  Notes outstanding were  converted  into
                  common  stock of the Company resulting in  a  $19.3
                  million increase to paid in capital.

                  In  2001,  the Company capitalized $2.6 million  in
                  interest  related to $44.8 million on deposit  with
                  aircraft manufacturers.
 79
   17.  Recent
   Accounting
   Pronouncement  On  July 5, 2001, the Financial Accounting Standards
   s              Board   issued  Statement  of  Financial  Accounting
                  Standard  No.  141,   "Business  Combinations",  and
                  Statement of Financial Accounting Standard No.  142,
                  "Goodwill  and Other Intangible Assets".   Statement
                  No. 141 addresses the accounting for acquisitions of
                  businesses   and   is  effective  for   acquisitions
                  occurring  on or after July 1, 2001.  Statement  No.
                  142  includes  requirements  to  test  goodwill  and
                  indefinite  life  intangible assets  for  impairment
                  rather than amortize them. Statement No. 142 will be
                  effective for fiscal years beginning after  December
                  15,  2001.  The Company will adopt Statement No. 142
                  beginning in the first quarter of 2002. The  Company
                  anticipates that implementation of SFAS 141 and SFAS
                  142  will  have  minimal  impact  on  the  Company's
                  financial position or results of operations.

                  On   October   3,  2001,  the  Financial  Accounting
                  Standards  Board  issued  FASB  Statement  No.  144,
                  Accounting for the Impairment or Disposal  of  Long-
                  Lived  Assets, which addresses financial  accounting
                  and reporting for the impairment or disposal of long-
                  lived  assets.   Statement No. 144  supersedes  FASB
                  Statement No. 121, Accounting for the Impairment  of
                  Long-Lived  Assets and for Long-Lived Assets  to  Be
                  Disposed  Of  and APB Opinion No. 30, Reporting  the
                  Results  of  Operations-Reporting  the  Effects   of
                  Disposal   of   a   Segment  of  a   Business,   and
                  Extraordinary,  Unusual  and Infrequently  Occurring
                  Events and Transactions.  Statement No. 144 includes
                  requirements related to the classification of assets
                  as held for sale, including the establishment of six
                  criteria  that  must  be  satisfied  prior  to  this
                  classification.   Statement No.  144  also  includes
                  guidance  related to the recognition and calculation
                  of   impairment   losses  for   long-lived   assets.
                  Statement No. 144 will be effective for fiscal years
                  beginning after December 15, 2001.  The Company will
                  adopt  Statement  No.  144 beginning  in  the  first
                  quarter of 2002.  Statement No. 144 is projected  to
                  have  minimal  impact  on  the  Company's  financial
                  position or results of operations.
 80         (in thousands, except per share amounts)
18.  Selected
   Quarterly
   Financial
   Data
   (Unaudited)
   
   
                                     Quarter Ended
                       March 31,    June 30,  September 30, December 31,
                           2001        2001           2001         2001


                                                 
   Operating            $133,454    $146,221    $147,651     $156,090
      revenues
   Operating              15,479      20,868      15,895      (8,049) (1)
      income (loss)
   Net income              9,625      12,948      12,751      (1,003) (1,3)
      (loss)
   Net income
      (loss) per
      share
     Basic                $ 0.23    $   0.30    $   0.29   $   (0.02)
     Diluted              $ 0.22    $   0.29    $   0.28   $   (0.02)
   Weighted
      average
      shares
      outstanding
     Basic                42,750      43,168      43,775       43,999
     Diluted              44,638      45,029      45,426       43,999


   Quarter Ended
                       March 31,    June 30,  September 30, December 31,
                           2000        2000           2000         2000

   Operating             $92,499    $116,332    $115,356     $128,339
     revenues
   Operating               4,540      20,629       2,226(2)   (3,308)(2)
     income (loss)
   Net income(loss)        2,280      12,029       2,666(2)   (1,821)(2)
   Net income(loss)
     per share
    Basic               $   0.06    $   0.31    $   0.06   $   (0.04)
    Diluted             $   0.06    $   0.28    $   0.06   $   (0.04)
   Weighted
     average
     shares
     outstanding
    Basic                 37,256      38,746      42,144       42,404
    Diluted               43,048      43,542      43,864       42,404
   
   1  In the fourth quarter of 2001, the Company recorded an aircraft
   early retirement charge.  The amount of the charge was 23.0
   million (pre-tax).
   2  In the third and fourth quarters of 2000, the Company recorded
   aircraft early retirement charges.  The amount of the charges were
   $8.7 million (pre-tax) in the third quarter, and $20.3 million
   (pre-tax) in the fourth quarter.
   3  Includes government compensation of $4.6 million (pre-tax) in the
   third quarter of 2001 and $5.1 million (pre-tax) in the fourth quarter
   of 2001.
   Note: The sum of the four quarters may not equal the totals for
   the year due to rounding of quarterly results.

 81
Item 9.   Changes in and Disagreements with Accountants on Accounting and
     Financial Disclosure

           None to report.



                                PART III

          The information required by this Part III (Items 10, 11, 12 and
13)  is  hereby  incorporated by reference from the Company's  definitive
proxy statement, which is expected to be filed pursuant to Regulation 14A
of  the Securities Exchange Act of 1934 not later than 120 days after the
end of the fiscal year covered by this report.


                                 PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

     (a)  1.   Financial Statements

               The  Consolidated Financial Statements listed in the index
               in Part II, Item 8, are filed as part of this report.

          2.   Consolidated Financial Statement Schedules

               Reference  is  hereby  made to the Consolidated  Financial
               Statements  and the Notes thereto included in this  filing
               in Part II, Item 8.

          3.   Exhibits

Exhibit
Number                Description of Exhibit

3.1  (note 3)    Restated Certificate of Incorporation of the Company.
3.2  (note 13)   Restated By-laws of the Company.
4.1  (note 11)   Specimen Common Stock Certificate.
4.19 (note 12)   Rights Agreement between Atlantic Coast Airlines
                 Holdings, Inc. and Continental Stock Transfer & Trust
                 Company dated as of January 27, 1999.
10.1  (notes 17 and 19)                                         Atlantic
                 Coast Airlines, Inc. 1992 Stock Option Plan.
10.6 (notes 5 & 18)                                             United
                 Express Agreement, dated as of November 22, 2000, as
                 amended as of February 6, 2001, among United Airlines,
                 Inc., Atlantic Coast Airlines and the Company.
10.8 (notes 9 & 18)                                             Delta
                 Connection Agreement, dated as of September 9, 1999
                 among Delta Air Lines, Inc., Atlantic Coast Airlines
                 Holdings, Inc. and Atlantic Coast Jet, Inc.
 82
10.12(a) (notes 2 & 19)                                        Second
                 Amended and Restated Severance Agreement, dated as of
                 July 25, 2001, between the Company and Kerry B. Skeen.
10.12(b) (notes 1 & 19)                                         Amended
                 and Restated Severance Agreement, dated as of December
                 28, 2001, between the Company and Thomas J. Moore.
10.12(c) (notes 1 & 19)                                         Form of
                 Severance Agreement.  The Company entered into
                 substantially similar agreements with other senior
                 executive officers.
10.12(d) (notes 1 & 19)
                 Form of Letter Agreement substantially similar to
                 agreements entered into with senior executive officers
                 regarding reduction in base salary.
10.13(a)  (note 15)                                             Form of
                 Indemnity Agreement. The Company has entered into
                 substantially identical agreements with the individual
                 members of its Board of Directors.
10.23  (note 1)  Loan and Security Agreement dated September 28, 2001
                 between Atlantic Coast Airlines and Wachovia Bank, N.A.
10.24  (notes 11 and 19)                                        Atlantic
                 Coast Airlines, Inc. 1995 Stock Incentive Plan, as
                 amended as of May 5, 1998.
10.245  (notes 7 and 19)                                        2000
                 Stock Incentive Plan of Atlantic Coast Airlines Holding,
                 Inc.
10.25(a)(notes 11 and 19) Form of Incentive Stock Option Agreement.  The
                 Company enters into this agreement with employees who
                 have been granted incentive stock options pursuant to
                 the Stock Incentive Plans.
10.25(b)  (notes 11 & 19)                                       Form of
                 Incentive Stock Option Agreement.  The Company enters
                 into this agreement with corporate officers who have
                 been granted incentive stock options pursuant to the
                 Stock Incentive Plans.
10.25(c) (notes 11 & 19)                                        Form of
                 Non-Qualified Stock Option Agreement. The Company enters
                 into this agreement with employees who have been granted
                 non-qualified stock options pursuant to the Stock
                 Incentive Plans.
10.25(d) (notes 11 & 19)                                        Form of
                 Non-Qualified Stock Option Agreement. The Company enters
                 into this agreement with corporate officers who have
                 been granted non-qualified stock options pursuant to the
                 Stock Incentive Plans.
10.25(e) (notes 11 & 19)                                        Form of
                 Restricted Stock Agreement. The Company entered into
                 this agreement with corporate officers who were granted
                 restricted stock pursuant to the Stock Incentive Plans.
10.27  (notes 8 & 19)                                           Form of
                 Split Dollar Agreement and Agreement of Assignment of
                 Life Insurance Death Benefit as Collateral.  The Company
                 has entered into substantially identical agreements with
                 Kerry B. Skeen, Thomas J. Moore, Michael S. Davis,
                 Richard J. Surratt, and William R. Lange.
10.31  (note 19) Summary of Senior Management Incentive Plan. The Company
                 has adopted a plan as described in this exhibit for 2002
                 and for the three previous years.
10.32  (note 19) Summary of Management Incentive Plan and Share the
                 Success Program.  The Company has adopted plans as
                 described in this exhibit for 2002 and for the three
                 previous years.
10.40A (notes 11 & 18)                                          Purchase
                 Agreement between Bombardier Inc. and Atlantic Coast
                 Airlines Relating to the Purchase of Canadair Regional
                 Jet Aircraft dated January 8, 1997, as amended through
                 December 31, 1998.
10.40A(1) (notes 9 & 18)                                        Contract
                 Change Orders No. 13, 14, and 15, dated April 28, 1999,
                 July 29, 1999, and September 24, 1999, respectively,
                 amending the Purchase Agreement between Bombardier Inc.
                 and Atlantic Coast Airlines relating to the purchase of
                 Canadair Regional Jet Aircraft dated January 8, 1997.
 83
10.41 (notes 9 & 18)                                            Purchase
                 Agreement between Bombardier Inc. and Atlantic Coast
                 Airlines relating to the Purchase of Canadair Regional
                 Jet Aircraft dated July 29, 1999, as amended through
                 September 30, 1999.
10.45 (note 4)   Form of Aircraft Purchase Agreement between Fairchild
                 Dornier GmbH and Atlantic Coast Airlines dated effective
                 December 20, 2000 (supersedes Exhibits 10.45 and
                 10.45(1) filed as an Exhibit to the Annual Report on
                 Form 10-K for the year ended December 31, 2000.
                 Confidential treatment is being sought for portions of
                 this exhibit).
10.50(a) (note 14)                                              Form of
                 Purchase Agreement, dated September 19, 1997, among the
                 Company, Atlantic Coast Airlines, Morgan Stanley & Co.
                 Incorporated and First National Bank of Maryland, as
                 Trustee.
10.50(b) (note 14)                                              Form of
                 Pass Through Trust Agreement, dated as of September 25,
                 1997, among the Company, Atlantic Coast Airlines, and
                 First National Bank of Maryland, as Trustee.
10.50(c) (note 14)                                              Form of
                 Pass Through Trust Certificate.
10.50(d) (note 14)                                              Form of
                 Participation Agreement, dated as of September 30, 1997,
                 Atlantic Coast Airlines, as Lessee and Initial Owner
                 Participant, State Street Bank and Trust Company of
                 Connecticut, National Association, as Owner Trustee, the
                 First National Bank of Maryland, as Indenture Trustee,
                 Pass-Through Trustee, and Subordination Agent,
                 including, as exhibits thereto, Form of Lease Agreement,
                 Form of Trust Indenture and Security Agreement, and Form
                 of Trust Agreement.
10.50(e) (note 14)
                 Guarantee, dated as of September 30, 1997, from the
                 Company.
10.80 (note 14)  Ground Lease Agreement Between The Metropolitan
                 Washington Airports Authority And Atlantic Coast
                 Airlines dated as of June 23, 1997.
10.85 (note 11)  Lease Agreement Between The Metropolitan Washington
                 Airports Authority and Atlantic Coast Airlines, with
                 amendments as of January 1, 1999.
21.1             Subsidiaries of the Company.
23.1             Consent of KPMG LLP.


Notes

(1)  Filed  as  an  Exhibit to this Annual Report on Form  10-K  for  the
       fiscal year ended December 31, 2001.
(2)  Filed  as  an Exhibit to the Quarterly Report on Form 10-Q  for  the
       three-month period ended September 30, 2001.
(3)  Filed  as  an Exhibit to the Quarterly Report on Form 10-Q  for  the
       three-month period ended June 30, 2001.
(4)  Filed  as  an Exhibit to the Quarterly Report on Form 10-Q  for  the
       three-month period ended March 31, 2001.
(5)    Filed  by Exhibit to the Annual Report on Form 10-K for the fiscal
       year ended December 31, 2000.
(6)    Filed  as  an Exhibit to the Current Report on Form 8-K  filed  on
       March 2, 2001.
(7)    Filed  as an Exhibit to the Quarterly Report on Form 10-Q for  the
       three-month period ended June 30, 2000.
(8)    Filed  as  an Exhibit to the Amended Annual Report on Form  10-K/A
       for the fiscal year ended December 31, 1999.
 84
(9)    Filed  as  Exhibit to the Quarterly Report on Form  10-Q  for  the
       three month period ended September 30, 1999.
(10)   Filed  as  Exhibit to the Quarterly Report on Form  10-Q  for  the
       three month period ended June 30, 1999.
(11)   Filed  as  an  Exhibit to the Annual Report on Form 10-K  for  the
       fiscal year ended December 31, 1998.
(12)   Filed   as   Exhibit  99.1  to  Form  8-A  (File  No.  000-21976),
       incorporated herein by reference.
(13)   Filed  as  Exhibit to the Quarterly Report on Form  10-Q  for  the
       three month period ended June 30, 1998.
(14)   Filed  as an Amendment to the Annual Report on Form 10-K  for  the
       fiscal  year  ended  December  31, 1997,  incorporated  herein  by
       reference.
(15)   Filed  as an Amendment to the Annual Report on Form 10-K  for  the
       fiscal  year  ended  December  31, 1996,  incorporated  herein  by
       reference.
(16)   Filed  as  an  Exhibit to the Annual Report on Form 10-K  for  the
       fiscal  year  ended  December  31, 1994,  incorporated  herein  by
       reference.
(17)   Filed  as  an  Exhibit  to  Form S-1, Registration  No.  33-62206,
       effective July 20, 1993, incorporated herein by reference.
(18)   Portions of this document have been omitted pursuant to a  request
       for confidential treatment that has been granted.
(19)   This  document  is a management contract or compensatory  plan  or
       arrangement.



Reports on Form 8-K:

10/10/01  Regulation FD Disclosure of presentation slides to be  used  in
analyst and/or investor meetings

10/19/01   Regulation FD Disclosure of press release announcing  capacity
levels and schedule additions

11/05/01  Salomon Smith Barney Transportation Conference Presentation

01/30/02    Raymond   James  &  Associates  Growth   Airline   Conference
Presentation

02/11/02  Goldman Sachs Air Carrier Conference Presentation

02/11/02   Deutsche  Banc  Alex. Brown Global  Transportation  Conference
Presentation

03/01/02   Raymond James & Associates 23rd Annual Institutional Investors
Conference Presentation

 85
                               SIGNATURES

      Pursuant  to  the  requirements of  Section  13  of  15(d)  of  the
Securities  Exchange  Act of 1934, the registrant has  duly  caused  this
report  to  be  signed on its behalf by the undersigned,  thereunto  duly
authorized on March 29, 2002.

                                   ATLANTIC COAST AIRLINES HOLDINGS, INC.

                                                    By:       /S/

                                                       Kerry B. Skeen
                                                       Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 29, 2002.

Name                            Title


           /S/                  Chairman of the Board of
                                Directors
Kerry B. Skeen                  and Chief Executive Officer
                                (Principal executive officer)

           /S/                  Director, President and
Thomas J. Moore                 Chief Operating Officer


           /S/                  Executive Vice President,
                                Treasurer and
Richard J. Surratt              Chief Financial Officer
                                (Principal financial officer)

           /S/                  Vice President, and Controller
David W. Asai                   (Principal accounting officer)


                                               /S/
C. Edward Acker                 Robert E. Buchanan
Director                        Director

           /S/                                /S/
Susan MacGregor Coughlin        Daniel L. McGinnis
Director                        Director

           /S/                                /S/
James C. Miller III             John M. Sullivan
Director                        Director