ASA HOLDINGS INC, S-4/A, 1996-11-07

ASA HOLDINGS INC
S-4/A, 1996-11-07
AIR TRANSPORTATION, SCHEDULED

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<PAGE> 1

As electronically filed with the Securities and Exchange Commission on
November 7, 1996
Registration No. 333-13071

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 1
TO

FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

ASA HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

GEORGIA 4512 58-2258221
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)

100 HARTSFIELD CENTRE PARKWAY
SUITE 800
ATLANTA, GEORGIA 30354
(404) 766-1400
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

JOHN W. BEISER Copy to:
ATLANTIC SOUTHEAST AIRLINES, INC. CRAIG H. KRITZER, ESQ.
100 HARTSFIELD CENTRE PARKWAY ALTMAN, KRITZER & LEVICK, P.C.
SUITE 800 6400 POWERS FERRY ROAD
ATLANTA, GEORGIA 30354 ATLANTA, GEORGIA 30339
(404) 766-1400 (770) 955-3555
(Name, address and telephone number,
including area code, of agent for service)

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as possible after this Registration Statement becomes
effective and the transactions described in the enclosed Proxy
Statement/Prospectus have been consummated.

If any of the securities being registered on this Form are being
offered in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. [ ]

The Registration fees were paid at the time of the original filing of
this registration statement.

---------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

================================================================================
<PAGE> 2
ASA HOLDINGS, INC.
CROSS-REFERENCE TABLE

LOCATION IN PROXY STATEMENT/PROSPECTUS OF INFORMATION
REQUIRED BY ITEMS OF FORM S-4

<TABLE>
<CAPTION>
Item Number and Caption Location in Proxy Statement/Prospectus
----------------------- --------------------------------------
<S> <C> <C>
A. INFORMATION ABOUT THE TRANSACTION

1. Forepart of Registration Statement and Outside Front Cover
Page of Prospectus . . . . . . . . . . . . . . . . . . . . Facing Page of the Registration
Statement; Outside Front Cover of Proxy
Statement/Prospectus

2. Inside Front and Outside Back Cover Pages of Prospectus . . Inside Front Cover Page: Available
Information; Incorporation of Certain
Documents by Reference. Outside Back
Cover Page: Table of Contents

3. Risk Factors, Ratio of Earnings to Fixed Charges and Other
Information . . . . . . . . . . . . . . . . . . . . . . . . Summary

4. Terms of the Transaction . . . . . . . . . . . . . . . . . Summary; The Proposed Reorganization;
Effect on Rights of Holders of Airlines
Common Stock; ASA Holdings Capital Stock

5. Pro Forma Financial Information . . . . . . . . . . . . . . Business and Management of Airlines

6. Material Contacts with the Company Being Acquired . . . . . Not Applicable

7. Additional Information Required for Reoffering by Persons
and Parties Deemed to be Underwriters . . . . . . . . . . . Not Applicable

8. Interests of Named Experts and Counsel . . . . . . . . . . Experts; Legal Matters

9. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities . . . . . . . . . . . . . . Business and Management of Airlines;
Business and Management of ASA Holdings

B. INFORMATION ABOUT THE REGISTRANT

10. Information With Respect to S-2 or S-3 Registrants . . . . Not Applicable

11. Incorporation of Certain Information by Reference . . . . . Not Applicable

12. Information With Respect to S-2 or S-3 Registrants . . . . Not Applicable

13. Incorporation of Certain Information by Reference . . . . . Not Applicable
</TABLE>

<PAGE> 3

<TABLE>
<S> <C> <C>
14. Information With Respect to Registrants Other Than S-3 or
S-2 Registrants . . . . . . . . . . . . . . . . . . . . . . Summary; Business and Management of ASA
Holdings; ASA Holdings Capital Stock;
Financial Statements

C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED

15. Information With Respect to S-3 Companies . . . . . . . . . Summary; Airlines Capital Stock and
Principal Holders Thereof; Business and
Management of Airlines; Incorporation of
Certain Documents by Reference

16. Information With Respect to S-2 or S-3 Companies . . . . . Not Applicable

17. Information With Respect to Companies Other Than S-2 or S-3
Companies . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable

D. VOTING AND MANAGEMENT INFORMATION

18. Information if Proxies, Consents or Authorization
are to be Solicited . . . . . . . . . . . . . . . . . . . . Summary; General Information; The Special
Meeting; The Proposed Reorganization,
Airlines Capital Stock and Principal
Holders Thereof; Business and Management
of ASA Holdings

19. Information if Proxies, Consents or Authorizations are not
to be Solicited, or in an Exchange Offer . . . . . . . . . . Not Applicable

</TABLE>

<PAGE> 4

[LOGO]

ATLANTIC SOUTHEAST AIRLINES, INC.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To the Shareholders of Atlantic Southeast Airlines, Inc.:

NOTICE IS HEREBY GIVEN of a Special Meeting of the shareholders of
Atlantic Southeast Airlines, Inc. ("AIRLINES") to be held in Meeting Rooms
117-118 at the Cobb Galleria Centre, Two Galleria Parkway, Atlanta, Georgia,
Thursday, December 19, 1996, at 11:00 a.m., Eastern Standard Time, for the
following purposes:

(1) To consider and vote upon a proposal to approve a corporate
reorganization that will include creation of a parent holding company
for Airlines (the "REORGANIZATION") and to adopt and approve an
Agreement and Plan of Merger, dated September 25, 1996 (the "MERGER
AGREEMENT"), by and among Airlines, ASA Holdings, Inc., a Georgia
corporation ("ASA HOLDINGS"), and Atlantic Southeast Merging Co., a
Georgia corporation ("MERGING CO."). The Merger Agreement provides
for the merger (the "MERGER") of Airlines with Merging Co., with
Airlines being the surviving corporation. ASA Holdings is a newly
formed, wholly owned subsidiary of Airlines organized specifically for
the purpose of becoming the new parent holding company in the
Reorganization. ASA Holdings subsequently formed Merging Co. as a
wholly owned subsidiary specifically to effect the Merger. Upon the
consummation of the Merger, (a) each issued and outstanding share of
Airlines' common stock, $0.10 par value per share ("AIRLINES COMMON
STOCK"), other than shares held by Airlines as treasury shares, will
be automatically deemed converted into one share of ASA Holdings'
common stock, $0.10 par value per share ("HOLDINGS COMMON STOCK"), (b)
each issued and outstanding share of common stock of Merging Co. will
be automatically deemed converted into shares of the surviving
corporation, (c) the shares of Holdings Common Stock owned by Airlines
before the Merger will be canceled and (d) the shares of Airlines
Common Stock held by Airlines as treasury shares before the Merger
will be canceled. Airlines will become a wholly owned subsidiary of
ASA Holdings and the current shareholders of Airlines will
automatically become shareholders of ASA Holdings. The terms of the
Merger Agreement and other transactions being effected as part of the
Reorganization are described in the accompanying Proxy
Statement/Prospectus.

(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.

Your attention is directed to the Proxy Statement/Prospectus submitted
with this Notice. Holders of shares of Airlines Common Stock do not have the
right to dissent with respect to the Reorganization or the Merger and receive
payment for the "fair value" of their shares by following the procedures
prescribed in Article 13 of the Georgia Business Corporation Code for the
reasons summarized under the caption "THE MERGER - DISSENTERS' RIGHTS" in the
enclosed Proxy Statement/Prospectus.

The Board of Directors has fixed the close of business on October 25,
1996 as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Special Meeting and at any adjournment
thereof.

<PAGE> 5
COMMON STOCK. SHARE CERTIFICATES THAT CURRENTLY REPRESENT AIRLINES COMMON
STOCK WILL AUTOMATICALLY BE DEEMED TO REPRESENT HOLDINGS COMMON STOCK AFTER THE
CONSUMMATION OF THE MERGER.

PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL
MEETING. THIS WILL ASSIST US IN PREPARING FOR THE MEETING. IF YOU ATTEND THE
SPECIAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE
PREVIOUSLY RETURNED YOUR PROXY CARD.

BY ORDER OF THE BOARD OF DIRECTORS

John W. Beiser
Secretary

November 14, 1996

Atlanta, Georgia

<PAGE> 6

ATLANTIC SOUTHEAST AIRLINES, INC.
PROXY STATEMENT

Special Meeting of Shareholders To Be Held on December 19, 1996

ASA HOLDINGS, INC.
PROSPECTUS

30,113,570 Shares of Airlines Common Stock, $0.10 par value per share,
to be issued in connection with a proposed holding company reorganization

This Proxy Statement/Prospectus is being furnished to shareholders of
Atlantic Southeast Airlines, Inc. ("AIRLINES") in connection with the
solicitation of proxies on behalf of the Board of Directors of Airlines for use
at the special meeting of shareholders of Airlines to be held on Thursday,
December 19, 1996, and at any adjournment thereof (the "SPECIAL MEETING"). At
the Special Meeting, shareholders of Airlines will be asked to consider and
vote upon a proposal to approve a corporate reorganization that will include
creation of a parent holding company for Airlines (the "REORGANIZATION") and to
adopt and approve an Agreement and Plan of Merger, dated September 25, 1996
(the "MERGER AGREEMENT"), by and among Airlines, ASA Holdings, Inc., a Georgia
corporation ("ASA HOLDINGS"), and Atlantic Southeast Merging Co., a Georgia
corporation ("MERGING CO."). The Merger Agreement provides for the merger (the
"MERGER") of Airlines with Merging Co., with Airlines being the surviving
corporation. ASA Holdings is a newly formed, wholly owned subsidiary of
Airlines organized specifically for the purpose of becoming the new parent
holding company in the Reorganization. ASA Holdings subsequently formed
Merging Co. as a wholly owned subsidiary specifically to effect the Merger.
Upon the consummation of the Merger, (a) each issued and outstanding share of
Airlines' common stock, $0.10 par value per share ("AIRLINES COMMON STOCK"),
other than shares held by Airlines as treasury shares, will be automatically
deemed converted into one share of ASA Holdings' common stock, $0.10 par value
per share ("HOLDINGS COMMON STOCK"), (b) each issued and outstanding share of
common stock of Merging Co. will be automatically deemed converted into shares
of the surviving corporation, (c) the shares of Holdings Common Stock owned by
Airlines before the Merger will be canceled and (d) the shares of Airlines
Common Stock held by Airlines as treasury shares before the Merger will be
canceled. Airlines will become a wholly owned subsidiary of ASA Holdings and
the current shareholders of Airlines will automatically become shareholders of
ASA Holdings. The Articles of Incorporation and Bylaws of ASA Holdings after
the Merger will differ in certain respects from those of Airlines immediately
before the Merger. See "EFFECT ON RIGHTS OF HOLDERS OF AIRLINES COMMON
STOCK" herein.

This Proxy Statement/Prospectus also constitutes a prospectus of ASA
Holdings relating to the issuance of shares of Holdings Common Stock to
shareholders of Airlines pursuant to the terms of the Merger. ASA Holdings has
filed a Registration Statement on Form S-4 (the "REGISTRATION STATEMENT") under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), with the
Securities and Exchange Commission (the "COMMISSION") covering the shares of
Holdings Common Stock to be issued in connection with the Merger.

THE SHARES OF HOLDINGS COMMON STOCK TO BE ISSUED IN THE MERGER HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

This Proxy Statement/Prospectus and the accompanying form of proxy for
the Special Meeting were first sent or given to Airlines' shareholders on or
about November 14, 1996.

<PAGE> 7
AVAILABLE INFORMATION

ASA Holdings has filed the Registration Statement with the Commission
under the Securities Act with respect to the shares of Holdings Common Stock to
be issued in connection with the Merger. This Proxy Statement/Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information relating to ASA Holdings and the
shares of Holdings Common Stock offered hereby, reference is hereby made to the
Registration Statement, including the exhibits and schedules thereto, which may
be inspected without charge at the office of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies of which may be obtained from
the Commission at prescribed rates. Statements in this Proxy
Statement/Prospectus as to the contents of any contract or other document that
is referred to herein and is filed as an exhibit to the Registration Statement,
summarize the material terms of such documents to the extent that a summary of
such terms is material to the related disclosure. Nevertheless, such summaries
are not necessarily complete. In each instance, reference is made to the copy
of such contract or document filed as an exhibit to the Registration Statement,
each such summary being qualified in all respects by such reference.

Airlines is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and, in
accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information
filed with the Commission by Airlines, and the Registration Statement filed by
ASA Holdings, can be inspected and copied at the office of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, or at the regional
offices maintained by the Commission at 7 World Trade Center, Suite 1300, New
York, New York 10048, and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661, and copies of such materials can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
also maintains a web site that contains reports, proxy and information
statements and other information regarding Airlines and the Registration
Statement. The address of this web site is http://www.sec.gov.

Airlines Common Stock is traded, and Holdings Common Stock will be
traded, on The Nasdaq Stock Market's National Market. Exchange Act reports,
proxy and information statements and other information regarding Airlines can
also be inspected at the office of The Nasdaq Stock Market, 1735 K Street, NW,
Washington, DC 20006-1506.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents previously filed with the Commission by
Airlines pursuant to the Exchange Act are incorporated by reference into this
Proxy Statement/Prospectus:

(i) Airlines' Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;

(ii) Airlines' Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;

(iii) Airlines' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996;

(iv) Airlines' Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996; and

(v) Airlines' Proxy Statement dated April 15, 1996, with respect to
Airlines' Annual Meeting of Shareholders held May 22, 1996; and

(vi) The description of Airlines Common Stock in Airlines'
Registration Statement on Form 8-A under the Exchange Act with
respect to such class of securities, and any amendment or
report filed for the purpose of updating such description.

All documents and reports filed by Airlines pursuant to Section 13(a),
13(c) 14 or 15(d) of the Exchange Act after the date of this Proxy
Statement/Prospectus and prior to the date of the Special Meeting shall be
deemed to be incorporated by reference in this Proxy Statement/Prospectus and
to be a part hereof from the dates of filing

<PAGE> 8

of such documents or reports. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Proxy Statement/Prospectus to
the extent that a statement contained herein or in any subsequently filed
document that is or is deemed to be incorporated by reference herein modifies
or supersedes such document. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute any
part of this Proxy Statement/Prospectus.

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF THESE
DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS) ARE AVAILABLE
WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST, FROM AIRLINES. SUCH REQUESTS
SHOULD BE DIRECTED TO RONALD V. SAPP, VICE PRESIDENT-FINANCE, ATLANTIC
SOUTHEAST AIRLINES, INC., 100 HARTSFIELD CENTRE PARKWAY, SUITE 800, ATLANTA,
GEORGIA 30354; TELEPHONE NUMBER (404) 766-1400. IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS PRIOR TO THE SPECIAL MEETING OF AIRLINES'
SHAREHOLDERS, ANY SUCH REQUEST SHOULD BE MADE BY DECEMBER 11, 1996, WHICH IS
FIVE (5) BUSINESS DAYS PRIOR TO THE DATE OF THE SPECIAL MEETING.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED HEREIN IN CONNECTION WITH THE OFFER OF
HOLDINGS COMMON STOCK TO BE ISSUED IN CONNECTION WITH THE MERGER. IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY ASA HOLDINGS, AIRLINES OR ANY OTHER PERSON. THIS PROXY
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO PURCHASE HOLDINGS COMMON STOCK IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR IN ANY OTHER CIRCUMSTANCE IN
WHICH IT WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROXY
STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

<PAGE> 9
SUMMARY

The following is a summary of certain information contained, or
incorporated by reference, elsewhere in this Proxy Statement/Prospectus. This
summary is not intended to be complete and is qualified in its entirety by
reference to, and should be read in conjunction with, the detailed information
and financial statements appearing elsewhere, or incorporated by reference, in
this Proxy Statement/Prospectus.

THE SPECIAL MEETING

At the Special Meeting on December 19, 1996, shareholders of Airlines
will be asked to consider and vote upon a proposal to approve the proposed
Reorganization and to adopt and approve the Merger Agreement. The
Reorganization will include creation of a parent holding company for Airlines.
A copy of the Merger Agreement is attached hereto as Exhibit A. For more
information on the Special Meeting, see "THE SPECIAL MEETING" herein.

Vote Required

The presence in person or by proxy of the holders of a majority of the
shares of Airlines Common Stock outstanding as of the October 25, 1996 record
date is necessary to constitute a quorum at the Special Meeting. If a quorum
is present, the affirmative vote of the holders of a majority of the shares of
Airlines Common Stock outstanding as of the record date is necessary to approve
the Reorganization and the Merger Agreement. As of the record date, the
executive officers and directors (7 persons as of the record date) of Airlines
beneficially owned an aggregate of 1,538,437 shares of Airlines Common Stock,
approximately 5.1% of the shares of Airlines Common Stock then outstanding. As
of the record date, Delta Air Lines Holdings, Inc. owned 7,995,000 shares of
Airlines Common Stock, approximately 26.5% of the outstanding Airlines Common
Stock. ASA Holdings, the sole shareholder of Merging Co., has approved the
Merger Agreement. Of the executive officers and directors (8 persons) of
Airlines who beneficially own shares of Airlines Common Stock, the three
executive officers (approximately 3.4% of the outstanding Airlines Common
Stock) have indicated to Airlines that they intend to vote for the proposal to
approve the proposed Reorganization and to adopt and approve the Merger
Agreement and none have indicated to Airlines that they intend to vote against
the proposal. No other executive officers, directors or persons known by
Airlines to be a beneficial owner of more than 5% of the outstanding Airlines
Common Stock (including Delta Air Lines Holdings, Inc.) have indicated to
Airlines their voting intentions with respect to the proposal to approve the
proposed Reorganization and to adopt and approve the Merger Agreement.

DESCRIPTION OF THE PROPOSED REORGANIZATION

General

Airlines' Board of Directors has unanimously approved and recommended
that the shareholders approve the proposed Reorganization and approve and adopt
the Merger Agreement pursuant to which the Reorganization will be effected.
The Reorganization will create a parent holding company for Airlines and
automatically convert Airlines Common Stock into Holdings Common Stock on a
one-for-one basis.

Companies Involved in the Proposed Reorganization

Airlines is a Georgia corporation. The mailing address of the
principal executive offices of Airlines is 100 Hartsfield Centre Parkway, Suite
800, Atlanta, Georgia 30354; and the telephone number at that office is (404)
766-1400.

ASA Investments, Inc., a Delaware corporation ("INVESTMENTS"), is a
wholly owned subsidiary of Airlines. The sole business of Investments has been
to invest certain cash assets contributed to it by Airlines. As of September
30, 1996, Investments had total assets of approximately $150 million.

1
<PAGE> 10

ASA Holdings is a newly formed, wholly owned subsidiary of Airlines
that it organized under the laws of the State of Georgia specifically for the
purpose of becoming the new parent holding company in the Reorganization. Its
executive offices are located at Airlines' principal executive offices referred
to above. ASA Holdings subsequently formed Merging Co. as a wholly owned
subsidiary specifically to effect the Merger. Neither ASA Holdings nor Merging
Co. has any significant assets or capitalization nor has engaged in any
business or prior activities other than in connection with the Reorganization.

The Proposed Reorganization

THE MERGER. The Merger Agreement provides for the merger of Airlines
with Merging Co., with Airlines being the surviving corporation. Upon the
consummation of the Merger, (a) each issued and outstanding share of Airlines
Common Stock (other than shares held by Airlines as treasury shares) will be
automatically deemed converted into one share of Holdings Common Stock, (b)
each issued and outstanding share of common stock of Merging Co. will be
automatically deemed converted into shares of the surviving corporation,
Airlines, (c) the shares of Holdings Common Stock owned by Airlines before the
Merger will be canceled and (d) the shares of Airlines Common Stock held by
Airlines as treasury shares before the Merger will be canceled. After the
consummation of the Merger, Airlines will be a wholly owned subsidiary of ASA
Holdings and the current shareholders of Airlines will become shareholders of
ASA Holdings. Each of Airlines' current shareholders will have exactly the
same proportionate interest in ASA Holdings after the consummation of the
Merger as their proportionate interest in Airlines immediately before the
Merger. For more information regarding the proposed Reorganization, see "THE
PROPOSED REORGANIZATION" herein.

THE SHAREHOLDERS OF AIRLINES IMMEDIATELY BEFORE THE CONSUMMATION OF
THE MERGER WILL AUTOMATICALLY BECOME OWNERS OF HOLDINGS COMMON STOCK UPON THE
CONSUMMATION OF THE MERGER AND THEREAFTER WILL CEASE TO BE OWNERS OF AIRLINES
COMMON STOCK. IT WILL NOT BE NECESSARY FOR AIRLINES' SHAREHOLDERS TO EXCHANGE
THEIR EXISTING CERTIFICATES REPRESENTING AIRLINES COMMON STOCK FOR SHARE
CERTIFICATES REPRESENTING HOLDINGS COMMON STOCK. SHARE CERTIFICATES THAT
CURRENTLY REPRESENT AIRLINES COMMON STOCK WILL AUTOMATICALLY BE DEEMED TO
REPRESENT HOLDINGS COMMON STOCK AFTER THE CONSUMMATION OF THE MERGER. SEE "THE
PROPOSED REORGANIZATION - TERMS OF THE MERGER AGREEMENT - EXCHANGE OF SHARE
CERTIFICATES" HEREIN.

If the Merger Agreement is approved and adopted by Airlines'
shareholders and the other conditions to the Merger are satisfied or waived and
if the Merger Agreement is not otherwise amended or terminated, the Merger will
become effective upon the later of (a) the filing of a certificate of merger
relating thereto with the Secretary of State of the State of Georgia, (b) at
11:59 p.m., Eastern Standard Time, December 31, 1996, or (c) such other time as
may be set forth in the certificate of merger. The Merger Agreement provides
that the parties thereto will cause such certificate of merger to be filed on
the date that each of the conditions to the consummation of the Merger has been
satisfied or waived.

For a description of the terms and conditions of the Merger, see "THE
PROPOSED REORGANIZATION - TERMS OF THE MERGER AGREEMENT" herein.

OTHER REORGANIZATION TRANSACTIONS. Immediately after the consummation
of the Merger, Airlines will effect a dividend to ASA Holdings of all of the
shares of Investments' capital stock held by Airlines ("AIRLINES' INVESTMENTS
DIVIDEND"). After the Reorganization is completed, Airlines and Investments
will each be wholly owned subsidiaries of ASA Holdings. SHAREHOLDER APPROVAL OF
THE REORGANIZATION CONSTITUTES APPROVAL OF AIRLINES' INVESTMENTS DIVIDEND.

2
<PAGE> 11

Upon the completion of the Reorganization, ASA Holdings will have the
same consolidated assets, liabilities and shareholders' equity (other than the
canceled treasury shares described above) and the same directors and executive
officers as Airlines had immediately before the Merger. See "THE PROPOSED
REORGANIZATION - OTHER REORGANIZATION TRANSACTIONS" herein. There will be no
difference in the state of incorporation of Airlines and ASA Holdings.
Modifications have been made to the Articles of Incorporation and Bylaws of ASA
Holdings as compared to those of Airlines. However, there have been no
material changes made to the Articles of Incorporation and Bylaws of ASA
Holdings other than that Airlines is authorized to issue up to 50,000,000
shares of Airlines Common Stock, whereas ASA Holdings is authorized to issue up
to 150,000,000 shares of Holdings Common Stock. These additional shares may be
utilized for a variety of corporate purposes, including, without limitation,
(a) to effect stock splits, (b) in connection with future public offerings to
raise additional capital or (c) to facilitate corporate acquisitions. See
"EFFECT ON RIGHTS OF HOLDERS OF AIRLINES COMMON STOCK" herein. After the
Merger, ASA Holdings expects to continue Airlines' current quarterly dividend
policy. See "ASA HOLDINGS CAPITAL STOCK - MARKETS FOR SECURITIES AND
DIVIDENDS" herein.

For a description of other Reorganization transactions, see "THE
PROPOSED REORGANIZATION - OTHER REORGANIZATION TRANSACTIONS" herein.

Reasons for the Proposed Reorganization

Airlines' Board of Directors believes the proposed Reorganization will
provide greater flexibility to ASA Holdings and its subsidiaries than is
available to Airlines with its current corporate structure. The holding
company structure will make available to ASA Holdings and its subsidiaries a
greater selection of financing, acquisition and organizational alternatives.
The holding company structure will provide greater flexibility by permitting
ASA Holdings to acquire additional businesses directly rather than through
Airlines, thereby permitting these businesses to remain independent of
Airlines' present operations and free from any direct constraints on Airlines
imposed by credit agreements, regulatory requirements or otherwise. ASA
Holdings will not be subject to the restrictive covenants in Airlines' credit
agreements and lease arrangements. Airlines' dividend of all of the shares of
Investment's capital stock to ASA Holdings after the Merger (see "TERMS OF THE
PROPOSED REORGANIZATION - OTHER REORGANIZATION TRANSACTIONS" herein) also will
provide ASA Holdings with approximately $150 million of assets that are free of
such covenants. Airlines' material lenders and lessors have consented to the
Reorganization where the credit agreements and lease arrangements make such
consent necessary.

There is no agreement currently in effect, nor are there any currently
ongoing negotiations, relating to the acquisition of any company by ASA
Holdings or Airlines. In addition, there are no pending discussions relating
to investments in Airlines or ASA Holdings by any other company. See "EFFECT
ON RIGHTS OF HOLDERS OF AIRLINES COMMON STOCK" herein.

AIRLINES' BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE
REORGANIZATION IS IN THE BEST INTERESTS OF AIRLINES AND ITS SHAREHOLDERS, HAS
UNANIMOUSLY APPROVED THE REORGANIZATION, HAS UNANIMOUSLY APPROVED AND ADOPTED
THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT AIRLINES' SHAREHOLDERS
VOTE FOR THE PROPOSAL TO APPROVE THE REORGANIZATION AND APPROVE AND ADOPT THE
MERGER AGREEMENT.

For more information regarding the reasons for the proposed
Reorganization, see "THE PROPOSED REORGANIZATION - REASONS FOR THE PROPOSED
REORGANIZATION" herein.

3
<PAGE> 12

Dissenters' Rights

Holders of shares of Airlines Common Stock do not have the right to
dissent with respect to the Reorganization or the Merger and receive payment
for the "fair value" of their shares under the Georgia Business Corporation
Code (the "GBCC") for the reasons summarized under the caption "THE PROPOSED
REORGANIZATION - DISSENTERS' RIGHTS" herein.

Certain Federal Income Tax Consequences

Airlines has received the opinion of Ernst & Young LLP regarding the
material federal income tax consequences of the proposed Reorganization. That
opinion is based on representations provided by management of Airlines and ASA
Holdings and the current provisions of the Internal Revenue Code of 1986, as
amended (the "CODE"), the Treasury Regulations promulgated thereunder, and
administrative and judicial interpretations thereof, all as in effect as of the
date of the opinion. Such laws or interpretations may differ upon the
consummation of the Merger, and relevant facts also may differ. The Ernst &
Young LLP letter includes the opinions that the following results will apply
with respect to the Reorganization:

1. No gain or loss will be recognized by the holders of Airlines
Common Stock upon the conversion of Airlines Common Stock into
Holdings Common Stock pursuant to the Merger;

2. The tax basis of the Holdings Common Stock to be received by
each holder of Airlines Common Stock pursuant to the Merger
will be the same as the tax basis of the Airlines Common Stock
that is converted into Holdings Common Stock pursuant to the
Merger;

3. The holding period of the Holdings Common Stock to be received
by each holder of Airlines Common Stock pursuant to the Merger
will include the period during which such holder held the
Airlines Common Stock that was converted into Holdings Common
Stock pursuant to the Merger provided that the Airlines Common
Stock was held as a capital asset on the effective date of the
Merger;

4. No gain or loss will be recognized by Airlines, ASA Holdings,
Merging Co. or Investments in connection with the Merger; and

5. No gain or loss will be recognized by ASA Holdings, Investments
or the holders of Airlines Common Stock as a result of the
Airlines' Investments Dividend.

THE DISCUSSION SET FORTH ABOVE DOES NOT ADDRESS THE STATE, LOCAL OR
FOREIGN TAX ASPECTS OF THE REORGANIZATION. THE DISCUSSION IS BASED ON
CURRENTLY EXISTING PROVISIONS OF THE CODE, EXISTING AND PROPOSED TREASURY
REGULATIONS THEREUNDER AND CURRENT ADMINISTRATIVE RULINGS AND COURT DECISIONS.
ALL OF THE FOREGOING ARE SUBJECT TO CHANGE AND ANY SUCH CHANGE COULD AFFECT THE
CONTINUING VALIDITY OF THIS DISCUSSION. EACH HOLDER OF AIRLINES COMMON STOCK
SHOULD CONSULT HIS OR HER OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX
CONSEQUENCES OF THE REORGANIZATION TO HIM OR HER, INCLUDING THE APPLICATION AND
EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.

If management of ASA Holdings and Airlines deem it to be appropriate,
Ernst & Young LLP will update its tax opinion as of the effectiveness of the
Airlines' Investments Dividend. Ernst & Young LLP is under no obligation to
update its tax opinion for changes in facts or law occurring after the
effectiveness of the Airlines' Investments Dividend.

For further information regarding the opinion from Ernst & Young LLP
regarding the material federal income tax consequences of the proposed
Reorganization, see "THE PROPOSED REORGANIZATION - CERTAIN FEDERAL INCOME
TAX CONSEQUENCES" herein.

Regulatory Requirements

Airlines is aware of no federal or state regulatory requirements that
must be complied with or approvals that must be obtained prior to the
completion of the Reorganization. See "THE PROPOSED REORGANIZATION -
REGULATORY REQUIREMENTS" herein.

EFFECT ON RIGHTS OF HOLDERS OF AIRLINES COMMON STOCK

The Merger will result in the shareholders of Airlines becoming
shareholders of ASA Holdings. The rights and privileges of holders of Holdings
Common Stock do not differ in any material respect from those now applicable to
holders of Airlines Common Stock. However, Airlines is authorized to issue up
to 50,000,000 shares of Airlines Common Stock, whereas ASA Holdings is
authorized to issue up to 150,000,000 shares of Holdings Common Stock. These
additional shares may be utilized for a variety of corporate purposes,
including, without limitation, (a) to effect stock splits, (b) in connection
with future public offerings to raise additional capital or (c) to facilitate
corporate acquisitions.

For further information regarding the differences between Airlines
Common Stock and Holdings Common Stock, see "EFFECT ON RIGHTS OF HOLDERS OF
AIRLINES COMMON STOCK" and "ASA HOLDINGS CAPITAL STOCK - GENERAL."

4
<PAGE> 13

MARKET FOR SECURITIES, MARKET PRICES AND DIVIDENDS

Airlines Common Stock

Airlines Common Stock is traded on The Nasdaq Stock Market's National
Market under the symbol "ASAI."

The following table sets forth the reported high and low closing sales
price for Airlines Common Stock for the fiscal quarters (or portions thereof)
indicated as reported in The Nasdaq National Market System. The quotations
reflect actual sales prices without retail mark-up, mark-down or commissions.

<TABLE>
<CAPTION>
Fiscal year ended
December 31, 1996 (to date) High Low
--------------------------- ---- ---

<S> <C> <C>
Quarter Ended March 31, 1996 $28.50 $17.88
Quarter Ended June 30, 1996 $29.38 $22.00
Quarter Ended September 30, 1996 $28.38 $20.25
October 1, 1996 through November 1, 1996 $22.38 $19.88

Fiscal year ended
December 31, 1995 High Low
----------------- ---- ---

Quarter Ended March 31, 1995 $21.00 $15.25
Quarter Ended June 30, 1995 $30.75 $18.00
Quarter Ended September 30, 1995 $34.25 $21.75
Quarter Ended December 31, 1995 $27.88 $20.75

Fiscal year ended
December 31, 1994 High Low
- ----------------- ---- ---

Quarter Ending March 31, 1994 $38.75 $31.25
Quarter Ending June 30, 1994 $33.00 $21.25
Quarter Ending September 30, 1994 $30.75 $23.00
Quarter Ending December 31, 1994 $24.50 $12.75
</TABLE>

Airlines paid cash dividends on outstanding Airlines Common Stock of 9.5
cents per share during each of the first three quarters of 1996 and has
announced a fourth quarter dividend of 9.5 cents per share. Airlines paid cash
dividends of 34 cents per share during 1995 and 32 cents per share during 1994.
For more information on Airlines Common Stock, see "AIRLINES CAPITAL STOCK AND
PRINCIPAL HOLDERS THEREOF" herein.

Holdings Common Stock

There has been and there will be no public market for Holdings Common
Stock prior to the consummation of the Merger. Effective upon the consummation
of the Merger, Holdings Common Stock will be registered under Section 12(g) of
the Exchange Act and will be traded on The Nasdaq Stock Market's National
Market under the symbol "ASAI." Airlines Common Stock will be simultaneously
delisted from The Nasdaq Stock Market's National Market.

No cash dividends have ever been declared by ASA Holdings on Holdings
Common Stock. Holders of Holdings Common Stock are entitled to receive such
dividends as from time to time may be declared by ASA Holdings' Board of
Directors. ASA Holdings expects to pay quarterly cash dividends with respect
to Holdings Common Stock at the same rates and on the same dates and terms as
those last approved by Airlines' Board of Directors with respect to its
Airlines Common Stock. Airlines paid cash dividends on the outstanding
Airlines Common Stock of 9.5 cents per share during each of the first two
quarters of 1996. However, ASA Holdings' Board of Directors will reconsider
the declaration and the amount of cash dividends periodically, in its sole
discretion, and there can be no assurance as to the declaration or the timing,
amount or other terms of dividends

5
<PAGE> 14

to be paid in the future. The payment of dividends in the future may depend
upon the results of operations, the financial condition of ASA Holdings and
other factors which ASA Holdings' Board of Directors deems relevant.

For more information on Holdings Common Stock, see "ASA HOLDINGS
CAPITAL STOCK" herein.

BUSINESS AND MANAGEMENT OF ASA HOLDINGS

Business

ASA Holdings will not have conducted any business operations prior to
the effective date of the Merger. Subsequent to that date, ASA Holdings
expects to engage in business operations only through its subsidiaries.
Immediately after the consummation of the Reorganization, Airlines and
Investments will be the sole subsidiaries of ASA Holdings. See "BUSINESS AND
MANAGEMENT OF ASA HOLDINGS" herein.

The consolidated financial statements of Airlines immediately before
the formation of ASA Holdings, the Merger and other aspects of the
Reorganization will not be materially different than the consolidated financial
statements of ASA Holdings immediately after the Reorganization. Pursuant to
the Reorganization there will be no change in the total assets, total
liabilities, total shareholders' equity or any components of the statements of
operations. Only the components of shareholders' equity in ASA Holdings'
consolidated balance sheet will change as a result of the cancellation of
Airlines' treasury shares. See "BUSINESS AND MANAGEMENT OF AIRLINES -
FINANCIAL STATEMENTS" herein.

Management

The executive officers and directors of ASA Holdings after the Merger
will be the same as those for Airlines immediately before the effective date of
the Merger. It is not expected that the aggregate compensation of the officers
and directors of ASA Holdings will change in connection with the Reorganization
from the compensation that was payable to them as Airlines' executive officers
and directors before the Merger. See "BUSINESS AND MANAGEMENT OF ASA HOLDINGS
- - MANAGEMENT" herein.

BUSINESS AND MANAGEMENT OF AIRLINES

Airlines is a certificated air carrier providing regularly scheduled,
high frequency airline service between (i) Hartsfield Atlanta International
Airport in Atlanta, Georgia (the "ATLANTA HUB") and 36 other airports in
Alabama, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, North
Carolina, South Carolina, Tennessee, Virginia and West Virginia and (ii)
Dallas/Fort Worth International Airport in Dallas, Texas (the "DALLAS/FORT
WORTH HUB") and 24 other airports in Arkansas, Kansas, Louisiana, Mississippi,
Oklahoma and Texas. Airlines' flights are utilized primarily by business and
military passengers to make connections with flights operated by Delta Air
Lines, Inc. ("DELTA") and other carriers from the Atlanta and Dallas/Fort
Worth hubs. See "BUSINESS AND MANAGEMENT OF AIRLINES" herein.

6
<PAGE> 15

Selected Financial Data

The following selected financial data for the five years ended
December 31, 1995 are derived from the audited consolidated financial
statements of Airlines. The financial data for the nine months ended September
30, 1996 are derived from unaudited financial statements. The unaudited
financial statements include all adjustments, consisting of normal recurring
accruals, which Airlines considers necessary for a fair presentation of the
financial position and the results of operations for these periods. Operating
results for the nine months ended September 30, 1996 are not necessarily
indicative of the results that may be expected for the entire year ending
December 31, 1996. The data set forth below should be read in conjunction with
the consolidated financial statements, related notes thereto and other
financial information appearing or incorporated by reference in Airlines'
Annual Report on Form 10-K for the year ended December 31, 1995, and Airlines'
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30,
1996 and September 30, 1996, each of which were filed with the Commission and
are incorporated herein by reference (see "INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE" herein).

ATLANTIC SOUTHEAST AIRLINES, INC.
SELECTED FINANCIAL DATA
(Dollars in thousands except per share amounts)

<TABLE>
<CAPTION>
Nine Months Ended Year Ended December 31 (audited)
September 31, 1996 -------------------------------------------------------
(unaudited) 1995 1994 1993 1992 1991
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income Statement Data

Total Operating Revenues $288,313 $328,725 $312,090 $288,463 $235,579 $221,916
Income from Operations 71,348 75,875 84,272 77,620 60,814 52,528
Income before Taxes and Accounting 75,002 80,774 85,620 77,422 59,317 51,596
Change
Income Taxes 28,726 29,637 32,964 31,090 22,250 19,093
Cumulative Effect of Change in - - - 4,212 - -
Accounting for Income Taxes
Net Income $46,276 $51,137 $52,656 $50,544 $37,067 $32,503
Net Income per Share * $1.48 $1.55 $1.54 $1.47 $1.09 $0.95

Balance Sheet Data

Working Capital $156,809 $141,677 $140,391 $126,975 $93,372 $78,721
Total Assets 507,855 512,699 519,684 474,599 430,752 377,603
Long-Term Debt, excluding current 101,412 120,210 152,610 135,963 145,804 139,356
portion
Total Liabilities 240,541 259,844 272,214 249,512 252,013 229,683
Shareholders' Equity 267,314 252,855 247,470 225,087 178,738 147,910

Shareholders' Equity per Share * $8.71 $7.98 $7.45 $6.55 $5.23 $4.35
Cash Dividends Declared per Share * $0.29 $0.34 $0.32 $0.28 $0.24 $0.20
</TABLE>

* Adjusted for stock splits on November 26, 1991 and February 18, 1993.

7
<PAGE> 16

GENERAL INFORMATION

This Proxy Statement/Prospectus is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of Airlines to be
voted at a Special Meeting of Airlines' Shareholders to be held on December 19,
1996, and any adjournment or adjournments thereof, for the purpose set forth in
the accompanying Notice of Special Meeting of Shareholders.

This Proxy Statement/Prospectus also constitutes the Prospectus of ASA
Holdings with respect to the shares of Holdings Common Stock to be issued in
the Merger.

THE PROPOSED REORGANIZATION

GENERAL

Airlines' Board of Directors has proposed a corporate reorganization
that will include creation of a parent holding company for Airlines pursuant to
the Merger. The Merger will be effected pursuant to the Merger Agreement, a
copy of which is attached hereto as Exhibit A and hereby incorporated herein by
reference. At the Special Meeting, shareholders of Airlines will be asked to
consider and vote upon a proposal to approve the Reorganization and to adopt
and approve the Merger Agreement.

COMPANIES INVOLVED IN THE PROPOSED REORGANIZATION

Airlines was incorporated under the laws of the State of Georgia.
Investments, a Delaware corporation, is a wholly owned subsidiary of Airlines
the sole business of which has been to invest certain cash assets contributed
to it by Airlines. As of September 30, 1996, Investments had total assets of
approximately $150 million. ASA Holdings is a newly formed, wholly owned
subsidiary of Airlines organized under the laws of the State of Georgia
specifically for the purpose of becoming the new parent holding company in the
Reorganization. Its executive offices are located at Airlines' principal
executive offices referred to below. ASA Holdings subsequently formed Merging
Co. as a wholly owned subsidiary specifically to effect the Merger. Neither
ASA Holdings nor Merging Co. has any significant assets or capitalization nor
has engaged in any business or prior activities other than in connection with
the Reorganization.

The mailing address of the principal executive offices of Airlines is
100 Hartsfield Centre Parkway, Suite 800, Atlanta, Georgia 30354; and the
telephone number at that office is (404) 766-1400.

THE MERGER

The Merger Agreement provides for the merger of Airlines with Merging
Co., with Airlines being the surviving corporation. Upon the consummation of
the Merger, (a) each issued and outstanding share of Airlines Common Stock
(other than shares held by Airlines as treasury shares) will be automatically
deemed converted into one share of Holdings Common Stock, (b) each issued and
outstanding share of common stock of Merging Co. will be automatically deemed
converted into shares of the surviving corporation, Airlines, (c) the shares of
Holdings Common Stock owned by Airlines before the Merger will be canceled and
(d) the shares of Airlines Common Stock held by Airlines as treasury shares
before the Merger will be canceled. After the consummation of the Merger,
Airlines will become a wholly owned subsidiary of ASA Holdings and the current
shareholders of Airlines will automatically become shareholders of ASA
Holdings. Each of Airlines' current shareholders will

8
<PAGE> 17

have exactly the same proportionate interest in ASA Holdings after the
consummation of the Merger as their proportionate interest in Airlines
immediately before the Merger.

OTHER REORGANIZATION TRANSACTIONS

Immediately after the consummation of the Merger, Airlines will effect
a dividend to ASA Holdings of all the shares of Investments' capital stock held
by Airlines. SHAREHOLDER APPROVAL OF THE REORGANIZATION CONSTITUTES APPROVAL
OF AIRLINES' DIVIDEND. After the Reorganization is completed, Airlines and
Investments will each be wholly owned subsidiaries of ASA Holdings as depicted
below:

CURRENT STRUCTURE
-----------------
Shareholders

Atlantic Southeast Airlines, Inc.
(Georgia corporation)

ASA Investments, Inc.
(Delaware corporation)

POST-REORGANIZATION
-------------------
Shareholders

ASA Holdings, Inc.
(Georgia corporation)

Atlantic Southeast Airlines, Inc. ASA Investments, Inc.
(Georgia corporation) (Delaware corporation)

Upon the completion of the Reorganization, ASA Holdings will have the
same consolidated assets, liabilities and shareholders equity and the same
directors and executive officers as Airlines had immediately prior to the
Merger. Only the components of shareholders' equity in ASA Holdings'
consolidated balance sheet will change as a result of the cancellation of
Airlines' treasury shares. See "BUSINESS AND MANAGEMENT OF AIRLINES -
FINANCIAL STATEMENTS" and "BUSINESS AND MANAGEMENT OF ASA HOLDINGS - FINANCIAL
STATEMENT" herein. Modifications have been made to the Articles of
Incorporation and Bylaws of ASA Holdings as compared to those of Airlines.
However, there have been no material changes made to the Articles of
Incorporation and Bylaws of ASA Holdings other than that Airlines is authorized
to issue up to 50,000,000 shares of Airlines Common Stock, whereas ASA Holdings
is authorized to issue up to 150,000,000 shares of Holdings Common Stock.
These additional shares may be utilized for a variety of corporate purposes,
including, without limitation, (a) to effect stock splits, (b) in connection
with future public offerings to raise additional capital or (c) to facilitate
corporate acquisitions. See "EFFECT ON RIGHTS OF HOLDERS OF AIRLINES COMMON
STOCK" herein. ASA Holdings also expects to continue Airlines' current
quarterly dividend policy. See "ASA HOLDINGS CAPITAL STOCK - MARKET FOR
SECURITIES AND DIVIDENDS" herein.

REASONS FOR THE PROPOSED REORGANIZATION

Airlines' Board of Directors believes that the proposed Reorganization
will provide greater flexibility to ASA Holdings and its subsidiaries than is
available to Airlines with its current corporate structure. The

9
<PAGE> 18

holding company structure will make available to ASA Holdings and its
subsidiaries a greater selection of financing, acquisition and organizational
alternatives. The holding company structure will provide greater flexibility
by permitting ASA Holdings to acquire additional businesses directly rather
than through Airlines, thereby permitting these businesses to remain
independent of Airlines' present operations and free from any direct
constraints on Airlines imposed by credit agreements, regulatory requirements
or otherwise.

Management determined that, in order to be in a position to take
timely advantage of any future opportunities, it was in the best interests of
Airlines and its shareholders to proceed with the proposed Reorganization at
this time. During the three years prior to the determination to proceed with
the proposed Reorganization and since the date of that determination, other
than with respect to the creation of a holding company structure, management of
Airlines did not formulate any material plans with respect to the nature of any
potential future acquisitions of any company by Airlines or any other
opportunities. There is no agreement currently in effect, nor are there any
currently ongoing negotiations, relating to the acquisition of any company by
ASA Holdings or Airlines. In addition, there are no pending discussions
relating to investments in Airlines or ASA Holdings by any other company.
Furthermore, ASA Holdings does not have any current plans or pending proposals
to issue additional shares of Holdings Common Stock other than pursuant to
Airlines' existing SAR Plan. See "THE PROPOSED REORGANIZATION - EMPLOYEE
BENEFIT PLANS" herein. Both before and after the proposed Reorganization is
completed, the Airlines Board of Directors has been able, and ASA Holdings'
Board of Directors will be able, to approve the issuance of additional shares
of capital stock without shareholder approval. Any such issuances of additional
shares would result in dilution of the current equity interest of existing
shareholders. The issuance of such additional securities will be subject to
certain limitations imposed by the rules of The Nasdaq Stock Market and by
general fiduciary principles. See "EFFECT ON RIGHTS OF HOLDERS OF AIRLINES
COMMON STOCK" herein.

The proposed holding company structure will provide additional
flexibility primarily because (a) any new subsidiaries formed by ASA Holdings
will be insulated from the liabilities of and risks associated with Airlines'
operation of a commercial airline; (b) Airlines will be better insulated from
the liabilities of any risks associated with the operation of businesses by
other subsidiaries of ASA Holdings; (c) ASA Holdings and its other
subsidiaries will not be restricted by debt agreements that have been or may be
entered into by Airlines that include restrictive covenants; (d) ASA Holdings
and its other subsidiaries will not be constrained by the other contracts that,
from time to time, are binding on Airlines; (e) Airlines will not be
constrained by the debt agreements or other contracts entered into by ASA
Holdings' subsidiaries; (f) depending on the business conducted by the
company, ASA Holdings and its other subsidiaries may be free from certain
direct constraints on Airlines imposed by regulatory requirements; and (g) the
holding company structure will accommodate any future acquisition
opportunities, whether the acquisition is inside or outside of Airlines'
current line of business.

Management believes that, after the Reorganization, borrowings from
banks, other financial institutions or the securities markets will be available
to ASA Holdings on substantially the same terms as are currently available to
Airlines. After the Reorganization, ASA Holdings also could borrow money
directly and use it internally or contribute it to Airlines or any other
subsidiary. In addition, any of the subsidiaries could borrow money
independently.

ASA Holdings will not be subject to the restrictive covenants in
Airlines' credit agreements and lease arrangements. The Airlines' Investments
Dividend (see "TERMS OF THE PROPOSED REORGANIZATION - OTHER REORGANIZATION
TRANSACTIONS" herein) also will provide ASA Holdings with approximately $150
million of assets that are free of the restrictive covenants in Airlines'
credit agreements and lease arrangements. Airlines' material lenders and
lessors have consented to the Reorganization where the credit agreements and
lease arrangements make such consent necessary.

AIRLINES' BOARD OF DIRECTORS HAS UNANIMOUSLY DETERMINED THAT THE
REORGANIZATION IS IN THE BEST INTERESTS OF AIRLINES AND ITS SHAREHOLDERS, HAS
UNANIMOUSLY APPROVED THE REORGANIZATION, HAS UNANIMOUSLY APPROVED AND
UNANIMOUSLY ADOPTED THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT
AIRLINES' SHAREHOLDERS VOTE FOR THE PROPOSAL TO APPROVE THE REORGANIZATION AND
APPROVE AND ADOPT THE MERGER AGREEMENT.

10
<PAGE> 19

TERMS OF THE MERGER AGREEMENT

The following is a summary of the material provisions of the Merger
Agreement, which is attached hereto as Exhibit A. This summary is not intended
to be complete and is qualified in its entirety by reference to, and should be
read in conjunction with, the Merger Agreement.

GENERAL. The Merger Agreement provides that, following approval of
the Merger Agreement by the shareholders of Airlines and the satisfaction or
waiver of the other conditions to the Merger, at the Effective Time of the
Merger (as defined below), Airlines will be merged with Merging Co., with
Airlines being the surviving corporation. Upon the Effective Time of the
Merger, the following transactions will occur:

(a) each issued and outstanding share of Airlines Common Stock
(other than shares held by Airlines as treasury shares) will
be automatically deemed converted into one share of Holdings
Common Stock;

(b) immediately after the conversion referred to in paragraph (a)
above, each issued and outstanding share of common stock of
Merging Co. will be automatically deemed converted into shares
of Airlines Common Stock;

(c) contemporaneously with the conversion referred to in paragraph
(b) above, the shares of Holdings Common Stock owned by
Airlines immediately prior to the Effective Time of the Merger
will be canceled;

(c) contemporaneously with the cancellation referred to in
paragraph (c) above, the shares of Airlines Common Stock held
by Airlines as treasury shares immediately prior to the
Effective Time of the Merger will be canceled; and

(e) any outstanding stock appreciation rights ("SARS") that
Airlines may have granted pursuant to its SAR Plan shall,
pursuant to the terms of the SAR Plan and the Merger
Agreement, automatically become SARs relating to Holdings
Common Stock upon the same terms.

Pursuant to the Merger, Airlines will become a wholly owned subsidiary
of ASA Holdings and the current shareholders of Airlines will become
shareholders of ASA Holdings. After the consummation of the Merger, each of
the current shareholders of Airlines will have exactly the same proportionate
interest in ASA Holdings as their proportionate interest in Airlines.

CONDITIONS TO THE MERGER. In addition to approval of the
Reorganization and the Merger Agreement by the shareholders of Airlines,
consummation of the Merger is subject to the satisfaction or waiver of, among
others, the following conditions: (i) approval of the listing of Holdings
Common Stock for quotation on The Nasdaq Stock Market's National Market, (ii)
effectiveness of the Registration Statement covering the shares of Holdings
Common Stock into which shares of Airlines Common Stock will be converted in
the Merger and (iii) receipt of an opinion of Ernst & Young LLP, independent
certified public accountants for Airlines and ASA Holdings, with respect to the
federal income tax consequences of the Reorganization. See "THE PROPOSED
REORGANIZATION - CERTAIN FEDERAL INCOME TAX CONSEQUENCES" herein. While, each
of these conditions may be waived by Airlines and ASA Holdings prior to the
consummation of the Merger, management does not currently expect to do so in
order to give effect to the Merger.

EFFECTIVE TIME OF THE MERGER. If the Merger Agreement is approved
and adopted by Airlines' shareholders and the other conditions to the Merger
are satisfied or waived and if the Merger Agreement is not otherwise amended or
terminated, the Merger will become effective upon the later of (a) the filing
of a certificate of merger relating thereto with the Secretary of State of the
State of Georgia, (b) at 11:59 p.m., Eastern Standard Time, December 31, 1996,
or (c) such other time as may be set forth in the certificate of merger (the
"EFFECTIVE TIME OF THE MERGER"). The Merger Agreement provides that the
parties thereto will cause such certificate of

11
<PAGE> 20

merger to be filed on the date that each of the conditions to the consummation
of the Merger has been satisfied or waived.

AMENDMENT. The Merger Agreement may be amended by mutual agreement of
the parties thereto without shareholder approval at any time after its approval
by Airlines' shareholder's provided that no such amendment is made that
adversely impacts the holders of Airlines Common Stock or that, by law,
requires further approval by Airlines' shareholders. Any amendment to the
Merger Agreement must be in writing and signed by the parties to the Merger
Agreement.

TERMINATION. The Merger Agreement may be terminated at any time prior
to the Effective Time of the Merger by the Board of Directors of either
Airlines and ASA Holdings, whether before or after shareholder approval of the
Reorganization.

EXCHANGE OF SHARE CERTIFICATES. THE SHAREHOLDERS OF AIRLINES BEFORE
THE CONSUMMATION OF THE MERGER WILL AUTOMATICALLY BECOME OWNERS OF HOLDINGS
COMMON STOCK UPON THE CONSUMMATION OF THE MERGER AND THEREAFTER WILL CEASE TO
BE OWNERS OF AIRLINES COMMON STOCK. IT WILL NOT BE NECESSARY FOR AIRLINES'
SHAREHOLDERS TO EXCHANGE THEIR EXISTING CERTIFICATES REPRESENTING AIRLINES
COMMON STOCK FOR SHARE CERTIFICATES REPRESENTING HOLDINGS COMMON STOCK. SHARE
CERTIFICATES THAT CURRENTLY REPRESENT AIRLINES COMMON STOCK WILL AUTOMATICALLY
BE DEEMED TO REPRESENT HOLDINGS COMMON STOCK AFTER THE CONSUMMATION OF THE
MERGER. THEREAFTER, WHEN ANY SHAREHOLDER TRANSFERS SHARES OF HOLDINGS COMMON
STOCK, THE SHAREHOLDER SHOULD DELIVER THE CERTIFICATE THAT PREVIOUSLY
REPRESENTED AIRLINES COMMON STOCK TO THE TRANSFER AGENT (PROPERLY ENDORSED AND
IN PROPER FORM FOR TRANSFER), AND THE TRANSFEREE WILL RECEIVE A CERTIFICATE
REPRESENTING HOLDINGS COMMON STOCK FOR THE NUMBER OF SHARES TRANSFERRED. ANY
SHARES REMAINING AFTER THE TRANSFER WILL BE RETURNED TO THE TRANSFEROR ON A
CERTIFICATE REPRESENTING HOLDINGS COMMON STOCK.

If any shareholder desires to transfer any certificate that previously
represented shares of Airlines Common Stock, it will be a condition to such
transfer that the certificate surrendered shall be properly endorsed and
otherwise in proper form for transfer and the person requesting such transfer
shall either:

(i) pay ASA Holdings or its agents any taxes or other
governmental charges required by reason of the issuance of certificates
representing shares of Holdings Common Stock in a name other than that of the
registered holder of the certificate so surrendered; or

(ii) establish to the satisfaction of ASA Holdings or its
agents that such taxes or governmental charges have been paid.

RECOMMENDATION OF AIRLINES' BOARD OF DIRECTORS

AIRLINES' BOARD OF DIRECTORS HAS DETERMINED THAT THE REORGANIZATION IS
IN THE BEST INTERESTS OF AIRLINES AND ITS SHAREHOLDERS, HAS APPROVED THE
REORGANIZATION, HAS APPROVED AND ADOPTED THE MERGER AGREEMENT AND RECOMMENDS
THAT AIRLINES' SHAREHOLDERS VOTE FOR THE PROPOSAL TO APPROVE THE REORGANIZATION
AND APPROVE AND ADOPT THE MERGER AGREEMENT.

12
<PAGE> 21

EMPLOYEE BENEFIT PLANS

ASA Holdings has agreed to assume the obligations as a plan sponsor
under the SAR Plan and Airlines' Supplemental Executive Retirement Plan
("SERP"). Further, Airlines' employee benefit plans (other than the SAR Plan)
will be amended, as necessary, to cover any eligible employees of ASA Holdings.
Each of Airlines' employee benefit plans that currently holds or provides for
distributions of Airlines Common Stock will be amended to provide that Holdings
Common Stock will be substituted for Airlines Common Stock as of the Effective
Time of the Merger.

ACCOUNTING TREATMENT

The proposed Reorganization involves the reorganization of interests
under common control and will be accounted for at historical cost in a manner
similar to that of a pooling of interests. The consolidated financial
statements of ASA Holdings after the Reorganization will reflect all of the
consolidated results of operations, consolidated assets and liabilities of
Airlines before the Reorganization and the results of operations, assets and
liabilities of Airlines and Investments after the Reorganization.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following summary is based upon the opinion of Ernst & Young LLP
as to the material federal income tax consequences of the proposed
Reorganization. That opinion is based on representations provided by
management of Airlines and ASA Holdings and the provisions of the Code, the
Treasury Regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as in effect as of the date of the opinion. Such
laws or interpretations may differ at the Effective Time of the Merger, and
relevant facts also may differ. The Ernst & Young LLP letter includes the
opinions that the following results will apply with respect to the
Reorganization:

1. No gain or loss will be recognized by the holders of Airlines
Common Stock upon the conversion of Airlines Common Stock into
Holdings Common Stock pursuant to the Merger;

13
<PAGE> 22

4. No gain or loss will be recognized by Airlines, ASA Holdings,
Merging Co. or Investments in connection with the Merger; and

5. No gain or loss will be recognized by ASA Holdings,
Investments or the holders of Airlines Common Stock as a
result of the Airlines' Investments Dividend.

DISSENTER'S RIGHTS

Holders of shares of Airlines Common Stock do not have the right to
dissent with respect to the Merger (or the other transactions in the
Reorganization) and receive payment for the "fair value" of their shares under
the GBCC. The GBCC provides that there shall be no right of dissent in favor
of the holder of shares of any class or series which, at the record date fixed
to determine the shareholders entitled to receive notice of and to vote at a
meeting at which a plan of merger or share exchange or a sale or exchange of
property or an amendment of the articles of incorporation is to be acted on,
were either listed on a national securities exchange or held of record by more
than 2,000 shareholders, unless:

(1) In the case of a plan of merger or share exchange, the
holders of shares of the class or series are required under the plan
of merger or share exchange to accept for their shares anything except
shares of the surviving corporation or another publicly held
corporation which at the effective date of the merger or share
exchange are either listed on a national securities exchange or held
of record by more than 2,000 shareholders, except for scrip or cash
payments in lieu of fractional shares; or

(2) The articles of incorporation or a resolution of the board
of directors approving the transaction provides otherwise.

Airlines Common Stock is traded on The Nasdaq Stock Market's National
Market, which for purposes of the GBCC is a national securities exchange and
qualifies Airlines for the exception from the dissenter's rights provisions of
the GBCC.

VOTE REQUIRED

The sole shareholder of Merging Co. must approve the Merger Agreement
and the shareholders of Airlines must approve the Reorganization (including the
Merger). ASA Holdings, the sole shareholder of Merging Co., has approved the
Merger Agreement.

Airlines' shareholders will vote on the proposal to adopt and approve
the Reorganization and the Merger Agreement at the Special Meeting. The
presence in person or by proxy of the holders of a majority of the shares

14
<PAGE> 23

of Airlines Common Stock outstanding as of the October 25, 1996, record date is
necessary to constitute a quorum at the Special Meeting. The affirmative vote
of the holders of a majority of the shares of Airlines Common Stock outstanding
as of the record date is necessary to approve the Reorganization and the Merger
Agreement. For more information regarding the vote required at the special
Meeting, see "THE SPECIAL MEETING - VOTE REQUIRED; SECURITY OWNERSHIP OF
MANAGEMENT" herein.

For more information regarding the Special Meeting, see "THE SPECIAL
MEETING" herein.

REGULATORY REQUIREMENTS

Airlines is aware of no federal or state regulatory requirements that
must be complied with or approvals that must be obtained prior to the
completion of the Reorganization.

EFFECT ON RIGHTS OF HOLDERS OF AIRLINES COMMON STOCK

Both before and after the proposed Reorganization is completed,
Airlines' Board of Directors has been able, and ASA Holdings' Board of
Directors will be able, to approve the issuance of additional shares of capital
stock without shareholder approval. Any such issuances of additional shares
would result in dilution of the current equity interest of existing
shareholders. Airlines and ASA Holdings do not have any current plans or
pending proposals to issue additional shares of Airlines Common Stock or
Holdings Common Stock other than pursuant to Airlines' existing SAR Plan. The
issuance of such additional securities will be subject to certain limitations
imposed by the rules of The Nasdaq Stock Market and by general fiduciary
principles. Generally, Nasdaq requirements include the requirement that
shareholders approve, among others things, (a) the issuance of common stock
(or securities convertible into common stock) resulting in a change in control,
(b) the sale or issuance of common stock (or securities convertible into common
stock), other than in a public offering, at less than the greater of book or
market value when the aggregate amount of shares sold equal 20% or more of the
number of shares or voting power of the common stock outstanding before the
transaction or (c) an acquisition effected by the issuance of common stock (or
securities convertible into common stock) in exchange for stock

15
<PAGE> 24

or assets where either (i) both (A) the stock or assets are owned by directors,
officers or holders of 5% or more of the outstanding common stock any of whom
has a 5% or greater interest individually, or 10% in the aggregate, in the
company or assets being acquired and (B) the common stock or convertible
securities issued in the transaction would result in a 5% or more increase in
outstanding common stock or (ii) the amount of shares or voting power of the
common stock to be issued (or which has the potential to be issued), other than
in a public offering for cash, will equal or exceed 20% of the number of shares
or voting power of the common stock outstanding before the issuance.

THE SPECIAL MEETING

TIME, DATE AND PLACE

The Special Meeting will be held in Meeting Rooms 117-118 at the Cobb
Galleria Centre, Two Galleria Parkway, Atlanta, Georgia, on Thursday, December
19, 1996, at 11:00 a.m. Eastern Standard Time. This proxy statement and
accompanying form of proxy were first sent or given to Shareholders on or about
November 14, 1996.

RECORD DATE AND SHARES ENTITLED TO VOTE

Only holders of record of shares of Airlines Common Stock at the close
of business on October 25, 1996 (the "RECORD DATE") are entitled to notice of
and to vote at the Special Meeting. As of such date, there were 30,148,570
shares of Airlines Common Stock issued and outstanding (excluding any treasury
shares) held by 1,133 holders of record. Holders of record of Airlines Common
Stock on the Record Date are entitled to one vote per share on any matter that
may properly come before the Special Meeting.

VOTE REQUIRED; SECURITY OWNERSHIP OF MANAGEMENT

The only class of securities entitled to vote at the Special Meeting
is Airlines Common Stock. Each share of Airlines Common Stock is entitled to
one vote at the Special Meeting. Airlines' Board of Directors, pursuant to
Airlines' Bylaws, fixed October 25, 1996, at the close of business, as the
Record Date for the determination of holders of Airlines Common Stock entitled
to notice of and to vote at the Special Meeting or at any adjournment or
adjournments thereof. As of the Record Date, there were 30,148,570 shares of
Airlines Common Stock outstanding and entitled to be voted at the Special
Meeting (excluding any treasury shares).

The presence in person or by proxy of the holders of a majority of the
shares of Airlines Common Stock outstanding as of the Record Date is necessary
to constitute a quorum at the Special Meeting. Abstentions will be counted as
shares that are present and entitled to vote for purposes of determining the
presence of quorum at the Special Meeting. If a quorum is present the
affirmative vote of the holders of a majority of the shares of Airlines Common
Stock outstanding as of the Record Date is necessary to approve the
Reorganization and the Merger Agreement. At this time, Airlines' management
knows of no matter to be presented for action at the Special Meeting other than
those mentioned herein. If, however, any other matters properly come before
the Special Meeting, generally, if a quorum is present, a proposal will pass if
the votes cast favoring the action exceed the votes cast opposing the action.
Abstentions and broker nonvotes with respect to the proposal to approve the
Reorganization and the Merger Agreement or any other matters to be voted on at
the Special Meeting will not count as either a vote for or against such
proposal at the Special Meeting.

16
<PAGE> 25

As of the Record Date, the executive officers and directors (7
persons as of the Record Date) of Airlines beneficially owned an aggregate of
1,538,437 shares of Airlines Common Stock, approximately 5.1% of the shares of
Airlines Common Stock then outstanding. As of the Record Date, Delta Air
Lines Holdings, Inc., owned 7,995,000 shares of Airlines Common Stock,
approximately 26.5% of the outstanding Airlines Common Stock. ASA Holdings,
the sole shareholder of Merging Co., has approved the Merger Agreement. Of the
executive officers and directors (8 persons) of Airlines who beneficially own
shares of Airlines Common Stock, the three executive officers (approximately
3.4% of the outstanding Airlines Common Stock) have indicated to Airlines that
they intend to vote for the proposal to approve the proposed Reorganization and
to adopt and approve the Merger Agreement and none have indicated to Airlines
that they intend to vote against the proposal. No other executive officers,
directors or persons known by Airlines to be a benefical owner of more than 5%
of the outstanding Airlines Common Stock (including Delta Air Lines Holdings,
Inc.) have indicated to Airlines their voting intentions with respect to the
proposal to approve the proposed Reorganization and to adopt and approve the
Merger Agreement.

ASA Holdings, the sole shareholder of Merging Co., has approved the
Reorganization and the Merger Agreement.

PROXIES

A form of proxy is enclosed with this Proxy Statement/Prospectus. All
shares of Airlines Common Stock represented by properly executed proxies,
unless such proxies have been previously revoked, will be voted in accordance
with the instructions indicated on such proxies. If no instructions are
indicated, such shares will be voted for approval of the Reorganization and the
Merger Agreement and, in the discretion of the proxy holder, as to any other
matter that may properly come before the Special Meeting.

SOLICITATION OF PROXIES

Proxies for the Special Meeting will be solicited by mail. Proxies
may also be solicited by directors, officers and regular employees of Airlines
personally or by telephone, but such persons will not be specially compensated
for such services. Airlines' regularly retained investor relations firm,
Corporate Communications, Inc., may also solicit proxies by telephone and mail.
Corporate Communications, Inc. will not receive a separate fee for any such
solicitations. Banks, brokers, nominees and other custodians and fiduciaries
will be reimbursed for their reasonable out-of-pocket expenses in forwarding
soliciting material to beneficial owners of Airlines Common Stock. The expense
of preparing, assembling, printing, mailing and soliciting proxies will be
borne by Airlines.

ACTION TO BE TAKEN UNDER THE PROXIES

When a proxy in the enclosed form is properly executed and timely
returned, the shares of Airlines Common Stock represented thereby will be voted
at the Special Meeting in the manner specified therein.

PROPOSED REORGANIZATION. Unless instructed otherwise in the space
provided in the proxy form, all properly executed proxies received by Airlines
will be voted at the Special Meeting "FOR" the proposal to approve the
Reorganization and to adopt and approve the Merger Agreement.

OTHER MATTERS. At this time, Airlines' management knows of no matter
to be presented for action at the Special Meeting other than those mentioned
herein. If, however, any other matters properly come before the Special
Meeting, it is intended that the properly executed proxies delivered to
Airlines will be voted in accordance with the judgment of the person or persons
voting such proxies, except as described below. If a broker indicates on a
proxy that it does not have discretionary authority as to certain shares of
Airlines Common Stock to vote on a particular matter, those shares will not be
voted on that matter. If any shareholder indicates on a proxy that the
shareholder is voting against the proposal to approve the proposed
Reorganization and to adopt and approve the Merger Agreement, those shares will
not be voted for any adjournment of the Special Meeting.

REVOCATION OF PROXIES. Any holder of Airlines Common Stock who
properly executes and delivers a proxy may revoke it at any time prior to it
being exercised. A proxy may be revoked either by (i) filing with the Secretary
of Airlines prior to the Special Meeting, at Airlines' principal executive
offices, either a written

17
<PAGE> 26

revocation of such proxy or a duly executed proxy bearing a later date or (ii)
attending the Special Meeting and voting in person, regardless of whether a
proxy has previously been given. Presence at the Special Meeting will not
revoke a shareholder's proxy unless such shareholder votes in person.

ASA HOLDINGS CAPITAL STOCK

GENERAL

The following is a summary of the material provisions of ASA Holdings'
Articles of Incorporation and Bylaws relating to the rights and privileges of
holders of Holdings Common Stock, which are attached as exhibits to the
Registration Statement of which this Proxy Statement/Prospectus is a part and
are hereby incorporated by reference. This summary is not intended to be
complete and is qualified in its entirety by reference to, and should be read
in conjunction with, ASA Holdings' Articles of Incorporation and Bylaws.

COMMON STOCK

The securities of ASA Holdings to be registered under the Exchange Act
consist of the 150,000,000 shares of Holdings Common Stock, $0.10 par value per
share, of which 1,000 shares are issued and outstanding as of November 1, 1996.
Holders of Holdings Common Stock have no preemptive rights.

Holders of Holdings Common Stock are entitled to receive such
dividends as from time to time may be declared by ASA Holdings' Board of
Directors and to share ratably in all assets available for distribution in the
event of a liquidation, dissolution or winding-up, either voluntary or
involuntary, of ASA Holdings. The shares of Holdings Common Stock are neither
redeemable nor convertible nor are there any sinking fund provisions relating
to the Holdings Common Stock.

VOTING RIGHTS

Holders of Holdings Common Stock are entitled to one vote per share on
all matters upon which shareholders have the right to vote. A majority of
shares of Holdings Common Stock, represented in person or by proxy, is required
to constitute a quorum at any meeting of shareholders. If a quorum is present,
the affirmative vote of the holders of a majority of the shares of Holdings
Common Stock represented at the meeting is required to act on any matter
submitted for a vote at the meeting. With respect to any election of
directors, at a meeting at which a quorum is present, any nominee receiving a
plurality of the votes entitled to be cast at the meeting will be elected.
Pursuant to the GBCC, certain proposed actions presented to the holders of
Holdings' Common Stock will pass only if the proposal receives a majority of
all the votes entitled to be cast at the meeting. Such actions include mergers
and share exchanges, a sale of all or substantially all of the assets of ASA
Holdings, amendments to Holdings' Articles of Incorporation that affect the
rights of the shareholders in any substantive way, and voluntary dissolution.
There is no difference in these voting requirements between Airlines Common
Stock and Holdings Common Stock. Holders of Holdings Common Stock have no
cumulative voting rights. See "AIRLINES CAPITAL STOCK AND PRINCIPAL HOLDERS
THEREOF - VOTING RIGHTS" herein.

CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK

Under ASA Holdings' Articles of Incorporation, after the
Reorganization there will be approximately 119,311,430 shares of Holdings
Common Stock available for future issuance without shareholder approval. These
additional shares may be utilized for a variety of corporate purposes including
(a) to effect stock splits,

18
<PAGE> 27

(b) in connection with future public offerings to raise additional capital or
(c) to facilitate corporate acquisitions. See "EFFECT ON RIGHTS OF HOLDERS OF
AIRLINES COMMON STOCK" herein.

REGISTRANT AND TRANSFER AGENT

SunTrust Bank, Atlanta, the transfer agent and registrar for Airlines
Common Stock, will also serve as transfer agent and registrar for Holdings
Common Stock.

MARKET FOR SECURITIES AND DIVIDENDS

There has been and there will be no public market for Holdings Common
Stock prior to the Effective Time of the Merger. At the Effective Time of the
Merger, Holdings Common Stock will be registered under Section 12(g) of the
Exchange Act and will be traded on The Nasdaq Stock Market's National Market
under the symbol "ASAI." Airlines Common Stock will be simultaneously delisted
from The Nasdaq Stock Market's National Market.

THE SHAREHOLDERS OF AIRLINES IMMEDIATELY BEFORE THE EFFECTIVE TIME OF
THE MERGER WILL AUTOMATICALLY BECOME OWNERS OF HOLDINGS COMMON STOCK UPON THE
EFFECTIVE TIME OF THE MERGER AND THEREAFTER WILL CEASE TO BE OWNERS OF AIRLINES
COMMON STOCK. IT WILL NOT BE NECESSARY FOR AIRLINES' SHAREHOLDERS TO EXCHANGE
THEIR EXISTING CERTIFICATES REPRESENTING AIRLINES COMMON STOCK FOR SHARE
CERTIFICATES REPRESENTING HOLDINGS COMMON STOCK. SHARE CERTIFICATES THAT
CURRENTLY REPRESENT AIRLINES COMMON STOCK WILL AUTOMATICALLY BE DEEMED TO
REPRESENT HOLDINGS COMMON STOCK AFTER THE EFFECTIVE TIME OF THE MERGER. SEE
"THE PROPOSED REORGANIZATION - TERMS OF THE MERGER AGREEMENT - EXCHANGE OF
SHARE CERTIFICATES" HEREIN.

No cash dividends have ever been declared by ASA Holdings on Holdings
Common Stock. See "AIRLINES CAPITAL STOCK AND PRINCIPAL HOLDERS THEREOF -
MARKET FOR SECURITIES AND DIVIDENDS" herein. After the Merger, ASA Holdings
expects to pay quarterly cash dividends with respect to Holdings Common Stock
at the same rates and on the same dates and terms as those last approved by
Airlines' Board of Directors with respect to Airlines Common Stock. Airlines
paid cash dividends on the outstanding Airlines Common Stock of 9.5 cents per
share during each of the first two quarters of 1996. However, ASA Holdings'
Board of Directors will reconsider the declaration and the amount of cash
dividends periodically, in its sole discretion, and there can be no assurance
as to the declaration or the timing, amount or other terms of dividends to be
paid in the future. The payment of dividends in the future may depend upon the
results of operations, the financial condition of ASA Holdings and other
factors which ASA Holdings' Board of Directors deems relevant.

SHAREHOLDER AGREEMENT

Pursuant to the terms of a Stock Purchase Agreement dated May 28, 1986
(the "STOCK PURCHASE AGREEMENT"), Delta has the right to nominate up to two
directors to Airlines' Board of Directors if Delta continues to own (directly
or indirectly) at least 10% of the outstanding Airlines Common Stock. As of
November 1, 1996, Delta (through a wholly owned subsidiary) owned approximately
26.5% of the outstanding Airlines Common Stock. See "AIRLINES VOTING
SECURITIES AND PRINCIPAL HOLDERS THEREOF - SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS" herein.

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<PAGE> 28

AIRLINES CAPITAL STOCK AND PRINCIPAL HOLDERS THEREOF

GENERAL

The following is a summary of the material provisions of Airlines'
Articles of Incorporation and Bylaws relating to the rights and privileges of
holders of Airlines Common Stock, which are incorporated by reference in
Airlines' Annual Report on Form 10-K for the year ended December 31, 1995,
which is incorporated herein by reference (see "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" herein). This summary is not intended to be complete
and is qualified in its entirety by reference to, and should be read in
conjunction with, Airlines' Articles of Incorporation and Bylaws.

COMMON STOCK

The securities of Airlines registered under the Exchange Act consist
of the 50,000,000 shares of authorized Airlines Common Stock, $0.10 par value
per share of which 30,113,570 shares were issued and outstanding as of
November 1, 1996. All outstanding shares of Airlines Common Stock are duly
authorized, fully paid and nonassessable. Holders of Airlines Common Stock
have no preemptive rights.

Holders of Airlines Common Stock are entitled to receive such
dividends as from time to time may be declared by Airlines' Board of Directors
and to share ratably in all assets available for distribution in the event of a
liquidation, dissolution or winding-up, either voluntary or involuntary, of
Airlines. The shares of Airlines Common Stock are neither redeemable nor
convertible nor are there any sinking fund provisions relating to the Airlines
Common Stock.

VOTING RIGHTS

Holders of Airlines Common Stock are entitled to one vote per share on
all matters upon which shareholders have the right to vote. A majority of
shares of Airlines Common Stock, represented in person or by proxy, is required
to constitute a quorum at any meeting of shareholders. If a quorum is present,
the affirmative vote of the holders of a majority of the shares of Airlines
Common Stock entitled to vote at the meeting is required to act on any matter
submitted for a vote at the meeting unless a greater vote is required by law.
Holders of Airlines Common Stock have no cumulative voting rights. With
respect to any election of directors, at a meeting at which a quorum is
present, any nominee receiving a plurality of the votes at the meeting will be
elected. Pursuant to the GBCC, certain proposed actions presented to the
holders of Airlines Common Stock will pass only if the proposal receives a
majority of all the votes entitled to be cast at the meeting. Such actions
include mergers and share exchanges, a sale of all or substantially all of the
assets of Airlines, amendments to Airlines' Articles of Incorporation that
affect the rights of the shareholders in any substantive way, and voluntary
dissolution. There is no difference in these voting requirements between
Airlines Common Stock and Holdings Common Stock. See "ASA HOLDINGS CAPITAL
STOCK - VOTING RIGHTS" herein.

CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK

Under Airlines' Articles of Incorporation, there will be approximately
19,311,430 shares of Airlines Common Stock available for future issuance
without shareholder approval. See "EFFECT ON RIGHTS OF HOLDERS OF AIRLINES
COMMON STOCK" herein.

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<PAGE> 29

REGISTRAR AND TRANSFER AGENT

The transfer agent and registrar for Airlines Common Stock is SunTrust
Bank, Atlanta.

MARKET FOR SECURITIES AND DIVIDENDS

Airlines Common Stock is traded on The Nasdaq Stock Market's National
Market under the symbol "ASAI." Effective upon the consummation of the Merger,
Airlines Common Stock will be delisted from The Nasdaq Stock Market's National
Market.

<TABLE>
<CAPTION>
Fiscal year ended
December 31, 1996 (to date) High Low
--------------------------- ---- ---
<S> <C> <C>
Quarter Ended March 31, 1996 $28.50 $17.88
Quarter Ended June 30, 1996 $29.38 $22.00
Quarter Ended September 30, 1996 $28.38 $20.25
October 1, 1996 through November 1, 1996 $22.38 $19.88

<CAPTION>
Fiscal year ended
December 31, 1995 High Low
----------------- ---- ---
Quarter Ended March 31, 1995 $21.00 $15.25
Quarter Ended June 30, 1995 $30.75 $18.00
Quarter Ended September 30, 1995 $34.25 $21.75
Quarter Ended December 31, 1995 $27.88 $20.75

<CAPTION>
Fiscal year ended
December 31, 1994 High Low
----------------- ---- ---
Quarter Ending March 31, 1994 $38.75 $31.25
Quarter Ending June 30, 1994 $33.00 $21.25
Quarter Ending September 30, 1994 $30.75 $23.00
Quarter Ending December 31, 1994 $24.50 $12.75
</TABLE>

Airlines paid cash dividends on outstanding Airlines Stock of 9.5 cents
per share during each of the first three quarters of 1996 and has announced a
fourth quarter dividend of 9.5 cents per share. Airlines paid cash dividends of
34 cents per share during 1995 and 32 cents per share during 1994. More
information regarding Airlines' payment of dividends is contained in its Annual
Report on Form 10-K for the year ended December 31, 1995, and its quarterly
reports on Form 10-Q for the quarters ended March 31, 1996, June 30, 1996, and
September 30, 1996, each of which were filed with the Commission and are
incorporated herein by reference (See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE" herein).

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<PAGE> 30

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information with respect to
Airlines Common Stock owned beneficially as of November 1, 1996, by each
Director, by each Executive Officer, by all Executive Officers and Directors as
a group and by each person known by Airlines to be a beneficial owner of more
than 5% of the outstanding Airlines Common Stock:

<TABLE>
<CAPTION>
Percentage of
Number of Shares Common Stock
Name of Beneficial Owner Owned Beneficially (1) (1)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Delta Air Lines Holdings, Inc. (2) 7,995,000 26.5%
FMR Corp. (3) 4,197,500 (3) 13.9%
George F. Pickett 606,912 (4)(5) 2.0%
John W. Beiser 418,797 (5)(6) 1.4%
Ronald V. Sapp 11,964 (5) *
Jean A. Mori 860 (7) *
Parker H. Petit 0 -
Alan M. Voorhees 448,130 (8) 1.5%
Ralph W. Voorhees 51,774 (9) *
Edward H. West 0 -
All Executive Officers and Directors as a group 1,538,437 (4)(5)(6)(7)(8)(9) 5.1%
(8 persons)
</TABLE>

- ------------------------
* Less than 1%.

(1) Information with respect to beneficial ownership is based upon
information furnished by each owner. As of November 1, 1996, there
were 30,113,570 shares of Airlines Common Stock outstanding (excluding
any treasury shares).

(2) The address of this beneficial owner is Suite 1300, 1105 North Market
Street, Wilmington, DE 19801.

(3) The address of this beneficial owner is 82 Devonshire Street, Boston,
MA 02109-3614. FMR Corp. advised Airlines, as of September 27, 1996
that shares owned beneficially by it include the following shares of
Airlines Common Stock: (a) 2,494,200 shares (approximately 8.3%)
beneficially owned by Fidelity Management and Research Company
("FMRC"), a wholly owned subsidiary of FMR Corp., as a result of FMRC
serving as investment adviser to various investment companies
registered under Section 8 of the Investment Company Act of 1940, and
serves as investment adviser to certain other funds which are
generally offered to limited groups of investors; (b) 1,489,190 shares
(approximately 4.9%) beneficially owned by Fidelity Management Trust
Company, a wholly owned subsidiary of FMR Corp. ("FMTC"), as a result
of FMTC serving as trustee or managing agent for various private
investment accounts, primarily employee benefit plans, and serving as
investment adviser to certain other funds which are generally offered
to limited groups of investors; and (c) 214,200 shares (less than 1%)
]beneficially owned by Fidelity International Limited, a wholly owned
subsidiary of FMR Corp. ("FIL"), as a result of FIL serving as
investment adviser to various non-U.S. investment companies. FMR
Corp. advised Airlines, as of September 27, 1996, that FMR Corp. has
sole voting power with respect to 910,000 shares (approximately 3.0%)
and sole dispositive power with respect to 3,983,300 shares

22
<PAGE> 31

(approximately 13.2%). FMR Corp. advised Airlines, as of September,
27, 1996, that FIL has sole voting and dispositive power with respect
to all the shares it beneficially owns.

(4) Includes 118,650 shares (less than 1%) held by the wife of George F.
Pickett, with respect to which Mr. Pickett disclaims any beneficial
ownership interest.

(5) Includes shares that the individual named on the table has the right
to acquire, on or before December 31, 1996 (60 days after November 1,
1996), through the exercise of SARs granted under the SAR Plan as
follows: George F. Pickett-6,975 shares (less than 1%); John W.
Beiser-6,994 shares (less than 1%); Ronald V. Sapp-2,075 shares (less
than 1%); and all Executive Officers and Directors as a group (8
persons)- 16,044 shares (less than 1%). For purposes of calculating
the number of shares that would be acquired if the individual named in
the table exercised all of the SARs that could be exercised on or
before December 31, 1996, $21.00 is assumed to be the exercise price
for all such SARs on September 26, 1996 (based on the closing price
per share on October 31, 1996), whether or not all such SARs were
exercisable on November 1, 1996. However, some of these SARs could not
be exercised because the grant price of $36.75 is greater than the
assumed exercise price and no appreciation would be realized.

(6) Includes 200,000 shares (less than 1%) held by the wife of John W.
Beiser, with respect to which Mr. Beiser disclaims any beneficial
ownership interest.

(7) Includes 130 shares (less than 1%) held by the wife of Jean A. Mori,
with respect to which Mr. Mori disclaims any beneficial ownership
interest.

(8) Includes 17,500 shares (less than 1%) held by the wife of Alan M.
Voorhees and 405,630 shares (1.4%) held irrevocable trusts created for
the benefit of the adult children of Alan M. Voorhees, with respect to
all of which Mr. Alan Voorhees disclaims any beneficial ownership
interest.

(9) Includes 26,200 shares (less than 1%) held by the wife of Ralph W.
Voorhees, with respect to which Mr. Ralph Voorhees disclaims any
beneficial ownership interest.

- ------------------

23
<PAGE> 32

BUSINESS AND MANAGEMENT OF AIRLINES

GENERAL

Airlines, a Georgia corporation, is a certificated air carrier
providing regularly scheduled, high frequency airline service between (i)
Hartsfield Atlanta International Airport in the Atlanta hub and 36 other
airports in Alabama, Florida, Georgia, Indiana, Kentucky, Louisiana,
Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West
Virginia and (ii) Dallas/Fort Worth International Airport in the Dallas/Fort
Worth hub and 24 other airports in Arkansas, Kansas, Louisiana, Mississippi,
Oklahoma and Texas. Airlines' flights are utilized primarily by business and
military passengers to make connections with flights operated by Delta and
other carriers from the Atlanta and Dallas/Fort Worth hubs.

As of September 26, 1996, Airlines' operating fleet consisted of 75
turboprop airplanes, 12 of which seat 66 passengers and the remaining 63 of
which seat 30 passengers, and 5 jets which seat 88 passengers each.

On July 15, 1986, Investments was incorporated in the State of
Delaware as a wholly-owned subsidiary of Airlines. The sole business of
Investments has been to invest certain cash assets contributed to it by
Airlines. For a description of the effect to the Reorganization on
Investments, see "THE PROPOSED REORGANIZATION - OTHER REORGANIZATION
TRANSACTIONS" herein.

On August 21, 1995, Airlines suffered a tragic loss when one of its
flights crashed. There were 26 passengers and three crew members on board that
flight. Of those individuals, there were nine fatalities (including one crew
member), 12 individuals either were not hospitalized or were released the day
after the crash with minor injuries and eight individuals were more seriously
injured. No one was injured or killed on the ground. The crash also caused
minor damage to a few trees adjacent to the pasture in which the plane came to
rest. Airlines had the crash site cleaned to the extent required by the
Federal Aviation Administration. Airlines has received insurance proceeds
from its insurance company related to the hull value of the aircraft and the
debt related to this aircraft was paid with part of these insurance proceeds.
A number of claims and lawsuits have been filed in connection with this matter.
The cause of the accident is still under investigation by the National
Transportation Safety Board. However, management believes and preliminary
findings indicate that the accident may have been caused by a fatigue failure
in one of the propellers. The propeller manufacturer (through its insurer) has
agreed to address all claims arising from the accident without acknowledging
fault. Accordingly, Airlines management does not believe that Airlines has
any liability in this matter, based on factual information currently available
to it. Therefore, Airlines has not accrued a liability for potential claims.
In addition, Airlines maintains insurance coverage which it believes, based on
factual information currently available to it, is sufficient to cover claims
associated with this incident if Airlines were found to be at fault.

A more detailed description of Airlines' business, together with
certain financial statements and selected financial information, is contained
in its Annual Report on Form 10-K for the year ended December 31, 1995, and its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30,
1996, and September 30, 1996, each of which were filed with the Commission and
are incorporated herein by reference (see "INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE" herein). Information with respect to the principal shareholders
and management of Airlines is contained in its Proxy Statement dated April 15,
1996, with respect to Airlines' Annual Meeting of Shareholders held May 22,
1996, which Proxy Statement was filed with the Commission and portions thereof
are incorporated by reference into the Form 10-K referenced above.

FINANCIAL STATEMENTS

24
<PAGE> 33

of operations. Only the components of shareholders' equity in ASA Holdings'
consolidated balance sheet will change as a result of the cancellation of
Airlines' treasury shares as illustrated below:

<TABLE>
<CAPTION>
September 30, 1996
-----------------------------------------
(unaudited)
(dollars in thousands, except per share
amounts)
ASA Holdings
Airlines and and Subsidiaries
Subsidiaries (Pro forma)
--------------- ----------------
<S> <C> <C>
Shareholders' Equity:

Common stock, $0.10 par; authorized - 50,000,000
shares and 150,000,000 shares (pro forma);
outstanding - 34,386,670 shares and 30,688,570
shares (pro forma) $ 3,439 $ 3,069
Capital in excess of par 45,887 -
Retained earnings 296,251 264,187
Unrealized holding loss on investments 58 58
--------- ---------
345,635 267,314

Less treasury stock at cost - 3,698,100 shares
and 0 shares (pro forma) (78,321) -
--------- ---------
Total Shareholders' Equity $ 267,314 $ 267,314
========= =========
</TABLE>

For information on the financial statements of ASA Holdings, see
"BUSINESS AND MANAGEMENT OF ASA HOLDINGS - FINANCIAL STATEMENT" and "FINANCIAL
STATEMENT" herein.

MANAGEMENT

At Airlines' 1996 Annual Meeting of the Shareholders, Airlines'
shareholders approved a proposal to fix the number of directors on the Board of
Directors at seven. Effective September 1, 1996, Julius P. Gwin, a Delta
nominee, resigned as a member of the Company's Board of Directors, as a result
of his retirement from Delta. As a result of his resignation, there were only
six members of Airlines' Board, none of which were Delta nominees. In October
1996, Delta nominated Edward H. West, Delta's Controller, to serve as a member
of the Company's Board of Directors, in accordance with the Stock Purchase
Agreement. On October 30, 1996, Airlines' Board of Directors elected Edward H.
West to serve as a director of the Company to fill the vacancy created by the
resignation of Mr. Gwin. In addition, the Board of Directors elected Mr. West
to serve as a member of the Audit Committee, along with Jean A. Mori and Ralph
W. Voorhees. Mr. West has been Delta's Controller since November 1, 1996.
Prior to that date, he was Director-Corporate Finance for Delta from December
1995 to October 1996, General Manager-Corporate Finance from January 1995 to
November 1995, and Administrative Assistant-Finance in 1994. From 1992 to 1994,
Mr. West was an Assistant Vice President for Wachovia Bank. Mr. West also
was employed by Mallen Industries in 1992 and by Trust Company Bank from 1988 to
1992.

For additional information regarding the executive officers and directors
of Airlines, see Airlines' Proxy Statement dated April 15, 1996, with respect to
Airlines' Annual Meeting of Shareholders held May 22, 1996, which Proxy
Statement was filed with the Commission and portions thereof are incorporated by
reference into Airlines' Form 10-K for the year ended December 31, 1995, which
was filed with the Commission and is incorporated herein by reference (see
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" herein).

LIMITATION ON LIABILITY AND INDEMNIFICATION OF DIRECTORS

Airlines' Articles of Incorporation provide that directors of Airlines
will not be personally liable for monetary damages to Airlines or its
shareholders for certain breaches of their fiduciary duty as directors to the
fullest extent allowable by Georgia law. Under current Georgia law, such a
provision may eliminate or limit the liability of a director of the corporation
or its shareholders for monetary damages for any action taken, or any failure
to take any action, as a director, except liability for: (i) any appropriation,
in violation of their duties, of any business opportunity of the corporation;
(ii) acts or omissions that involve intentional misconduct or a knowing
violation of law; (iii) approval of certain unlawful distributions to
shareholders in excess of amounts legally available for such distributions; and
(iv) any transaction from which the director received an improper personal
benefit. In appropriate circumstances, equitable remedies or nonmonetary
relief, such as an injunction,

25
<PAGE> 34

will remain available to a shareholder seeking redress from any such violation.
In addition, the provision applies only to claims against a director arising
out of his role as a director and not in any other capacity (such as an officer
or employee of Airlines).

Airlines' Bylaws and the GBCC provide that Airlines will indemnify its
directors and officers, and persons serving at the request of Airlines as a
director or officer of another corporation, partnership, joint venture, trust
or other enterprise, against all expenses (including attorneys' fees) and all
obligations to pay judgments, fines, and amounts paid in a settlement actually
and reasonably incurred by any such person in connection with threatened,
pending or completed actions, suits or proceedings, whether civil, criminal,
administrative or investigative, to which such person becomes subject by having
served in such role. Such indemnification shall be made if such person acted
in a manner that he reasonably believed to be in or not opposed to the best
interests of Airlines and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, will not, of itself,
create a presumption that such person did not so act and did not have such
reasonable cause to believe. With respect to actions by or on behalf of
Airlines, the foregoing indemnification pursuant to the Bylaws shall not be
paid for judgments, fines or amounts paid in settlement, but shall be paid for
reasonable expenses (including attorneys' fees) incurred in connection with
such actions, suits or proceedings.

Pursuant to the GBCC, indemnification is mandatory with respect to a
director or officer who is successful, on the merits or otherwise, with respect
to any claim, action, suit or proceeding of the character described above or
any issue or matter therein. In other cases, pursuant to Airlines' Bylaws and
the GBCC, Airlines will indemnify the persons discussed in the immediately
preceding paragraph only when (a) Airlines' Board of Directors by a majority
vote of a quorum consisting of directors who are not parties to the action,
suit or proceeding, (b) if such a quorum is not obtainable, a committee,
consisting of two or more directors who are not parties to the actions, suit or
proceeding designated by the Board of Directors (in which designation
interested directors may participate), by a majority vote, or (c) special legal
counsel selected by the Board of Directors or its committee in the manner
described in (a) or (b) above, or, if a quorum of the Board of Directors cannot
be obtained, by a majority vote of the full Board of Directors (in which
selection interested directors may participate), or (d) the shareholders, by
the affirmative vote of a majority of the shares entitled to vote thereon,
determine that indemnification is proper in the circumstances because the
person has met the applicable standard of conduct discussed in the immediately
preceding paragraph. However, if authorized by (a) Airlines' Board of
Directors by a majority vote of a quorum consisting of directors who are not
parties to the action, suit or proceeding, or (b) the shareholders, expenses
shall be paid by Airlines as they are incurred and in advance of the final
disposition of the relevant case, upon receipt of an undertaking by the
director or officer to repay such amounts if it shall ultimately be determined
that he or she is not entitled to be indemnified.

Pursuant to Airlines' Bylaws and the GBCC, if any amounts are paid by
way of indemnification, other then pursuant to a court order or action by the
shareholders or by an insurance carrier pursuant to insurance maintained by
Airlines, then Airlines is required to send notice to all shareholders of
record of the person paid, the amounts paid and the status at the time of such
payment of the litigation or threatened litigation.

Airlines maintains a directors' and officers' liability insurance
policy covering certain losses arising from claims made against them by reason
of wrongful acts (with certain exceptions) committed by them in their
capacities as directors and officers. The insurer's limit of liability under
the policy is $10 million per policy year, subject to the exceptions and other
limitations set forth therein. Airlines also maintains a directors' and
officers' excess liability insurance policy covering certain losses arising
from claims made against them by reason of

26
<PAGE> 35

wrongful acts (with certain exceptions) committed by them in their capacities
as directors and officers. The insurer's limit of liability under this policy
is also $10 million per policy year, subject to the exceptions and other
limitations set forth therein.

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
Airlines pursuant to the foregoing provisions, the Commission requires
disclosure that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, in their
opinion, therefore unenforceable.

BUSINESS AND MANAGEMENT OF ASA HOLDINGS

GENERAL

ASA Holdings was incorporated under the laws of the State of Georgia
on September 20, 1996. The sole business purpose of ASA Holdings is to become
the parent holding company for Airlines and its subsidiaries as described in
this Proxy Statement/Prospectus. Prior to the Effective Time of the Merger,
ASA Holdings will not have conducted any business activities.

FINANCIAL STATEMENT

A consolidated audited balance sheet of ASA Holdings as of September
25, 1996, the independent auditor's report thereon and the related notes are
included as a part of this Proxy Statement/Prospectus. The consolidated
financial statements of Airlines immediately before the formation of ASA
Holdings, the Merger and the other aspects of the Merger will not be materially
different than the consolidated financial statements of ASA Holdings
immediately after the Reorganization. Pursuant to the Reorganization, there
will be no change in the total assets, total liabilities, total shareholders'
equity or any components of the statements of operations. Only the components
of shareholders' equity in ASA Holdings' consolidated balance sheet will change
as a result of the cancellation of Airlines treasury shares. See "BUSINESS AND
MANAGEMENT OF AIRLINES - FINANCIAL STATEMENTS" herein.

MANAGEMENT

The executive officers and directors of ASA Holdings after the Merger
will be the same as those for Airlines immediately before the Effective Time of
the Merger. It is not expected that the aggregate compensation of the officers
and directors as of ASA Holdings will change in connection with the
Reorganization from the compensation that was payable to them as Airlines'
executive officers and directors before the Merger. See "BUSINESS AND
MANAGEMENT OF AIRLINES - MANAGEMENT" herein.

It is contemplated that the Stock Purchase Agreement between Airlines
and Delta will be amended as a result of the Reorganization to substitute the
right to nominate two directors to ASA Holdings' Board of Directors if Delta
continues to own (directly or indirectly) at least 10% of the outstanding
Holdings Common Stock after the Merger. See "BUSINESS AND MANAGEMENT OF
AIRLINES - MANAGEMENT" herein. As of November 1, 1996, Delta (through a
wholly owned subsidiary) owned approximately 26.5% of the outstanding Airlines
Common Stock. See "AIRLINES VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF -
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS" herein.

27
<PAGE> 36

LIMITATION ON LIABILITY AND INDEMNIFICATION OF DIRECTORS

With respect to limitation of liability and indemnification of
directors, the Articles of Incorporation and Bylaws of ASA Holdings are
substantially identical to those of Airlines. See "BUSINESS AND MANAGEMENT OF
AIRLINES - LIMITATION ON LIABILITY AND INDEMNIFICATION OF DIRECTORS" herein.

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
ASA Holdings pursuant to the foregoing provisions, the Commission requires
disclosure that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, in their
opinion, therefore unenforceable.

EXPERTS

The consolidated financial statements of Airlines and related
financial statement schedule appearing in Airlines' Annual Report on Form 10-K
for the year ended December 31, 1995, which is incorporated herein by reference
(see "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" herein), have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

ASA Holdings' consolidated balance sheet at September 25, 1996,
appearing in this Proxy Statement/Prospectus and Registration Statement has
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein, and is included in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.

LEGAL MATTERS

The legality of the shares of Holdings Common Stock being issued will
be passed upon for ASA Holdings by Altman, Kritzer & Levick, P.C., Atlanta,
Georgia.

OTHER MATTERS

ACTION ON OTHER MATTERS AT THE SPECIAL MEETING

At this time, Airlines does not know of any other matters to be
presented for action at the Special Meeting other than those mentioned in the
Notice of Special Meeting of Shareholders and referred to in this Proxy
Statement/Prospectus. If any other matter comes before the meeting, it is
intended that the proxies will be voted in respect thereof in accordance with
the judgment of the persons voting the proxies.

SHAREHOLDERS' PROPOSALS FOR 1997 ANNUAL MEETING

Airlines (or if the Reorganization is completed, ASA Holdings) plans
to hold its 1997 Annual Meeting of its shareholders during the month of May
(the "1997 ANNUAL MEETING"). Any proposal of a shareholder intended to be
presented at the 1997 Annual Meeting must be received by the Secretary of
Airlines (or if the Reorganization is completed, ASA Holdings) for inclusion in
the proxy statement and form of proxy for that meeting no later than December
17, 1996. Such proposals must meet the requirements of the regulations

28
<PAGE> 37

promulgated by Airlines (or if the Reorganization is completed, ASA Holdings)
to be eligible for inclusion in the 1997 proxy materials.

SHAREHOLDERS ARE URGED TO DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED
PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. YOUR COOPERATION WILL BE APPRECIATED. YOUR PROXY WILL BE
VOTED, WITH RESPECT TO THE MATTERS IDENTIFIED THEREON, IN ACCORDANCE WITH ANY
SPECIFICATIONS ON THE PROXY.

BY ORDER OF THE BOARD OF DIRECTORS

29
<PAGE> 38

FINANCIAL STATEMENT

INDEX TO FINANCIAL STATEMENT

ASA HOLDINGS, INC.

<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
Financial Statement:
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Consolidated Balance Sheet as of September 25, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Notes to Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
</TABLE>

F-1
<PAGE> 39

REPORT OF INDEPENDENT AUDITORS

The Shareholder and Board of Directors
ASA Holdings, Inc.

We have audited the accompanying consolidated balance sheet of ASA
Holdings, Inc. and subsidiary as of September 25, 1996. This consolidated
balance sheet is the responsibility of the Company's management. Our
responsibility is to express an opinion on this balance sheet based on our
audit.

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

In our opinion, the consolidated balance sheet referred to above
presents fairly, in all material respects, the consolidated financial position
of ASA Holdings, Inc. and subsidiary at September 25, 1996, in conformity with
generally accepted accounting principles.

/s/ Ernst & Young LLP

Atlanta, Georgia
September 25, 1996

F-2
<PAGE> 40

ASA HOLDINGS, INC. AND SUBSIDIARY

Consolidated Balance Sheet
September 25, 1996

<TABLE>
<S> <C>
ASSETS $ -
-----------
TOTAL ASSETS $ -
===========
LIABILITIES AND SHAREHOLDER'S EQUITY

Total Liabilities $ -

Shareholder's Equity
Common stock, $.10 par; authorized - 150,000,000 shares;
issued - 1,000 shares 100
Capital in excess of par 900
Note receivable from Airlines (1,000)
-----------
Retained earnings -
-----------
Total Shareholder's Equity -
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ -
===========
</TABLE>

F-3
<PAGE> 41
ASA HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED BALANCE SHEET

September 25, 1996

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

ASA Holdings, Inc. ("ASA Holdings") was incorporated on September 20, 1996 by
Atlantic Southeast Airlines, Inc. ("Airlines") as its wholly owned subsidiary.
The sole purpose of ASA Holdings is to become the holding company for Airlines
and its subsidiaries. As a result, ASA Holdings has not conducted any business
activities to date.

ASA Holdings formed Atlantic Southeast Merging Co. ("Merging Co."), as its
wholly-owned subsidiary. Pursuant to the Agreement and Plan of Merger, Merging
Co. will be merged into Airlines (the "Merger"), with Airlines being the
surviving corporation. In connection with the Merger, each outstanding share
of common stock of Airlines, $0.10 par value per share ("Airlines Common
Stock"), other than existing treasury shares, will be converted into one share
of common stock of ASA Holdings, $0.10 par value per share ("Holdings Common
Stock"), and the shares of common stock of Merging Co. owned by ASA Holdings
will be converted into shares of Airlines Common Stock. The shares of Holdings
Common Stock currently owned by Airlines will be canceled. The shares of
Airlines Common Stock held by Airlines as treasury shares will be canceled.
After the Merger, the current shareholders of Airlines will be shareholders of
ASA Holdings and Airlines will be a wholly owned subsidiary of ASA Holdings.
Each of the current shareholders of Airlines will have exactly the same
proportionate interest in ASA Holdings after the Merger as they currently have
in Airlines.

Principles of Consolidation

The consolidated balance sheet includes the accounts of ASA Holdings and its
wholly-owned subsidiary Merging Co. All significant intercompany accounts have
been eliminated in consolidation.

NOTE RECEIVABLE

The note receivable from Airlines is an unsecured, non-interest bearing demand
note for $1,000.

SHAREHOLDERS' EQUITY

There are 150,000,000 authorized shares of Holdings Common Stock. At September
25, 1996, 1,000 shares of Holdings Common Stock were issued and outstanding.
(See "Description of Business" above.)

USE OF ESTIMATES

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results inevitably will differ from those
estimates, and such differences may be material to the financial statements.

F-4
<PAGE> 42

EXHIBIT A

AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER
AMONG
ASA HOLDINGS, INC.
AND
ATLANTIC SOUTHEAST AIRLINES, INC.
AND
ATLANTIC SOUTHEAST MERGING CO.

THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (THIS
"AGREEMENT") IS ENTERED INTO THIS 6TH DAY OF NOVEMBER, 1996, BY AND AMONG ASA
HOLDINGS, INC., A GEORGIA CORPORATION ("HOLDINGS"), ATLANTIC SOUTHEAST
AIRLINES, INC., A GEORGIA CORPORATION ("AIRLINES"), AND ATLANTIC SOUTHEAST
MERGING CO., A GEORGIA CORPORATION ("MERGING CO.").

W I T N E S E T H :

WHEREAS, THE RESPECTIVE BOARDS OF DIRECTORS OF HOLDINGS, MERGING CO.
AND AIRLINES HAVE APPROVED THE MERGER OF MERGING CO. WITH AND INTO AIRLINES
(THE "MERGER") UPON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THIS
AGREEMENT, WHEREBY EACH ISSUED AND OUTSTANDING SHARE OF COMMON STOCK ("AIRLINES
COMMON STOCK"), PAR VALUE $0.10 PER SHARE, OF AIRLINES (WHICH SHALL NOT INCLUDE
TREASURY SHARES) WILL BE CONVERTED INTO THE RIGHT TO RECEIVE ONE (1) SHARE OF
COMMON STOCK, PAR VALUE $0.10 PER SHARE OF HOLDINGS ("HOLDINGS COMMON STOCK");

WHEREAS, ON SEPTEMBER 29, 1996 HOLDINGS, MERGING CO. AND AIRLINES
ENTERED INTO AN AGREEMENT AND PLAN OF MERGER (THE "ORIGINAL AGREEMENT");

WHEREAS, EACH OF HOLDINGS, MERGING CO. AND AIRLINES HAVE DETERMINED
THAT IT IS IN THEIR BEST INTEREST TO AMEND AND RESTATE THE ORIGINAL AGREEMENT
TO CLARIFY THAT AMENDMENTS SUBSEQUENT TO THE APPROVAL OF THE MERGER BY THE
SHAREHOLDERS OF AIRLINES AND MERGING CO. MAY ONLY BE EFFECTED IN THE EVENT THAT
SUCH AMENDMENTS DO NOT ADVERSELY IMPACT THE HOLDERS OF AIRLINES COMMON STOCK;

WHEREAS, THE MERGER REQUIRES THE APPROVAL OF THE HOLDERS OF A MAJORITY
OF THE OUTSTANDING SHARES OF THE AIRLINES COMMON STOCK ENTITLED TO VOTE THEREON
AT A MEETING OF HOLDERS OF AIRLINES COMMON STOCK TO BE CALLED THEREFOR (THE
"AIRLINES SHAREHOLDER APPROVAL") AND THE APPROVAL OF THE SOLE SHAREHOLDER OF
MERGING CO.; AND

WHEREAS, FOR FEDERAL INCOME TAX PURPOSES, IT IS INTENDED THE MERGER
SHALL QUALIFY AS AN EXCHANGE WITHIN THE MEANING OF SECTION 351(a) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND A REORGANIZATION
WITHIN THE MEANING OF SECTION 368(a)(1)(B) OF THE CODE.

NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUAL
AGREEMENTS OF THE PARTIES CONTAINED HEREIN AND IN ACCORDANCE WITH THE LAWS OF
THE STATE OF GEORGIA, THE PARTIES HERETO, INTENDING TO BE LEGALLY BOUND, DO
HEREBY AGREE AS FOLLOWS:

ARTICLE ONE

THE MERGER

SECTION 1.01. THE MERGER. UPON THE TERMS AND SUBJECT TO THE
CONDITIONS SET FORTH IN THIS AGREEMENT, AND IN ACCORDANCE WITH THE GEORGIA
BUSINESS CORPORATION CODE (THE "GBCC"), MERGING CO. SHALL BE MERGED WITH AND
INTO AIRLINES AT THE EFFECTIVE TIME (AS DEFINED BELOW). FOLLOWING THE
EFFECTIVE

<PAGE> 43

TIME, THE SEPARATE CORPORATE EXISTENCE OF MERGING CO. SHALL CEASE AND AIRLINES
SHALL CONTINUE AS THE SURVIVING CORPORATION (THE "SURVIVING CORPORATION") AND
SHALL SUCCEED TO AND ASSUME ALL THE RIGHTS AND OBLIGATIONS OF MERGING CO. IN
ACCORDANCE WITH THE GBCC.

SECTION 1.02. CLOSING. THE CLOSING OF THE MERGER (THE "CLOSING")
WILL TAKE PLACE AT 10:00 A.M. ON A DATE TO BE SPECIFIED BY THE PARTIES (THE
"CLOSING DATE"), WHICH SHALL BE NO LATER THAN THE SECOND BUSINESS DAY AFTER
SATISFACTION OF THE CONDITIONS SET FORTH IN SECTION 4.01, AT THE OFFICES OF
ALTMAN, KRITZER & LEVICK, 6400 POWERS FERRY ROAD, ATLANTA, GEORGIA 30339,
UNLESS ANOTHER DAY OR PLACE IS AGREED TO IN WRITING BY THE PARTIES HERETO.

SECTION 1.03. EFFECTIVE TIME. SUBJECT TO THE PROVISIONS OF THIS
AGREEMENT, ON OR AFTER THE CLOSING DATE THE PARTIES SHALL FILE A CERTIFICATE OF
MERGER OR OTHER APPROPRIATE DOCUMENTS (IN ANY SUCH CASE, THE "CERTIFICATE OF
MERGER") EXECUTED IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF THE GBCC AND
SHALL MAKE ALL OTHER FILINGS OR RECORDINGS REQUIRED UNDER THE GBCC. THE MERGER
SHALL BECOME EFFECTIVE AFTER THE CLOSE OF BUSINESS ON DECEMBER 31, 1996 AT
11:59 P.M., OR AT SUCH OTHER TIME AS MAY BE SPECIFIED IN THE CERTIFICATE OF
MERGER (THE TIME THE MERGER BECOMES EFFECTIVE BEING HEREINAFTER REFERRED TO AS
THE "EFFECTIVE TIME").

SECTION 1.04. EFFECT OF THE MERGER. THE MERGER SHALL HAVE THE
EFFECT SET FORTH IN SECTION 14-2-1106 OF THE GBCC.

SECTION 1.05. ARTICLES OF INCORPORATION AND BYLAWS.

(A) ARTICLES OF INCORPORATION. THE ARTICLES OF
INCORPORATION OF MERGING CO., AS IN EFFECT AT THE EFFECTIVE TIME, SHALL BE THE
ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION FOLLOWING THE MERGER
UNTIL AMENDED AS PROVIDED BY LAW.

(B) BYLAWS. THE BYLAWS OF MERGING CO., AS IN EFFECT AT
THE EFFECTIVE TIME, SHALL BE THE BYLAWS OF THE SURVIVING CORPORATION UNTIL
AMENDED AS PROVIDED BY LAW.

SECTION 1.06. DIRECTORS. THE DIRECTORS OF MERGING CO. AT THE
EFFECTIVE TIME SHALL BE THE DIRECTORS OF THE SURVIVING CORPORATION, UNTIL THE
EARLIER OF THEIR RESIGNATION OR REMOVAL OR UNTIL THEIR RESPECTIVE SUCCESSORS
ARE DULY ELECTED AND QUALIFIED, AS THE CASE MAY BE.

SECTION 1.07. OFFICERS. THE OFFICERS OF AIRLINES AT THE EFFECTIVE
TIME SHALL BE THE OFFICERS OF THE SURVIVING CORPORATION, UNTIL THE EARLIER OF
THEIR RESIGNATION OR REMOVAL OR UNTIL THEIR RESPECTIVE SUCCESSORS ARE DULY
ELECTED AND QUALIFIED, AS THE CASE MAY BE.

ARTICLE TWO

EFFECT ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES

SECTION 2.01. EFFECT ON CAPITAL STOCK. AS OF THE EFFECTIVE TIME,
BY VIRTUE OF THE MERGER AND WITHOUT ANY ACTION ON THE PART OF THE HOLDER OF ANY
SHARES OF AIRLINES COMMON STOCK OR THE HOLDER OF ANY SHARES OF CAPITAL STOCK OF
MERGING CO.:

A-2
<PAGE> 44

(A) CAPITAL STOCK OF MERGING CO. EACH ISSUED AND
OUTSTANDING SHARE OF CAPITAL STOCK OF MERGING CO. SHALL BE CONVERTED INTO AND
BECOME ONE FULLY PAID AND NON-ASSESSABLE SHARE OF COMMON STOCK, PAR VALUE $0.10
PER SHARE, OF THE SURVIVING CORPORATION. THE NUMBER OF SHARES OF COMMON STOCK
OF THE SURVIVING CORPORATION OUTSTANDING AFTER THE EFFECTIVE TIME SHALL BE THE
SAME AS THE NUMBER OF SHARES OF CAPITAL STOCK OF MERGING CO. OUTSTANDING
IMMEDIATELY PRIOR TO THE EFFECTIVE TIME, AND ALL OF SUCH SHARES OF OUTSTANDING
COMMON STOCK OF THE SURVIVING CORPORATION SHALL BE HELD BY HOLDINGS.
CONTEMPORANEOUSLY WITH THE CONVERSION OF THE SHARES OF MERGING CO. COMMON
STOCK, THE PROMISSORY NOTE MADE BY HOLDINGS IN CONNECTION WITH THE ACQUISITION
OF SUCH SHARES SHALL BE CANCELLED.

(B) CANCELLATION OF AIRLINES-OWNED STOCK. EACH SHARE OF
HOLDINGS COMMON STOCK AND AIRLINES COMMON STOCK THAT IS OWNED BY AIRLINES SHALL
AUTOMATICALLY BE CANCELED AND RETIRED AND SHALL CEASE TO EXIST, AND NO HOLDINGS
COMMON STOCK OR OTHER CONSIDERATION SHALL BE DELIVERED IN EXCHANGE FOR SUCH
CANCELED AND RETIRED HOLDINGS COMMON STOCK OR AIRLINES COMMON STOCK.
CONTEMPORANEOUSLY WITH THE CANCELLATION OF THE SHARES OF HOLDINGS COMMON STOCK
OWNED BY AIRLINES, THE PROMISSORY NOTE MADE BY AIRLINES IN FAVOR OF HOLDINGS IN
CONNECTION WITH THE ACQUISITION OF SUCH SHARES SHALL BE CANCELLED.

(C) CONVERSION OF AIRLINES COMMON STOCK. EXCEPT AS
PROVIDED IN SECTION 2.01(b), EACH ISSUED AND OUTSTANDING SHARE OF AIRLINES
COMMON STOCK SHALL BE CONVERTED INTO THE RIGHT TO RECEIVE ONE FULLY PAID AND
NON-ASSESSABLE SHARE OF HOLDINGS COMMON STOCK. AS OF THE EFFECTIVE TIME, ALL
SUCH SHARES OF AIRLINES COMMON STOCK SHALL NO LONGER BE OUTSTANDING AND SHALL
AUTOMATICALLY BE CANCELED AND RETIRED AND SHALL CEASE TO EXIST, AND EACH HOLDER
OF A CERTIFICATE REPRESENTING ANY SUCH SHARES OF AIRLINES COMMON STOCK SHALL
CEASE TO HAVE ANY RIGHTS WITH RESPECT THERETO, EXCEPT THE RIGHT (AS PROVIDED IN
THIS SECTION 2.01(c), TO RECEIVE THE SHARES OF HOLDINGS COMMON STOCK TO BE
ISSUED IN CONSIDERATION THEREFOR UPON SURRENDER OF SUCH CERTIFICATE IN
ACCORDANCE WITH SECTION 2.02, WITHOUT INTEREST.

(D) SARS. EACH ISSUED AND OUTSTANDING STOCK APPRECIATION
RIGHT ("SAR") GRANTED PURSUANT TO THE 1990 STOCK APPRECIATION RIGHTS PLAN OF
AIRLINES (THE "PLAN") SHALL PERTAIN TO AND APPLY TO THE SAME NUMBER AND KIND OF
SHARES OF HOLDINGS COMMON STOCK TO WHICH THE HOLDER OF THE SAR COULD HAVE BEEN
ENTITLED HAD HE ON THE RECORD DATE OF THE MERGER BEEN THE RECORD HOLDER OF THE
NUMBER OF SHARES OF AIRLINES COMMON STOCK SUBJECT TO THE SAR. IT WILL NOT BE
NECESSARY FOR THE HOLDER OF ANY SUCH SAR TO DELIVER THE AWARD (AS DEFINED IN
THE PLAN) PERTAINING THERETO TO HOLDINGS FOR AMENDMENT OR MODIFICATION IN ANY
RESPECT. AT THE EFFECTIVE TIME, AS A RESULT OF HOLDINGS BECOMING THE PARENT OF
AIRLINES, HOLDINGS SHALL (i) BECOME A SPONSOR OF THE PLAN, WHICH SHALL CONTINUE
TO PROVIDE THAT ONLY EMPLOYEES OF AIRLINES SHALL BE QUALIFIED PARTICIPANTS OF
THE PLAN, AND (ii) ASSUME THE PLAN AND ALL OF THE OBLIGATIONS OF AIRLINES UNDER
THE PLAN. THE PLAN SHALL BE AMENDED TO REFLECT THE IMPLEMENTATION OF THE
PRECEDING SENTENCE, AS WELL AS ANY OTHER CHANGES APPROPRIATE AS A RESULT OF THE
MERGER.

SECTION 2.02. EXCHANGE OF CERTIFICATES.

(A) STOCK CERTIFICATE. FOLLOWING THE EFFECTIVE TIME,
EACH HOLDER OF AN OUTSTANDING CERTIFICATE OR CERTIFICATES THERETOFORE
REPRESENTING SHARES OF AIRLINES COMMON STOCK MAY, BUT SHALL NOT BE REQUIRED TO,
SURRENDER THE SAME TO HOLDINGS FOR CANCELLATION OR TRANSFER, AND EACH SUCH
HOLDER OR TRANSFEREE WILL BE ENTITLED TO RECEIVE CERTIFICATES REPRESENTING THE
SAME NUMBER OF SHARES OF HOLDINGS COMMON STOCK AS THE SHARES OF AIRLINES COMMON
STOCK PREVIOUSLY REPRESENTED BY THE STOCK CERTIFICATES SURRENDERED. IF ANY
CERTIFICATE REPRESENTING SHARES OF HOLDINGS COMMON STOCK IS TO BE ISSUED IN A
NAME OTHER THAN THAT IN WHICH THE CERTIFICATE THERETOFORE REPRESENTING THE
AIRLINES COMMON STOCK SURRENDERED IS REGISTERED, IT SHALL BE A CONDITION TO
SUCH ISSUANCE THAT THE CERTIFICATES SURRENDERED SHALL BE PROPERLY

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<PAGE> 45

ENDORSED AND OTHERWISE IN PROPER FORM FOR TRANSFER AND THE PERSON REQUESTING
SUCH ISSUANCE SHALL EITHER:

(I) PAY HOLDINGS OR ITS AGENTS ANY TAXES OR OTHER
GOVERNMENTAL CHARGES REQUIRED BY REASON OF THE ISSUANCE OF CERTIFICATES
REPRESENTING SHARES OF HOLDINGS COMMON STOCK IN A NAME OTHER THAN THAT OF THE
REGISTERED HOLDER OF THE CERTIFICATE SO SURRENDERED; OR

(II) ESTABLISH TO THE SATISFACTION OF HOLDINGS OR
ITS AGENTS THAT SUCH TAXES OR GOVERNMENTAL CHARGES HAVE BEEN PAID.

UNTIL SO SURRENDERED OR PRESENTED FOR TRANSFER, EACH OUTSTANDING CERTIFICATE
WHICH, PRIOR TO THE EFFECTIVE TIME, REPRESENTED AIRLINES COMMON STOCK SHALL BE
DEEMED AND TREATED FOR ALL CORPORATE PURPOSES TO REPRESENT THE OWNERSHIP OF THE
SAME NUMBER OF SHARES OF HOLDINGS COMMON STOCK AS THOUGH SUCH SURRENDER OR
TRANSFER OR EXCHANGE HAD TAKEN PLACE.

(B) NO FURTHER OWNERSHIP RIGHTS IN AIRLINES COMMON STOCK.
ALL SHARES OF HOLDINGS COMMON STOCK ISSUED IN ACCORDANCE WITH THE TERMS OF THIS
ARTICLE TWO SHALL BE DEEMED TO HAVE BEEN ISSUED (AND PAID) IN FULL SATISFACTION
OF ALL RIGHTS PERTAINING TO THE SHARES OF AIRLINES COMMON STOCK THERETOFORE
REPRESENTED BY SUCH CERTIFICATE, SUBJECT, HOWEVER, TO THE SURVIVING
CORPORATION'S OBLIGATION TO PAY DIVIDENDS OR MAKE ANY OTHER DISTRIBUTIONS WITH
A RECORD DATE PRIOR TO THE EFFECTIVE TIME WHICH MAY HAVE BEEN DECLARED OR MADE
BY AIRLINES ON SUCH SHARES OF AIRLINES COMMON STOCK PRIOR TO THE DATE OF THIS
AGREEMENT AND WHICH REMAIN UNPAID AT THE EFFECTIVE TIME. THERE SHALL BE NO
FURTHER REGISTRATION OF TRANSFERS ON THE STOCK TRANSFER BOOKS OF THE SURVIVING
CORPORATION OF THE SHARES OF AIRLINES COMMON STOCK, WHICH WERE OUTSTANDING
IMMEDIATELY PRIOR TO THE EFFECTIVE TIME.

ARTICLE THREE

CONDITIONS PRECEDENT

SECTION 3.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. THE RESPECTIVE OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER ARE
SUBJECT TO THE SATISFACTION OR WAIVER ON OR PRIOR TO THE CLOSING DATE OF THE
FOLLOWING CONDITIONS:

(A) SHAREHOLDER APPROVAL. THE AIRLINES SHAREHOLDER
APPROVAL AND THE APPROVAL OF THE SOLE SHAREHOLDER OF HOLDINGS SHALL HAVE BEEN
OBTAINED.

(B) FORM S-4. THE REGISTRATION STATEMENT ON FORM S-4
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY HOLDINGS IN CONNECTION
WITH THE ISSUANCE OF HOLDINGS COMMON STOCK IN THE MERGER SHALL HAVE BECOME
EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SHALL NOT BE THE
SUBJECT OF ANY STOP ORDER OR PROCEEDINGS SEEKING A STOP ORDER.

(C) TAX OPINION. AIRLINES SHALL HAVE RECEIVED FROM ERNST
& YOUNG, LLP, AIRLINES' CERTIFIED PUBLIC ACCOUNTING FIRM AN OPINION STATING THE
MERGER WILL BE TREATED FOR FEDERAL INCOME TAX PURPOSES AS AN EXCHANGE WITHIN
THE MEANING OF SECTION 351(a) OF THE CODE AND A REORGANIZATION WITHIN THE
MEANING OF SECTION 368(a)(1)(B) OF THE CODE.

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<PAGE> 46

(D) NASDAQ/NMS APPROVAL. THE SHARES OF HOLDINGS COMMON
STOCK TO BE ISSUED IN THE MERGER SHALL HAVE BEEN APPROVED FOR LISTING ON THE
NASDAQ STOCK MARKET'S NATIONAL MARKET SYSTEM.

ARTICLE FOUR

TERMINATION, AMENDMENT AND WAIVER

SECTION 4.01. TERMINATION. THIS AGREEMENT MAY BE TERMINATED AT ANY
TIME PRIOR TO THE EFFECTIVE TIME, WHETHER BEFORE OR AFTER THE AIRLINES
SHAREHOLDER APPROVAL, BY THE BOARD OF DIRECTORS OF EITHER AIRLINES OR HOLDINGS.

SECTION 4.02. EFFECT OF TERMINATION. IN THE EVENT OF TERMINATION
OF THIS AGREEMENT AS PROVIDED IN SECTION 4.01, THIS AGREEMENT SHALL FORTHWITH
BECOME VOID AND HAVE NO EFFECT, WITHOUT ANY LIABILITY OR OBLIGATION ON THE PART
OF HOLDINGS, MERGING CO. OR AIRLINES.

SECTION 4.03. AMENDMENT. THIS AGREEMENT MAY BE AMENDED BY THE
PARTIES HERETO AT ANY TIME BEFORE OR AFTER THE AIRLINES SHAREHOLDER APPROVAL;
PROVIDED, HOWEVER, THAT AFTER ANY SUCH AIRLINES SHAREHOLDER APPROVAL, THERE
SHALL BE MADE NO AMENDMENT THAT ADVERSELY IMPACTS THE HOLDERS OF AIRLINES
COMMON STOCK OR THAT BY LAW REQUIRES FURTHER APPROVAL BY THE AIRLINES
SHAREHOLDERS WITHOUT THE FURTHER APPROVAL OF SUCH SHAREHOLDERS. THIS AGREEMENT
MAY NOT BE AMENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED ON BEHALF OF EACH
OF THE PARTIES.

SECTION 4.04. WAIVER. AT ANY TIME PRIOR TO THE EFFECTIVE TIME, ANY
PARTY HERETO MAY WAIVE COMPLIANCE BY ANY OTHER PARTY OR PARTIES HERETO WITH ANY
OF THE AGREEMENTS OR CONDITIONS CONTAINED IN THIS AGREEMENT. ANY AGREEMENT ON
THE PART OF A PARTY TO ANY SUCH WAIVER SHALL BE VALID ONLY IF SET FORTH IN AN
INSTRUMENT IN WRITING SIGNED ON BEHALF OF SUCH PARTY. THE FAILURE OF ANY PARTY
TO THIS AGREEMENT TO ASSERT ANY OF ITS RIGHTS UNDER THE AGREEMENT OR OTHERWISE
SHALL NOT CONSTITUTE A WAIVER OF SUCH RIGHTS.

ARTICLE FIVE

GENERAL PROVISIONS

SECTION 5.01. NOTICES. ALL NOTICES, REQUESTS, CLAIMS, DEMANDS AND
OTHER COMMUNICATIONS UNDER THIS AGREEMENT SHALL BE IN WRITING AND SHALL BE
DEEMED GIVEN IF DELIVERED PERSONALLY, TELECOPIED (WHICH IS CONFIRMED) OR SENT
BY OVERNIGHT COURIER (PROVIDING PROOF OF DELIVERY) TO EACH OF THE PARTIES
DELIVERED TO ATLANTIC SOUTHEAST AIRLINES, INC., 100 HARTSFIELD CENTRE PARKWAY,
SUITE 800, ATLANTA, GEORGIA 30354 TO THE ATTENTION OF JOHN W. BEISER (OR TO
SUCH OTHER ADDRESS FOR A PARTY AS SHALL BE SPECIFIED BY LIKE NOTICE).

SECTION 5.02. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.
THIS AGREEMENT (i) CONSTITUTES THE ENTIRE AGREEMENT, AND SUPERSEDES ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS, BOTH WRITTEN AND ORAL, AMONG THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT AND (ii) EXCEPT FOR THE
PROVISIONS OF ARTICLE TWO, ARE NOT INTENDED TO CONFER UPON ANY PERSON OTHER
THAN THE PARTIES HERETO ANY RIGHTS OR REMEDIES.

SECTION 5.03. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA, REGARDLESS
OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF.

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<PAGE> 47

IN WITNESS WHEREOF, HOLDINGS, MERGER CO. AND AIRLINES HAVE CAUSED THIS
AGREEMENT TO BE SIGNED BY THEIR RESPECTIVE OFFICERS THEREUNTO DULY AUTHORIZED,
ALL AS OF THE DATE FIRST ABOVE WRITTEN.

SWORN TO, SIGNED, SEALED AND DELIVERED ASA HOLDINGS, INC.
BEFORE ME, THIS 6TH DAY OF NOVEMBER,
1996, IN THE PRESENCE OF:

/s/ R. Mark Bole BY: /s/ George F. Pickett
- --------------------------------- ------------------------------
WITNESS

/s/ Debora L. Nash
- ---------------------------------
NOTARY PUBLIC

MY COMMISSION EXPIRES: Notary Public, Fayette County, Georgia
My Commission Expires June 9, 2000

(Notarial Seal)

SWORN TO, SIGNED, SEALED AND DELIVERED ATLANTIC SOUTHEAST AIRLINES, INC.
BEFORE ME, THIS 6TH DAY OF NOVEMBER,
1996, IN THE PRESENCE OF:

/s/ R. Mark Bole BY: /s/ George F. Pickett
- --------------------------------- ------------------------------
WITNESS

/s/ Debora L. Nash
- ---------------------------------
NOTARY PUBLIC

MY COMMISSION EXPIRES: Notary Public, Fayette County, Georgia
My Commission Expires June 9, 2000

(Notarial Seal)

(SIGNATURES CONTINUED ON NEXT PAGE)

A-6
<PAGE> 48

(SIGNATURES CONTINUED FROM PREVIOUS PAGE)

SWORN TO, SIGNED, SEALED AND DELIVERED ATLANTIC SOUTHEAST MERGING CO.
BEFORE ME, THIS 6TH DAY OF NOVEMBER,
1996, IN THE PRESENCE OF:

/S/ R. Mark Bole BY: /s/ John W. Beiser
- --------------------------------- ------------------------------
WITNESS

/s/ Debra L. Nash
- ---------------------------------
NOTARY PUBLIC

MY COMMISSION EXPIRES: Notary Public, Fayette County, Georgia
My Commission Expires June 9, 2000

(Notarial Seal)

A-7
<PAGE> 49

[back cover]
TABLE OF CONTENTS

<TABLE>
<S> <C>
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
THE PROPOSED REORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Companies Involved in the Proposed Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Other Reorganization Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Reasons for the Proposed Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Terms of the Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Recommendation of Airlines' Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Dissenter's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Regulatory Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
EFFECT ON RIGHTS OF HOLDERS OF AIRLINES COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
THE SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Time, Date and Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Record Date and Shares Entitled to Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Vote Required; Security Ownership of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Action to be Taken Under the Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ASA HOLDINGS CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Certain Effects of Authorized But Unissued Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Registrant and Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Market for Securities and Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Shareholder Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
AIRLINES CAPITAL STOCK AND PRINCIPAL HOLDERS THEREOF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Certain Effects of Authorized but Unissued Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Registrar and Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Market for Securities and Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Security Ownership of Management and Certain Beneficial Owners . . . . . . . . . . . . . . . . . . . . . . . 22
BUSINESS AND MANAGEMENT OF AIRLINES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Limitation on Liability and Indemnification of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . 25
BUSINESS AND MANAGEMENT OF ASA HOLDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Financial Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Limitation on Liability and Indemnification of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . 28
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Action on Other Matters at the Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Shareholders' Proposals for 1997 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
FINANCIAL STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>

<PAGE> 50

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant's Articles of Incorporation provide that directors of
the Registrant will not be personally liable for monetary damages to the
Registrant or its shareholders for any action taken, or any failure to take any
action, as directors to the fullest extent permitted by the GBCC. Under
current Georgia law, directors would remain liable for: (i) any appropriation,
in violation of his duties, of any business opportunity of the corporation;
(ii) acts or omissions that involve intentional misconduct or a knowing
violation of law; (iii) approval of certain unlawful distributions to
shareholders in excess of amounts legally available for such distributions; and
(iv) any transaction from which the director received an improper personal
benefit. In appropriate circumstances, equitable remedies or nonmonetary
relief, such as an injunction, will remain available to a shareholder seeking
redress from any such violation. In addition, the provision applies only to
claims against a director arising out of his role as a director and not in any
other capacity (such as an officer or employee of the Registrant).

The Bylaws of the Registrant and the GBCC provide that the Registrant
will indemnify its directors and officers, and persons serving at the request
of the Registrant as a director, officer, partner, trustee, employee or agent
of another domestic or foreign corporation, partnership, joint venture, trust,
employee benefit plan or other entity, against all obligations to pay expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by any such person in connection with
threatened, pending or completed actions, suits or proceedings, whether civil,
criminal, administrative or investigative and whether formal or informal, to
which such person becomes subject by having served in such role. Such
indemnification shall be made if such person acted in good faith and he
reasonably believed (x) in the case of conduct in his official capacity, that
such conduct was in the best interest of the Registrant, (y) in all other cases
that such conduct was at least not opposed to the best interests of the
Registrant and, (2) with respect to any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful. An individual's conduct with
respect to an employee benefit plan for a purpose he believed in good faith to
be in the interests of the participants and the beneficiaries is conduct that
meets the above standard. The termination of any action, suit or proceeding by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, will not, of itself, be determinative that such person did not
meet the above standard. With respect to actions by or on behalf of the
Registrant, the foregoing indemnification pursuant to the Bylaws shall not be
paid for judgments, fines, or amounts paid in settlement, but shall be paid for
reasonable expenses (including attorneys' fees) actually incurred in connection
with such actions, suits or proceedings. Notwithstanding the foregoing, no
indemnification shall be made in respect of any claim, issue or matter as to
which any person shall have been adjudged to be liable to the Registrant unless
and only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but in view of all relevant circumstances, it is fair and reasonable to
indemnify such person for such expenses which the court shall deem proper.

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<PAGE> 51

disinterested directors of the Registrant, a resolution adopted by a majority
vote of all disinterested directors of the Registrant (a majority of whom shall
for such purpose constitute a quorum) or by a majority of a committee of two or
more disinterested directors appointed by such a vote, or if such a quorum of
disinterested directors can not be obtained, by independent counsel in a
written opinion, (c) a resolution adopted by a majority in the interest of the
shares of the Registrant entitled to vote at any meeting, but shares owned by
or voted under the control of a director who at the time does not qualify as a
disinterested director may not be voted on the determination, or (d) order of
any court having jurisdiction over the Registrant. A majority of the members
of the Board of Directors of the Registrant who were not parties to such
action, suit or proceeding or a majority in interest of the shares of the
Registrant entitled to vote shall be authorized to pay to any person entitled
to indemnification all actual expenses incurred in connection with such action,
suit or proceeding during the pendency thereof.

Pursuant to Registrant's Bylaws and the GBCC, if any amounts are paid
by way of indemnification, other then pursuant to a court order or action by
the shareholders or by an insurance carrier pursuant to insurance maintained by
Registrant, then Registrant is required to send notice to all shareholders of
record of the person paid, the amounts paid and the status at the time of such
payment of the ligation or threatened litigation.

The Registrant maintains a directors' and officers' liability
insurance policy covering certain losses arising from claims made against them
by reason of wrongful acts (with certain exceptions) committed by them in their
capacities as directors and officers. The insurer's limit of liability under
the policy is $10 million per policy year, subject to the exceptions and other
limitations set forth therein. The Registrant also maintains a directors' and
officers' excess liability insurance policy covering certain losses arising
from claims made against them by reason of wrongful acts (with certain
exceptions) committed by them in their capacities as directors and officers.
The insurer's limit of liability under this policy is also $10 million per
policy year, subject to the exceptions and other limitations set forth therein.

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
Registrant pursuant to the foregoing provisions, the Commission requires
disclosure that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, in their
opinion, therefore unenforceable.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(A) EXHIBIT INDEX

2 Amended and Restated Agreement and Plan of Merger (Attached as
Exhibit A to the Proxy Statement/Prospectus forming a part of
this Registration Statement)
3(a) Articles of Incorporation*
3(b) Bylaws*
4 Instruments defining the rights of security holders, including
indentures. See Exhibits 3(a) and 3(b).
5 Opinion of Altman, Kritzer & Levick, P.C.*
8 Tax Opinion of Ernst & Young LLP
21 List of Subsidiaries of the Registrant*
23(a) Consent of Altman, Kritzer & Levick, P.C. (included in
Exhibit 5)*
23(b) Consent of Ernst & Young LLP
24 Powers of Attorney*

* Previously filed

II-2
<PAGE> 52

(B) THE FINANCIAL STATEMENT SCHEDULES FILED AS PART OF THIS
REGISTRATION STATEMENT ARE AS FOLLOWS:

None.

Schedules other than any listed above have been omitted because they
are not applicable or required under the accounting regulations and related
instructions of the Securities and Exchange Commission.

ITEM 22. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10
(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in the registration statement; and

(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement.

(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.

(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(c) The undersigned Registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder through
use of a prospectus which is a part of this Registration Statement, by any
person or party who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.

(d) The Registrant undertakes that every prospectus (i) that is
filed pursuant to the immediately preceding paragraph, or (ii) that purports to
meet the requirements of section 10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(f) The undersigned Registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other

II-3
<PAGE> 53

equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the Registration Statement through the date
of responding to the request.

(g) The undersigned Registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the subject of
and included in the Registration Statement when it became effective.

II-4
<PAGE> 54

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized on November 7, 1996.

ASA HOLDINGS, INC.

By: /s/ George F. Pickett
------------------------------
George F. Pickett
Chairman of the Board and Chief
Executive Officer (Principal
Executive Officer)

II-5
<PAGE> 55

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:

<TABLE>
<S> <C>
/s/ George F. Pickett November 7, 1996
- ----------------------------------------
George F. Pickett, Chairman of the Board
and Chief Executive Officer (Principal
Executive Officer) and Director

/s/ John W. Beiser* November 7, 1996
- ----------------------------------------
John W. Beiser, President, Secretary
and Director

/s/ Ronald V. Sapp* November 7, 1996
- ----------------------------------------
Ronald V. Sapp, Vice President Finance
and Treasurer (Principal Financial and
Accounting Officer)

/s/ Jean A. Mori* November 7, 1996
- ----------------------------------------
Jean A. Mori, Director

/s/ Parker H. Petit* November 7, 1996
- ----------------------------------------
Parker H. Petit, Director

/s/ Ralph W. Voorhees*
- ---------------------------------------- November 7, 1996
Ralph W. Voorhees, Director

/s/ Alan M. Voorhees* November 7, 1996
- ----------------------------------------
Alan M. Voorhees, Director
</TABLE>

* By: /s/ George F. Pickett
--------------------------------------
George F. Pickett, as attorney-in-fact

II-6
<PAGE> 56

EXHIBIT INDEX

Exhibit Number and Description

2 Amended and Restated Agreement and Plan of Merger (Attached as
Exhibit A to the Proxy Statement/Prospectus forming a part of
this Registration Statement).
3(a) Articles of Incorporation*
3(b) Bylaws*
4 Instruments defining the rights of security holders, including
indentures. See Exhibits 3(a) and 3(b).
5 Opinion of Altman, Kritzer & Levick, P.C.*
8 Tax Opinion of Ernst & Young LLP
21 List of Subsidiaries of Registrant*
23(a) Consent of Altman, Kritzer & Levick, P.C. (included in
Exhibit 5)
23(b) Consent of Ernst & Young LLP
24 Powers of Attorney*

* Previously filed

<PAGE> 57

APPENDIX A

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD DECEMBER 19, 1996

ATLANTIC SOUTHEAST AIRLINES, INC.

The undersigned hereby appoints John W. Beiser and George F. Pickett,
or either of them, as Proxies, each with the power to appoint his substitute
and hereby authorizes them to represent and to vote, as designated on the
reverse side, all the shares of common stock of Atlantic Southeast Airlines,
Inc. held of record on October 25,1996, at the Special Meeting of the
Shareholders to be held on Thursday, December 19, 1996, at 11:00 A.M. at the
Cobb Galleria Centre, Meeting Rooms 117-118, Two Galleria Parkway, Atlanta,
Georgia or any adjournment thereof.

(Continued and to be signed on the reverse side)

THIS PROXY, DULY EXECUTED, WILL BE VOTED Please mark your votes
AS SPECIFIED. IF NO DIRECTION IS MADE, as indicated in
THIS PROXY WILL BE VOTED FOR PROPOSAL 1. this example /X/

1. Adoption and approval of the proposed reorganization of the corporate
structure of Atlantic Southeast Airlines, Inc., including the formation of a
holding company, and the adoption and approval of the Agreement and Plan of
Merger dated September 25, 1996, among Atlantic Southeast Airlines, Inc., ASA
Holdings, Inc. and Atlantic Southeast Merging Co.

FOR AGAINST ABSTAIN
/ / / / / /

2. In their discretion, the Proxies are authorized
to vote upon such other business as may come before
the meeting or adjournment thereof. I PLAN TO ATTEND / /

The undersigned hereby acknowledges
receipt of the Proxy Statement and
Notice of Annual Meeting to be held
December 19, 1996.

Dated:_______________________, 1996

______________________________(Seal)

(Please sign exactly as your name
appears hereon. If shares are
registered in more than one name,
each holder should sign. When signing
as an attorney, administrator,
executor, guardian, conservator,
receiver or trustee, please add your
title as such. If executed by a
corporation, the proxy should be signed
by a duly authorized officer or agent.)

PLEASE SIGN, DATE AND PROMPTLY RETURN
THIS PROXY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.

<PAGE> 1

EXHIBIT 8

TAX OPINION OF ERNST & YOUNG LLP

Ernst & Young LLP Suite 2800 Phone: 404 874 8300
600 Peachtree Street
Atlanta, Georgia 30308-2215

November 7, 1996

Atlantic Southeast Airlines, Inc.
ASA Holdings, Inc.
100 Hartsfield Centre Parkway, Suite 800
Atlanta, Georgia 30354

You have requested our opinion as to certain Federal income tax
consequences arising from the merger of a newly created subsidiary of ASA
Holdings, Inc. ("Holdings"), which is a newly created subsidiary of Atlantic
Southeast Airlines, Inc. ("ASA"), with and into ASA ("the Holding Company
Formation"), and the subsequent distribution of the stock of ASA Investments,
Inc. ("ASAI") by ASA to Holdings ("the Distribution"), as discussed below. In
rendering this opinion, we have relied upon the information set forth below
under the heading "Facts" and the information, presented by the management of
ASA and Holdings to us in the following documents (the "Documents"):

1. The Statement of Facts and Representations, dated November 7,
1996 (the "Statement of Facts and Representations"), provided by the
management of ASA and Holdings;

2. The Amended and Restated Agreement and Plan of Merger among
Holdings, ASA and Atlantic Southeast Merging Co. ("MergerSub") dated
November 6, 1996; and

3. The Form S-4 Registration Statement Under the Securities Act of
1933 and accompanying exhibits dated November 7, 1996 (hereinafter
collectively referred to as the "Registration Statement").

You have advised us that the information contained in the Documents, and as
set forth below, provide an accurate and complete description of the facts and
circumstances concerning the Holding Company Formation and the Distribution. We
have made no independent determination regarding such facts and circumstances
and, therefore, have relied upon the information set forth below under the
heading "Facts" and in the Documents for purposes of this opinion. Any changes
to the information or to the Documents may affect the conclusions stated herein.

We understand that you will include a reference to Ernst & Young LLP and
our opinion in the Registration Statement, and will include a copy of our
opinion as an exhibit thereto. Subject to our prior review and approval, we
consent to such reference and a copy of our opinion with that filing.

Ernst & Young LLP is a member of Ernst & Young International, Ltd.
<PAGE> 2

Atlantic Southeast Airlines, Inc. Page 2
ASA Holdings, Inc. November 7, 1996

FACTS

You have represented to us certain facts and circumstances contained in the
Statement of Facts and Representations. Additionally, you have represented the
following to us:

ASA is a Georgia corporation formed in 1979 which is engaged in the
operation of a regional airline. ASA has a marketing agreement with Delta Air
Lines, Inc. ("Delta") whereby its flights are listed as Delta connecting
flights. In addition to operating the airline, ASA also owns and leases
equipment, property, and facilities used to operate the airline.

ASA is authorized to issue up to 50,000,000 shares of common stock ("ASA
Common Stock"), $0.10 par value per share, of which approximately 30,113,570
shares of the ASA Common Stock are outstanding, and no shares of any other class
are authorized or outstanding.

Delta Airlines Holdings, Inc., a wholly owned subsidiary of Delta, owns
approximately 26.5 percent of ASA's outstanding stock. The remaining shares are
owned by the public. Additionally, pursuant to reports filed with the Securities
and Exchange Commission, and information provided to management of ASA, (i)
Fidelity Management & Research Company ("Fidelity") is the manager of numerous
separate diversified, open-end management investment companies commonly referred
to as mutual funds, (ii) Fidelity manages mutual funds which own, in the
aggregate, approximately 10 percent of ASA's outstanding stock, (iii) management
of ASA and Holdings have no knowledge that any single Fidelity mutual fund owns
5 percent or more of ASA's outstanding stock. All of ASA's shares are traded on
The Nasdaq Stock Market's National Market System.

Since 1987, ASA has had a stock repurchase program in effect which permits
its management, in its discretion, to purchase shares of ASA Common Stock when
it deems it appropriate. As a result of prior purchases under this program,
shares have been purchased and held by ASA as treasury stock. These shares were
purchased by ASA because management believed that such purchases were a good
investment of ASA's resources based on existing market conditions. As part of
the Holding Company Formation, ASA will cancel all of its treasury shares.

ASAI, a Delaware corporation incorporated on July 15, 1986, is a wholly
owned subsidiary of ASA. The sole business of ASAI has been to invest certain
cash assets contributed to it by ASA. ASAI has total assets with a fair market
value of approximately $150 million.

Holdings, a Georgia corporation, was formed by ASA to act as the direct
holding company of ASA and ASAI upon the consummation of the Holding Company
Formation and the Distribution. Holdings is authorized to issue up to
150,000,000 shares of common stock (the "Holdings Common Stock"), $0.10 par
value, and no other shares of any other class are authorized. Immediately prior
to the Holding Company Formation, there will be no shares of Holdings Common
Stock issued and outstanding other than the shares held by ASA. The management
of ASA and Holdings expect that Holdings will have a stock repurchase program
similar to ASA's.

It is anticipated after the consummation of the Holding Company Formation,
the Stock Purchase Agreement dated May 28, 1986 between ASA and Delta will be
modified making Holdings a party and providing Delta with the right to nominate
up to two directors to Holdings' Board of Directors so long as Delta continues
to own (directly or indirectly) at least 10 percent of the outstanding Holdings
Common Stock after the Holding Company Formation.
<PAGE> 3

Atlantic Southeast Airlines, Inc. Page 3
ASA Holdings, Inc. November 7, 1996

MergerSub, a Georgia corporation, will be formed as a wholly owned
subsidiary of Holdings solely for the purpose of effectuating the Holding
Company Formation.

ASA and ASAI file a consolidated Federal income tax return. After the
consummation of the Holding Company Formation and the Distribution, Holdings, as
the common parent of ASA and ASAI, will also file a consolidated Federal income
tax for the group.

BUSINESS PURPOSES

As indicated in the Registration Statement, and as you have advised us, the
Holding Company Formation and the Distribution are being undertaken to confer
the following benefits:

(1) The Holding Company Formation will provide greater flexibility to
Holdings and its subsidiaries by making available a greater selection of
financing, acquisition, and organizational alternatives than are available
to ASA under its current corporate structure. For example, the Holding
Company Formation will permit Holdings to acquire additional businesses
directly rather than through ASA, thereby permitting these businesses to
remain independent of ASA's present operations, and free from any direct
constraints on ASA imposed by credit agreements, regulatory requirements,
or otherwise.

(2) The Distribution will provide Holdings, through its ownership in
ASAI, approximately $150 million of assets that are free of the restrictive
covenants in ASA's credit agreements and lease arrangements. Holdings could
use these funds without being subject to the restrictive covenants
currently imposed on ASA.

PROPOSED TRANSACTIONS

To accomplish the business purposes set forth above, the following
transactions are proposed:

(i) ASA formed Holdings and contributed a note (the "Holdings Capital
Note") to Holdings of a nominal amount to supply minimal capital.

(ii) Holdings will form MergerSub and will contribute a note (the
"MergerSub Capital Note") to MergerSub of a nominal amount to supply
minimal capital.

(iii) Pursuant to Georgia Business Corporation Code, MergerSub will
merge with and into ASA, with ASA surviving. As a result of such merger,
the following shall occur: (a) each issued and outstanding share of ASA
Common Stock (other than treasury shares, which will be canceled as part of
the Holding Company Formation) will be automatically deemed converted into
one share of Holdings Common Stock; (b) each issued and outstanding share
of common stock of MergerSub will be automatically deemed converted into
shares of ASA Common Stock; (c) the shares of Holdings Common Stock that
are held by ASA immediately prior to the merger will be canceled; and (d)
the Holdings Capital Note and the MergerSub Capital Note will be canceled.
Further, pursuant to Georgia Business Corporation Code, holders of the ASA
Common Stock do not have the right to dissent with respect to the Holding
Company Formation and receive payment for the "fair value" of their shares.

(iv) Subsequent to the effective date of the Holding Company
Formation, ASA will distribute all of its shares in ASAI to Holdings.
<PAGE> 4

Atlantic Southeast Airlines, Inc. Page 4
ASA Holdings, Inc. November 7, 1996

Following the consummation of the Holding Company Formation and the
Distribution, ASA and ASAI will each be wholly owned subsidiaries of Holdings
and the current shareholders of ASA will be shareholders of Holdings, each
owning exactly the same proportionate interest in Holdings as their
proportionate interests in ASA immediately before the Holding Company Formation.

REPRESENTATIONS

You have made the following representations to us in connection with the
proposed Holding Company Formation and the Distribution as described in the
section entitled "PROPOSED TRANSACTIONS," above:

(a) Holdings will not issue stock or securities in consideration for
services rendered to or for the benefit of Holdings in connection with the
conversion of the ASA Common Stock into Holdings Common Stock.

(b) In connection with the Holding Company Formation, Holdings will
not issue stock or securities for indebtedness of Holdings that is not
evidenced by a security, or for interest on indebtedness of Holdings.

(c) The ASA Common Stock converted into Holdings Common Stock in the
Holding Company Formation is not subject to any liability of the ASA
shareholders and no liability of any ASA shareholder will be assumed by
Holdings in the Holding Company Formation.

(d) The Holding Company Formation is not the result of the
solicitation by a promoter, broker, or investment banking house.

(e) The ASA shareholders will not retain any rights in the ASA Common
Stock converted into Holdings Company Stock in the Holding Company
Formation.

(f) There is no indebtedness between the ASA shareholders and
Holdings, and there will be no indebtedness created in favor of the ASA
shareholders as a result of the Holding Company Formation.

(g) The conversion of ASA Common Stock into Holdings Common Stock will
occur under a plan agreed upon before the Holding Company Formation in
which the rights of the ASA shareholders and Holdings are defined.

(h) All exchanges comprising the conversion of ASA Common Stock into
Holdings Common Stock will occur on approximately the same date.

(i) With the exception of any repurchases by Holdings pursuant to its
contemplated share repurchase program, which will be separate and
independent of the Holding Company Formation, there is no plan or intention
on the part of Holdings to redeem or otherwise reacquire any stock or
indebtedness to be issued in the Holding Company Formation.

(j) Taking into account any planned issuance of additional shares of
Holdings Common Stock; any issuance of Holdings Common Stock in
consideration for services; the exercise of any Holdings Common Stock
rights, warrants, or subscriptions; a public offering of Holdings Common
Stock; and the sale, exchange, transfer by gift, or other disposition of
any Holdings Common Stock received in connection with the Holding Company
Formation, after the Holding Company Formation the ASA shareholders will
<PAGE> 5

Atlantic Southeast Airlines, Inc. Page 5
ASA Holdings, Inc. November 7, 1996

own Holdings stock possessing at least 80% of the total combined voting
power of all classes of Holdings stock entitled to vote and at least 80% of
the total number of shares of all other classes of Holdings stock.

(k) As part of the Holding Company Formation, the ASA Common Stock
held by the ASA shareholders immediately before the Holding Company
Formation will be converted into Holdings Common Stock that has a fair
market value as of the effective date of the Holding Company Formation
approximately equal to the fair market value of such ASA Common Stock
immediately before the Holding Company Formation.

(l) Following the Holding Company Formation, Holdings will remain in
existence and retain the ASA Common Stock.

(m) ASA will pay all of the expenses, if any, of Holdings, ASA,
MergerSub, and ASAI incurred in connection with the Holding Company
Formation and the Distribution. ASA and Holdings will not pay any expenses
of the ASA shareholders.

(n) Holdings will not be (a) a regulated investment company, (b) a
real estate investment trust, or (c) a corporation more than 80% of the
total value of whose assets (excluding cash and nonconvertible debt
obligations from consideration) are held for investment. In making the
determination under (c), Holdings' stock ownership in ASA and ASAI is
disregarded, and Holdings is deemed to own the assets held by those
corporations.

(o) To the actual knowledge of management of ASA and Holdings, no ASA
shareholder is under the jurisdiction of a court in a title 11 or similar
case, and the Holdings Common Stock received by the ASA shareholders in the
Holding Company Formation will not be used to satisfy the indebtedness of
any such debtor.

(p) Holdings will not be a corporation the principal activity of which
is the performance of personal services substantially performed by
employee-owners.

(q) To the actual knowledge of management of ASA and Holdings, there
is no existing plan or intention by the ASA shareholders who own 5 percent
or more of the ASA Common Stock and there is no plan or intention on the
part of the remaining ASA shareholders to sell, exchange, or otherwise
dispose of a number of shares of Holdings Common Stock received in the
Holding Company Formation that would reduce the ASA shareholders' ownership
of Holdings Common Stock to a number of shares having a value, immediately
following the Holding Company Formation, of less than 50 percent of the
value of all of the ASA Common Stock outstanding immediately before the
Holding Company Formation. Shares of ASA Common Stock and shares of
Holdings Common Stock held by shareholders who were ASA shareholders
immediately before the Holding Company Formation and otherwise sold,
redeemed, or disposed of prior or subsequent to the Holding Company
Formation have been considered in making this representation.

(r) ASA has no plan or intention to issue additional shares after the
Holding Company Formation so that, if such shares were issued after the
Holding Company Formation Holdings would own ASA shares possessing less
than 80% of the total combined voting power of all classes of stock
entitled to vote or less than 80% of the total number of shares of all
other classes of ASA stock.

(s) Holdings has no current plan or intention to liquidate ASA; to
merge ASA into another corporation; to cause ASA to sell or otherwise
dispose of any of its assets, except for the Distribution and
<PAGE> 6

Atlantic Southeast Airlines, Inc. Page 6
ASA Holdings, Inc. November 7, 1996

dispositions made in the ordinary course of business; or to sell or
otherwise dispose of any of the ASA Common Stock received in the Holding
Company Formation.

(t) The ASA Common Stock outstanding before the Holding Company
Formation will be converted solely into Holdings Common Stock. No ASA
Common Stock will be redeemed for cash or other property furnished by
Holdings, and Holdings will provide no other consideration to the ASA
shareholders as part of the Holding Company Formation.

(u) At the time of the Holding Company Formation, ASA will not have
outstanding any warrants, options, convertible securities, or any other
type of right pursuant to which any person could acquire stock in ASA that,
if exercised or converted, would cause Holdings to own ASA shares
possessing less than 80% of the total combined voting power of all classes
of ASA stock entitled to vote or less than 80% of the total number of
shares of all other classes of ASA stock.

(v) Holdings does not own, directly or indirectly, nor has it owned
during the past five years, directly or indirectly, any stock of ASA.

(w) Following the Holding Company Formation, ASA will continue its
historic business or use a significant portion of its historic business
assets in a business.

(x) On the date of the Holding Company Formation, the fair market
value of the assets of ASA will exceed the sum of its liabilities plus the
liabilities, if any, to which the assets are subject.

(y) ASA and Holdings are not under the jurisdiction of a court in a
Title 11 or similar case.

MEMORANDUM OF AUTHORITIES

For information purposes, we have provided the following discussion of the
authorities we deemed applicable to the rendering of the foregoing opinion.

1. APPLICABLE PROVISIONS

A. SECTION 351 -- TRANSFER TO A CORPORATION

Section 351(a) of the Internal Revenue Code of 1986, as amended (the
"Code") provides that no gain or loss is recognized if property is transferred
to a corporation by one or more persons solely in exchange for stock in such
corporation and, immediately after the exchange, the transferors are in
"control" of the transferee as defined in Section 368(c) of the Code. For
purposes of Section 368(c), control is defined as the ownership of stock
possessing at least 80 percent of the total combined voting power and at least
80 percent of the total number of shares of all other classes of stock of the
corporation.

Provided that a transaction qualifies under Section 351, the following
additional provisions apply. Section 358 provides generally that the basis of
the stock received by a transferor is equal to the basis of the property
transferred. Section 1223(l) of the Code provides that, in determining the
period for which a taxpayer has held property received in an exchange, the
period for which the taxpayer held the property exchanged is included if the
property has, for purposes of determining gain or loss from a sale or exchange,
the same basis in whole or in part in the taxpayer's hands as the property
exchanged, and the property exchanged constitutes a capital asset at the time of
the exchange. Section 1032(a) provides that no gain or loss is recognized to a
corporation on the receipt of money or other property in exchange for its stock.
<PAGE> 7

Atlantic Southeast Airlines, Inc. Page 7
ASA Holdings, Inc. November 7, 1996

B. SECTION 351 -- HOLDING COMPANY FORMATION

A transaction which takes the form of a reverse triangular merger may be
treated as a transfer of stock. See Rev. Rul. 67-448, 1967-2 C.B. 144, and Rev.
Rul. 73-427, 1973-2 C.B. 301, in which corporations which were formed solely to
be acquired in a merger were disregarded as transitory, and the transactions
were characterized according to their substance. In this case, the substance of
the transaction is that the ASA shareholders will transfer their stock to
Holdings in exchange for Holdings stock. In fact, the Internal Revenue Service
(the "Service") has ruled that transactions such as this one, in which a holding
company is formed through a reverse triangular merger, are to be treated as
Section 351 exchanges. See, for example, PLRs 8901035 (October 6, 1988), 8742079
(July 24, 1987), 8737044 (June 15, 1987), 8732020 (May 8, 1987), 8726014 (March
25, 1987).(1)

C. TYPE B REORGANIZATION -- HOLDING COMPANY FORMATION

Section 368(a)(1)(B) of the Code provides that the term reorganization (a
"Type B Reorganization") includes the acquisition by one corporation, in
exchange solely for its voting stock, of stock of another corporation, if,
immediately after the acquisition, the acquiring corporation has control (within
the meaning of Section 368(c) above) of the target. As described in paragraph b.
above, the Service has ruled that a transaction which may take the form of
reverse triangular merger will be treated as a transfer/acquisition of stock
which (if it otherwise so qualifies) may be treated as a Type B Reorganization.
See Rev. Rul. 67-448, 1967-2 C.B. 144. Section 368(b) of the Code defines the
term "a party to a reorganization" to include a corporation resulting from a
reorganization, and both corporations, in the case of a reorganization
resulting from the acquisition by one corporation of stock or properties of
another.

Provided that a transaction qualifies as a Type B Reorganization, the
following additional provisions apply. Section 354 of the Code provides that the
shareholders of the acquired corporation (here ASA) recognize no gain or loss
upon the exchange of their stock for stock of the acquiring corporation (here
Holdings). Section 358 of the Code provides that the basis of the stock of the
acquiring corporation received by the shareholders of the acquired corporation
is generally the same as the basis of the stock surrendered in exchange
therefor. Section 1223(l) of the Code provides that, in determining the period
for which a taxpayer has held property received in an exchange, the period for
which the taxpayer held the property exchanged is included if the property has,
for purposes of determining gain or loss from a sale or exchange, the same basis
in whole or in part in the taxpayer's hands as the property exchanged, and the
property exchanged constitutes a capital asset at the time of the exchange.
Section 1032 provides that no gain or loss is recognized to a corporation upon
the receipt of property in exchange for its stock.

D. THE DISTRIBUTION

Section 301 of the Code provides rules applicable to a distribution of
property by a corporation to its shareholders with respect to its stock. Section
301(c)(1) of the Code generally provides that a dividend is

- ---------------

(1) Pursuant to Section 6110(j)(3) of the Code, the private letter rulings
cited in this opinion letter are not used or cited as precedent but rather
as evidence of the Service's long-standing position in interpreting the law
and as evidence of the general understanding of the law at the time the
ruling was issued. See, e.g., Telecommunications, Inc. v. Commissioners, 95
T.C. 495 (1990).
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included in gross income. Section 316(a) of the Code provides, as a general
rule, that the term "dividend" means any distribution of property made by a
corporation to its shareholders out of its earnings and profits.

Treas. Reg. sec. 1.1502-13(f) provides additional special rules for
intercompany distributions to which Section 301 applies. Treas. Reg.
sec. 1.1502-13(f)(2)(ii) provides that an intercompany distribution is not
included in the gross income of the distributee member, so long as the
distribution results in a corresponding negative adjustment reflected under
Treas. Reg. sec. 1.1502-32 in the distributee member's basis in the distributing
member's stock. Treas. Reg. sec. 1.1502-32(b)(2)(iv) generally provides that an
intercompany distribution would produce a negative investment adjustment.

Section 311(b)(1) of the Code provides generally that if a corporation
distributes property to a shareholder in a distribution to which Section 301
applies, then gain shall be recognized to the distributing corporation (in an
amount equal to the excess of the property's fair market value over its adjusted
basis) as if such property were sold to the distributee.

Treas. Reg. sec. 1.1502-13(c) provides a "matching rule," whereby a
seller's ("S's") income, gain, deduction, and loss from an intercompany
transaction is generally deferred, and is taken into account only when the buyer
("B") takes into account its corresponding items. Treas. Reg. sec. 1.1502-13(d)
provides an "acceleration rule," whereby S's deferred gain or loss could also be
triggered when, among other things, S or B leaves the group, or the property is
no longer held by a member of the group. Treas. Reg. sec. 1.1502-13(f)(2)(iii)
provides, in part, that the principles of Section 311(b) apply to the
distributing member's loss, as well as gain, from an intercompany distribution
of property. Thus, the distributing member's gain or loss is deferred and is
taken into account under the matching rule or the acceleration rule, discussed
in this paragraph.

2. DISCUSSION OF THE PROPOSED TRANSACTIONS

The following is a discussion of certain Federal income tax consequences of
the Holding Company Formation and the Distribution.

THE HOLDING COMPANY FORMATION

The Holding Company Formation described in Steps (i), (ii), and (iii) under
the above heading "Proposed Transaction" will qualify for tax-free treatment
under Sections 351 of the Code because the transaction will meet the
requirements set forth above. As described above, the Service has consistently
held that the formation of a holding company structure by utilizing a reverse
subsidiary merger qualifies under Section 351 of the Code. See Rev. Rul. 67-448,
and Rev. Rul. 73-427, supra. Because the ASA shareholders will receive at least
80 percent of the outstanding common stock of Holdings, and because Holdings
will have no other class of stock outstanding, the ASA shareholders will obtain
control of Holdings as defined in Section 368(c). Similarly, the Holding Company
Formation will qualify as a Type B Reorganization. Thus, since Holdings has
solely voting stock outstanding, solely voting stock of Holdings will be issued
in the exchange. After the exchange, Holdings will be in control of ASA with the
meaning of Section 368(c) of the Code.

Under Treas. Reg. sec. 1.1502-75(d)(2)(ii), an affiliated group filing a
consolidated return is considered as remaining in existence where a parent
transfers substantially all of its assets to one or more subsidiaries. In Rev.
Rul. 82-152, 1982-2 C.B. 205, the Service held that, in a transaction similar to
the proposed transaction, the principles of Treas. Reg. sec. 1.1502-75(d)(2)(ii)
will apply. As a result, the current affiliated group with ASA as the common
parent (the "ASA group") will be treated as remaining in existence within the
meaning
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ASA Holdings, Inc. November 7, 1996

of Treas. Reg. sec. 1.1502-75(d)(2)(ii), with Holdings becoming the common
parent of the affiliated group. In such case, the members of the ASA group will
not close their taxable years, and will remain on the taxable year previously
used by the ASA group. Treas. Reg. sec. 1.1502-75(d)(2)(iii).

In the case of a transaction in which a corporation succeeds another
corporation as the common parent of a consolidated group under the principles of
Treas. Reg. sec. 1.1502-75(d)(2) (a "group structure change"), special rules
apply to determine the basis of the stock of the former parent in the hands of
the new holding company, as well as the earnings and profits of the new holding
company. As discussed in the paragraph above, we believe that the proposed
transaction will be governed by Treas. Reg. sec. 1.1502-75(d)(2)(ii) and,
thereby, will constitute a group structure change. Under Treas. Reg.
sec. 1.1502-31, following the group structure change, the basis of the stock of
the former common parent (ASA) in the hands of the owning member (Holdings) is
equal generally to the former common parent's net basis in its assets. For this
purpose, net basis is generally the excess of the former common parent's basis
in its assets over its liabilities and the liabilities to which its assets are
subject. Treas. Reg. sec. 1.1502-31(c). Under Treas. Reg. sec. 1.1502-33, in the
case of a group structure change, the earnings and profits of the new common
parent (Holdings) are adjusted to reflect the earnings and profits of the former
common parent (ASA).

THE DISTRIBUTION

The Distribution should be treated as a distribution of property made by a
corporation to a shareholder with respect to its stock under Section 301 of the
Code. As the Distribution will be an intercompany distribution between ASA and
Holdings, Treas. Reg. sec. 1.1502-13(f)(2)(ii) will apply to exclude from the
gross income of Holdings the amount, in value, of the ASAI stock distributed.
Pursuant to Treas. Reg. sec. 1.1502-13(f)(2)(iii) and -13(f)(5)(i), to the
extent gain or loss, if any, is realized by ASA on the Distribution that gain or
loss will be deferred, and taken into account later at the time and in the
manner described in Treas. Reg. sec. 1.1502-13.

FEDERAL INCOME TAX CONSEQUENCES -- OPINION

It is our opinion that the following results will apply with respect to the
Holding Company Formation:

(1) The formation of MergerSub and its merger with and into ASA will
be disregarded for Federal income tax purposes and the Holding Company
Formation will be treated as a transfer by the ASA shareholders of their
ASA Common Stock to Holdings solely in exchange for shares of Holdings
Common Stock. That deemed transfer will constitute an exchange within the
meaning of Section 351(a) of the Code and a reorganization described in
Section 368(a)(1)(B) of the Code.

(2) No gain or loss will be recognized by the ASA shareholders upon
the conversion of ASA Common Stock into Holdings Common Stock pursuant to
the Holding Company Formation.

(3) The tax basis of the Holdings Common Stock to be received by the
ASA shareholders will be the same as the tax basis of the ASA Common Stock
converted into Holdings Common Stock pursuant to the Holding Company
Formation.

(4) The holding period of the Holdings Common Stock to be received by
the ASA shareholders will include the period during which the ASA Common
Stock converted into Holdings Common Stock pursuant to the Holding Company
Formation was held, provided the ASA Common Stock was held as a capital
asset on the date of the Holding Company Formation.
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ASA Holdings, Inc. November 7, 1996

(5) No gain or loss will be recognized by Holdings, ASA, MergerSub, or
ASAI pursuant to the Holding Company Formation.

(6) Holdings' tax basis in the stock of ASA immediately after the
Holding Company Formation will be equal to ASA's net tax basis in its
assets immediately after the Holding Company Formation.

(7) The affiliated group of which ASA was the common parent
immediately prior to the Holding Company Formation will remain in existence
with Holdings as the new common parent.

(8) The members of the affiliated group of which ASA was the common
parent will not close their taxable years as a result of the Holding
Company Formation, and will remain on the taxable year presently used by
the ASA group.

(9) Following the Holding Company Formation, the earnings and profits
of Holdings will be adjusted to reflect the earnings and profits of ASA.

It is our opinion that the following results will apply with respect to the
Distribution:

(10) The Distribution will not be included in the gross income of
Holdings.

(11) No gain or loss will be recognized by Holdings, ASAI, or the ASA
shareholders upon the distribution by ASA of all of the outstanding stock
of ASAI to Holdings.

(12) To the extent gain or loss, if any, is realized by ASA upon the
distribution by ASA of all of the outstanding stock of ASAI to Holdings,
such gain or loss will be recognized under the principles of Section
311(b)(1) of the Code but deferred by ASA and taken into account by ASA at
the time and in the manner described in Treas. Reg. sec. 1.1502-13.

(13) As a result of the Distribution, the adjusted tax basis of the
ASA Common Stock in the hands of Holdings will be reduced by the value of
the ASAI stock distributed to Holdings in the Distribution.

SCOPE OF OPINION

The scope of this opinion is expressly limited to the Federal income tax
issues specifically addressed in (1) through (13) in the section titled "FEDERAL
INCOME TAX CONSEQUENCES -- OPINION," above as related to the Holding Company
Formation and the Distribution. Our opinion has not been requested and none is
expressed with respect to any other tax issues arising from the proposed
transactions, including, but not necessarily limited to other Subchapter C or
consolidated return consequences, state, local, and/or foreign tax consequences,
and employee benefit tax consequences, which may arise as a result of the
Holding Company Formation and the Distribution.

Specifically, we have made no determination nor expressed any opinion as to
any limitations, including, but not necessarily limited to, those which may be
imposed under Section 382 of the Code, on the availability of net operating loss
carryovers (or built-in losses), if any, after the Holding Company Formation
and the Distribution. We have made no determination nor expressed any opinion as
to the fair market value of any stock being converted or distributed in the
Holding Company Formation and the Distribution.

Our opinion, as stated above, is based in part on our reliance upon the
information set forth above under the heading "Facts" and the information in the
Documents described above. Any changes to the information or to the Documents
may affect our conclusions stated above. Our opinion is also based upon our
analysis of
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ASA Holdings, Inc. November 7, 1996

the Code, the regulations thereunder, current case law, and published rulings as
of the date hereof. The foregoing are subject to change, and such change may be
retroactively effective. If so, our views, as set forth above, may be affected
and may not be relied upon. We have undertaken no obligation to update this
opinion for changes in facts or law occurring subsequent to the date thereof.

This opinion is being rendered only to the addressees in connection with
the Holding Company Formation and the Distribution and is solely for the benefit
of the addressees and the addressees' shareholders. This opinion may not be
relied upon by any other person or persons, or used for any other purposes,
including, but not necessarily limited to, filings with Governmental agencies
(except as stated above, the consented filing with the Securities and Exchange
Commission), without our prior written consent.

This letter is an opinion of our firm as to the interpretation of certain
provisions of existing Federal tax law and, as such, is not binding on the
Service or the courts.

Very truly yours,

/s/ ERNST & YOUNG LLP
--------------------------------------

<PAGE> 1

EXHIBIT 23(b)

CONSENT OF ERNST & YOUNG LLP

We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Proxy Statement/Prospectus and Registration
Statement (Form S-4) of ASA Holdings, Inc. and to the incorporation by
reference therein of our report dated February 2, 1996, with respect
to the consolidated financial statements and schedule of Atlantic
Southeast Airlines, Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1995, filed with the Securities and
Exchange Commission.

In addition, we consent to the reference to our firm under the
captions "Experts" and "Certain Federal Income Tax Consequences" and
to the use of our report dated September 25, 1996, with respect to the
consolidated financial statement of ASA Holdings, Inc. and our opinion
dated November 7, 1996 with respect to certain of the Federal income
tax consequences of the proposed reorganization of Atlantic Southeast
Airlines, Inc. into a holding company structure included in Amendment
No. 1 to the Proxy Statement/Prospectus and Registration Statement
(Form S-4) of ASA Holdings, Inc.

/s/ Ernst & Young LLP

Atlanta, Georgia

November 7, 1996