<PAGE>
As filed with the Securities and Exchange Commission on September __, 1998
Registration No. 333-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------
AIRTRAN HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Nevada 4512 58-2189551
(State or other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
9955 AirTran Boulevard Leslie C. Head, Esq.
Orlando, Florida 32827 9955 AirTran Boulevard
(407)251-5600 Orlando, Florida 32827
(Address, including zip code, (407)251-5600
and telephone number, including (Name, address, including zip code,
area code, of registrant's and telephone number, including
principal executive offices) area code, of agent for service)
</TABLE>
------------------
Copies to:
Robert B. Goldberg, Esq.
Ellis, Funk, Goldberg, Labovitz & Dokson, P.C.
3490 Piedmont Road, N.E., Suite 400
Atlanta, Georgia 30305
(404) 233-2800
Approximate date of commencement of proposed sale to the public: The sale of
securities under this Registration Statement will begin as soon as practicable
after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered in
connection with dividend or interest reinvestment plans, please check the
following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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==================================================================================================================
Title of Each Class of Securities to be Amount Proposed Maximum Proposed Maximum Amount of
Registered to be Offering Price Aggregate Offering Registration
Registered Per Share Price Fee
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 50,000 shares $4.5625 (1) $228,125.00 $100.00
==================================================================================================================
</TABLE>
(1) The price is estimated in accordance with Rule 457(c) under the Securities
Act of 1933, as amended, solely for the purpose of calculating the
registration fee and is equal to the average of the high and low sales
prices of the Common Stock as reported on the NASDAQ Stock Market on August
28, 1998.
------------------
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 the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
AIRTRAN HOLDINGS, INC.
CROSS REFERENCE SHEET
SHOWING THE LOCATION IN THE PROSPECTUS
OF THE INFORMATION REQUIRED ON FORM S-3.
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Item Number and Caption in Form S-3 Location or Caption in Prospectus
- ----------------------------------- ---------------------------------
<S> <C>
1. Forepart of the Registration Statement Cover Page of Registration Statement and
and Outside Front Cover Page of Prospectus......... Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of Inside Front Cover Page; Outside Back
Prospectus......................................... Cover Page
3. Summary Information; Risk Factors and
Ratio of Earnings to Fixed Charges................. Summary Information; Risk Factors
4. Use of Proceeds.................................... Use of Proceeds
5. Determination of Offering Price.................... Plan of Distribution
6. Dilution........................................... Not Applicable
7. Selling Security Holders........................... Selling Stockholder
8. Plan of Distribution............................... Outside Front Cover Page; Plan of Distribution
9. Description of Securities to be Registered......... Outside Front Cover Page; Summary Information;
Plan of Distribution
10. Interests of Named Experts and Counsel............. Legal Matters; Experts
11. Material Changes................................... Material Changes in Business
12. Incorporation of Certain Information by Reference.. Information Incorporated by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities..... Not Applicable
</TABLE>
<PAGE>
PROSPECTUS
AIRTRAN HOLDINGS, INC.
50,000 Shares of Common Stock Offered for Resale
This Prospectus covers 50,000 shares of Common Stock, par value $.001 per
share (the "Shares") of AirTran Holdings, Inc., a Nevada corporation (the
"Company") that may be sold from time to time by a certain security holder (the
"Selling Stockholder"). See SELLING STOCKHOLDER. The Company will not receive
any of the proceeds from any sale of Shares by the Selling Stockholder. The
Price to the Public for Shares being sold by the Selling Stockholder and the
Proceeds to Selling Stockholder will depend on the market price of such
securities when sold. The Selling Stockholder may engage brokers or dealers to
sell Shares and will be solely responsible for any commissions and discounts so
incurred. See PLAN OF DISTRIBUTION.
The Common Stock is traded on the NASDAQ Stock Market under the symbol AAIR.
On September ___, 1998, the last reported sale price of the Common Stock as
quoted on the NASDAQ Stock Market was $__________.
ANY INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE RISK FACTORS ON PAGE 6.
___________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
REGULATORY AUTHORITY NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES REGULATORY AUTHORITY
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
___________________________________
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES
IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
___________________________________
The date of this Prospectus is September __, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the periodic reporting and other 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 Securities and Exchange Commission (the "SEC" or
"Commission"). Copies of such periodic reports, proxy statements and other
information filed by the Company with the Commission may be inspected at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, or at its regional offices located at the
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and 7 World Trade Center, 13th Floor, New York, New York 10007. The SEC
maintains a Web site that contains reports, proxy and information statements and
other information regarding the Company. The address of such Web site is
http://www.sec.gov.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement," which term shall include all amendments, exhibits, annexes and
schedules thereto) pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations promulgated thereunder,
covering the Shares being offered hereby. This Prospectus does not contain all
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 about the Company and the securities offered hereby,
reference is made to the Registration Statement. The Registration Statement may
be inspected and copied, at prescribed rates, at the SEC's public reference
facilities at the addresses set forth above. The Common Stock of the Company is
traded on the NASDAQ National Market. Reports, proxy statements and other
information concerning the Company may be inspected at the offices of the
National Association of Securities Dealers, Inc. ("NASD"), 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents heretofore filed by the Company with the Commission
are hereby incorporated herein by reference: (i) the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997; (ii) the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998 and June
30, 1998; (iii) the description of the Company's Common Stock set forth in the
Company's registration statement filed pursuant to Section 12 of the Exchange
Act, and any amendment or report filed for the purpose of updating any such
description; and (iv) all reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the quarter covered by the
Registrant's Quarterly Report on Form 10-Q for its quarter ended June 30, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14, or
15(d) of the Exchange Act after the date of this Prospectus shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
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 Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. COPIES OF DOCUMENTS INCORPORATED BY REFERENCE IN
THIS PROSPECTUS (EXCLUDING EXHIBITS THAT ARE NOT OTHERWISE INCORPORATED BY
REFERENCE) ARE AVAILABLE WITHOUT CHARGE UPON REQUEST FROM LESLIE C. HEAD, ESQ.,
VICE PRESIDENT AND GENERAL COUNSEL, AIRTRAN HOLDINGS, INC., 9955 AIRTRAN
BOULEVARD, ORLANDO, FLORIDA 32827.
FORWARD LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE CERTAIN FORWARD
LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 WITH RESPECT TO THE RESULTS OF OPERATIONS AND BUSINESS OF THE
COMPANY. THESE FORWARD LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE CONTEMPLATED, PROJECTED, FORECAST, ESTIMATED OR BUDGETED IN SUCH FORWARD
LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (I)
HEIGHTENED COMPETITION, INCLUDING SPECIFICALLY THE INTENSIFICATION OF PRICE
COMPETITION AND THE ENTRY OF NEW COMPETITORS; (II) THE IMPACT OF THE COMPANY'S
LABOR DISPUTE WITH THE ASSOCIATION OF FLIGHT ATTENDANTS; (III) INCREASED
GOVERNMENT SCRUTINY OR GOVERNMENT IMPOSED LIMITATIONS ON OPERATIONS; (IV) ANY
AIRLINE INCIDENTS OR ACCIDENTS SUFFERED BY THE COMPANY; (V) LOSS OF KEY
EXECUTIVES; (VI) GENERAL ECONOMIC AND BUSINESS CONDITIONS WHICH ARE LESS
FAVORABLE THAN EXPECTED; AND (VII) UNANTICIPATED CHANGES IN INDUSTRY TRENDS.
-2-
<PAGE>
SUMMARY INFORMATION
The following summary is qualified in its entirety by the more detailed
information contained elsewhere herein or incorporated herein by reference,
including the financial statements and related notes. Certain risks of an
investment in the Common Stock offered hereby are described under RISK FACTORS.
Each prospective investor is urged to read this Prospectus and the information
incorporated herein by reference in its entirety.
THE COMPANY
The Company, through its wholly owned subsidiaries, AirTran Airlines, Inc.
and AirTran Airways, Inc., operates an affordable, no frills, limited frequency,
scheduled airline serving short haul markets primarily in the eastern United
States. The Company believes that its low cost, no frills philosophy allows it
to offer among the lowest fares in its markets and generate its own traffic by
stimulating incremental demand with fare conscious travelers.
The Company commenced flight operations in October 1993 with two McDonnell
Douglas DC-9 aircraft ("DC-9 aircraft") serving three cities from Atlanta with
eight flights per day. Prior to June 17, 1996, the Company offered service to
30 cities from Atlanta, Washington, D.C. (Dulles Airport), Boston and Orlando
and operated up to 320 flights per peak day with its fleet of 51 aircraft. The
Company's operations were interrupted by the suspension of the Company's service
on June 17, 1996, pursuant to a consent order entered into with the FAA
following the accident involving Flight 592 on May 11, 1996 and the ensuing
extensive adverse media and intense FAA scrutiny. The Company resumed limited
operations with service between Atlanta and four other cities as of September
30, 1996. The FAA has now approved all 40 of AirTran Airlines' DC-9 Series 30
aircraft for flight. In addition, AirTran Airways operates 11 Boeing 737-200
aircraft ("B737 aircraft").
In July 1998, the Company announced its new schedule, to be implemented in
September and October 1998, under which the Company's service from Atlanta will
be expanded and all nonstop service between Orlando and cities other than
Atlanta will be eliminated. Under the new schedule to be fully implemented in
October 1998, the Company will operate a total of up to 282 flights per day of
which 262 flights per day are between Atlanta and 30 other cities. Additional
service is offered between Washington, D.C. (Dulles Airport) and Boston and
Chicago and between Boston and Philadelphia.
THE OFFERING
Common Stock That May Be
Offered by the Selling Stockholder................ 50,000 shares
Common Stock Outstanding As of June 30, 1998 (1).. 64,565,498 shares
NASDAQ Stock Market Symbol for Common Stock....... AAIR
Risk Factors...................................... For a description of certain
risks inherent in an
investment in the Common
Stock, see RISK FACTORS.
- ----------
(1) The number of shares outstanding does not give effect to shares of Common
Stock issuable upon the exercise of outstanding stock options granted to
officers, employees and consultants.
-3-
<PAGE>
SUMMARY FINANCIAL AND OPERATING DATA
The following summary financial and operating data of the Company for the
years ended December 31, 1993, 1994, 1995, 1996 and 1997, are derived from the
audited consolidated financial statements of the Company. The financial and
operating data for the six month periods ended June 30, 1997 and 1998 are
derived from unaudited consolidated financial statements. The unaudited
financial statements include all adjustments, consisting of normal recurring
accruals which the Company considers necessary for a fair presentation of the
financial position and the results of operations for these periods. Operating
results for the six months ended June 30, 1998 are not necessarily indicative of
the results that may be expected for the entire year. The data should be read in
conjunction with the consolidated financial statements, related notes and other
financial information incorporated by reference herein.
(In thousands, except per share and operating data)
<TABLE>
<CAPTION>
Year ended Six Months
December 31 Ended June 30
--------------------------------------------------------------- ----------------------
1993(1) 1994 1995 1996(2) 1997 1997 1998
------------- --------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Operating revenues................... $ 5,811 $133,901 $367,757 $ 219,636 $ 211,456 $ 84,687 $218,529
Operating expenses:
Flight operations................. 474 6,967 16,273 16,479 22,260 8,904 23,102
Aircraft fuel..................... 977 21,775 55,813 46,691 48,796 19,852 35,791
Maintenance....................... 732 14,862 47,330 49,500 76,502 24,640 38,536
Station operations................ 1,199 20,198 49,931 42,018 49,625 22,485 40,858
Passenger services................ 228 3,942 10,363 8,879 9,558 3,817 9,375
Marketing and advertising......... 1,097 6,546 8,989 8,426 16,998 5,227 9,904
Sales and reservations............ 967 11,325 31,156 18,378 19,025 6,801 27,454
General and administrative........ 866 5,039 10,617 13,659 12,228 6,143 8,689
Employee bonus.................... -- 5,146 14,382 1,245 -- -- --
Depreciation...................... 138 3,555 15,148 17,551 28,024 12,247 13,228
Arrangement fee for
aircraft transfers.............. -- -- -- (13,036) -- -- --
Gain on insurance recovery........ -- -- (1,094) (2,815) -- -- --
Gain (loss) on disposal of
property........................ -- -- -- (3,934) 124 (49) 45
Rebranding expenses............... -- -- -- -- 5,243 -- --
Shutdown and other nonrecurring
expenses........................ -- -- -- 67,994 24,839 9,338 --
------- -------- -------- ---------- ---------- ---------- --------
Total operating expenses............. 6,678 99,355 258,908 271,035 313,222 119,405 206,982
------- -------- -------- ---------- ---------- ---------- --------
Operating income (loss).............. (867) 34,546 108,849 (51,398) (101,766) (34,718) 11,547
Interest expense.................. 112 2,388 6,579 22,186 24,331 12,722 12,751
Interest income................... (85) (1,423) (5,555) (7,652) (6,659) (3,268) (1,904)
------- -------- -------- ---------- ---------- ---------- --------
Income (loss) before income taxes.... (894) 33,581 107,825 (65,932) (119,438) (44,172) 700
Provision for income taxes........ -- 12,849 40,062 (24,463) (22,775) (16,439) 14
------- -------- -------- ---------- ---------- ---------- --------
Net income (loss).................... $ (894) $ 20,732 $ 67,763 $ (41,469) $ (96,663) $ (27,733) $ 686
======== ======== ======== ========== ========== ========== ========
Basic income (loss) per share........ $(.06) $.51 $1.24 $(.76) $(1.72) $(.51) $.01
Diluted income (loss) per share...... $(.06) $.46 $1.13 $(.76) $(1.72) $(.51) $.01
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents............ $13,247 $ 85,078 $127,947 $ 150,013 $ 86,025 $ 149,725 $ 59,195
Working capital...................... 10,284 58,585 63,523 168,554 25,886 131,997 3,717
Property and equipment, net.......... 13,458 71,880 196,954 162,572 234,345 194,050 259,092
Total assets......................... 30,264 173,039 346,741 417,187 433,864 377,008 431,894
Total debt........................... 10,397 46,965 109,038 244,706 250,712 235,661 251,874
Stockholders' equity................. 15,143 93,117 162,065 123,399 94,447 95,884 96,056
</TABLE>
See footnotes on page 5
-4-
<PAGE>
<TABLE>
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Year ended Six Months
December 31 Ended June 30
--------------------------------------------------- ---------------------------
1994 1995 1996 1997 1997 1998
------------ ----------- ----------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA (3):
Revenue passengers enplaned................ 2,040,892 5,177,629 3,003,883 3,005,731 1,347,656 2,628,830
Revenue passenger miles (RPM)(thousands)... 940,546 2,624,298 1,534,439 1,597,585 661,283 1,638,259
Available seat miles (ASM)(thousands)...... 1,470,614 3,812,696 2,689,127 3,017,892 1,213,139 2,697,552
Load factor................................ 64.0% 68.8% 57.1% 52.9% 54.5% 60.7%
Break-even load factor excluding shutdown
and other nonrecurring expenses......... 44.6% 45.8% 57.0% 78.5% 78.9% 60.9%
Average fare............................... $ 63.48 $ 68.10 $ 69.81 $ 66.85 $ 59.59 $ 79.60
Passenger yield............................ 13.77c 13.44c 13.67c 12.58c 12.14c 12.76c
Total revenue per ASM...................... 9.05c 9.62c 8.12c 7.01c 6.98c 8.10c
Operating cost per ASM excluding shutdown
and other nonrecurring expenses......... 6.71c 6.77c 7.50c 9.56c 9.07c 7.67c
Completion factor.......................... 99.5% 99.0% 90.3% 99.1% 99.4% 97.6%
Aircraft in service (end of period)........ 22 42 15 44 30 51
Cities served (end of period).............. 17 26 18 43 24 37
Average passenger trip length (miles)...... 461 507 511 587 491 623
Average stage length (miles)............... 444 497 501 587 461 544
</TABLE>
___________________________
(1) The Company's flight operations commenced October 26, 1993. Prior to that
time, the Company was in the development stage.
(2) The Company's operations were suspended from June 18, 1996 until September
30, 1996 as a result of a consent order entered into between the Company
and the FAA.
(3) All operating data other than total revenue per ASM and total cost per ASM
refers to scheduled service. The terms included in Operating Data have the
meanings indicated below:
"REVENUE PASSENGERS ENPLANED" represents the number of paid passengers
boarded.
"REVENUE PASSENGER MILES" or "RPMS" represents the number of miles flown by
revenue passengers on scheduled flights.
"AVAILABLE SEAT MILES" or "ASMS" represents the number of seats available
for passengers on scheduled flights multiplied by the number of miles those
seats are flown.
"LOAD FACTOR" represents revenue passenger miles divided by scheduled
service ASMs.
"BREAK-EVEN LOAD FACTOR" represents the percentage of revenue passenger
miles which must be flown for the airline to break-even after operating and
interest expenses but without regard to employee bonuses paid at the
discretion of the Company. Break-even load factor is calculated by taking
total expenses less employee bonuses and non-passenger revenue, divided by
scheduled service ASMs, divided by passenger yield.
"AVERAGE FARE" represents passenger revenue divided by revenue passengers
enplaned.
"PASSENGER YIELD" represents the total passenger revenue divided by RPMs.
"TOTAL REVENUE PER ASM" represents total revenues divided by total
available seat miles (including charter service ASMs).
"OPERATING COST PER ASM EXCLUDING SHUTDOWN AND OTHER NONRECURRING EXPENSES"
represents total operating expenses (other than shutdown and other
nonrecurring expenses) divided by total available seat miles (including
charter service ASMs).
"COMPLETION FACTOR" represents the percentage of scheduled flights actually
flown by the Company.
"AVERAGE PASSENGER TRIP LENGTH" represents the distance computed by
dividing passenger miles by revenue passengers enplaned.
"AVERAGE STAGE LENGTH" represents the scheduled aircraft miles flown
divided by the total number of departures.
-5-
<PAGE>
RISK FACTORS
Any investment in the Common Stock offered hereby involves a high degree of
risk. Prospective investors should read this entire Prospectus carefully and
should consider, among other things, the risks and the speculative factors
inherent in and affecting the Company's business described below and throughout
this Prospectus.
Accident/Suspension of Operations
As a result of the accident involving Flight 592, the ensuing adverse media
coverage and intensive FAA scrutiny, the Company suspended its operations on
June 17, 1996, pursuant to a consent order entered into with the FAA. The
Company now faces the following additional risk factors: (i) the suspension of
operations resulted in the failure of the Company to meet certain financial
covenants (the fixed charge coverage ratio) under certain of its secured debt
instruments. All of this debt was repaid in August 1997; (ii) there can be no
assurance that the Company will be able to regain and maintain its low cost
structure or to recover sufficient customer acceptance in order to regain
profitability on a consistent basis; (iii) the Company may have increased costs
or reduced customer support which could decrease the Company's profitability
indefinitely; (iv) the expansion of the Company's operations will likely be
subject to FAA and DOT approval for an indefinite period of time; and (v) the
occurrence of one or more subsequent incidents or accidents involving the
Company's aircraft would likely have a substantial adverse effect on the
Company's public perception and future operations.
Recent Operating Losses
Prior to second quarter 1998, the Company had realized net losses in eight
consecutive quarters. The inability of the Company to maintain its
profitability or the failure by the Company to cover fixed charges in the future
could result in a failure to meet the Company's debt service obligations,
restrictions on the Company's activities or other material adverse effects on
the Company's financial condition and results of operations. The Company's
consolidated leverage and recent history of losses may adversely affect the
Company's ability to obtain financing on terms satisfactory to the Company in
the future.
Significant Leverage; Ability to Repay Indebtedness At Maturity
The Company had approximately $251.9 million of indebtedness on a
consolidated basis as of June 30, 1998. The Company is subject to debt
indentures which limit, but do not prohibit, the incurrence of additional
indebtedness, secured or unsecured, by the Company and its subsidiaries.
Subject to limitations under the indentures, the Company expects that it and its
subsidiaries will incur substantial additional indebtedness in the future in
connection with the acquisition of additional aircraft and for other purposes.
As a result, a substantial portion of the Company's cash flow is, and will
continue to be, devoted to debt service.
The entire principal amounts of the Company's 10 1/4% senior notes ($150.0
million) and 10 1/2% senior secured notes ($80.0 million) become due on April
15, 2001. The Company does not expect to generate sufficient cash flow from
operations to repay all $230.0 million of such indebtedness and, accordingly, in
order to repay this indebtedness, the Company will likely need to seek
refinancing through additional equity or debt or a combination thereof. There
can be no assurance that sufficient equity or debt financing will be available,
or, if available, that it will be on terms acceptable to the Company. If no
such financing were available, the Company could be forced to default on its
debt obligations and, as an ultimate remedy, seek protection under the Federal
bankruptcy laws.
The Company's ability to make scheduled payments of principal of, to pay
interest on or to refinance its indebtedness depends on its future performance
and financial results, which, to a certain extent, are subject to general
economic, financial, competitive, legislative, regulatory and other factors
beyond its control. There can be no assurance that the Company's business will
generate sufficient cash flow from operations or that future borrowings will be
available in an amount sufficient to enable the Company to service its
indebtedness or make necessary capital expenditures. The degree to which the
Company is leveraged could have important consequences to the stockholders of
the Company, including, but not limited to, the following: (i) a substantial
portion of the Company's cash flow from operations will be required to be
dedicated to debt service and will not be available to the Company for its
operations; (ii) the Company's ability to obtain additional financing in the
future for aircraft purchases, capital expenditures, working capital or general
corporate purposes could be limited, and (iii) the Company's increased
vulnerability to adverse general economic and industry conditions.
-6-
<PAGE>
Limited Operating History
The Company began flight operations on October 26, 1993, and was profitable
for the two years prior to the May 11, 1996 accident. The Company's operations
since September 30, 1996 were constrained by a phased return to service of its
aircraft fleet as the return to service of each aircraft was subject to FAA
approval. Although the Company was profitable during the quarter ended June 30,
1998, there can be no assurance that the Company will be able to maintain its
profitability. The Company's success in the future will depend on the Company's
ability to continue to stimulate air traffic and attract customers in its
markets and to maintain a low cost structure that will allow the Company to
operate profitably its affordable, no frills service.
Atlanta Market Dominance by Delta Air Lines, Inc.
The Atlanta market which is the Company's principal hub is currently
dominated by Delta Air Lines, Inc. ("Delta"), which presently offers more than
600 flights per day from Atlanta. During the first six months of 1998, Delta
enplaned approximately 76% of all passengers at Atlanta's Hartsfield
International Airport. There can be no assurance that the Company will be able
to be successful in light of Delta's Atlanta market dominance.
Competition and Competitive Reaction
The airline industry is highly competitive, primarily due to the effects of
the Airline Deregulation Act of 1978 (the "Deregulation Act"), which has
substantially eliminated government authority to regulate domestic routes and
fares, and has increased the ability of airlines to compete with respect to
destination, flight frequencies and fares. The Company competes with airlines
which presently serve the Company's current and proposed routes and which are
larger and have greater name recognition and greater financial resources than
the Company. The Company may also face competition from airlines which may
begin serving any of the markets the Company serves or may subsequently serve,
from an expansion of existing low fare service offered by current competitors,
from new low cost airlines that may be formed to compete in the low fare market
and from ground transportation alternatives.
Other airlines may meet or price their fares below the Company's fares or
introduce new non-stop service between cities served by the Company on a one-
stop basis, and prevent the Company from attaining a share of the passenger
traffic necessary to maintain profitable operations. The Company's ability to
meet price competition depends on its ability to operate at costs equal to or
lower than its competitors or potential competitors. In addition, competitors
with greater financial resources than the Company may price their fares below
the Company's fares or increase their service which could have a material
adverse effect on the Company's business.
Recent legislation imposes taxes on domestic airline transportation equal to
a per segment flown charge (initially $1.00 to be increased to $3.00 by 2003)
plus a percentage of the ticket price (initially 9% to be decreased to 7.5% in
1999). These taxes will likely have a greater effect on leisure travelers.
Since the Company relies to a large extent on leisure travelers, such a tax
increase may affect the Company to a greater extent than the Company's
competitors who rely more heavily on business travelers.
Litigation
As a result of the accident and suspension of operations, several class
action suits have been filed by stockholders against the Company and various
officers and directors alleging, among other things, misrepresentations under
applicable securities laws. The plaintiffs seek unspecified damages based upon
the decrease in market value of shares of the Company's stock. Although the
Company denies that it has violated any of its obligations under the federal
securities laws, there can be no assurance that the Company will not sustain
material liability under such or related lawsuits.
Numerous lawsuits have also been filed against the Company seeking damages
attributable to the deaths of those on Flight 592. The Company's insurance
carrier has assumed defense of these lawsuits under a reservation of rights.
The Company maintains $750.0 million of liability insurance per occurrence with
a major group of independent insurers that provides facilities for all forms of
aviation insurance for many major airlines. Although the Company believes,
based on the information currently available to it, that such coverage will be
sufficient to cover claims associated with this accident and that the insurers
have sufficient financial strength to pay claims, there can be no assurance that
the total amount of judgments and settlements will not exceed the amount of
insurance available therefor or that all damages awarded will be covered by
insurance.
Several governmental inquiries and investigations have been launched in
connection with the loss of Flight 592, including investigations by the DOT, the
NTSB, the U.S. Attorney's Office in Atlanta, Georgia and Miami, Florida and
certain state agencies in Florida. Although the Company does not believe, based
on information currently available to it, that such investigations and inquiries
will result in any finding of criminal wrongdoing on its part, the
investigations have not yet been concluded and the possibility of such a finding
-7-
<PAGE>
cannot be ruled out. The Company may also be named as a partially responsible
party and/or be assessed civil penalties in connection with the accident and/or
the results of ensuing investigations. Any such findings or penalties could be
material. In addition, it is possible that the Company could be indirectly
affected by negative publicity related to charges of wrongdoing, if any, against
others acting on behalf of the Company at the time of the accident.
On August 30, 1996, Metropolitan Nashville Airport Authority filed suit
against the Company in State Court in Tennessee for breach of contract and a
declaratory judgment for an anticipatory breach. The Nashville Airport
Authority seeks damages of approximately $2.6 million. The dispute involves
whether the Company was entitled to exercise a termination right contained in
its lease Agreement.
In May 1997, the State of Florida filed suit against the Company and its
insurers in the United States District Court for the Southern District of
Florida seeking recovery of costs incurred relating to the accident involving
Flight 592. The Company's insurance carrier has assumed defense of this suit on
the Company's behalf. The Company does not believe that it is obligated for
such amounts and has filed a motion to dismiss this lawsuit. However, the suit
is in its preliminary stages and there can be no assurance that the Company will
not sustain material liability under such suit.
Aging Aircraft; Maintenance and Reliability
The Company's entire fleet consists of DC-9 aircraft manufactured between
1967 and 1976 and Boeing 737-200 aircraft manufactured between 1968 and 1985.
Because many aircraft components are required to be replaced after specified
numbers of flight hours or take-off and landing cycles and because new aviation
technology may be required to be retrofitted, in general, the cost to maintain
aging aircraft will exceed the cost to maintain newer aircraft. The Company
believes that its cost to maintain its aircraft in the long-term will be
consistent with industry experience for this aircraft type and age used by
comparable airlines. However, since the resumption of the Company's service in
September 1996, the Company has incurred higher than usual maintenance expenses
as a result of expenses related to reactivating its aircraft. Amendments to FAA
regulations are under consideration which would require certain heavy
maintenance checks and other additional maintenance requirements for aircraft
operating beyond certain operational limits. It is likely that these maintenance
requirements will apply to the aircraft operated by the Company, although it is
uncertain whether the proposed amendments will require any changes to the heavy
maintenance procedures already utilized by the Company. In addition, the Company
will be required to comply with any other future regulations or Airworthiness
Directives issued with respect to aging aircraft. There can be no assurance that
the Company's costs of maintenance (including costs to comply with aging
aircraft requirements) will not materially increase in the future.
The Company believes that its aircraft are mechanically reliable based on
the percentage of scheduled flights completed. However, there can be no
assurance that the Company's aircraft will continue to be sufficiently reliable
over longer periods of time. Furthermore, given the age of the Company's fleet,
any public perception that the Company's aircraft are less than completely
reliable could have a material adverse effect on the Company's business.
Various incidents involving the Company's aircraft prior to May 1996, the
accident involving Flight 592 and the suspension of operations have further
contributed to a negative public perception as to the safety of the Company's
aircraft and operations. See "Risk Factors--Accident/Suspension of Operations."
Various FAA findings and safety violations by the Company discovered by the
FAA in connection with its special scrutiny of the Company led to the consent
order under which the Company's operations were suspended. Although the Company
has satisfied the FAA sufficiently to justify a return of its operating
certificate, the Company continues to be subject to a high level of FAA scrutiny
and there can be no assurance that the Company will be able to avoid violations
in the future.
Stage 3 Compliance
To satisfy FAA rules regarding allowable noise levels, each new entrant
airline must have at least 75% of its fleet in compliance with Stage 3 noise
level requirements by the end of 1998. The balance of each airline's fleet must
be brought into compliance with Stage 3 noise requirements by December 31, 1999.
As of August 31, 1998, 31 of the Company's 51 aircraft meet the Stage 3
requirements. The Company intends to meet its Stage 3 noise requirement
obligations by installing hush kits on Stage 2 aircraft or disposing of Stage 2
aircraft and by acquiring or leasing Stage 3 aircraft. Although the Company
does not believe that there will be a problem in installing the hush kits or
acquiring Stage 3 aircraft on a timely basis, there can be no assurance that the
Company will be able to do so or that failure to do so will not have a material
adverse effect on the Company's business.
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<PAGE>
Low Fuel Efficiency of the Company's Fleet
The Company's DC-9-32 aircraft and Boeing 737-200 aircraft are relatively
fuel inefficient compared to newer aircraft and industry averages. A significant
increase in the price of jet fuel would therefore result in a disproportionately
higher increase in the Company's average total costs than that of its
competitors using more fuel efficient aircraft. Fuel costs also are affected by
increases in taxes imposed on sale of fuel. For example, in August 1993, the
federal taxes on domestic fuel were increased by 4.3 cents per gallon. The
Company estimates that a 14 increase in fuel cost would increase the Company's
fuel expenses by approximately $114,000 per month based on the Company's current
fuel consumption rate.
The cost and availability of fuel are subject to many economic and political
factors and events occurring throughout the world. The Company has no agreement
with any fuel suppliers assuring the availability and price stability of fuel.
Consequently, the future cost and availability of fuel to the Company cannot be
predicted, and substantial price or tax increases or the unavailability of
adequate supplies could have a material adverse effect on the Company's
business.
Aircraft Acquisition Expenditures
The Company has contracted with the Boeing Company ("Boeing") to purchase 50
Boeing 717 ("B717") aircraft to be delivered from 1999 to 2002. The total cost
of the B717 aircraft to be provided by Boeing will exceed $1.0 billion. While
Boeing has committed to provide assistance with respect to the financing of the
aircraft to be acquired, the Company will be required to obtain the financing
from other sources. While the Company believes that financing for these
aircraft will be available, there can be no assurances that such additional
financing will remain available when needed or be available on attractive terms.
As a result of the accident involving Flight 592, the resulting heightened
FAA scrutiny, customer acceptance concerns and the requirement that the FAA
approve additional aircraft, the Company's continuing expansion has been and may
continue to be delayed. Accordingly, the Company may not be able to utilize all
the aircraft it has committed to purchase. Although the Company has obtained
attractive purchase terms from Boeing, if the Company cannot use such aircraft,
it may be required to sell or lease such aircraft on terms which will depend
upon market conditions at the time. There can be no assurance that the Company
will not suffer a financial loss from any such sales or leases. See "Risk
Factors--Accident/Suspension of Operations."
Employee Relations
The Company has been in negotiations with the Association of Flight
Attendants ("AFA") over a labor contract, but reached an impasse on August 6,
1998. The Company and the AFA were notified that the National Mediation Board
was terminating its services and that beginning September 5, 1998, either party
could resort to self-help remedies, including a strike by the members of the
AFA. The Company has made contingency plans to mitigate the impact of potential
disruptions. However, a significant work stoppage by the AFA could have a
material adverse effect on the Company. In the event there is a significant
work stoppage, there can be no assurance that the Company will be able to
sustain sufficient cash flows from operations to meet its Boeing 717-200
progress payments and Stage 3 requirements.
Risks of Expansion
The Company intends to expand its operations into new markets, subject to
FAA and DOT approval. Although the Company's low fare service had previously
been accepted in the Company's markets, there can be no assurance that its
service will continue to be accepted in its markets, particularly in light of
the accident involving Flight 592 and greater competition in the Company's
markets. Furthermore, the Company's continued expansion will require
substantial additional capital expenditures, thereby increasing the risks
associated with expansion.
Airport Access
The Company's markets are located primarily in the eastern United States.
Access to certain "slot" controlled airports (such as Washington's National, New
York's Kennedy and LaGuardia and Chicago's O'Hare) is limited and there can be
no assurance that the Company would be able to obtain or maintain access to such
airports at an acceptable cost. Any condition which would deny or limit the
Company's access to the airports it serves or seeks to serve may have a material
adverse effect on the Company's business.
Reliance on Others
The Company has entered into agreements with contractors, including other
airlines, to provide certain facilities and services required for its
operations, including aircraft maintenance, ground facilities, baggage handling
and personnel training. The Company will likely need to enter into similar
agreements in any new markets it decides to serve. All of these agreements are
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<PAGE>
subject to termination after notice. The Company's reliance upon others to
provide essential services on behalf of the Company may result in relative
inability to control the efficiency, timeliness and quality of contract
services. For example, the Company's reliance on SabreTech, Inc. for certain
maintenance work appears to have contributed to the accident involving Flight
592. Management expects that the Company will be required to rely on such
contractors for some time in the future.
Risk of Loss
As evidenced by the crash of Flight 592 on May 11, 1996, the Company is
exposed to potential catastrophic losses that may be incurred in the event of an
aircraft accident. Any such accident could involve not only repair or
replacement of a damaged aircraft and its consequent temporary or permanent loss
from service, but also significant potential claims of injured passengers and
others. The Company is required by the Department of Transportation ("DOT") to
carry liability insurance on each of its aircraft. The Company currently
maintains liability insurance in the amount of $750.0 million per occurrence.
Although the Company currently believes its insurance coverage is adequate,
there can be no assurance that the amount of such coverage will not be changed
or that the Company will not be forced to bear substantial losses from
accidents. The Company's cost of insurance substantially increased after the
accident. Substantial claims resulting from an accident in excess of related
insurance coverage could have a material adverse effect on the Company.
Moreover, any aircraft accident, even if fully insured, could cause and has
caused a public perception that some of the Company's aircraft are less safe or
reliable than other aircraft, which could have and has had a material adverse
effect on the Company's business.
Dependence on Executive Officers
The Company is dependent on the services of D. Joseph Corr (President and
Chief Executive Officer) and its other executive officers. The loss of services
of these officers could materially and adversely affect the business of the
Company and its future prospects. The Company does not, and does not presently
intend to, maintain key man life insurance on any of the Company's officers.
Cyclical Nature of Airline Industry
The airline industry is highly sensitive to general economic conditions.
Because a substantial portion of airline travel (both business and personal) is
leisure travel, the industry tends to experience severe adverse financial
results during general economic downturns. Any prolonged general reduction in
airline passenger traffic may adversely affect the Company, particularly since
the Company is substantially dependent on leisure travel and on the stimulation
of additional discretionary air travel.
Federal Regulation
The Company has the necessary authority to conduct flight operations,
including a Certificate of Public Convenience and Necessity from the DOT and an
operating certificate from the FAA; however, the continuation of such authority
is subject to continued compliance with applicable statutes, rules and
regulations pertaining to the airline industry, including any new rules and
regulations that may be adopted in the future. The FAA has the authority to
bring proceedings to enforce the safety laws and regulations under the Federal
Aviation Act of 1958, as amended (the "Aviation Act"), including the assessment
of civil penalties, suspension or revocation of the Company's authority to
operate and the pursuit of criminal sanctions. The DOT has similar authority
with regard to enforcement of the economic laws and regulations under the
Aviation Act. No assurance can be given with respect to the cost of compliance
with all present and future rules and regulations and the effect on the business
of the Company, particularly its expansion plans and aircraft acquisition
program.
Extraordinary regulatory review of the Company's operations by the FAA
followed the accident involving Flight 592 on May 11, 1996, and various FAA
findings and violations of FAA safety rules ultimately resulted in the consent
order under which the Company's operations were suspended on June 17, 1996. In
the consent order, the FAA alleged that the Company violated various federal
regulations relating to aircraft maintenance, maintenance manuals, training,
record keeping and reporting and the Company agreed to present a plan to the FAA
specifying the methods by which it would demonstrate to the FAA its
qualifications to hold an air carrier operating certificate. The Company
implemented several operating and administrative changes to address the FAA's
concerns and subsequently satisfied the FAA with respect to the safety
violations referenced in the consent order. The FAA returned the Company's
operating certificate to it on August 29, 1996. The Company is likely to be
subject to increased and continuing regulatory scrutiny which could affect the
Company's operations, acquisition program and expansion plans indefinitely.
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Unauthorized Parts
The Company has heavy aircraft maintenance as well as engine and component
overhaul performed by FAA approved contract maintenance providers. Each of the
contractors as well as the Company has procedures in place to ensure the use of
authorized materials during the performance of maintenance. A risk exists that
through fraud or negligence unauthorized parts could be used on any air
carrier's aircraft including those of the Company.
No Dividends
The Company has never paid cash dividends on its stock and has no plans to
do so in the foreseeable future. The Company intends to retain earnings, if
any, for business use.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of Common
Stock by Selling Stockholder.
MATERIAL CHANGES IN BUSINESS
The following supplements information contained in the business description
of the Company incorporated by reference from the Company's annual report on
Form 10-K for the year ended December 31, 1997.
1. Executive Officers and Directors. In May 1998, Richard Schroeter was
--------------------------------
elected as Senior Vice President Finance (Chief Financial Officer) of the
Company. In July 1998, M. Ponder Harrison resigned as Senior Vice President --
Sales and Marketing of the Company's operating subsidiaries. Although no
successor has been elected, certain of Mr. Harrison's duties have been assumed
by Jeffrey MacKinney, the Senior Vice President -- Planning of the Company's
operating subsidiaries. In August 1998, Robert C. Pohlad resigned from the
Company's Board of Directors. A replacement has yet to be selected.
2. Current Markets. Since April 1, 1998, the Company has commenced service or
---------------
announced the commencement of service on the following routes:
<TABLE>
<CAPTION>
Route Commencement Date
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<S> <C>
Atlanta - Buffalo NY April 1, 1998
Atlanta - Greensboro NC April 1, 1998
Atlanta - Richmond VA April 1, 1998
Atlanta - Hartford CT May 18, 1998
Atlanta - Quad Cities/Moline IL September 9, 1998
Atlanta - Miami FL September 16, 1998
Atlanta - Newark NJ October 1998
</TABLE>
By September 1998, the Company will discontinue all nonstop service between
Orlando and all markets other than Atlanta, and the Company will also
discontinue service between Atlanta and West Palm Beach FL in September 1998.
3. Current Fleet. As of September 1, 1998, the Company operates 40 DC-9
-------------
aircraft and 11 B737 aircraft.
4. Employee Relations. In April 1998, the Company reached agreement with the
------------------
National Pilot Association and the AirTran Pilots Association representing the
Company's pilots. The Company does not believe that the agreement will
materially increase its cost of operations.
The Company has been in negotiations with the AFA over a labor contract, but
reached an impasse on August 6, 1998. The Company and the AFA were notified
that the National Mediation Board was terminating its services and that
beginning September 5, 1998, either party could resort to self-help remedies,
including a strike by the members of the AFA. The Company has made contingency
plans to mitigate the impact of potential disruptions. However, a significant
work stoppage by the AFA could have a material adverse effect on the Company.
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<PAGE>
SELLING STOCKHOLDER
The Selling Stockholder with respect to the 50,000 Shares being registered
herewith is Aviation Management Systems, Inc., a Massachusetts corporation
("AMS") wholly owned by John W. Shaffer. In consideration for certain services
rendered by AMS to Airways (which merged into the Company in November 1997), AMS
received warrants to purchase 50,000 shares of Common Stock of Airways at $3.82
per share. As a result of the merger, such warrant now applies to shares of
Common Stock of the Company and the warrant price continues to be $3.82 per
share. This Prospectus relates to the shares of Common Stock that may be
acquired by AMS upon exercise of the warrant. Neither AMS nor John W. Shaffer
owns any stock in the Company.
PLAN OF DISTRIBUTION
The 50,000 shares of Common Stock being registered herewith for the account
of the Selling Stockholder may be sold from time to time to purchasers directly
by the Selling Stockholder. Alternatively, the Selling Stockholder may from
time to time offer such securities through dealers or agents, who may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholder and any dealers or agents that participate in the
distribution of securities offered hereby may be deemed to be underwriters, and
any profit on the sale of such securities by them and any discounts, commissions
or concessions received by any such dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act.
The securities offered hereby may be sold from time to time in one or more
transactions at a fixed offering price which may be changed or at varying prices
determined at the time of sale or at negotiated prices.
The Selling Stockholder has agreed to pay up to $10,000 of the expenses
incident to this offering and will also pay all commissions and fees of persons
employed by the Selling Stockholder. The Company will pay all other expenses
incident to this offering. Under agreements entered into with the Company, the
Selling Stockholder and any broker-dealer it may utilize will be indemnified by
the Company against certain civil liabilities, including liabilities under the
Securities Act.
The Selling Stockholder will be subject to applicable provisions of the
Exchange Act and rules and regulations thereunder, including without limitation
Rules 10b-6 and 10b-7 which provisions may limit the timing of purchases and
sales of any of the Company's securities by the Selling Stockholder. All of the
foregoing may affect the marketability of the securities.
The Selling Stockholder will have the right to sell under Rule 144, rather
than under this Prospectus. In order to meet the terms of Rule 144, a Selling
Stockholder must have held the stock being sold for at least one year, must file
a notice with the Commission and must conduct the sale in a "broker's
transaction" as defined in Rule 144, among other conditions.
LEGAL MATTERS
Certain legal matters regarding the validity of the Common Stock offered
hereby will be passed upon for the Company by Ellis, Funk, Goldberg, Labovitz &
Dokson, P.C., Atlanta, Georgia. Certain shareholders of Ellis, Funk, Goldberg,
Labovitz & Dokson, P.C. own approximately 23,600 shares of common stock of the
Company.
EXPERTS
The consolidated financial statements and schedule of AirTran Holdings, Inc.
appearing in AirTran Holdings, Inc.'s Annual Report (Form 10-K) for the year
ended December 31, 1997, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated financial statements and schedule are
incorporated herein by reference in reliance on their report given on their
authority as experts in accounting and auditing.
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<PAGE>
No dealer, salesman or any other person has been authorized by the Company to
give any information or to make any representations other than those contained
in this Prospectus in connection with the offering made hereby, and if given or
made, such information or representations may not be relied upon. The
Prospectus does not constitute an offer to sell or the solicitation of an offer
to buy any securities other than those specifically offered hereby or an offer
to sell, or a solicitation of an offer to buy, to any person in any jurisdiction
in which such offer or sale would be unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the Company since
any of the dates as of which information is furnished or since the date of this
Prospectus.
<TABLE>
<CAPTION>
-----------------------
TABLE OF CONTENTS
Page
----
<S> <C>
Available Information......... 2
Incorporation of Certain
Information by Reference... 2
Forward Looking Statements
Summary Information........... 3
Risk Factors.................. 6
Use of Proceeds............... 11
Material Changes in Business.. 11
Selling Stockholder........... 12
Plan of Distribution.......... 12
Legal Matters................. 12
Experts....................... 12
</TABLE>
AIRTRAN HOLDINGS, INC.
50,000 Shares of
Common Stock
September ____, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The fees and expenses to be paid in connection with this offering are as
follows:
SEC filing fee........................... $ 100.00
Accounting fees and expenses*............
Legal fees and expenses*.................
--------
Miscellaneous*........................... $
========
- -----------------
*Estimated
Of these expenses, $10,000 will be paid by the Selling Stockholder and the
Company will pay the balance of such expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation of the Company provide that directors of the
Company will not be personally liable for monetary damages to the Company for
certain breaches of their fiduciary duty as directors to the fullest extent
allowable by Nevada law. Under current Nevada law, directors would remain
liable for: (i) acts or omissions which involve intentional misconduct, fraud
or a knowing violation of law, and (ii) approval of certain illegal dividends or
redemptions. In appropriate circumstances, equitable remedies or nonmonetary
relief, such as an injunction, will remain available to a stockholder 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 Company).
The Company also has the obligation, pursuant to the Company's By-laws, to
indemnify any director or officer of the Company for all expenses incurred by
them in connection with any legal action brought or threatened against such
person for or on account of any action or omission alleged to have been
committed while acting in the course and scope of the person's duties, if the
person acted in good faith and in a manner which the person reasonably believed
to be in or not opposed to the best interests of the Company, and with respect
to criminal actions, had no reasonable cause to believe the person's conduct was
unlawful, provided that such indemnification is made pursuant to then existing
provisions of Nevada General Corporation Law at the time of any such
indemnification.
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<PAGE>
ITEM 16. EXHIBITS
Exhibit Index
Exhibit No. and Description
---------------------------
4.1 Articles of Incorporation. (1)
4.2 Bylaws. (As amended on November 17, 1997). (2)
4.3 Stock Purchase Warrant dated January 8, 1997, granted by Airways
Corporation to John Shaffer dba Aviation Management Systems.
4.4 Plan of Reorganization and Agreement of Merger dated July 10, 1997,
between ValuJet, Inc. and Airways Corporation. (3)
4.5 Plan of Merger dated July 10, 1997, between ValuJet, Inc. and Airways
Corporation. (3)
4.6 Amendment to Plan of Reorganization and Agreement of Merger between
ValuJet, Inc. and Airways Corporation. (3)
4.7 Amendment to Plan of Merger between ValuJet, Inc. and Airways
Corporation. (3)
5.1 Opinion of Ellis, Funk, Goldberg, Labovitz & Dokson, P.C.
23.1 Consent of Ellis, Funk, Goldberg, Labovitz & Dokson, P.C. (included in
Exhibit 5.1)
23.2 Consent of Independent Auditors.
24.1 Powers of Attorney (included on signature pages)
___________________________________
(1) Incorporated by reference to the Company's Registration Statement on Form
S-4, registration number 33-95232, filed with the Commission on August 1,
1995, and amendments thereto.
(2) Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, Commission File No. 0-26914, filed with
the Commission on March 27, 1998.
(3) Incorporated by reference to the Company's Registration Statement on Form
S-4, registration number 333-33837, filed with the Commission on August 18,
1997, and amendments thereto.
II-2
<PAGE>
ITEM 17. 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;
(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;
provided, however, that paragraphs (1)(i) and (1)(ii) of this Section do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
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) 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.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia on the 2nd day of
September, 1998.
AIRTRAN HOLDINGS, INC.
By: /s/ D. Joseph Corr
--------------------------
D. Joseph Corr, President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints D. JOSEPH CORR and RICHARD SCHROETER, and either
of them (with full power in each to act alone), his true and lawful attorneys-
in-fact, with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 2nd day of September, 1998.
<TABLE>
<CAPTION>
<S> <C>
/s/ D. Joseph Corr September 2, 1998
- --------------------------------- President (Chief Executive
D. Joseph Corr Officer) and Director
/s/ Richard Schroeter September 2, 1998
- --------------------------------- Senior Vice President-Finance
Richard Schroeter (Principal Financial Officer)
/s/ David W. Lancelot September 2, 1998
- --------------------------------- Controller (Principal
David W. Lancelot Accounting Officer)
/s/ Don L. Chapman September 2, 1998
- --------------------------------- Director
Don L. Chapman
/s/ John K. Ellingboe September 2, 1998
- --------------------------------- Director
John K. Ellingboe
/s/ Lewis H. Jordan September 2, 1998
- --------------------------------- Director
Lewis H. Jordan
September ____, 1998
- --------------------------------- Director
Robert C. Pohlad
/s/ Robert L. Priddy September 2, 1998
- --------------------------------- Director
Robert L. Priddy
September ____, 1998
- --------------------------------- Director
Robert D. Swenson
</TABLE>
II-4
<PAGE>
EXHIBIT 4.3
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF CAN BE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT OR 1933, AS AMENDED, AND
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT, UNLESS, IN THE OPINION OF COUNSEL TO THE COMPANY, SUCH REGISTRATION
IS NOT THEN REQUIRED.
STOCK PURCHASE WARRANT
THIS WARRANT, is issued as of and effective as of the 8th day of January
1997, by Airways Corporation, a Delaware corporation (the "Company"), to John
Shaffer dba Aviation Management Systems (the "Holder").
1. ISSUANCE OF WARRANT. For good and valuable consideration, the
-------------------
receipt and sufficiency of which are hereby acknowledged, the Company hereby
grants to the Holder the right to purchase up to 50,000 shares (the "Shares") of
common stock, par value, $.01 per share of the Company in accordance with the
terms of this Warrant.
2. EXERCISE PRICE. The exercise price per share for which all or any of
--------------
the Shares may be purchased pursuant to the terms of this Warrant shall be $3.82
per share (the "Exercise Price"), subject to adjustment as set forth herein.
3. EXERCISE OF WARRANT. Subject to Section 10, the rights represented by
-------------------
this Warrant shall terminate 2 years from the effective date hereof. The period
during which the Warrant shall be exercisable shall be referred to as the
Exercise Period. Payment of the Exercise Price for Shares purchased under this
Warrant shall be made upon exercise of the Warrant and shall be paid to the
Company in cash (certified or cashier's check). The Holder shall have the right
to exercise the Warrant two times during the Exercise Period. Any such exercise
may be as to all or any increment of Shares issuable pursuant to the Warrant.
Upon exercise, the Holder shall deliver a written notice of intent to exercise,
in substantially the form of the "Notice to Exercise" attached hereto as Exhibit
A, to the Company at 6280 Hazeltine National Drive, Orlando, Florida 32822 or
such address as the Company shall designate in a written notice to the Holder.
If any law or regulation requires the Company to take any action with
respect to the Shares specified in such notice, then the date for the delivery
of such Shares against payment therefor shall be extended for the period
necessary to take such action. In the event of any failure to pay for the number
of Shares specified in such notice on the date set forth therein, the exercise
of the Warrant with respect to such number of Shares shall be treated as if it
had never been made. As soon as reasonably practical after the Holder has
validly exercised the Warrant, the Company shall cause the appropriate number of
Shares to be issued and delivered to the Holder.
<PAGE>
4. CHANGES IN CAPITAL STRUCTURE. If there is any change in the capital
----------------------------
structure of the Company through a consolidation, reorganization,
recapitalization or merger in which the Company is the surviving entity, the
number of shares issuable pursuant to the Warrant and the Exercise Price shall
be adjusted by the Board as it deems equitable, in its absolute discretion, to
prevent dilution or enlargement of the rights of the Holder. Any other
transactions (including, but not limited, the Company's issuance of its common
stock in acquisitions, the sale of the Company's stock in an initial public
offering or a private offering, the granting of options under the Company's
Stock Option Plan, or granting options outside of the Stock Option Plan) will
not result in any adjustment to the number of Shares issuable under the Warrant
or the Exercise Price.
In the event of a dissolution or liquidation of the Company, the Warrant shall
be cancelled to the extent not previously exercised. In the event of any
reorganization or merger, in which the Company is not the surviving entity, the
plan or agreement respecting such reorganization or merger shall define the
rights under this Warrant.
5. RIGHTS PRIOR TO PURCHASE OF STOCK. The Holder shall have no right as a
---------------------------------
shareholder with respect to any of the Shares covered by the Warrant until the
Holder has made full payment for the Shares being purchased and said Shares have
been issued and delivered to the Holder. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date such Shares are fully paid for, issued and delivered, except as
provided in Section 4.
6. CERTAIN RESTRICTIONS. The Holder will acquire the Shares for the Holder's
--------------------
own account, for investment only end without a view to resale or distribution
except in compliance with the Securities Act of 1933 (the "Act") and any
applicable state securities laws, and upon the acquisition of the Shares, the
Holder will enter into such written representations, warranties and agreements
as the Company may request in order to comply with the Act, any applicable state
securities laws and this Warrant. The issuance of Shares to the Holder pursuant
to the exercise of the Warrant shall be conditioned upon the execution by the
Holder of a stock purchase agreement containing such terms and conditions as the
Company in its sole discretion may require.
7. WITHHOLDING TAXES. The Holder agrees that he is an independent contractor,
-----------------
and that he will pay, on the date of exercise of the Warrant, the taxes required
to be paid, if any, pursuant to any law or regulation of any governmental
authority, whether federal, state, local, domestic or foreign.
8. SHARES RESERVED. The Company shall at all times during the Exercise Period
---------------
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of this Warrant.
<PAGE>
9. NONTRANSFERABILITY. The Warrant may not be transferred except by will
------------------
or the laws of descent and distribution and, during the lifetime of the Holder,
and may be exercised only by the Holder. Except as provided in the preceding
sentence, no Warrant nor any interest in the Warrant shall be subject to
assignment, transfer, pledge, hypothecation or other disposition either by
voluntary or involuntary act of the Holder or the Holder's heir or beneficiary
or by operation of law. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Warrant contrary to the provisions
hereof, or the levy of any execution, attachment or similar process upon the
Warrant shall be null, void and without effect. Nor shall such Warrant or right
be subject to the demands or claims of any creditor of such person.
Additionally, neither the Holder nor any other person or entity shall have any
interest in any specific asset or assets or stock of the Company by reason of
the granting of the Warrant.
10. DELAY IN EXERCISE. The Board of Directors of the Company may determine
-----------------
in its discretion, that listing, registration or qualification of the Shares
subject to the Warrant upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of the exercise of such Warrant; and in
such event such Warrant may not be exercised in whole or in part unless and
until such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Board of
Directors of the Company.
IN WITNESS WHEREOF, the parties have executed this Warrant effective as of
the 8th day of January, 1997.
AIRWAYS CORPORATION
By: /s/ Robert D. Swenson
------------------------------------
Name: Robert D. Swenson
----------------------------------
Title: President
---------------------------------
/s/ John W. Shaffer
----------------------------------------
John Shaffer d.b.a. Aviation Management
Systems
-3-
<PAGE>
EXHIBIT A
---------
NOTICE OF EXERCISE
To: AIRWAYS CORPORATION
I hereby purchase from AIRWAYS CORPORATION (the "Company")
-------------
shares of its Common Stock in accordance with the terms of the Warrant dated as
of January 8, 1997. I hereby tender payment in the amount of $ .
---------
I hereby request that certificates for such shares of Common Stock (or
any other securities or other property issuable upon such exercise) be issued in
the name of and delivered to the address set forth below.
----------------------------------------
John Shaffer d.b.a. Aviation Management
Systems
Address:
--------------------------------
--------------------------------
--------------------------------
----------------------------------------
Taxpayer Identification Number or Social
Security Number
<PAGE>
[LETTERHEAD OF ELLIS, FUNK, GOLDBERG, LABOVITZ & DOKSON, P.C. APPEARS HERE]
EXHIBIT 5.1
September 2, 1998
AirTran Holdings, Inc.
9955 AirTran Boulevard
Orlando, Florida 32827
Re: AirTran Holdings, Inc. Registration Statement on Form S-3
---------------------------------------------------------
Gentlemen:
At your request we have examined the Registration Statement on Form S-3
filed by AirTran Holdings, Inc. (the "Company"), a Nevada corporation, with the
Securities and Exchange Commission with respect to the registration under the
Securities Act of 1933, as amended, of 50,000 shares of Common Stock, $.001 par
value per share, of the Company (the "Common Stock") issuable by the Company
upon the exercise of certain warrants that have been issued by the Company to
Aviation Management Systems, Inc. (the "AMS Warrants").
As your counsel, and in connection with the preparation of the Registration
Statement, we have examined the originals or copies of such documents, corporate
records, certificates of public officials, officers of the Company and other
instruments relating to the authorization and issuance of the Common Stock as we
deemed relevant or necessary for the opinion herein expressed.
Upon the basis of the foregoing, it is our opinion that the Common Stock to
be issued and sold by the Company upon the exercise of the AMS Warrants will be,
upon exercise of the AMS Warrants in accordance with their terms (including
payment of the warrant exercise price) and issuance of shares by the Company,
legally issued, fully-paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name in the "Legal"
section of the Registration Statement, including the Prospectus constituting a
part thereof, and any amendments thereto.
Yours truly,
ELLIS, FUNK, GOLDBERG, LABOVITZ
& DOKSON, P.C.
By: /s/ Robert B. Goldberg
----------------------
Robert B. Goldberg
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 13, 1998, in the Registration Statement (Form
S-3) and related Prospectus of AirTran Holdings, Inc. for the registration of
50,000 shares of its common stock.
We also consent to the incorporation by reference therein of our report dated
February 13, 1998 with respect to the financial statement schedule of AirTran
Holdings, Inc. for the years ended December 31, 1997, 1996, and 1995 included
in the Annual Report (Form 10-K) for 1997 filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Atlanta, Georgia
August 31, 1998
