AMTRAN INC
AMTRAN, INC., 2000 10-K, EXHIBIT 10.5
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>33
<FILENAME>0033.txt
<DESCRIPTION>AMTRAN, INC., 2000 10-K, EXHIBIT 10.5
<TEXT>




                              ESCALATION ADJUSTMENT

                         AIRFRAME AND OPTIONAL FEATURES


                                     between

                               THE BOEING COMPANY

                                       and

                             America Trans Air, inc.


           Supplemental Exhibit AE1 to Purchase Agreement Number 2262


                               (For Model 717-200, 737-600, 737-700, 737-800 and
                       737-900 the Airframe  Price  Includes the Engine Price at
                       its basic thrust level.)


<PAGE>




1.           Formula.
             -------

             Airframe and Optional  Features price  adjustments  (Airframe Price
Adjustment) are used to allow prices to be stated in current year dollars at the
signing  of this  Purchase  Agreement  and to  adjust  the  amount to be paid by
Customer at delivery for the effects of economic fluctuation. The Airframe Price
Adjustment  will be  determined  at the time of Aircraft  delivery in accordance
with the following formula:

             Pa = (P+B)(L + M) - P

             Where:

                      Pa            =  Airframe  Price  Adjustment.  (For  Model
                                    717-200,   737-600,   737-700,  737-800  and
                                    737-900,  the  Airframe  Price  includes the
                                    Engine Price at its basic thrust level.)

                      L =  .65 x ( ECI
                                  -----
                                   ECIb   )where  ECIb  is  the  base
                                           year index (as set forth in
                                           Table  1 of  this  Purchase
                                           Agreement)

                      M =  .35 x ( ICI
                                  -----
                                   ICIb    )where ICIb is the base year index
                                           (as set forth in Table 1 of this
                                            Purchase Agreement)

                      P =  Airframe Price plus Optional Features Price
                           (as set forth in Table 1 of this Purchase Agreement).

                      B =  0.005 x (N/12) x (P)  where N is the calendar month
                                                 and year of scheduled Aircraft
                                                 delivery minus the calendar
                                                 month and year of the Base
                                                 Price Year, both as shown in
                                                 Table 1 of this Purchase
                                                 Agreement.

                      ECI is a value  determined  using the U.S.  Department  of
                      Labor,  Bureau of Labor Statistics  "Employment Cost Index
                      for  workers  in  aerospace   manufacturing  -  Wages  and
                      Salaries" (ECI code 3721W),  calculated by  establishing a
                      three-month  arithmetic  average  value  (expressed  as  a
                      decimal and rounded to the nearest tenth) using the values
                      for the fifth, sixth and seventh months prior to the month
                      of scheduled delivery of the applicable  Aircraft.  As the
                      Employment  Cost  Index  values  are  only  released  on a
                      quarterly basis, the value released for the month of March
                      will be used for the months of January and  February;  the
                      value  for June  used for  April  and May;  the  value for
                      September  used for July and  August;  and the  value  for
                      December used for October and November.

                      ICI is a value  determined  using the U.S.  Department  of
                      Labor,  Bureau of Labor  Statistics  "Producer  Prices and
                      Price Index - Industrial  Commodities  Index ", calculated
                      as a 3-month  arithmetic  average of the released  monthly
                      values  (expressed as a decimal and rounded to the nearest
                      tenth)  using the values  for the 5th,  6th and 7th months
                      prior to the month of scheduled delivery of the applicable
                      Aircraft.

                      As an example,  for an Aircraft  scheduled to be delivered
                      in the month of January,  the months June, July and August
                      of the preceding year will be utilized in determining  the
                      value of ECI and ICI.

     Note:  i. In  determining  the  values  of L and M,  all  calculations  and
resulting  values  will  be  expressed  as a  decimal  rounded  to  the  nearest
ten-thousandth.

     ii. .65 is the numeric  ratio  attributed  to labor in the  Airframe  Price
Adjustment formula.

     iii. .35 is the numeric ratio attributed to materials in the Airframe Price
Adjustment formula.

     Iv. The  denominators  (base year  indices) are the actual  average  values
reported by the U.S.  Department of Labor, Bureau of Labor Statistics (base year
June 1989 = 100).  The  applicable  base year and  corresponding  denominator is
provided by Boeing in Table 1 of this Purchase Agreement.

     iv. The final value of Pa will be rounded to the nearest dollar.

     vi. The Airframe Price  Adjustment  will not be made if it will result in a
decrease in the Aircraft Basic Price.


2.           Values to be Utilized in the Event of Unavailability.
             -----------------------------------------------------

             2.1 If the Bureau of Labor  Statistics  substantially  revises  the
methodology used for the determination of the values to be used to determine the
ECI and ICI values (in contrast to benchmark adjustments or other corrections of
previously released values), or for any reason has not released values needed to
determine the applicable  Airframe Price Adjustment,  the parties will, prior to
the  delivery of any such  Aircraft,  select a  substitute  from other Bureau of
Labor   Statistics   data  or  similar   data   reported   by   non-governmental
organizations.  Such substitute will result in the same  adjustment,  insofar as
possible,  as would have been calculated  utilizing the original values adjusted
for fluctuation during the applicable time period.  However, if within 24 months
after  delivery of the Aircraft,  the Bureau of Labor  Statistics  should resume
releasing  values  for  the  months  needed  to  determine  the  Airframe  Price
Adjustment,  such values will be used to  determine  any increase or decrease in
the Airframe Price  Adjustment for the Aircraft from that determined at the time
of delivery of the Aircraft.

             2.2  Notwithstanding  Article 2.1 above,  if prior to the scheduled
delivery  month of an Aircraft the Bureau of Labor  Statistics  changes the base
year for determination of the ECI and ICI values as defined above, such re-based
values will be incorporated in the Airframe Price Adjustment calculation.

             2.3 In the event escalation  provisions are made non-enforceable or
otherwise  rendered  void by any agency of the  United  States  Government,  the
parties  agree,  to the extent they may lawfully do so, to equitably  adjust the
Aircraft Price of any affected Aircraft to reflect an allowance for increases or
decreases in labor  compensation  and material costs occurring since February of
the price base year shown in the Purchase Agreement which is consistent with the
applicable provisions of paragraph 1 of this Supplemental Exhibit AE1.

             2.4 If within 12 months of Aircraft  delivery,  the published index
values  are  revised  due to an  acknowledged  error  by  the  Bureau  of  Labor
Statistics,  the  Airframe  Price  Adjustment  will be  re-calculated  using the
revised index values (this does not include those values noted as preliminary by
the Bureau of Labor  Statistics).  A credit  memorandum or supplemental  invoice
will be issued for the Airframe Price  Adjustment  difference.  Interest charges
will not  apply  for the  period  of  original  invoice  to  issuance  of credit
memorandum or supplemental invoice.

Note:        i. The  values  released  by the  Bureau  of Labor  Statistics  and
             available to Boeing 30 days prior to the scheduled  delivery  month
             of an Aircraft will be used to determine the ECI and ICI values for
             the applicable  months (including those noted as preliminary by the
             Bureau  of  Labor  Statistics)  to  calculate  the  Airframe  Price
             Adjustment  for the Aircraft  invoice at the time of delivery.  The
             values will be considered  final and no Aircraft Price  Adjustments
             will be made after Aircraft delivery for any subsequent  changes in
             published Index values, subject always to paragraph 2.4 above.

             ii. The maximum  number of digits to the right of the decimal after
             rounding  utilized  in any part of the  Airframe  Price  Adjustment
             equation  will be 4, where  rounding  of the  fourth  digit will be
             increased to the next highest  digit when the 5th digit is equal to
             5 or greater.

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