The personnel costs, totaling approximately $900,000, were primarily associated

with contractual obligations arising from the retirement of the company's

former chairman/CEO. The company also experienced unusually high medical

costs in the 2004 second quarter due to several catastrophic claims, and

as a result had to increase its medical claims accrual by nearly $900,000.

Gil Duarte, chief financial officer, commented, "Over the course of

the quarter, we reviewed an upward trend in employee medical claims and therefore

took appropriate action to limit our future exposure. We will continue to

monitor these expenses closely, and will adjust our accrual for the third

quarter if warranted."

World Airways plans to issue its financial results for the second quarter

after the market close tomorrow.