KHK Kitty Hawk

Kitty Hawk, Inc. (AMEX:KHK), today announced that its wholly-owned subsidiary, Kitty Hawk Aircargo, Inc., has entered into a one year charter contract with the H.E. Sutton Forwarding Company, LLC. Kitty Hawk will operate one of its B727 aircraft on an ACMI basis (managing the Aircraft, Crew, Maintenance and Insurance), for the purpose of transporting horses within the United States. The Kitty Hawk aircraft and flight crews will be based in Lexington, Kentucky. Based on successful performance of the contract, the total annual revenue to Kitty Hawk Aircargo, Inc. is estimated to be approximately $2.7 million. H.E. Sutton is the leader in domestic equine air travel; its mission is to safely and efficiently transport horses between all of the major Thoroughbred racing and breeding markets in the U.S. and Canada. "The whole staff at H.E. Sutton looks forward to a long and mutually prosperous relationship with Kitty Hawk Aircargo,� said Robert Clark, President of H.E. Sutton. �Our reputation within the Thoroughbred horse racing industry as the first name in equine air travel depends on reliable air carrier service and we are confident that Kitty Hawk�s industry-leading reliability and commitment to customer service will sustain that reputation.� �Kitty Hawk has been a major carrier of high value shipments and exotic and other live animals for many years and all live cargo is given our highest level of care,� said Robert W. Zoller, president and chief executive officer of Kitty Hawk, Inc. �Given the special requirements of moving horses, we are proud that H.E. Sutton recognized Kitty Hawk Aircargo�s industry leading service, experience and expertise for moving high value, high security and mission-critical heavyweight freight of all kinds and trusts us with this precious cargo. With H.E. Sutton we aim to expand and improve the service standard in this specialized niche in the freight transport industry.� About Kitty Hawk, Inc. www.kittyhawkcompanies.com As a recognized leader in customer service, Kitty Hawk is the premier provider of guaranteed, mission-critical, time-definite overnight air, second-morning air and time-definite expedited ground freight transportation to major business centers, international freight gateways and surrounding communities throughout North America, including, Alaska; Hawaii; Toronto, Canada; and San Juan, Puerto Rico. Kitty Hawk's scheduled freight network and award-winning, guaranteed overnight time-definite air or expedited ground products are ideal for heavy-weight (over 150 lbs.), high-value or high-security, special goods with unique dimension, perishable, animal and/or other shipments requiring special handling. With more than 30 years experience in the aviation and air freight industries, Kitty Hawk plays a key connecting role in the global supply chain. Kitty Hawk serves the logistics needs of more than 550 freight forwarders, integrated carriers, domestic and international airlines and logistics companies with its extensive integrated air and ground network, fleet of Boeing 737-300SF and 727-200 cargo aircraft, as well as a 240,000-square-foot cargo warehouse, U.S. Customs clearance and sort facility at its Fort Wayne, Indiana hub. In 2005, Kitty Hawk became the North American launch customer for the fuel-efficient and environmentally friendly Boeing 737-300SF cargo aircraft. In late 2005, Kitty Hawk launched its new coast-to-coast and border-to-border expedited ground network reaching key business centers throughout the US, Canada and Mexico. In early 2006, to manage the growing demand for its high customer service ground freight product Kitty Hawk formed Kitty Hawk Ground, Inc. In June 2006, Kitty Hawk Ground acquired and began integrating the majority of the assets of 20-year-old Air Container Transport (ACT), the dominant expedited airport-to-airport freight trucking company operating from Southwestern Canada to San Diego as well as additional cities as far east as Texas and Illinois. In early 2007, Kitty Hawk is scheduled to implement its new internet-based, customer-focused information technology and cargo management platform which is specifically designed for enhanced customer service and communications, tracing and tracking of shipments as well as operation management for all of the Company�s air and ground network, regional hub operations and cargo accounting and related administrative functions. About H.E. Sutton Forwarding Company, LLC www.suttonforwarding.com Since 1969, H.E. "Tex" Sutton Forwarding Company, LLC. has been the leader in domestic Equine Air travel. H.E.�Sutton is the only U.S. company to have a dedicated Boeing 727 cargo aircraft at its disposal. The company�s only mission is to safely and efficiently transport horses between all of the major Thoroughbred racing and breeding markets in the U.S. and Canada. Sutton�s custom walk-on and off loading ramps, climate controlled cabin, and experienced horse handlers provide�our�four legged passengers with the�most comfortable and least stressful way to get to that important race, show, auction�or breeding engagement within hours from coast to coast! Statement under the Private Securities Litigation Reform Act This report may contain forward-looking statements that are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or future financial and operating performance and involve known and unknown risks and uncertainties that may cause actual results or performance to be materially different from those indicated by any forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "forecast," "may," "will," "could," "should," "expect," "intends," "plan," "believe," "potential" or other similar words indicating future events or contingencies. Some of the things that could cause actual results to differ from expectations are: economic conditions; the impact of high fuel prices; cancellation of the ACMI horse charter contract by H.E. Sutton; our inability to successfully implement and operate our expanded scheduled airport-to-airport expedited ground freight network; our inability to successfully operate and integrate the Air Container Transport operation and to retain their customers; failure of key suppliers and vendors to perform; our inability to attract sufficient customers at economical prices for our expanded ground network; unforeseen increases in liquidity and working capital requirements related to our expanded ground network; potential competitive responses from other operators of nationwide airport-to-airport ground freight networks; the continued impact of terrorist attacks, global instability and potential U.S. military involvement; the Company's significant lease obligations and indebtedness; the competitive environment and other trends in the Company's industry; changes in laws and regulations; changes in the Company's operating costs including fuel; changes in the Company's business plans; interest rates and the availability of financing; limitations upon financial and operating flexibility due to the terms of our credit facility; liability and other claims asserted against the Company; labor disputes; the Company's ability to attract and retain qualified personnel; and inflation. For a discussion of these and other risk factors, see the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed therein. These risk factors may not be exhaustive. The Company operates in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on the Company's business or events described in any forward-looking statements. The Company disclaims any obligation to publicly update or revise any forward-looking statements after the date of this report to conform them to actual results.