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Wed, Oct 31, 2007

Kitty Hawk Cuts Service, Jobs Following Bankruptcy Filing

Filed Chapter 11 Twice In Seven Years

Beleaguered air freight and ground cargo operation Kitty Hawk Inc. announced this week it has shut down most of its operations, and will eliminate 500 jobs.

According to the Dallas Morning News, Kitty Hawk Aircargo and KH Ground Inc., filed for Chapter 11 bankruptcy protection from creditors two weeks ago... the second time in seven years it had done so. Kitty Hawk previously filed for protection in 2000, and reemerged in 2002.

"Kitty Hawk's financial condition has deteriorated significantly over the last year, and the ceasing of network air and ground operations is necessitated by, among other things, a 25 percent decrease in year-over-year demand for its air product and a 15 percent year-over-year decrease in demand for its ground product," the carrier said.

Kitty Hawk officials also cited record-high jet and diesel fuel prices as reasons for the grim news. The operation reported net losses of $19.9 million in the first six months of 2007... and over $34 million since January 2006.

The cargo company is based at Dallas/Fort Worth International Airport, and has a hub in Fort Wayne, IN. The carrier said it plans to continue charter air cargo and on-demand operations.

Kitty Hawk appealed to investors in August it would likely need more loans or equity to "fund our operations during the second quarter of 2008" -- but then filed for bankruptcy protection October 15.

Shares in the air-and-ground operation will likely be delisted from the American Stock Exchange on Wednesday. Shares stopped trading upon its bankruptcy filing, at a whopping nine cents a share.

According to its bankruptcy filing, Kitty Hawk has 776 employees, of which 671 are full-time workers.



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