<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

                    FOR THE QUARTER ENDED SEPTEMBER 30, 1997

                                       or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

                         COMMISSION FILE NUMBER 0-25202

                                KITTY HAWK, INC.
             (Exact name of registrant as specified in its charter)

       Delaware                                             75-2564006
(State of Incorporation)                                 (I.R.S. Employer
                                                         Identification No.)

                              1515 West 20th Street
                                 P.O. Box 612787
              Dallas/Fort Worth International Airport, Texas 75261

                                 (972) 456-2200
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [x ] No [ ]

Number of shares outstanding of the registrant's common stock, $0.01 par value,
as of November 12, 1997: 10,451,807.


<PAGE>   2
                      KITTY HAWK, INC. AND SUBSIDIARIES


<TABLE>
<CAPTION>
                                                                                           Page Number

<S>                                                                                            <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

     Condensed Consolidated Balance Sheets
         September 30, 1997 and December 31, 1996............................................  3

     Condensed Consolidated Statements of Operations
         Three months ended September 30, 1997 and 1996, and
         Nine months ended September 30, 1997 and 1996.......................................  4

     Condensed Consolidated Statements of Stockholders' Equity
         Nine months ended September 30, 1997................................................  5

     Condensed Consolidated Statements of Cash Flows
         Nine months ended September 30, 1997 and 1996.......................................  6

     Notes to Condensed Consolidated Financial Statements....................................  7 - 9

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.................................................  10 - 17

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings...................................................................  18

Item 2.  Changes in Securities...............................................................  18

Item 3.  Defaults upon Senior Securities.....................................................  18

Item 4.  Submission of Matters to a Vote of Security Holders.................................  18

Item 5.  Other Information...................................................................  18

Item 6.  Reports on Form 8-K and Exhibits....................................................  18

Signatures...................................................................................  20
</TABLE>



                                       2
<PAGE>   3

PART I.  FINANCIAL INFORMATION

                        KITTY HAWK, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                             SEPTEMBER 30,       DECEMBER 31,
ASSETS                                                           1997               1996
                                                            -------------       -------------
                                                             (unaudited)

<S>                                                         <C>                 <C>          
Current assets
     Cash and cash equivalents .......................      $   2,403,480       $  27,320,402
     Trade accounts receivable .......................         21,644,727          37,828,018
     Deferred income taxes ...........................            107,564             107,564
     Inventory and aircraft supplies .................          5,587,548           2,789,982
     Prepaid expenses and other assets ...............          2,825,072           1,143,989
     Deposits on aircraft ............................          3,875,316           5,438,628
                                                            -------------       -------------
         Total current assets ........................         36,443,707          74,628,583
                                                            -------------       -------------

Property and equipment
     Aircraft ........................................        144,649,024          53,140,853
     Aircraft work-in-progress .......................          8,178,161           6,732,878
     Machinery and equipment .........................          5,122,368           2,680,692
     Leasehold improvements ..........................          3,053,624             778,879
     Building ........................................          1,770,000                  --
     Furniture and fixtures ..........................            173,899             166,057
     Transportation equipment ........................            417,247             289,499
                                                            -------------       -------------
                                                              163,364,323          63,788,858
     Less:  accumulated depreciation and amortization         (23,007,382)        (15,390,015)
                                                            -------------       -------------
         Net property and equipment ..................        140,356,941          48,398,843
                                                            -------------       -------------

Total assets .........................................      $ 176,800,648       $ 123,027,426
                                                            =============       =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
     Accounts payable ................................      $   8,522,412       $   8,853,292
     Accrued expenses ................................         13,226,661          23,668,609
     Income taxes payable ............................          2,892,856           2,526,737
     Accrued maintenance reserves ....................          3,326,009           2,373,157
     Current maturities of long-term debt ............          8,373,261           3,687,888
                                                            -------------       -------------
         Total current liabilities ...................         36,341,199          41,109,683

Long-term debt .......................................         72,673,469          21,080,452
Deferred income taxes ................................          2,544,900           2,544,900

Commitments and contingencies

Stockholders' equity
     Preferred stock, $1 par value:  Authorized shares
         --1,000,000; none issued .....................                --                  --


     Common stock, $.01 par value:  Authorized
        shares --25,000,000; issued and outstanding
        --10,669,517 .................................            106,695             106,695


     Additional paid-in capital ......................         33,949,825          33,968,700
     Retained earnings ...............................         33,260,862          26,293,298
     Less common stock in treasury,
        217,710 shares ...............................         (2,076,302)         (2,076,302)
                                                            -------------       -------------
         Total stockholders' equity ..................         65,241,080          58,292,391
                                                            -------------       -------------

Total liabilities and stockholders' equity ...........      $ 176,800,648       $ 123,027,426
                                                            =============       =============
</TABLE>


                            See accompanying notes.

                                       3
<PAGE>   4

                        KITTY HAWK, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)           

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED                       NINE MONTHS ENDED
                                                            SEPTEMBER 30,                           SEPTEMBER 30,
                                                       1997               1996                1997                1996
                                                   ------------       ------------       -------------       ------------

<S>                                                <C>                <C>                <C>                 <C>         
Revenues:
     Air freight carrier ....................      $ 22,552,078       $ 14,341,022       $  55,789,112       $ 39,615,267
     Air logistics ..........................        18,646,695         16,133,748          45,878,185         43,144,127
                                                   ------------       ------------       -------------       ------------
         Total revenues .....................        41,198,773         30,474,770         101,667,297         82,759,394
                                                   ------------       ------------       -------------       ------------

Costs of revenues:
     Air freight carrier ....................        15,231,990          9,347,832          38,075,855         29,688,049
     Air logistics ..........................        17,218,740         14,871,505          42,037,740         39,139,436
                                                   ------------       ------------       -------------       ------------
         Total costs of revenues ............        32,450,730         24,219,337          80,113,595         68,827,485
                                                   ------------       ------------       -------------       ------------

Gross profit ................................         8,748,043          6,255,433          21,553,702         13,931,909

General and administrative expenses .........         2,665,737          2,305,187           7,550,059          6,877,198
Non-qualified employee profit sharing expense           489,503            479,706           1,161,261            446,928
Stock option grants to executives ...........                --             (1,250)                 --          4,230,954
                                                   ------------       ------------       -------------       ------------

Operating income ............................         5,592,803          3,471,790          12,842,382          2,376,829

Other income (expense):
     Interest expense .......................          (759,694)          (506,725)         (1,809,076)        (1,530,003)
     Loss on asset disposal .................                --           (589,049)                 --           (589,049)
     Other, net .............................           154,447            124,904             579,300            262,584
                                                   ------------       ------------       -------------       ------------

Income before income taxes ..................         4,987,556          2,500,920          11,612,606            520,361

Income taxes ................................         1,995,022          1,100,154           4,645,042            268,912
                                                   ------------       ------------       -------------       ------------

Net income ..................................      $  2,992,534       $  1,400,766       $   6,967,564       $    251,449
                                                   ============       ============       =============       ============

Net income per share ........................      $       0.29       $       0.18       $        0.67       $       0.03
                                                   ============       ============       =============       ============

Weighted average common and common
     equivalent shares outstanding ..........        10,451,807          7,750,000          10,451,807          7,891,431
                                                   ============       ============       =============       ============
</TABLE>



                            See accompanying notes.

                                       4
<PAGE>   5
                        KITTY HAWK, INC. AND SUBSIDIARIES

          CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (unaudited)           


<TABLE>
<CAPTION>
                                                                        ADDITIONAL  
                                            NUMBER OF      COMMON        PAID-IN           RETAINED          TREASURY
                                             SHARES         STOCK        CAPITAL           EARNINGS            STOCK        TOTAL
                                           ----------------------------------------------------------------------------------------

<S>                                        <C>             <C>          <C>              <C>              <C>          <C>         
Balance at December 31, 1996 ...........   10,669,517      $ 106,695    $ 33,968,700    $26,293,298      $(2,076,302)  $ 58,292,391

Additional costs relating to initial 
public offering.........................           --             --         (18,875)            --               --        (18,875)

Net income .............................           --             --              --      6,967,564               --      6,967,564
                                           ----------------------------------------------------------------------------------------

Balance at September 30, 1997 ..........   10,669,517      $ 106,695    $ 33,949,825    $33,260,862      $(2,076,302)  $ 65,241,080
                                           ========================================================================================
</TABLE>





                            See accompanying notes.

                                       5
<PAGE>   6
                        KITTY HAWK, INC. AND SUBSIDIARIES

               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)           
<TABLE>
<CAPTION>
                                                                     NINE MONTHS ENDED
                                                                       SEPTEMBER 30,
                                                             -------------------------------
                                                                 1997                1996
                                                             ------------       ------------

<S>                                                          <C>                <C>         
Operating activities:
   Net income .........................................      $  6,967,564       $    251,449
   Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation and amortization ....................         7,617,367          4,301,437
     Deferred income taxes ............................                --            998,963
     Stock option grants to executives ................                --          4,230,954
     Changes in operating assets and liabilities:
       Trade accounts receivable ......................        16,183,291         26,916,983
       Inventory and aircraft supplies ................        (2,797,566)        (2,074,509)
       Prepaid expenses and other assets ..............        (1,681,083)         3,761,048
       Deposits on aircraft ...........................         1,563,312                 --
       Accounts payable and accrued expenses ..........       (10,772,828)       (16,862,704)
       Income taxes payable ...........................           366,119         (2,017,806)
       Accrued maintenance reserves ...................           952,852            125,059
                                                             ------------       ------------

Net cash provided by operating activities .............        18,399,028         19,630,874

Investing activities:
   Capital expenditures ...............................       (99,575,465)       (31,367,208)

Financing activities:
   Proceeds from issuance of long-term debt ...........        59,104,130         17,392,032
   Repayments of long-term debt .......................        (2,825,740)        (3,038,212)
   Additional costs relating to initial public offering           (18,875)                --
   Tax benefit of stock option grants to executives ...                --            404,570
   Acquisition of treasury shares .....................                --         (2,076,302)
   Proceeds from issuance of common stock .............                --              4,430
                                                             ------------       ------------

Net cash provided by financing activities .............        56,259,515         12,686,518
                                                             ------------       ------------

Net increase (decrease) in cash and cash
 equivalents ..........................................       (24,916,922)           950,184

Cash and cash equivalents at beginning of
   period .............................................        27,320,402          3,355,293
                                                             ------------       ------------

Cash and cash equivalents at end of period ............      $  2,403,480       $  4,305,477
                                                             ============       ============
</TABLE>


                            See accompanying notes.

                                       6
<PAGE>   7

                        KITTY HAWK, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION

     The accompanying condensed consolidated financial statements, which should
be read in conjunction with the consolidated financial statements and footnotes
included in the Transition Report on Form 10-K/A filed with the Securities and
Exchange Commission for the four month period ended December 31, 1996, are
unaudited (except for the December 31, 1996 condensed consolidated balance sheet
which was derived from the Company's audited consolidated balance sheet included
in the aforementioned Form 10-K/A), but have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting only of normal
recurring accruals) considered necessary for a fair presentation have been
included.

     Operating results for the three month and nine month periods ended
September 30, 1997 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1997.

     Net income per share is computed by dividing net income by the weighted
average number of common and common equivalent shares outstanding during the
period. The effect of options to purchase 390,707 and 153,567 shares of the
Company's common stock at $0.01 granted to certain executives in December 1995
and June 1996, respectively, have been included in the calculation of weighted
average common and common equivalent shares through their dates of exercise for
the nine month period ended September 30, 1996.

2.   REGISTRATION OF STOCK OFFERING

     In October 1996, the Company sold in an initial public offering 2,700,000
shares of Common Stock.

3.   INTEREST RATE RISK MANAGEMENT

     The Company has entered into an interest rate swap contract to effectively
convert a portion of a floating-rate obligation to a fixed-rate obligation. 
This agreement involves the exchange of amounts based on a fixed interest rate
to amounts based on floating interest rates over the life of the agreement
without an exchange of the national amount upon which the payments are based. 
The differential to be paid or received as interest rates change is accrued and
recognized as an adjustment of interest expense related to the obligation.  The
related amount payable to or receivable from counterparties is included in
current liabilities or assets.  The fair value of the swap agreement is not
recognized in the financial statements.  Gains and losses on a termination of
the interest rate swap agreement, should it occur, will be deferred as an
adjustment to the carrying amount of the outstanding obligation and amortized
as an adjustment to interest expense related to the obligation over the
remaining term of the original contract life of the terminated swap agreement. 
In the event of the early extinguishment of a designated obligation, any
realized or unrealized gain or loss from the swap would be recognized in income
coincident with the extinguishment.

4.   LITIGATION

     The Company filed suit against Express One International, Inc. ("Express
One") in July 1992 in Dallas County, Texas, claiming that Express One breached
an aircraft charter agreement and seeking actual damages of approximately
$60,000. Express One counterclaimed, asserting that the Company wrongfully
repudiated the lease agreement and seeking damages of $356,718 for services
performed, $1,140,000 for additional fees it would have received under the
contract, punitive damages and its attorney's fees and costs.

     In February 1995, a jury awarded the Company $25,000 in damages plus its
attorneys' fees and denied Express One's counterclaims. The court entered
judgment in favor of the Company for $25,000 in damages, for $148,115 in
attorney's fees through trial and for additional attorneys fees if Express One
appeals. Before expiration of the time for appeal, Express One filed a petition
under Chapter 11 of the U.S. Bankruptcy Code. There is a dispute about whether
Express One has preserved a right to appeal and whether the judgment has become
final. Therefore, the judgment awarded to the Company has not been recorded in
the financial statements. The Company does not expect the outcome of this matter
to have a material adverse effect on the Company's financial condition or
results of operations.

     The U.S. Postal Service ("USPS") selected the Company's air freight carrier
in September 1992 as the successful bidder on a contract for a multi-city
network of air transportation services supporting the USPS 



                                       7
<PAGE>   8

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Express Mail system. Two unsuccessful bidders sued the USPS to enjoin the award.
The Company intervened. This litigation (the "ANET Litigation") was settled in
April 1993 by agreements under which the USPS terminated the Company's contract
for convenience and awarded the contract to the incumbent contractor, Emery
Worldwide Airlines, Inc. ("Emery").

     In March 1995, the Company was served with a complaint in a qui tam lawsuit
filed on behalf of the U.S. Government by a third-party plaintiff seeking to
share a recovery under the Federal False Claims Act (the "Act"). The suit, filed
in May 1994, was filed under seal in accordance with the Act, to enable the U.S.
Government to review the claim before its disclosure to the defendants. The U.S.
Government declined to pursue the claim, but the third-party plaintiff chose to
continue. The suit claimed that the Company and another defendant fraudulently
failed to disclose to the USPS, both in the Company's successful bid and in the
settlement of the ANET litigation, that certain of the aircraft the Company
proposed to purchase and use to perform the contract were aging aircraft with
high use, and claimed that the Company and Emery similarly fraudulently
conspired in connection with the settlement of the ANET litigation. The suit
sought to recover treble the $10 million settlement payment made by the USPS in
settling the ANET litigation, plus the third party plaintiff's costs and fees.
In May 1996, the court dismissed the suit and awarded the Company its attorneys'
fees and costs. The plaintiff has asked the court to reconsider its ruling. The
Company does not expect the outcome of this matter to have a material adverse
effect on the Company's financial condition or results of operations.

5.   EARNINGS PER SHARE

     In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings per Share, which is required to be adopted on December 31,
1997. Early adoption of the new standard is not permitted. At that time, the
Company will be required to change the method currently used to compute earnings
per share and to restate all prior periods. The new standard eliminates primary
and fully diluted earnings per share and requires presentation of basic and
diluted earnings per share together with disclosure of how the per share amounts
were computed. Because the application of SAB No. 83, in calculation of per
share amounts under FAS 128 is presently uncertain, the Company is unable to
determine the effect of this new standard on per share amounts prior to 1997.
The effect on 1997 per share amounts is not expected to be material.

6.   ACQUISITION OF AIRCRAFT AND MERGER

     On September 17, 1997, the Company acquired sixteen Boeing 727 aircraft
from American International Airways, Inc. ("AIA") for approximately $51 million.
As part of the transaction, the Company was assigned all of the customer
contracts relating to the aircraft purchased. The purchase agreement provides
AIA an option to repurchase, no later than March 31, 1998, thirteen of these,
Boeing 727 aircraft from the Company for $37 million, plus any costs incurred by
the Company to maintain the repurchased aircraft. Similarly, the Company has an
option to require AIA to repurchase, no later than December 31, 1997, thirteen
of these Boeing 727 aircraft for $37 milion, plus any costs incurred by the
Company to maintain the repurchased aircraft. In order to finance the
acquisition of the aircraft, the Company amended its existing credit agreement
to permit additional borrowings of $45.9 million. Such additional borrowings
bear interest at a Eurodollar rate plus 1.5% to 2.0%, based upon the Company's
Debt-to-Cash Flow ratio, plus an additional 1.0% beginning in 1999 and 1.5%
beginning in 2000, with maturity on June 30, 2001.


     In September 1997, the Company and the sole shareholder of AIA, Kalitta

Flying Service, Inc. ("KFS"), O.K. Turbines, Inc. ("OK"), American 
International Travel, Inc. ("AIT"), and Flight One Logistics, Inc. ("FOL")
(collectively, "the Kalitta Companies"), entered into an Agreement and Plan of
Merger, which was subsequently amended (as amended, the "Merger Agreement"). 
Upon satisfaction of the conditions to the Merger Agreement, the consummation
of the transactions contemplated by the Merger Agreement is subject to a number
of customary conditions.   Each of the respective Kalitta Companies will be
merged (the "Merger") with and into separate subsidiaries of the Company, with
each of the Kalitta Companies surviving the Merger as a direct, wholly owned
subsidiary of the Company. At the effective time of the Merger, the outstanding
shares of capital stock of four of the Kalitta Companies (AIA, AIT, FOL and OK)
will be converted into the right to receive their prorata portion of 4,099,150
shares of the Company's common stock. The outstanding shares of capital stock
of KFS will be converted into the right to receive $20,000,000 cash.
        


                                       8
<PAGE>   9

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


     Concurrently with the consummation of the Merger, the Company will close a 
3,000,000 share common stock offering and a $340,000,000 senior secured note
offering. Of the 3,000,000 shares to be sold in the common stock offering,
the Company will sell 2,200,000 shares and certain stockholders of
the Company will sell 800,000 shares. The Company will not receive any of the
net proceeds from the sale of shares by such stockholders. The consummation of
the common stock offering and the note offering is conditioned upon (i) the
concurrent consummation of the Merger and each offering and (ii) entering into
the New Credit Facility (as defined) and Term Loan (as defined). The net
proceeds from the common stock offering and the note offering will be used (i)
to refinance and  restructure all but approximately $10 million of the
outstanding debt of the Company and the Kalitta Companies, (ii) to acquire two
Boeing 747s and convert them from passenger configuration to freighter
configuration, (iii) to pay the $20 million cash consideration in connection
with the Merger and (iv) to pay miscellaneous expenses. The Company intends to
use any remaining net proceeds for working capital.



                                       9
<PAGE>   10
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS                 


Overview

     Revenues. The Company's revenues are derived from two related businesses:
(i) air freight carrier and (ii) air logistics. Air freight carrier revenues
are derived substantially from aircraft, crew, maintenance, and insurance
("ACMI") contracts and on-demand charters flown with the Company's aircraft.
Air logistics revenues are derived substantially from on-demand air freight
charters arranged by the Company for its customers utilizing the flight
services of third party air freight carriers. With respect to on-demand
charters that are arranged by the Company and flown with its aircraft, charges
to the customer for air transportation are accounted for as air freight carrier
revenues and charges for ground handling and transportation are accounted for
as air logistics revenues. General Motors Corporation ("GM"), the USPS and
Burlington Air Express, Inc. have each accounted for more than 10% of the
Company's revenues for the nine months ended September 30, 1997 and 1996,
respectively.

     Costs of Revenues. The principal components of the costs of revenues
attributable to the air freight carrier consist of the costs for the
maintenance and operation of aircraft, including the salaries of pilots and
maintenance personnel, charges for fuel, insurance and maintenance and
depreciation of engines and airframes. Generally, charges for fuel are only
applicable for the on-demand charters flown by the air freight carrier because
fuel for the ACMI contract charters is generally provided by the customer or
billed to the customer on a direct pass-through basis. The principal components
of the costs of revenues attributable to air logistics consist of sub-charter
costs paid to third party air freight carriers and costs paid for ground
handling and transportation. With respect to on-demand charters that are flown
on the Company's aircraft, all related air transportation expenses are
allocated to the air freight carrier business and all related cargo ground
handling and transportation expenses are allocated to air logistics business.

     Boeing 727 Proposed Airworthiness Directive. The Federal Aviation 
Administration ("FAA") has reevaluated the engineering analysis which 
supported the grant of Boeing 727 cargo modification supplemental type 
certificates ("STCs") used in modifying the Company's Boeing 727s from 
passenger to freighter configuration.  The FAA has preliminarily determined
that the STC design features do not meet FAA certification criteria in several 
respects. The FAA has issued a proposed Airworthiness Directive ("AD") to 
address the first of the FAA's concerns - the structural strength of the
aircraft floor structure.  Other areas of concern relate to the strength of
various cargo-handling system components of the Boeing 727 aircraft and are
expected to be addressed by the FAA in subsequently issued ADs.  See "--
Liquidity and Capital Resources".                                       
        
        
        



                                       10
<PAGE>   11

RESULTS OF OPERATIONS

     The following table sets forth, on a comparative basis for the periods
indicated, the components of the Company's gross profit (in thousands) and the
gross profit margin by revenue type:

<TABLE>
<CAPTION>
                                            Three months ended September 30,
                                    ----------------------------------------------
                                              1997                     1996
                                    ---------------------    ---------------------

<S>                                 <C>            <C>       <C>            <C>   
Air freight carrier:
         Revenues ............      $22,552        100.0%    $14,341        100.0%
         Costs of revenues....       15,232         67.5       9,348         65.2
                                    -------        -----     -------        ----- 
         Gross profit ........      $ 7,320         32.5%    $ 4,993         34.8%
                                    =======        =====     =======        ===== 

Air logistics:
         Revenues ............      $18,647        100.0%    $16,134        100.0%
         Costs of revenues....       17,219         92.3      14,872         92.2
                                    -------        -----     -------        ----- 
         Gross profit ........      $ 1,428          7.7%    $ 1,262          7.8%
                                    =======        =====     =======        ===== 
</TABLE>

<TABLE>
<CAPTION>
                                             Nine months ended September 30,
                                    ----------------------------------------------
                                            1997                      1996
                                    ---------------------    ---------------------

<S>                                 <C>            <C>       <C>            <C>   
Air freight carrier:
         Revenues ............      $55,789        100.0%    $39,615        100.0%
         Costs of revenues....       38,076         68.3      29,688         74.9
                                    -------        -----     -------        ----- 
         Gross profit ........      $17,713         31.7%    $ 9,927         25.1%
                                    =======        =====     =======        ===== 

Air logistics:
         Revenues ............      $45,878        100.0%    $43,144        100.0%
         Costs of revenues....       42,038         91.6      39,139         90.7
                                    -------        -----     -------        ----- 
         Gross profit ........      $ 3,840          8.4%    $ 4,005          9.3%
                                    =======        =====     =======        ===== 
</TABLE>

     The following table presents, for the periods indicated, condensed
consolidated income statement data expressed as a percentage of total revenues:

<TABLE>
<CAPTION>
                                                       Three months ended         Nine months ended 
                                                          September 30,              September 30,
                                                      --------------------      --------------------
                                                       1997         1996         1997         1996
                                                      -------      -------      -------      ------- 

<S>                                                      <C>          <C>          <C>          <C>  
Revenues:
     Air freight carrier .......................         54.7%        47.1%        54.9%        47.9%
     Air logistics .............................         45.3         52.9         45.1         52.1
                                                      -------      -------      -------      ------- 
         Total revenues ........................        100.0        100.0        100.0        100.0
Total costs of revenues ........................         78.8         79.5         78.8         83.2
                                                      -------      -------      -------      ------- 
Gross profit ...................................         21.2         20.5         21.2         16.8
General and administrative expenses ............          6.5          7.5          7.4          8.3
Non-qualified employee profit sharing expense...          1.2          1.6          1.2          0.5
Stock option grants to executives ..............           --           --           --          5.1
                                                      -------      -------      -------      ------- 
Operating income ...............................         13.5         11.4         12.6          2.9
Interest expense ...............................         (1.8)        (1.7)        (1.8)        (1.9)
Loss on asset disposal .........................           --         (1.9)          --         (0.7)
Other income ...................................          0.4          0.4          0.6          0.3
                                                      -------      -------      -------      ------- 
Income before income taxes .....................         12.1          8.2         11.4          0.6
Income taxes ...................................          4.8          3.6          4.6          0.3
                                                      -------      -------      -------      ------- 
Net income .....................................          7.3%         4.6%         6.8%         0.3%
                                                      =======      =======      =======      =======
</TABLE>




                                       11
<PAGE>   12

QUARTER ENDED SEPTEMBER 30, 1997 COMPARED TO QUARTER ENDED SEPTEMBER 30, 1996

     Revenues -- Air Freight Carrier. Air freight carrier revenues increased to
$22.6 million, or 57.3%, from $14.3 million for the three months ended September
30, 1997, as compared to the three months ended September 30, 1996, principally
from an increase in fleet size from 23 aircraft to 44 aircraft at September 30,
1997. Air freight carrier on-demand and ACMI contract charter revenues were $4.6
million and $17.5 million, or 20.2% and 77.5%, respectively, of total air
freight carrier revenues for the quarter ended September 30, 1997, as compared
to $3.9 million and $9.9 million, or 27.0% and 69.2%, respectively, for the
quarter ended September 30, 1996. Revenues from on-demand charters flown by
Company aircraft for the quarter ended September 30, 1997 decreased 18% from the
comparable prior year period due to aircraft being shifted from on-demand to
ACMI contract charter service which is consistent with the Company's strategy of
using more of its fleet in ACMI business which produces relatively stable
revenues. Prices for the Company's on-demand and ACMI contract charters remained
relatively constant.

     Revenues -- Air Logistics. Air logistics revenues increased $2.5 million,
or 15.6%, to $18.6 million in the quarter ended September 30, 1997, from $16.1
million in the quarter ended September 30, 1996.  This increase was primarily
due to increased demand for on-demand charters generally and specifically for
charters that require larger aircraft, which generate greater revenues. Prices
for the Company's air logistics services remained relatively constant.

     Costs of Revenues -- Air Freight Carrier. Air freight carrier costs of
revenues increased $5.9 million, or 62.9%, to $15.2 million in the quarter ended
September 30, 1997, from $9.3 million in the quarter ended September 30, 1996.
This increase was primarily due to increased fleet size and additional ACMI
contract charters. The gross profit margin from the air freight carrier
decreased to 32.5% in the quarter ended September 30, 1997, from 34.8% in the
quarter ended September 30, 1996. This decrease was a result of lower revenues
and higher maintenance costs associated with three aircraft being out of service
while undergoing repairs or required guidance system upgrades.

     As reported to the FAA, overall aircraft utilization increased to 8,451
flight hours for the quarter ended September 30, 1997, from 5,599 in the quarter
ended September 30, 1996, a 50.9% increase. This increase was primarily due to
increased fleet size and hours flown for ACMI contract charters.

     Costs of Revenues -- Air Logistics. Air logistics costs of revenues
increased $2.3 million, or 15.8%, to $17.2 million in the quarter ended
September 30, 1997, from $14.9 million in the quarter ended September 30, 1996,
reflecting an increased volume of business. The gross profit margin from air
logistics remained relatively flat at 7.7% for the two comparative quarters.

     General and Administrative Expenses. General and administrative expenses
increased $361,000, or 15.6%, to $2.7 million in the quarter ended September 30,
1997, from $2.3 million in the quarter ended September 30, 1996. This increase
was primarily due to an increase in support functions and administrative costs
associated with the growth in the aircraft fleet and the increased volume of
business of the air freight carrier in the quarter ended September 30, 1997. As
a percentage of total revenues, general and administrative expenses decreased to
6.5% in the quarter ended September 30, 1997, as compared to 7.5% for the
quarter ended September 30, 1996.

     Non-qualified Employee Profit Sharing Expense. Employee profit sharing
expense remained relatively flat at $490,000 for the quarter ended September 30,
1997 as compared to $480,000 for the quarter ended September 30, 1996.

     Operating Income. As a result of the above, operating income increased $2.1
million to $5.6 million in the quarter ended September 30, 1997, from $3.5
million in the quarter ended September 30, 1996. Operating income margin
increased to 13.5% in the quarter ended September 30, 1997, from 11.4% in the
quarter ended September 30, 1996.

     Interest Expense. Interest expense increased to $760,000 for the quarter
ended September 30, 1997, from $507,000 for the quarter ended September 30,
1996, a 50% increase. The increase was primarily the result of the addition of
long-term debt used to finance major aircraft maintenance costs and the
acquisition of the sixteen Boeing 727 aircraft from the Kalitta Companies on
September 17, 1997.

     Other Income (Expense). Other income increased to $154,000 in the quarter
ended September 30, 1997, from $125,000 in the comparable prior year period. The
increase was primarily due to increased interest income in the quarter 


                                       12
<PAGE>   13

ended September 30, 1997, from the investment of unused net proceeds from the
Company's October 1996 initial public offering.

     Income Taxes. Income taxes as a percentage of income before income taxes
decreased to 40.0% for the quarter ended September 30, 1997, from 44.0% for the
comparable prior year period. The increase was primarily due to decreased state
income taxes.

     Net Income. As a result of the above, net income increased to $3.0 million
in the quarter ended September 30, 1997, compared to net income of $1.4 million
in the quarter ended September 30, 1996. Net income as a percentage of total
revenues increased to 7.3% in the quarter ended September 30, 1997, from 4.6% in
the comparable prior year period.


NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1996

     Revenues -- Air Freight Carrier. Air freight carrier revenues increased to
$55.8 million, or 40.8%, from $39.6 million for the nine months ended September
30, 1997 as compared to the nine months ended September 30, 1996 principally due
to an increase in fleet size. Air freight carrier on-demand and ACMI contract
charter revenues were $12 million and $42.4 million, or 21.5% and 76.1%,
respectively, of total air freight carrier revenues for the nine months ended
September 30, 1997, as compared to $14.1 million and $24.2 million, or 35.5% and
61.1%, respectively, for the nine months ended September 30, 1996. Revenues from
on-demand charters flown by Company aircraft for the nine months ended September
30, 1997 decreased 14.5% from the comparable prior year period due to aircraft
being shifted from on-demand to ACMI contract charter service, which is
consistent with Kitty Hawk's strategy of using more of its fleet in ACMI
business which produces relatively stable revenues. Prices for the Company's
on-demand and ACMI contract charters remained relatively constant.

     Revenues -- Air Logistics. Air logistics revenues increased $2.7 million,
or 6.3%, to $45.9 million in the nine months ended September 30, 1997, from
$43.1 million in the nine months ended September 30, 1996. This increase was
primarily due to increased demand in the first and third quarters for on-demand
charters generally and specifically for charters that require larger aircraft,
which generate greater revenues. Prices for the Company's air logistics services
remained relatively constant. The number of on-demand charters managed decreased
by 967 charters, or 8.3%, to 10,640 for the nine months ended September 30, 1997
from 11,607 for the nine months ended September 30, 1996. This was principally
due to a strike at GM during the fourth quarter of 1996 and in the first nine
months of 1997.

     Costs of Revenues -- Air Freight Carrier. Air freight carrier costs of
revenues increased $8.4 million, or 28.3%, to $38.1 million in the nine months
ended September 30, 1997, from $29.7 million in the nine months ended September
30, 1996, reflecting increased costs associated with increased fleet size and
additional ACMI contract charters. The gross profit margin from the air freight
carrier increased to 31.7% in the nine months ended September 30, 1997, from
25.1% in the nine months ended September 30, 1996. This increase was primarily
the result of lower maintenance costs resulting from operational efficiencies
associated with increased fleet size and lower depreciation costs resulting from
the sale of eight JT8D-9A engines.
 
     As reported to the FAA, overall aircraft utilization increased to 21,912
flight hours for the nine months ended September 30, 1997, from 15,628 in the
nine months ended September 30, 1996, a 40.2% increase. This increase was
primarily due to increased fleet size and hours flown for ACMI contract
charters.

     Costs of Revenues -- Air Logistics. Air logistics costs of revenues
increased $2.9 million, or 7.4%, to $42 million in the nine months ended
September 30, 1997, from $39.1 million in the nine months ended September 30,
1996, reflecting an increased volume of business. The gross profit margin from
air logistics decreased to 8.4% in the nine months ended September 30, 1997,
from 9.3% in the comparable prior year period, a decrease of 9.7%. This decrease
was primarily due to increased rates paid to third party air freight carriers
which could not be passed on to the Company's customers due to contractually
established rates.
 
     General and Administrative Expenses. General and administrative expenses
increased $673,000, or 9.8%, to $7.6 million in the nine months ended September
30, 1997, from $6.9 million in the nine months ended September 30, 1996. This
increase was primarily due to an increase in support functions and
administrative costs associated with the growth in the aircraft fleet and the
increased volume of business of the air freight carrier in the nine months ended
September 30, 1997. As a percentage of total revenues, general and
administrative expenses decreased to 7.4% in the nine months ended September 30,
1997, from 8.3% in the nine months ended September 30, 1996.
 
     Non-qualified Employee Profit Sharing Expense. Employee profit sharing
expense increased $714,000, or 159.8%, to $1.2 million in the nine months ended
September 30, 1997, from $447,000 in the nine months ended September 30, 1996,
reflecting the increase of net income before taxes in the nine months ended
September 30, 1997.
 
     Stock Option Grants to Executives. There was no stock option grant expense
during the nine months ended September 30, 1997. During the nine month period
ended September 30, 1996, the Company granted two executive officers options to
purchase 544,274 shares of Common Stock that resulted in a charge to earnings of
approximately $4,231,000.

     Operating Income. As a result of the above, operating income increased
$10.5 million, or 440.3%, to $12.8 million in the nine months ended September
30, 1997, from $2.4 million in the nine months ended September 30, 1996.
Operating income margin increased to 12.6% in the nine months ended September
30, 1997, from 2.9% in the nine months ended September 30, 1996.
 
     Interest Expense. Interest expense increased to $1.8 million for the nine
months ended September 30, 1997, as compared to $1.5 million for the nine months
ended September 30, 1996 due to an increase in long term debt associated with
financing major aircraft maintenance costs and the acquisition of 16 Boeing 727
aircraft from the Kalitta Companies in September 1997.
 
     Loss on Asset Disposal. Loss on asset disposal during the nine months ended
September 30, 1996 was $589,000, which resulted from write-downs associated with
equipment dispositions.
 
     Other Income (Expense). Other income increased to $579,000 in the nine
months ended September 30, 1997, from $263,000 in the comparable prior year
period. The increase was primarily due to increased interest income in the nine
months ended September 30, 1997 from the investment of proceeds from the
Company's initial public offering.

     Income Taxes. Income taxes as a percentage of income before income taxes
decreased to 40% for the nine months ended September 30, 1997, from 51.7% for
the comparable prior year period. The decrease was primarily due to decreased
state income taxes.

     Net Income. As a result of the above, net income increased to $7 million in
the nine months ended September 30, 1997, compared to $251,000 in the nine
months ended September 30, 1996. Net income as a percentage of total revenues
increased to 6.8% in the nine months ended September 30, 1997, from 0.3% in the
comparable prior year period.




                                       13
<PAGE>   14

LIQUIDITY AND CAPITAL RESOURCES

     The Company's capital requirements are primarily for the acquisition and
modification of aircraft and working capital. In addition, the Company has, and
will continue to have, capital requirements for the requisite periodic and major
overhaul maintenance checks for its air freight carrier fleet and, subsequent
to the note offering, will have substantial debt service expenses. The Company's
funding of its capital requirements historically has been primarily from a
combination of internally generated funds, bank borrowings and the proceeds of
its October 1996 initial public offering. In addition to purchasing aircraft, 
the Company has leased aircraft and entered into a sale leaseback transaction 
to acquire aircraft and may enter into similar transactions in the future.

     In September 1997, the Company and the sole shareholder of AIA, Kalitta
Flying Service, Inc. ("KFS"), O.K. Turbines, Inc. ("OK"), American 
International Travel, Inc. ("AIT"), and Flight One Logistics, Inc. ("FOL")
(collectively, "the Kalitta Companies"), entered into an Agreement and Plan of
Merger, which was subsequently amended (as amended, the "Merger Agreement"). 
The consummation of the transactions contemplated by the Merger Agreement is
subject to a number of customary conditions. Upon satisfaction of the
conditions to the Merger Agreement, each of the respective Kalitta Companies
will be merged (the "Merger") with and into separate subsidiaries of the
Company, with each of the Kalitta Companies surviving the Merger as a direct,
wholly owned subsidiary of the Company. At the effective time of the Merger,
the outstanding shares of capital stock of four of the Kalitta Companies (AIA,
AIT, FOL and OK) will be converted into the right to receive their prorata
portion of 4,099,150 shares of the Company's common stock. The outstanding
shares of capital stock of KFS will be converted into the right to receive
$20,000,000 cash.

     Concurrently with the consummation of the Merger, the Company will close a 
3,000,000 share common stock offering and a $340,000,000 senior secured note
offering. Of the 3,000,000 shares to be sold in the common stock offering, the
Company will sell 2,200,000 shares and certain stockholders of the Company will
sell 800,000 shares. The Company will not receive any of the net proceeds from
the sale of shares by such stockholders. The consummation of the common stock
offering and the note offering is conditioned upon (i) the concurrent
consummation of the Merger and each offering and (ii) entering into the New
Credit Facility (as defined) and Term Loan (as defined). The net proceeds from
the common stock offering and the note offering will be used (i) to refinance
and restructure all but approximately $10 million of the outstanding debt of
the Company and the Kalitta Companies, (ii) to acquire two Boeing 747s and
convert them from passenger configuration to freighter configuration, (iii) to
pay the $20 million cash consideration in connection with the Merger and (iv)
to pay miscellaneous expenses. The Company intends to use any remaining net
proceeds for working capital.




                                       14
<PAGE>   15


     Cash provided by operating activities was $18.4 million and $19.6 million
in the nine months ended September 30, 1997 and 1996, respectively. As of
September 30, 1997, the Company had working capital of $102,508 compared to 
$33.5 million at December 31, 1996.

     Cash used by investing activities was $99.6 million and $31.4 million for
the nine months ended September 30, 1997 and 1996, respectively. Cash provided
by financing activities was $56.3 million and $12.7 million for the nine months
ended September 30, 1997 and 1996, respectively.

     On August 14, 1996, Kitty Hawk entered into a Credit Agreement with Wells
Fargo Bank (Texas), National Association ("WFB"), and Bank One, Texas, N.A.
("BOT") for a $15 million Revolving Credit Loans Facility (the "Revolving Credit
Facility"), an approximately $12.7 million Term Loans A Facility (the "Term
Loans A"), an approximately $11.2 million Term Loans B Facility (the "Term Loans
B"), and a $10 million Term Loans C Facility (the "Term Loans C")
(collectively, the "Commitments"). As of November 10, 1997, approximately $7.7
million was outstanding under the Revolving Credit Facility, approximately $10
million was outstanding under Term Loans A, approximately $9.6 million was
outstanding under Term Loans B, and approximately $5.4 was outstanding under
Term Loans C. Borrowings under these Commitments bear interest at WFB's prime
rate, or at Kitty Hawk's option, a Eurodollar rate plus 1.5% to 2.0%, based
upon a debt-to-cash flow ratio of Kitty Hawk. WFB, pursuant to an amendment to
the Credit Agreement, financed $45.9 million of the Company's recent $51
million acquisition of sixteen Boeing 727 aircraft from the Kalitta Companies.
This $45.9 million loan bears interest at a Eurodollar rate plus 1.5% to 2.0%
based upon a debt-to-cash flow ratio of Kitty Hawk, plus an additional 1.0% in
1999 and 1.5% beginning in 2000, with maturity on June 30, 2001.  In connection
with consummation of the common stock offering and the note offering, the
Company intends to repay all outstanding borrowings under the Commitments.

     The Company has two loans with 1st Source Bank. As of November 10, 1997,
the outstanding balance of the first loan was approximately $790,000. The loan
bears interest at 9.75%, is secured by a DC9-15F and matures in May 2000. As of
November 10, 1997, the outstanding balance of the second loan was approximately
$1.2 million. The loan bears interest at 8.5%, is secured by a DC9-15F and
matures in July 2002. The 1st Source loans contain certain aircraft maintenance
covenants and provide that a change in the Company's business is an event of
default upon which 1st Source may declare all or any part of the remaining
unpaid principal due and payable. This debt will remain outstanding following
consummation of the common stock offering and the note offering.

     In November 1996, in connection with the Company's recent acquisition of a
one-third undivided interest in four Falcon 20 jet aircraft, the Company and the
two other co-owners of such aircraft entered into a five year, $4.3 million term
loan. The loan bears interest at a floating prime rate, is secured by the four
Falcon 20 jet aircraft and requires monthly payments of principal and interest.
The Company's liability under such loan is limited to $2.0 million. This debt 
will remain outstanding following consummation of the common stock offering 
and the note offering.

     In connection with the common stock offering and the note offering, all but
approximately $2 million of Kitty Hawk's existing debt will be refinanced.
Concurrently with the consummation of the Merger, the common stock offering and
the note offering, the Company will enter into a new senior secured revolving
credit facility providing for borrowings up to $100 million subject to borrowing
base limitations (the "New Credit Facility") and a new $45.9 million term loan
(the "Term Loan") with WFB individually and as agent for other lenders.  The New
Credit Facility and Term Loan will be secured by accounts receivable, all
inventory (including rotables), intangibles and contract rights, cash, 16 Boeing
727 aircraft and related engines acquired by Kitty Hawk from the Kalitta
Companies in September 1997 and the stock of each of the subsidiaries of Kitty
Hawk, the stock of each of the Kalitta Companies and the Kalitta Companies' 60%
interest in American International Cargo ("AIC"). In addition, the New Credit
Facility and Term Loan will be guaranteed by each of Kitty Hawk's subsidiaries
and each of the Kalitta Companies (other than AIC).

     Capital expenditures were $99.6 million and $31.4 million for the nine
months ended September 30, 1997 and 1996,



                                       15
<PAGE>   16

respectively. Capital expenditures for the nine months ended September 30, 1997
were primarily for the overhaul of several JT8D-7 jet engines and the  purchase
of: (i) eighteen Boeing 727-200 aircraft, (ii) cargo and noise abatement
modifications for one Boeing 727-200 aircraft, (iii) noise abatement equipment
with respect to two DC9-15F aircraft, (iv)  ten reconditioned JT8D jet engines,
(v) leasehold improvements to Boeing 727-200 aircraft, (vi) the 40,000 square
foot headquarters facility and related ground sublease at Dallas/Fort Worth 
International Airport, (vii) major maintenance checks and (viii) ground service
equipment. Capital expenditures for the nine  months ended September 30, 1996
were primarily for the purchase of: (i) three Boeing 727-200 aircraft and (ii)
cargo and noise abatement modifications for two Boeing 727-200 aircraft.

     In October 1996, the Company sold in an initial public offering 2,700,000
shares of Common Stock, raising net proceeds of approximately $29.3 million to
purchase and modify to cargo configuration five Boeing 727-200 aircraft. As of
November 10, 1997, the Company has used all of the net proceeds of the initial
public offering to fund these costs. The Company has purchased (i) one Boeing
727-200 freighter aircraft for $4.4 million, (ii) one Boeing 727-200 aircraft
for $2.3 million which is being modified to cargo configuration for an
additional cost of approximately $3.3 million (including approximately $2.2
million for noise abatement equipment), (iii) one Boeing 727-200 aircraft for
$3.5 million which was modified to cargo configuration for an additional cost
of approximately $5.2 million (including noise abatement equipment for
approximately $2.5 million), (iv) one Boeing 727-200 aircraft for $3.5 million
which was placed into revenue service as a leased passenger aircraft until its
next major maintenance check (approximately 3,000 flight hours) at which time
the Company currently anticipates modifying the aircraft to cargo configuration
for an additional cost of approximately $5.0 million (including $2.5 million
for noise abatement equipment which has already been installed) and (v) $5.0
million for partial payment on the sixteen Boeing 727 aircraft acquired from
the Kalitta Companies. 

     In December 1996, the Company amended its agreement with its supplier of
noise abatement equipment to increase the number of hushkits it has firmly
committed to purchase and to establish fixed prices. In connection with this
new agreement, the Company paid the vendor an additional $350,000 in deposits
on future, firm orders valued between $13 and $17.5 million, depending on type
selected. In 1997, the Company has spent an aggregate of $8.0 million for noise
abatement modifications. In 1998, the Company anticipates an aggregate capital
expenditure ranging from $27 million to $31 million for noise abatement
modifications to aircraft currently owned. In the event the Company acquires
more aircraft than currently proposed, the Company's anticipated aggregate
capital expenditures for noise abatement modifications in 1998 could materially
increase.

     The Company's fleet is comprised of 41 owned and 3 leased aircraft, which
includes 32 Boeing 727 aircraft, 5 Douglas DC9-15F aircraft and 7 turbo-prop
Convairs. The Company anticipates converting one passenger configured Boeing
727-200 aircraft to cargo configuration in 1998. These aircraft do not include a
Westwind used solely to transport Company personnel and the Company's undivided
one-third interest in four Falcon 20 jet aircraft leased to a third-party
operator. Manufacturers' Service Bulletins ("Service Bulletins") and ADs issued
under the FAA's "Aging Aircraft" program or issued on an ad hoc basis cause
certain of these aircraft to be subject to extensive aircraft examinations and
require certain of these aircraft to undergo structural inspections and
modifications to address problems of corrosion and structural fatigue at
specified times. It is possible that additional Service Bulletins or ADs
applicable to the types of aircraft included in the Company's fleet could be
issued in the future.

     As of September 30, 1997, Kitty Hawk owned 29 and leased 3 Boeing 727
aircraft, 29 of which were previously converted from passenger configuration to
freighter configuration by the installation of a large cargo door and numerous
interior modifications related to the installation of cargo container handling
systems. The aircraft conversion process was previously approved by the FAA, by
the issuance of STCs to four firms that engineered and designed the conversion
hardware and aircraft modification processes. All but one of the Company's
aircraft have previously been modified utilizing STCs held by three of these
four firms.

     The FAA has reevaluated the engineering analysis which supported the grant
of Boeing 727 cargo modification STCs and has preliminarily determined that the
STC design features do not meet FAA certification criteria in several respects.
To address this issue the FAA has issued a proposed AD to address the first of
the FAA's concerns - the structural strength of the aircraft floor structure.
Other areas of concern relate to the strength of various  cargo-handling
components of the Boeing 727 aircraft and are expected to be addressed by the
FAA in subsequently issued ADs.



                                       16
<PAGE>   17
     If the proposed Directive is adopted, each operator of Boeing 727
freighter aircraft modified by any of the four firms will be required to limit
the weight of each container (or pallet) position and to adopt other aircraft
operating restrictions depending on the configuration of the aircraft, until
the operator can demonstrate that the floor strength meets the FAA's
certification criteria. Under the proposed Directive, the Company would be
required to limit the weight per container/pallet position to approximately
4,000 pounds from a current maximum of 8,000 pounds. After a period of 120 days
from the date the Directive becomes effective, the maximum per position weight
will be fixed at approximately 3,000 pounds, until the Company can demonstrate
that the floor strength meets the FAA's certification criteria.

     The Company is urging the FAA to allow additional time before requiring
operators to modify the aircraft to bring them into compliance. In addition,
the Company is working with the STC holders which are performing engineering
analysis to seek a cost effective solution. There can be no assurance as to
the terms of the final Directive and whether a satisfactory solution can be
engineered. If no such solution is developed and approved by the FAA, the
capacity of the Company's Boeing 727 fleet will be reduced. The FAA's proposed
Directive is being opposed on its merits by a number of Boeing 727 operators.
One of the Company's Boeing 727 aircraft was converted to freighter
configuration by Boeing and is not subject to the foregoing proposed Directive.

     The cost of compliance with such ADs and Service Bulletins cannot
currently be estimated, but could be substantial.

     The Company historically has followed, and currently intends to follow, a
policy of retiring Convairs at the time of their next scheduled major overhaul
maintenance checks rather than expending the amounts necessary for such checks.
Two Convairs have been retired since December 31, 1996.

     The Company believes that available funds (including the New Credit
Facility), bank borrowings and cash flows expected to be generated by
operations, along with the net proceeds of the note offering and the common
stock offering, will be sufficient to meet its anticipated cash needs for
working capital and capital expenditures for at least the next 12 months.
Thereafter, if cash generated by operations is insufficient to satisfy the
Company's liquidity requirements, the Company may sell additional equity or
debt securities or obtain additional credit facilities. However, there can be
no assurance that the Company will be able to sell any additional equity or
debt securities or obtain any additional credit facilities.

SEASONALITY

     Certain of the Company's customers engage in seasonal businesses,
especially the U.S. Postal Service and customers in the automotive industry. As
a result, the Company's air freight charter logistics business has historically
experienced its highest quarterly revenues and profitability during the fourth
quarter of the calendar year due to the peak Christmas season activity of the
U.S. Postal Service and during the period from June 1 to November 30 when
production schedules of the automotive industry typically increase.
Consequently, the Company experiences its lowest quarterly revenue and
profitability during the first quarter of the calendar year.



                                       17
<PAGE>   18

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         Information pertaining to this item is incorporated from Part I. 
         Financial Information (Note 3 - Litigation).

ITEM 2.  CHANGES IN SECURITIES

         Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

ITEM 5.  OTHER INFORMATION

         Not applicable.

ITEM 6.  REPORTS ON FORM 8-K AND EXHIBITS

         (a)  The Company filed Form 8-K on October 2, 1997 and Amendment No. 1 
              to Form 8-K on November 6, 1997 to disclose the acquisition of 
              sixteen Boeing 727 aircraft from AIA and incurrance of 
              $45,900,000 of related bank debt.

         (b)  Exhibits:

              The following exhibits are filed herewith or are incorporated by
              reference from previous filings with the Securities and Exchange 
              Commission.



                                       18
<PAGE>   19

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
     Exhibit No.           Description
     -----------           -----------
<S>                 <C>                                                        
        3.1         -- Certificate of Incorporation of the Company.(2)

        3.2         -- Bylaws of the Company.(2)

        3.3         -- Amendment No. 1 to the Certificate of Incorporation of the Company.(2)

        3.4         -- Amendment No. 1 to the Bylaws of the Company.(2)

        4.1         -- Specimen Common Stock Certificate.(3)

       10.1

       10.2

       11.1         -- Statement of Computation of Net Income per Share.(1)

       21.1         -- Subsidiaries of the Registrant.(3)

       27.1         -- Financial Data Schedule.(1)
</TABLE>

-----------

     (1) Filed herewith.

     (2) Previously filed as an exhibit to the Company's Registration Statement
         on Form S-1 (Reg. No. 33-85698) dated as of December 1994, and 
         incorporated herein by reference.

     (3) Previously filed as an exhibit to the Company's Registration Statement
         on Form S-1 (Reg. No. 333-8307) dated as of October 1996, and 
         incorporated herein by reference.




                                       19
<PAGE>   20

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on the 14th day of November, 1997.

                                    KITTY HAWK, INC.

                                    By: /s/RICHARD R. WADSWORTH, JR.
                                        ---------------------------------------
                                        Richard R. Wadsworth, Jr.
                                        Senior Vice President -- Finance,
                                        Chief Financial Officer, and Secretary



                                       20
<PAGE>   21

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
     Exhibit No.           Description
     -----------           -----------
<S>                 <C>                                                        
        3.1         -- Certificate of Incorporation of the Company.(2)

        3.2         -- Bylaws of the Company.(2)

        3.3         -- Amendment No. 1 to the Certificate of Incorporation of the Company.(2)

        3.4         -- Amendment No. 1 to the Bylaws of the Company.(2)

        4.1         -- Specimen Common Stock Certificate.(3)

       10.1

       10.2

       11.1         -- Statement of Computation of Net Income per Share.(1)

       21.1         -- Subsidiaries of the Registrant.(3)

       27.1         -- Financial Data Schedule.(1)
</TABLE>

-----------

     (1) Filed herewith.

     (2) Previously filed as an exhibit to the Company's Registration Statement
         on Form S-1 (Reg. No. 33-85698) dated as of December 1994, and 
         incorporated herein by reference.

     (3) Previously filed as an exhibit to the Company's Registration Statement
         on Form S-1 (Reg. No. 333-8307) dated as of October 1996, and 
         incorporated herein by reference.