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UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM
10-Q

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(Mark One)

x

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

For the quarterly period ended March 31, 2003

OR

o

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

For the transition period from_______________to _______________

Commission file number:0-25202

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KITTY HAWK, INC.

(Exact name of registrant as specified in its
charter)

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| | Delaware(State or other jurisdiction ofincorporation or organization) |  | 75-2564006(I.R.S. EmployerIdentification No.) | 
| | --------------------------------------------------------------------- |  | --------------------------------------------- | 

| | 1515 West 20th StreetP.O. Box 612787Dallas/Fort Worth International Airport, Texas(Address of
principal executive offices) |  | 75261(Zip Code) | 
| | -------------------------------------------------------------------------------------------------------------------------- |  | --------------- | 

(972) 456-2200(Registrants telephone number, including area code)

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 o No x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).Yes o No x

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.Yes x No o

The number of shares of common stock, par value $0.000001 per share, outstanding at May 14, 2003 was 37,744,655.

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KITTY HAWK, INC.

INDEX



|         |  |                       |  |                                                                                           | PAGE NUMBER
|-------- |  | --------------------- |  | ----------------------------------------------------------------------------------------- | -----------
|         |  |                       |  |                                                                                           |            
|PART I.  |  | FINANCIAL INFORMATION | 
|         |  |                       |  |                                                                                           |            
|         |  | Item 1.               |  | Financial Statements                                                                      |            
|         |  |                       |  |                                                                                           |            
|         |  |                       |  | Condensed Consolidated Balance SheetsMarch 31, 2003 and December 31, 2002                 | 3          
|         |  |                       |  |                                                                                           |            
|         |  |                       |  | Condensed Consolidated Statements of OperationsThree months ended March 31, 2003 and 2002 | 4          
|         |  |                       |  |                                                                                           |            
|         |  |                       |  | Condensed Consolidated Statement of Stockholders EquityThree months ended March 31, 2003 | 5          
|         |  |                       |  |                                                                                           |            
|         |  |                       |  | Condensed Consolidated Statements of Cash FlowsThree months ended March 31, 2003 and 2002 | 6          
|         |  |                       |  |                                                                                           |            
|         |  |                       |  | Notes to Condensed Consolidated Financial Statements                                      | 7          
|         |  |                       |  |                                                                                           |            
|         |  | Item 2.               |  | Managements Discussion and Analysis of FinancialCondition and Results of Operations      | 11         
|         |  |                       |  |                                                                                           |            
|         |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risk                                | 17         
|         |  |                       |  |                                                                                           |            
|         |  | Item 4.               |  | Controls and Procedures                                                                   | 18         
|         |  |                       |  |                                                                                           |            
|PART II. |  | OTHER INFORMATION     | 
|         |  |                       |  |                                                                                           |            
|         |  | Item 1.               |  | Legal Proceedings                                                                         | 18         
|         |  |                       |  |                                                                                           |            
|         |  | Item 2.               |  | Changes in Securities and Use of Proceeds                                                 | 21         
|         |  |                       |  |                                                                                           |            
|         |  | Item 3.               |  | Defaults upon Senior Securities                                                           | 21         
|         |  |                       |  |                                                                                           |            
|         |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                       | 21         
|         |  |                       |  |                                                                                           |            
|         |  | Item 5.               |  | Other Information                                                                         | 21         
|         |  |                       |  |                                                                                           |            
|         |  | Item 6.               |  | Exhibits and Reports on Form 8-K                                                          | 22         

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

KITTY HAWK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)



|                                                                                                                                                                                                                                                                                        |  | March 31,2003 |        | December 31,2002 |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------ | ---------------- | -
|                                                                                                                                                                                                                                                                                        |  | (unaudited)   |        |                  |  
|                                                                                                                                                                                                                                                                                        |  |               |        |                  |  
|ASSETS                                                                                                                                                                                                                                                                                  |  |               |        |                  |  
|Current assets:                                                                                                                                                                                                                                                                         |  |               |        |                  |  
|Cash and cash equivalents                                                                                                                                                                                                                                                               |  | $             | 5,361  |                  | $
|Restricted cash and short-term investments                                                                                                                                                                                                                                              |  |               | 355    |                  |  
|Trade accounts receivable, net of allowance for doubtful accounts of $0.6 million and $0.5 million,
respectively                                                                                                                                                                        |  |               | 12,055 |                  |  
|Assets held for sale                                                                                                                                                                                                                                                                    |  |               | 1,949  |                  |  
|Inventory and aircraft supplies                                                                                                                                                                                                                                                         |  |               | 5,878  |                  |  
|Deposits and prepaid expenses                                                                                                                                                                                                                                                           |  |               | 1,720  |                  |  
|Prepaid fuel                                                                                                                                                                                                                                                                            |  |               | 1,863  |                  |  
|Other current assets, net                                                                                                                                                                                                                                                               |  |               | 1,281  |                  |  
|Total current assets                                                                                                                                                                                                                                                                    |  |               | 30,462 |                  |  
|Property and equipment, net                                                                                                                                                                                                                                                             |  |               | 10,944 |                  |  
|Other assets, net                                                                                                                                                                                                                                                                       |  |               | 811    |                  |  
|                                                                                                                                                                                                                                                                                        |  |               |        |                  |  
|Total assets                                                                                                                                                                                                                                                                            |  | $             | 42,217 |                  | $
|                                                                                                                                                                                                                                                                                        |  |               |        |                  |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                                                                                    |  |               |        |                  |  
|Current liabilities:                                                                                                                                                                                                                                                                    |  |               |        |                  |  
|Accounts payable  trade                                                                                                                                                                                                                                                                |  | $             | 945    |                  | $
|Accrued wages                                                                                                                                                                                                                                                                           |  |               | 671    |                  |  
|Other accrued expenses                                                                                                                                                                                                                                                                  |  |               | 7,008  |                  |  
|Accrued professional fees                                                                                                                                                                                                                                                               |  |               | 278    |                  |  
|Other taxes payable                                                                                                                                                                                                                                                                     |  |               | 1,978  |                  |  
|Accrued maintenance reserves                                                                                                                                                                                                                                                            |  |               | 8,252  |                  |  
|Current maturities of long-term debt                                                                                                                                                                                                                                                    |  |               | 2,223  |                  |  
|                                                                                                                                                                                                                                                                                        |  |               |        |                  |  
|Total current liabilities                                                                                                                                                                                                                                                               |  |               | 21,355 |                  |  
|Long-term debt                                                                                                                                                                                                                                                                          |  |               | 1,827  |                  |  
|Lease return provisions                                                                                                                                                                                                                                                                 |  |               | 2,299  |                  |  
|Other long-term liabilities                                                                                                                                                                                                                                                             |  |               | 1,460  |                  |  
|Stockholders equity:                                                                                                                                                                                                                                                                   |  |               |        |                  |  
|Preferred stock, $0.01 par value per share: Authorized shares  3,000,000 at March 31, 2003 and December 31, 2002,
respectively; none issued                                                                                                                                            |  |               |       |                  |  
|Common stock, $0.000001 and $0.01 par value per share at March 31, 2003 and December 31, 2002, respectively: Authorized shares  62,000,000 at March 31, 2003 and December 31, 2002; issued and outstanding  37,744,655 and none at March 31, 2003 and December 31, 2002, respectively |  |               |       |                  |  
|Additional capital                                                                                                                                                                                                                                                                      |  |               | 16,600 |                  |  
|Retained earnings (accumulated deficit)                                                                                                                                                                                                                                                 |  |               | (1,324 | )                |  
|                                                                                                                                                                                                                                                                                        |  |               |        |                  |  
|Total stockholders equity                                                                                                                                                                                                                                                              |  |               | 15,276 |                  |  
|                                                                                                                                                                                                                                                                                        |  |               |        |                  |  
|Total liabilities and stockholders equity                                                                                                                                                                                                                                              |  | $             | 42,217 |                  | $

The accompanying
notes are an integral part of these financial statements.

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KITTY HAWK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)(unaudited)



|                                           |  | Successor                    |            |   | Predecessor |  
|------------------------------------------ |  | ---------------------------- | ---------- | - | ----------- | -
|                                           |  | Three months ended March 31, |           
|                                           |  | 2003                         |            |   | 2002        |  
|                                           |  |                              |            |   |             |  
|Revenue:                                   |  |                              |            |   |             |  
|Scheduled freight                          |  | $                            | 28,429     |   |             | $
|ACMI                                       |  |                              | 2,387      |   |             |  
|Miscellaneous                              |  |                              | 168        |   |             |  
|Total revenue                              |  |                              | 30,984     |   |             |  
|Cost of revenue:                           |  |                              |            |   |             |  
|Flight expense                             |  |                              | 6,262      |   |             |  
|Transportation expense                     |  |                              | 6,039      |   |             |  
|Fuel expense                               |  |                              | 7,921      |   |             |  
|Maintenance expense                        |  |                              | 3,360      |   |             |  
|Freight handling expense                   |  |                              | 5,730      |   |             |  
|Depreciation and amortization              |  |                              | 905        |   |             |  
|Operating overhead expense                 |  |                              | 2,434      |   |             |  
|                                           |  |                              |            |   |             |  
|Total cost of revenue                      |  |                              | 32,651     |   |             |  
|                                           |  |                              |            |   |             |  
|Gross profit (loss)                        |  |                              | (1,667     | ) |             |  
|General and administrative expense         |  |                              | 2,685      |   |             |  
|Operating loss from continuing operations  |  |                              | (4,352     | ) |             |  
|Other (income) expense:                    |  |                              |            |   |             |  
|Interest expense                           |  |                              | 116        |   |             |  
|Reorganization expense                     |  |                              |           |   |             |  
|Other, net                                 |  |                              | (481       | ) |             |  
|                                           |  |                              |            |   |             |  
|Loss from continuing operations            |  |                              | (3,987     | ) |             |  
|Discontinued operations:                   |  |                              |            |   |             |  
|Loss from discontinued operations          |  |                              |           |   |             |  
|                                           |  |                              |            |   |             |  
|Net loss                                   |  | $                            | (3,987     | ) |             | $
|                                           |  |                              |            |   |             |  
|Basic and diluted net loss per share:      |  |                              |            |   |             |  
|Continuing operations                      |  | $                            | (0.08      | ) |             | $
|                                           |  |                              |            |   |             |  
|Discontinued operations                    |  | $                            |           |   |             | $
|                                           |  |                              |            |   |             |  
|Total basic and diluted net loss per share |  | $                            | (0.08      | ) |             | $
|                                           |  |                              |            |   |             |  
|Weighted average common shares outstanding |  |                              | 49,999,970 |   |             |  
|                                           |  |                              |            |   |             |  

The accompanying notes are an integral part of these financial statements.

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KITTY HAWK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY

(in thousands, except share data)(unaudited)



|                                       |  | Number ofShares |  | CommonStock |   | AdditionalCapital |   | RetainedEarnings(AccumulatedDeficit) |  | Total |       
|-------------------------------------- |  | --------------- |  | ----------- | - | ----------------- | - | ------------------------------------ |  | ----- | ------
|                                       |  |                 |  |             |   |                   |   |                                      |  |       |       
|Balance at December 31, 2002           |  |                |  | $           |  |                   | $ | 16,600                               |  | $     | 2,663 
|Net loss                               |  |                |  |             |  |                   |   |                                     |  |       | (3,987
|Issue common stock (See Notes 3 and 6) |  | 37,744,655      |  |             |  |                   |   |                                     |  |       |      
|                                       |  |                 |  |             |   |                   |   |                                      |  |       |       
|Balance at March 31, 2003              |  | 37,744,655      |  | $           |  |                   | $ | 16,600                               |  | $     | (1,324

The accompanying
notes are an integral part of these financial statements.

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KITTY HAWK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)(unaudited)



|                                                                                                       |  | Successor                    |        |   | Predecessor |  
|------------------------------------------------------------------------------------------------------ |  | ---------------------------- | ------ | - | ----------- | -
|                                                                                                       |  | Three months ended March 31, |       
|                                                                                                       |  | 2003                         |        |   | 2002        |  
|                                                                                                       |  |                              |        |   |             |  
|Operating activities:                                                                                  |  |                              |        |   |             |  
|Net loss                                                                                               |  | $                            | (3,987 | ) |             | $
|Subtract: Loss from discontinued operations                                                            |  |                              |       |   |             |  
|                                                                                                       |  |                              |        |   |             |  
|Loss from continuing operations                                                                        |  |                              | (3,987 | ) |             |  
|Adjustments to reconcile loss from continuing operations to net cash provided by operating activities: |  |                              |        |   |             |  
|Depreciation and amortization expense                                                                  |  |                              | 989    |   |             |  
|Gain on disposal of property and equipment                                                             |  |                              | (262   | ) |             |  
|Provision for doubtful accounts                                                                        |  |                              | 142    |   |             |  
|Changes in operating assets and liabilities:                                                           |  |                              |        |   |             |  
|Trade accounts receivable                                                                              |  |                              | (737   | ) |             |  
|Inventory and aircraft supplies                                                                        |  |                              | 63     |   |             |  
|Prepaid expenses and other                                                                             |  |                              | (866   | ) |             |  
|Accounts payable and accrued expenses                                                                  |  |                              | (331   | ) |             |  
|Accrued maintenance reserves                                                                           |  |                              | 441    |   |             |  
|                                                                                                       |  |                              |        |   |             |  
|Net cash (used in) provided by operating activities                                                    |  |                              | (4,548 | ) |             |  
|Investing activities:                                                                                  |  |                              |        |   |             |  
|Proceeds from sale of assets                                                                           |  |                              | 350    |   |             |  
|Redemption of restricted cash                                                                          |  |                              | 238    |   |             |  
|Capital expenditures                                                                                   |  |                              | (104   | ) |             |  
|                                                                                                       |  |                              |        |   |             |  
|Net cash provided by investing activities                                                              |  |                              | 484    |   |             |  
|Financing activities:                                                                                  |  |                              |        |   |             |  
|Payments on liabilities subject to compromise                                                          |  |                              |       |   |             |  
|Repayments of long-term debt                                                                           |  |                              | (928   | ) |             |  
|Net cash used in financing activities                                                                  |  |                              | (928   | ) |             |  
|                                                                                                       |  |                              |        |   |             |  
|Cash used in continuing operations                                                                     |  |                              | (4,992 | ) |             |  
|Cash provided by discontinued operations                                                               |  |                              |       |   |             |  
|Net decrease in cash and cash equivalents                                                              |  |                              | (4,992 | ) |             |  
|Cash and cash equivalents at beginning of period                                                       |  |                              | 10,353 |   |             |  
|Cash and cash equivalents at end of period                                                             |  | $                            | 5,361  |   |             | $

The accompanying
notes are an integral part of these financial statements.

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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 Companys Annual Report on Form 10-K filed with the Securities and Exchange Commission for
the year ended December 31, 2002, are unaudited (except for the December 31, 2002 condensed consolidated balance sheet, which was derived from the Companys audited consolidated balance sheet included in the aforementioned Form 10-K), but have
been prepared in accordance with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments)
considered necessary for a fair presentation have been included.

The preparation of the consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, management
evaluates its estimates and judgments and incorporates any changes in such estimates and judgments into the accounting records underlying the Companys consolidated financial statements. Management bases its estimates and judgments on
historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.

The Company emerged from bankruptcy on September 30, 2002. Therefore, operating results
for the three month period ended March 31, 2003 are for the successor company, and the operating results shown for the three month period ended March 31, 2002 are for the predecessor company. Operating results for the three months ended March 31,
2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003.

2.LEGAL
PROCEEDINGS

In July 2002, the Company filed a demand for binding arbitration against EGL, Inc. d/b/a Eagle Global Logistics with the American Arbitration
Association to resolve its claim to collect for freight transportation services rendered to EGL in the amount of approximately $4.0 million plus all interest, attorneys fees and costs allowable by law. In August 2002, EGL filed an answer and
counter-claim in the arbitration proceeding denying the Companys claim and asserting a counter-claim for consequential damages in an unspecified amount, but in excess of $1.0 million plus costs and attorneys fees, for an alleged breach
of a contract by the Company. The arbitration proceeding, which will resolve both parties claims, is currently scheduled to begin in June 2003.

The
Company is also subject to various other legal proceedings and claims which have arisen in the ordinary course of business.

While the outcome of the legal
proceedings and claims described above cannot be predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material adverse effect on the Companys business.

3.BANKRUPTCY PROCEEDINGS

On or about May 1,
2000 (the Petition Date), Kitty Hawk, Inc. and all nine of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of
Texas, Fort Worth Division (the Bankruptcy Court). These proceedings were jointly administered under case No. 400-42141-BJH-11.

On August 5, 2002,
the Bankruptcy Court entered an order dated August 5, 2002 (the Confirmation Order) confirming the Debtors Final Joint Plan of Reorganization dated August 2, 2002, with certain modifications (as so modified, the Plan of
Reorganization). On September 30, 2002, the Plan of Reorganization became effective (the Effective Date).

Kitty Hawk, Inc. and its two
wholly-owned subsidiaries, Kitty Hawk Cargo, Inc. (hereafter Cargo) and Kitty Hawk Aircargo, Inc. (hereafter Aircargo), emerged from bankruptcy on the Effective Date. Prior to the Effective Date, the seven other subsidiaries
of Kitty Hawk, Inc. that filed for bankruptcy were merged with and

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consolidated into Kitty Hawk, Inc. pursuant to the Plan of Reorganization. As a result, Kitty Hawk, Inc., Cargo and Aircargo are the surviving corporate
entities pursuant to the Plan of Reorganization.

Kitty Hawk, Inc. is a holding company and does not currently have any independent operations. Cargo operates
an expedited scheduled freight network through its hub in Fort Wayne, Indiana. Aircargo is a FAR Part 121 certificated air carrier and operates a fleet of Boeing 727-200 freighter aircraft for Cargo and third-party customers.

Pursuant to the Plan of Reorganization, all of Kitty Hawk, Inc.s previously issued common stock and 9.95% Senior Secured Notes due 2004 (the Senior Notes) were
cancelled as of the Effective Date. Holders of Kitty Hawk, Inc.s previously issued common stock received no consideration in connection with the cancellation of their shares of common stock.

On or about the Effective Date, in addition to payment of certain administrative claims arising from the Companys bankruptcy proceedings, the Company delivered $29.1 million to HSBC Bank USA,
as successor Trustee and Collateral Trustee (the Trustee), for the benefit of the holders of its Senior Notes (the Noteholders). The Plan of Reorganization provides for the Companys former general unsecured trade
creditors to receive only shares of common stock in exchange for their claims. In addition, the Plan of Reorganization provides for Aircargo to purchase two aircraft and related engines from affiliates of Pegasus Aviation, Inc. (Pegasus)
and to continue to lease four aircraft and related engines from affiliates of Pegasus under modified operating leases as a settlement of claims.

On December
23, 2002, the Company filed a motion with the Bankruptcy Court requesting an order modifying the Plan of Reorganization to allow the Company to:



amend its Second Amended and Restated Certificate of Incorporation to reduce the par value of its common stock (the New
Stock) from $0.01 per share to $0.000001 per share;



modify its Plan of Reorganization to provide that the non-U.S. citizen holders of the former 9.95% Senior Secured Notes would share ratably in a distribution of 21.5% of the
common stock to be issued under the Plan of Reorganization and, to the extent the non-U.S. citizen holders are entitled to more than 21.5% of the common stock to be issued under the Plan of Reorganization, the non-U.S. citizen holders would receive
warrants to purchase the remaining shares of common stock that they would have otherwise been entitled to receive if they were U.S. citizens; and



issue warrants under the Bankruptcy Code that would be exempt from federal, state or local laws requiring registration of the warrants
or New Stock to be issued upon exercise of the warrants.

On January 29, 2003, the Bankruptcy Court granted the Companys motion and entered an order on
January 31, 2003 modifying the Plan of Reorganization in the manner described above.

As of December 31, 2002, the Company had completed most of the
significant cash payments required by the Plan of Reorganization to be made at or near the Effective Date, other than (i) certain priority claim payments due to employees of a former subsidiary of the Company in the amount of approximately $1.8
million, (ii) payments to bankruptcy-related professionals in connection with the final fee applications filed with the Bankruptcy Court in the amount of approximately $304,000, and (iii) payments to other administrative and priority claimants, the
amount of whose claims is disputed and has not yet been resolved by the Bankruptcy Court.

Because none of the New Stock was issued as of December 31, 2002,
the consolidated financial statements at December 31, 2002 reflect no common stock as being issued or outstanding. In return for debt forgiveness, settlements and other compromises, which were settled in September 2002, the Company issued New Stock
and warrants to purchase New Stock to the Companys former creditors in March 2003 in the following amounts:

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|Creditor                                                                         |  | Shares ofNew StockIssued |  | Shares ofNew StockRepresentedby Warrants | 
|-------------------------------------------------------------------------------- |  | ------------------------ |  | ---------------------------------------- | 
|                                                                                 |  |                          |  |                                          | 
|Holders of the Companys former Senior Notes                                     |  | 28,244,655               |  | 12,255,315                               | 
|Trusts for the benefit of the Companys former general unsecured trade creditors |  | 7,000,000                |  |                                         | 
|An affiliate of Pegasus Aviation, Inc.                                           |  | 2,500,000                |  |                                         | 
|                                                                                 |  |                          |  |                                          | 
|Total                                                                            |  | 37,744,655               |  | 12,255,315                               | 

The warrants have
an exercise price of $0.000001 per share, a term of 10 years and are exercisable only by a citizen of the U.S. as defined in 49 U.S.C. § 40102(a)(15). The 7,000,000 shares of New Stock to be issued to the Companys former general unsecured
trade creditors were issued initially to two trusts. These trusts will hold the shares for the benefit of the Companys former general unsecured trade creditors and will distribute the shares once all claims are allowed or dismissed.

4.DISCONTINUED OPERATIONS

Since May
1, 2000, the Company has undergone a significant number of changes in its operations as it entered and prepared to emerge from bankruptcy. In accordance with SFAS 144, the operations that ceased, or were disposed of, in the last three years have
been presented as discontinued operations and include the operations of the Companys wide-body air freight carrier, the non-continental U.S. operations of its expedited scheduled freight network and its air logistics service provider
(including a small aircraft maintenance operation). The results of these operations and the related assets and liabilities of these operations have been segregated in the accompanying consolidated financial statements for the quarter ended March 31,
2002. There are no discontinued operations for the quarter ended March 31, 2003.

On May 1, 2000, the Company ceased operations of its wide-body air freight
carrier and the non-continental U.S. operations of its expedited scheduled freight network. The property and equipment and other assets (inventory and aircraft supplies, airline operating certificates, etc.) related to these operations were taken
out of service and either sold in a series of auctions, sold in individual transactions, or title was relinquished to parties with a secured interest in the assets.

Any assets of the discontinued operations which were not sold or otherwise disposed of as of August 31, 2002 became property of the parent company when its subsidiaries merged into Kitty Hawk, Inc. prior to the Effective Date and are included
in the accompanying balance sheets as continuing operations. These assets are comprised mainly of accounts receivable, various deposits and an office building complex in Michigan and are not revenue producing. Any residual liabilities associated
with these operations were treated in accordance with the Companys Plan of Reorganization.

The following table summarizes the financial performance of
the Companys discontinued operations:



|                                  |  | Three months endedMarch 31, 2002 |       
|--------------------------------- |  | -------------------------------- | ------
|                                  |  | (in thousands)                   |       
|                                  |  |                                  |       
|Revenue                           |  | $                                | 516   
|Operating expenses                |  |                                  | 287   
|Other expense                     |  |                                  | 7,826 
|                                  |  |                                  |       
|Loss from discontinued operations |  | $                                | (7,597

5.SEGMENT REPORTING

The Companys continuing operations are comprised of two main businesses  an expedited
scheduled freight network and an air freight carrier airline, which primarily supports the expedited scheduled freight network by transporting cargo in its fleet of Boeing 727-200 aircraft. Each of these is a business segment, with its respective
financial performance detailed below. Each business segment is currently evaluated on financial performance at the operating income line.

The Company operates
a major independent city-to-city expedited scheduled freight network in the United States and Canada providing next-morning, two-day and three-day delivery service. As an independent freight network, the Company does not typically provide ground
transportation from shippers to the cargo facilities or from

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the cargo facilities to recipients. As a result, the Company primarily provides freight services to freight forwarders who arrange pick up from shippers and
final delivery to recipients. On occasion, the Company arranges for the initial pick up of freight from its customers as well as the final delivery to recipients.

In addition to supporting the expedited scheduled freight network, the air freight carrier airline also provides dedicated air freight carrier services for a variety of third parties. These services are provided under contractual arrangements
where the Company provides the aircraft, crew, maintenance and insurance (ACMI). Additionally, ad hoc charters are performed. In support of the expedited scheduled freight network, the air freight carrier allocates its cost on a block hour basis,
which is reflected as revenue from intersegment operations in the following table.

The column labeled other consists of corporate activities.
Business assets are owned by or allocated to each of the business segments. Assets included in the column labeled other include cash, allowance for doubtful accounts and the corporate headquarters building.



|                                     |  | ScheduledFreightNetwork |        | Air FreightCarrier |   | Other  |   | DiscontinuedOperations |         | Eliminations |   | ConsolidatedBalance |  
|------------------------------------ |  | ----------------------- | ------ | ------------------ | - | ------ | - | ---------------------- | ------- | ------------ | - | ------------------- | -
|                                     |  | (in thousands)          |       
|                                     |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Successor:                           |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Three months ended March 31, 2003:   |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Revenue from external customers      |  | $                       | 28,429 |                    | $ | 2,555  |   | $                      |        |              | $ |                    |  
|Revenue from intersegment operations |  |                         |       |                    |   | 8,952  |   |                        |        |              |   |                    |  
|Depreciation and amortization        |  |                         | 91     |                    |   | 814    |   |                        |        |              |   |                    |  
|Operating income (loss)              |  |                         | (4,483 | )                  |   | 355    |   |                        | (224    | )            |   |                    |  
|Interest expense                     |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Other income                         |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Net loss                             |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Total assets                         |  | $                       | 4,003  |                    | $ | 19,364 |   | $                      | 18,850  |              | $ |                    |  
|Predecessor:                         |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Three months ended March 31, 2002:   |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Revenue from external customers      |  | $                       | 24,618 |                    | $ | 469    |   | $                      |        |              | $ |                    |  
|Revenue from intersegment operations |  |                         |       |                    |   | 13,253 |   |                        |        |              |   |                    |  
|Depreciation and amortization        |  |                         | 150    |                    |   | 1,585  |   |                        |        |              |   |                    |  
|Operating loss                       |  |                         | (5,753 | )                  |   | (181   | ) |                        | (616    | )            |   |                    |  
|Interest expense                     |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Other expense                        |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Loss from continuing operations      |  |                         |        |                    |   |        |   |                        |         |              |   |                     |  
|Total assets                         |  | $                       | 12,606 |                    | $ | 12,137 |   | $                      | 443,697 |              | $ | (207,625            | )

6.EARNINGS PER SHARE

Predecessor:Basic loss per share, for the quarter ended March 31, 2002, is based upon the weighted average number of common shares outstanding
during the period. There were no dilutive shares outstanding during the period presented. All predecessor shares were cancelled pursuant to the Plan of Reorganization (see Note 3).

Successor:Pursuant to the Plan of Reorganization (see Note 3), in March 2003, the Company issued common shares and warrants to purchase common shares to its former creditors. Because the
exercise price of the warrants is nominal, such warrants are treated as outstanding common shares for purposes of calculating loss per share. These shares are deemed to be outstanding for the entire period presented. Other than the warrants, at
March 31, 2003, the Company had no dilutive securities outstanding.

7.RELATED PARTY TRANSACTIONS

The Company has long-term agreements with Pegasus and the Kitty Hawk Collateral Liquidating Trust (the Trust) to lease or use aircraft and engines. Each of
Pegasus and certain beneficiaries of the Trust own more than 5.0% of the outstanding New Stock. Additionally, a member of the Company's board of directors is a managing director of one of the beneficiaries of the Trust.See
Item 13. Certain Relationships and Related Transactions of the Companys Annual Report on Form 10-K for the year ended December 31, 2002 for more information related to these agreements.

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ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Kitty Hawk operates through its two wholly-owned subsidiaries, Kitty Hawk Cargo and Kitty Hawk Aircargo. For the three months ended March 31, 2003, we generated approximately 91.8% of our revenue
from our expedited scheduled freight network, which is operated by Kitty Hawk Cargo. Kitty Hawk Aircargo, our air freight carrier airline, primarily supports Kitty Hawk Cargos expedited scheduled freight network by transporting cargo in its
fleet of Boeing 727-200 freighter aircraft. In addition, Kitty Hawk Aircargo also provides dedicated air freight transportation services for a variety of customers.

We operate a major independent city-to-city expedited scheduled freight network solely in the U.S. and Canada providing next-morning, two-day and three-day delivery service. As an independent freight network, we typically do not transport
freight from shippers to our cargo facilities or from our cargo facilities to recipients. As a result, we primarily provide freight services to freight forwarders who either transport the freight to and from our cargo facilities in the origin and
destination cities we serve or arrange for others to provide these services. On occasion, we arrange for the initial pick up of freight from our customers as well as the final delivery to recipients.

We emerged from bankruptcy on September 30, 2002 and adopted Statement of Position 90-7, or Fresh Start Accounting. In accordance with Fresh Start Accounting, all of our assets and liabilities were
restated to reflect their respective fair market values as of September 30, 2002. Our consolidated financial statements after September 30, 2002 are not comparable to the periods prior to September 30, 2002. Differences between periods due to Fresh
Start Accounting are explained as necessary. The discussion that follows represents the operating results of the successor company as compared to the predecessor company and should be read in conjunction with the information set forth under
Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2002.

Revenue.Scheduled freight revenue is generated from freight transportation services provided by our expedited scheduled freight network. Other revenue includes:



Postal contracts revenue,
which is generated from contracts with the U.S. Postal Service under which we generally provide the aircraft, crew, maintenance and insurance, known as ACMI, ground handling and sorting services contracts related thereto and management of peak
season operations;



ACMI
revenue, which is generated from ACMI contracts with third-parties and ad hoc charter revenue generated by our air freight carrier airline; and



Miscellaneous revenue, which is generated from freight handling services provided for
third-parties, other than the U.S. Postal Service.

Cost of Revenue.Included in our cost of revenue are the following major categories:



Flight Expense, which consists
of costs related to the flight operations of our air freight carrier airline, including:



crew member wages, benefits, training and travel;



operating lease expense for leased aircraft operated by us;



insurance costs related to aircraft operated by us;
and



flight operations and airline
management costs, wages and benefits.



Transportation Expense, which consists of costs related to the physical movement of freight between our cargo facilities and which is not otherwise classified as flight expense, including:



third-party aircraft charter expense;



aircraft ground operating costs, such as landing and
parking fees charged by airports and cost of deicing aircraft;

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

trucking expenses
for cities in our expedited scheduled freight network that are not served by our aircraft; and



pickup and/or final delivery expenses as directed by customers.



Fuel, which consists of the all-inclusive cost of all jet fuel consumed in our expedited scheduled freight
network and on ad hoc charters that include jet fuel in the charter service, and the cost of all taxes, fees and surcharges necessary to deliver the jet fuel into the aircraft.



MaintenanceExpense, which
consists of costs to maintain aircraft and aircraft engines operated by our air freight carrier airline, including:



wages and benefits for maintenance and records personnel;



costs for contract mechanics at cargo facility outstations;



costs of aircraft parts and supplies; and



accruals for light C-checks and heavy shop visits
for engines.



Freight Handling
Expense, which consists of costs to handle the loading and unloading of freight on aircraft and trucks operating within our expedited scheduled freight network, including:



wages and benefits for our Fort Wayne, Indiana hub
sort and ramp operations personnel;



contract services to warehouse, load and unload aircraft principally at cargo facility outstations; and



wages and benefits for our outstation cargo facility personnel.



Depreciation and Amortization, which consists of depreciation and amortization expenses for our owned
airframes and aircraft engines and freight-handling equipment.



Operating Overhead, which consists of direct overhead costs related to operating our expedited scheduled freight network and air freight carrier
airline, including:



wages and benefits
for operational managers of Kitty Hawk Cargo;



expedited scheduled freight network sales and marketing expenses;



wages and benefits for customer service personnel;



rent and utilities;



bad debt expense; and



general operational office expenses.

General and Administrative Expenses.General and administrative expenses consist of salaries, benefits and expenses for executive management (other than management of Kitty Hawk Aircargo and Kitty Hawk Cargo),
information technology, human resources, accounting, finance, legal and corporate communications personnel. In addition, costs for strategic planning, financial planning and asset acquisitions are included in general and administrative expenses.
Also included are legal and professional fees and consulting fees.

Discontinued Operations.Discontinued operations consist of the
activities in the quarter ended March 31, 2002 related to disposing of the assets of Kitty Hawk International, our wide-body air freight carrier airline. This business ceased operating during the bankruptcy proceedings. See Item 1. Business
 Changes in Our Business Operations Since 2000 in our Annual Report on Form 10-K for the year ended December 31, 2002.

Critical Accounting
Policies.For a discussion of our critical accounting policies refer to Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  Critical Accounting Policies
included in our Annual Report on Form 10-K for the year ended December 31, 2002. There have been no material changes to the critical accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2002.

RESULTS OF OPERATIONS

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

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|                                                    |  | Three months ended March 31, |   
|--------------------------------------------------- |  | ---------------------------- | --
|                                                    |  | 2003                         |   
|                                                    |  |                              |   
|Revenue:                                            |  |                              |   
|Scheduled freight                                   |  | 91.8                         | % 
|Other                                               |  | 8.2                          |   
|                                                    |  |                              |   
|Total revenue                                       |  | 100.0                        |   
|Cost of revenue                                     |  | 105.4                        |   
|Gross profit (loss)                                 |  | (5.4                         | ) 
|General and administrative expenses                 |  | 8.7                          |   
|Operating loss from continuing operations           |  | (14.1                        | ) 
|Other (income) expense:                             |  |                              |   
|Interest expense                                    |  | 0.4                          |   
|Reorganization expense                              |  |                             |   
|Other (income) expense                              |  | (1.6                         | ) 
|                                                    |  |                              |   
|Total other (income) expense                        |  | (1.2                         | ) 
|                                                    |  |                              |   
|Loss from continuing operations before income taxes |  | (12.9                        | ) 
|Income tax benefit                                  |  |                             |   
|Loss from continuing operations operations          |  | (12.9                        | ) 
|Loss from discontinued operations                   |  |                             |   
|Net loss                                            |  | (12.9                        | )%

QUARTER ENDED MARCH 31, 2003
COMPARED TO QUARTER ENDED MARCH 31, 2002

REVENUE

General. The following table presents, for the periods indicated, the components of our revenue in dollars and as a percentage of our total revenue and the percentage change from period-to-period:



|                  |  | Three months ended March 31, |        |                           |      
|----------------- |  | ---------------------------- | ------ | ------------------------- | -----
|                  |  | 2003                         |        | 2002                      |      
|                  |  | Revenue                      |        | Percentageof TotalRevenue |      
|                  |  | (dollars in thousands)       |        |                           |      
|                  |  |                              |        |                           |      
|Scheduled freight |  | $                            | 28,429 |                           | 91.8 
|Other:            |  |                              |        |                           |      
|ACMI              |  |                              | 2,387  |                           | 7.7  
|Miscellaneous     |  |                              | 168    |                           | 0.5  
|Total revenue     |  | $                            | 30,984 |                           | 100.0

Scheduled
Freight. In the first quarter of 2003, the increase in our scheduled freight revenue was primarily due to an increase of 5.5% in the chargeable weight carried in our expedited scheduled freight network, which was partially
due to adding two cities to our network. In addition, our total yield increased by 12% due to several price increases beginning in the second quarter of 2002, including a fuel surcharge to mitigate the increase in our fuel expense.

ACMI. In December 2002, we entered into a one-year ACMI contract to provide BAX Global with three Boeing 727-200 freighter aircraft. This
contract may be cancelled by either party with thirty days' notice.

Miscellaneous. During the first quarter of 2003, our
miscellaneous revenue resulted from flying ad-hoc charter services for several customers. During the first quarter of 2002, our miscellaneous revenue resulted from providing aircraft ground handling for customers at one of our company operated
outstations. This activity ceased in July 2002 when we contracted with a third-party to provide our aircraft ground handling services at this same outstation.

COST OF REVENUE

General.The following table presents, for the periods indicated, the components of our cost of revenue
in dollars and as a percentage of total revenue and the percentage change from period-to-period:

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|                              |  | Three months ended March 31, |        |                           |      
|----------------------------- |  | ---------------------------- | ------ | ------------------------- | -----
|                              |  | 2003                         |        | 2002                      |      
|                              |  | CostofRevenue                |        | Percentageof TotalRevenue |      
|                              |  | (dollars in thousands)       |        |                           |      
|                              |  |                              |        |                           |      
|Flight expense                |  | $                            | 6,262  |                           | 20.2 
|Transportation expense        |  |                              | 6,039  |                           | 19.5 
|Fuel                          |  |                              | 7,921  |                           | 25.6 
|Maintenance expense           |  |                              | 3,360  |                           | 10.8 
|Freight handling expense      |  |                              | 5,730  |                           | 18.5 
|Depreciation and amortization |  |                              | 905    |                           | 2.9  
|Operating overhead            |  |                              | 2,434  |                           | 7.9  
|                              |  |                              |        |                           |      
|Total cost of revenue         |  | $                            | 32,651 |                           | 105.4

Flight Expense.For the quarter ended March 31, 2003, flight expense decreased in absolute dollars as a result of reduced aircraft lease expense from renegotiations of our aircraft lease agreements through our bankruptcy proceedings.
Additionally, we flew 3% less block hours in the first quarter of 2003 as compared to the first quarter of 2002.

As a percentage of our total revenue, flight
expense decreased to 20.2% in the first quarter of 2003 from 29.1% for the quarter ended March 31, 2002. This decrease is due to a shift from flying four of our own aircraft in our expedited scheduled freight network, which is classified as flight
expense, to chartering two third-party aircraft which is classified as transportation expense.

Transportation Expense.In the
first quarter of 2003, transportation expense increased $3.9 million, or 184.6%, from the first quarter of 2002. This increase is primarily due to a one-year agreement signed in December 2002 to charter two Douglas DC-8 aircraft in our expedited
scheduled freight network. This agreement is with an affiliate of BAX Global and may be cancelled by either party with thirty days' notice. These chartered aircraft allow us to carry the same amount of freight as four of our Boeing 727-200 freighter
aircraft, at a more economical rate per hour. The use of these chartered aircraft caused transportation expense to increase as a percent of total revenue as costs were shifted from flight expense.

Fuel.For the quarter ended March 31, 2003, fuel expense increased in absolute dollars and as a percent of total revenue due to an increase of $0.37, or 48%, in our average
cost per gallon of jet fuel in the three months ended March 31, 2003 as compared to three months ended March 31, 2002, which increased our quarter-over-quarter fuel expense by approximately $2.5 million. This was partially offset by an approximately
2% decrease in the number of gallons of jet fuel used in the first quarter of 2003 versus the first quarter of 2002 due to the fleet mix and a jet fuel conservation program that was implemented in the first quarter of 2003. To mitigate the increase
in our fuel expense, we implemented a fuel surcharge beginning in the second quarter of 2002.

Maintenance Expense.In the first
quarter of 2003, maintenance expense decreased in absolute dollars and as a percentage of total revenue primarily due to accruing fewer reserves for heavy aircraft maintenance. During 2002, we determined that in light of declining fair market values
for our Boeing 727 freighter aircraft and the general availability of replacement freighter aircraft, it made economic sense for us to permanently retire some of our airframes and aircraft engines at their next scheduled heavy maintenance event,
rather than performing the scheduled heavy maintenance. As a result, we were no longer required to record maintenance reserves for these airframes and aircraft engines, which further reduced our maintenance expense in the first quarter of 2003. We
achieved additional savings in our third-party aircraft maintenance costs as a result of rate negotiations and performing work with our own employees.

Freight Handling Expense.In the first quarter of 2003 as compared to the quarter ended March 31, 2002, freight handling expense decreased slightly, despite the fact that we carried 5% more chargeable weight pounds in
our expedited scheduled freight network. During the first quarter of 2003, we renegotiated many of our existing freight handling contracts and obtained more favorable rates. In addition, we closed three of our company operated outstations in
exchange for third-party freight handling services at lower rates.

Depreciation and Amortization.In the first quarter of 2003,
depreciation and amortization expenses declined in absolute dollars and as a percentage of total revenue primarily due to the adoption of Fresh Start Accounting, which reduced our overall property and equipment cost basis.

Operating Overhead.In the first quarter of 2003, operating overhead decreased in absolute dollars due to the reduction in the scope of our operations
during the first quarter of 2003 as compared to the first quarter of 2002.

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As a percentage of total revenue, operating overhead decreased to 7.9% in first quarter of 2003 from 11.0% in first quarter of 2002. The decrease was
primarily due to closing a company operated outstation in July 2002 and eliminating postal operations administrative positions.

GROSS
PROFIT

For the quarter ended March 31, 2003, we recognized negative gross profit of $(1.7) million, which was an improvement of $2.4 million, or 58.8%, as
compared to the quarter ended March 31, 2002. The improvement was due to reduced expenses as a percent of total revenue in our operations, the December 2002 ACMI contract with BAX Global and improved yield in our expedited scheduled freight
business.

GENERAL AND ADMINISTRATIVE EXPENSE

General and
administrative expense increased by $0.2 million, or 7.3%, during the first quarter of 2003 as compared to the first quarter of 2002. The increase is entirely a result of bankruptcy-related expenses as we implemented our plan of reorganization,
including issuing our new common stock and reconciling our general unsecured claims. We expect bankruptcy-related expenses to decrease significantly in 2003 as we complete the implementation of our plan of reorganization.

INTEREST EXPENSE AND OTHER (INCOME) EXPENSE

Interest expense decreased by $0.4
million, or 75.8%, in first quarter of 2003 as compared to the first quarter of 2002. This decrease is due to a $14.6 million reduction in outstanding debt since April 2002. Reorganization expense decreased $1.9 million, or 100%, to zero in the
first quarter of 2003 as compared to the third quarter of 2002 due to our exit from bankruptcy in September 2002. Other income increased by $0.6 million, or 478.7%, in first quarter of 2003 as compared to the first quarter of 2002, due to gains
recognized on sales of miscellaneous equipment as we transitioned three of our company operated outstations to third-party service providers.

INCOME TAX
BENEFIT

We recognized no tax benefit on our loss for the first quarter of 2003 and 2002, because we increased our valuation allowance related to our
deferred tax assets that resulted from our loss.

LOSS FROM CONTINUING OPERATIONS

Our loss from continuing operations for the first quarter of 2003 was $4.0 million, a decrease of 56.3%, as compared to the $9.1 million loss from continuing operations in the first quarter of 2002.

LOSS FROM DISCONTINUED OPERATIONS

In the first quarter of 2003, we had
no income or loss from our discontinued operations as we disposed of substantially all discontinued operations assets and liabilities in September 2002 in connection with our emergence from bankruptcy. Any remaining assets became property of our
parent company. For the quarter ended March 31, 2002, the losses from discontinued operations were attributable to the disposal of assets at less than fair market values.

LIQUIDITY AND CAPITAL RESOURCES

General.Currently, our primary source of liquidity is our cash flow from operations.
In addition, we may supplement our liquidity by accessing our receivables purchase facility with KBK Financial, Inc.

As a result of the bankruptcy process, we
significantly reduced our ratio of debt to equity. Substantially all of our debt has been extinguished, retired or converted into equity pursuant to our plan of reorganization, which has simplified our financial obligations and commitments. Although
we currently have less liquidity, our debt obligations have also been dramatically reduced.

At March 31, 2003, cash and cash equivalents were $5.4 million as
compared to $10.4 million at December 31, 2002. Additionally, at March 31, 2003 and December 31, 2002, we had no funds advanced from our receivables purchase facility and, as a result, $5.0 million was available under that facility.

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At March 31, 2003, we had net working capital of $9.1 million as compared to $12.2 million at December 31, 2002. The decrease in our net
working capital was primarily due to a decrease in cash partially offset by a decrease in accrued wages.

Our capital expenditures for the remainder of 2003
are currently projected to be less than $1.0 million excluding heavy airframe maintenance and heavy shop visits for engines.

In 2004, the aircraft leases
with affiliates of Pegasus Aviation, Inc. and our agreement with the Kitty Hawk Collateral Liquidating Trust under which we currently operate 14 Boeing 727-200 freighter aircraft are scheduled to expire. These 14 aircraft represent a majority of our
current operating fleet and will represent an increasing percentage of our operating fleet over time as we take non-economically viable aircraft out of service at their next scheduled heavy maintenance event. There can be no assurance that the
lessors or owners of these aircraft will continue to make these aircraft available to us on terms and conditions we find acceptable. We currently believe there are sufficient available aircraft in the market to meet our needs if we are unable to, or
decide not to, extend these agreements. However, there may be initial cash requirements or transitional maintenance expenditures to obtain other aircraft or retain some or all of the aircraft covered by these agreements. Without adequate aircraft at
an economically viable cost, we may not be able to continue to operate our businesses or generate operating income or profits. For more information on these agreements, see Item 13. Certain Relationships and Related Transactions in our
Annual Report on Form 10-K for the year ended December 31, 2002.

Receivables Purchase Facility. We entered into an account transfer
and purchase agreement with KBK Financial for a $5.0 million receivables purchase facility as part of our plan of reorganization. The receivables purchase facility may be increased up to a $10.0 million facility if KBK Financial obtains a qualified
participant. At December 31, 2002 and March 31, 2003, we had no funds advanced under this facility.

The receivables purchase facility advances funds to us at
a rate of 85% of the invoice amount purchased by KBK Financial. All of our invoices are available for sale under the receivables purchase facility. Our invoices may be offered to KBK Financial on a daily basis, and we may offer an unlimited number
of invoices, subject to the $5.0 million funding limit. KBK Financial can accept or reject offered invoices and is not obligated to purchase any invoices. KBK Financial exercises control over our incoming lockbox receipts in order to ensure that the
cash received on purchased invoices is collected. To secure any of our unpaid obligations to KBK Financial, KBK Financial also has liens on our inventory, equipment (excluding airframes and aircraft engines), accounts, accounts and contract rights,
contracts, drafts, acceptances, documents, instruments, chattel paper, deposit accounts and general intangibles. The receivables purchase facility does not have any financial covenants tied to our operating performance.

The receivables purchase facility contains fixed and variable discount rate pricing components. The fixed discount is 0.6% of the invoice amount and is payable at the time of
funding. The variable rate is KBK Financials base rate as established by KBK from time to time, plus 2.00% per annum and is payable based on the number of days from the sale of the invoice to KBK Financial through and including the third
business day after the invoice is collected. The variable discount rate will not be less than 6.75%.

Because funds advanced under this facility are considered
a contingent sale of the particular invoices sold, we report funds advanced as a reduction of trade accounts receivables in our consolidated financial statements.

The receivables purchase facility does not have a stated expiration date, but may be terminated by either party without penalty upon thirty days written notice.

1st Source Bank Note. In November 2000, we executed a promissory note and entered into a security agreement with 1st Source Bank to settle lease obligations existing
prior to our bankruptcy filing. Under these agreements, 1st Source Bank advanced to us approximately $8.5 million. The promissory note bears interest at a fixed rate of 8.9% per annum, provides for monthly principal and interest payments
of $202,000, is fully amortizing over the term of the loan and matures in February 2005.

The promissory note is guaranteed by us and is secured by two Boeing
727-200 airframes and five aircraft engines. At March 31, 2003, we owed 1st Source Bank approximately $3.9 million under this note and the collateral had a carrying value of substantially less than the amount owed. Under these agreements,
we are required to

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perform light and heavy maintenance on the airframes and aircraft engines and to keep them airworthy. These agreements do not have any minimum collateral
value or financial covenants.

CONTRACTUAL OBLIGATIONS

The following table sets
forth our contractual obligations at March 31, 2003, for the periods shown (dollars in thousands):



|Contractual Obligations                                                          |  | Total |        | Due byDecember 31,2003 |   | Due byDecember 31,2005 |  | Due byDecember 31,2007 |        | Due byJanuary 31,2020 |  
|-------------------------------------------------------------------------------- |  | ----- | ------ | ---------------------- | - | ---------------------- |  | ---------------------- | ------ | --------------------- | -
|                                                                                 |  |       |        |                        |   |                        |  |                        |        |                       |  
|Debt                                                                             |  | $     | 4,055  |                        | $ | 1,717                  |  | $                      | 2,338  |                       | $
|Non-aircraft operating leases                                                    |  |       | 39,516 |                        |   | 1,030                  |  |                        | 5,571  |                       |  
|Aircraft operating leases and use agreements (excluding lease return conditions) |  |       | 9,810  |                        |   | 6,140                  |  |                        | 3,670  |                       |  
|Purchase commitments                                                             |  |       |       |                        |   |                       |  |                        |       |                       |  
|Total contractual cash obligations                                               |  | $     | 53,381 |                        | $ | 8,887                  |  | $                      | 11,579 |                       | $

SEASONALITY OF RESULTS AND
OPERATING LEVERAGE

Our business is seasonal in nature. In a typical calendar year, we experience increasing revenue with each passing quarter, beginning
with the first quarter. The U.S. domestic economy entered a downturn in late 2000. During 2001, the demand for our expedited scheduled freight services generally trended downward the entire year. When it became apparent that there would not be an
improvement in the third and fourth quarters of 2001, we reduced the size of our expedited scheduled freight network and our expenses as rapidly as possible.

In 2002 and for the first quarter of 2003, we experienced normal seasonal trends in our expedited scheduled freight business. However, in the first half of the second quarter of 2003, we have experienced less than expected revenue in our
expedited scheduled freight business. Therefore, we do not expect that we will experience normal seasonal trends in the second quarter of 2003. We believe this is a result of the war in Iraq which has had a negative impact on the demand for U.S.
domestic expedited freight shipments.

We currently derive substantially all of our revenue from our expedited scheduled freight business. This business has
significant operating costs that are fixed and cannot be materially reduced in the short-term if the expedited scheduled freight business cannot generate expected levels of revenue. Once revenue reaches the break-even point in a given period, each
additional dollar of revenue contributes a relatively high percentage to operating income. However, if revenue does not reach the break-even point in a given period, the operations will sustain losses, which could be significant depending on the
amount of the deficit. We have, and will continue to have, capital requirements for the requisite periodic and major overhaul maintenance checks for our fleet and for debt service. We also have seasonal working capital needs, because we generate
higher revenue in the fourth calendar quarter and lower revenue in the first calendar quarter. Funding requirements have historically been met through internally generated funds, bank borrowings and aircraft and other asset sales and from public and
private offerings of equity and debt securities. From time to time, we have entered into sale/leaseback transactions to acquire aircraft and may do so in the future.

ITEM
3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At March 31, 2003, we had outstanding debt of $4.0 million, of which
$3.9 million was long-term debt bearing interest at a rate of 8.9% with a maturity date of February 2005.

We do not currently have significant exposure to
changing interest rates on our promissory note to 1st Source Bank or the KBK Financial receivables purchase facility. Our promissory note to 1st Source Bank bears a fixed interest rate of 8.9% per annum. The receivables
purchase facility contains a 0.6% fixed discount rate and variable discount rate equal to a base rate determined by KBK Financial, plus 2.0% per annum. The variable rate may not be less than 6.75%.

At March 31, 2003, we had approximately $3.9 million outstanding under the 1st Source Bank promissory note and no outstanding balance under our receivables purchase facility. To the extent
we use our receivables purchase facility, we will bear interest rate risk on the amount funded.SeeItem 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations  Liquidity and Capital Resources.

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Our exposure to changing interest rates on invested cash is minimal because we invest our cash in a U.S. Treasury backed money-market
fund which has low risk and a low interest rate. At March 31, 2003, approximately $5.5 million of our cash was so invested, including approximately $0.7 million of outstanding checks.

We have not undertaken any actions to cover interest rate market risk and are not a party to any interest rate market risk management activities.

A hypothetical 10% decline in market interest rates over the next year would have little impact on our earnings and cash flow because of the fixed rates on our debt.

Jet fuel is a significant cost of operating aircraft. We do not have any agreements with jet fuel suppliers assuring the availability or price stability of jet fuel. We also do not participate in any
open market hedging activities related to jet fuel.

At current levels of operations in our expedited scheduled freight business, each $0.01 change in the
price per gallon of jet fuel results in a change in our annual fuel cost of $290,000.

We do not purchase or hold any derivative financial instruments for
trading purposes.

ITEM 4.CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. The term disclosure controls and
procedures is defined in Rule 13a-14(c) of the Securities Exchange Act of 1934, or the Exchange Act. This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a
company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods. Our Chief Executive Officer and our Chief Financial Officer have evaluated the effectiveness of our disclosure
controls and procedures as of a date within 90 days before the filing of this quarterly report, and they have concluded that as of that date, our disclosure controls and procedures were effective at ensuring that required information will be
disclosed on a timely basis in our reports filed under the Exchange Act.

(b) Changes in Internal Controls. We maintain a system of
internal controls that are designed to provide reasonable assurance that our books and records accurately reflect in all material respects our transactions and that our established policies and procedures are followed. There were no significant
changes to our internal controls or in other factors that could significantly affect our internal controls subsequent to the date of their evaluation by our Chief Executive Officer and our Chief Financial Officer, including any corrective actions
with regard to significant deficiencies and material weaknesses.

PART II. OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

Bankruptcy Proceedings

Proceedings under Chapter 11 of the Bankruptcy Code.On or about May 1, 2000, we and all nine of our subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the Northern District of Texas, Fort Worth Division. These proceedings were jointly administered under case No. 400-42141-BJH-11.

On August 5,
2002, the bankruptcy court entered an order, confirming our final joint plan of reorganization dated August 2, 2002, with certain modifications.

Subsequent Modification of the Plan of Reorganization.We filed a motion with the bankruptcy court on December 23, 2002, requesting an order modifying the plan of reorganization to allow us to:



amend our Second Amended and Restated Certificate of
Incorporation to reduce the par value of our common stock from $0.01 per share to $0.000001 per share;

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

modify our plan of
reorganization to provide that the non-U.S. citizen holders of our former 9.95% Senior Secured Notes would share ratably in a distribution of 21.5% of our common stock to be issued under our plan of reorganization and, to the extent the non-U.S.
citizen holders are entitled to more than 21.5% of the common stock to be issued under our plan of reorganization, the non-U.S. citizen holders would receive warrants to purchase the remaining shares of our common stock that they would have
otherwise been entitled to receive if they were U.S. citizens; and



issue warrants under the bankruptcy code that would be exempt from federal, state or local laws requiring registration of the warrants or the common stock to be issued upon
exercise of the warrants.

On January 29, 2003, the bankruptcy court granted our motion and entered an order on January 31, 2003 modifying our plan
of reorganization in the manner described above.

Summary of Principal Effects of the Plan of Reorganization.The principal effects
of our plan of reorganization are summarized below:



Corporate Reorganization under Chapter 11 Bankruptcy Proceedings.We and our two subsidiaries, Kitty Hawk Aircargo and Kitty Hawk Cargo, emerged
from bankruptcy on September 30, 2002. Prior to this date, our seven other subsidiaries that filed for bankruptcy were merged with and consolidated into us pursuant to the plan of reorganization.



New Board of Directors and Chief Executive
Officer. As of October 1, 2002, James R. Craig, Gerald L. Gitner, Tamir Thomas Hacker, Myron Kaplan, John Malloy, Robert Peiser and Tilmon J. Reeves were appointed to our board of directors. Our Second Amended and
Restated Certificate of Incorporation provides that these directors may not be removed as directors prior to September 30, 2003, except for cause. In November 2002, Messrs. Craig and Reeves resigned from our board of directors, Robert W.
Zoller, Jr., was elected Chief Executive Officer and appointed to our board of directors, and Mr. Gitner was appointed Non-Executive Chairman of the Board.



Amended and Restated Certificate of Incorporation. On September 30, 2002, we filed our
Second Amended and Restated Certificate of Incorporation authorizing the issuance of up to 65,000,000 shares of capital stock, consisting of 3,000,000 shares of new preferred stock, par value $0.01 per share, and 62,000,000 shares of new common
stock (CUSIP No. 498326 20 6), par value $0.01 per share. On February 6, 2003, we filed an amendment to our Second Amended and Restated Certificate of Incorporation to reduce the par value of our common stock to $0.000001 per share.



Cancellation of Old Common Stock, Senior Notes and
General Unsecured Claims. All of our previously issued common stock (CUSIP No. 498326 10 7) and 9.95% Senior Secured Notes were cancelled as of September 30, 2002. In addition, as of September 30, 2002, the claims of our
former general unsecured trade creditors were cancelled. Holders of our previously issued common stock received no consideration in connection with the cancellation of their shares of common stock. Holders of our former 9.95% Senior Secured Notes
received cash, common stock and warrants in connection with the cancellation of their notes, and our former general unsecured trade creditors will receive common stock in satisfaction of their claims.



Issuance of New Common Stock and
Warrants. In return for debt forgiveness, settlements and other compromises, we issued common stock and warrants to acquire common stock to our former creditors in the following amounts:

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|Creditor                                                         |  | Shares ofCommon StockIssued |            | Shares ofCommon StockRepresented byWarrants | 
|---------------------------------------------------------------- |  | --------------------------- | ---------- | ------------------------------------------- | 
|                                                                 |  |                             |            |                                             | 
|Holders of our former 9.95% Senior Secured Notes                 |  |                             | 28,244,655 |                                             | 
|Trusts for the benefit of our former general unsecured creditors |  |                             | 7,000,000  |                                             | 
|An affiliate of Pegasus Aviation, Inc.                           |  |                             | 2,500,000  |                                             | 
|                                                                 |  |                             |            |                                             | 
|Total                                                            |  |                             | 37,744,655 |                                             | 

The warrants have
an exercise price of $0.000001 per share, a term of 10 years and are exercisable only by a citizen of the U.S. as defined in 49 U.S.C. § 40102(a)(15). The 7,000,000 shares of common stock to be issued to our former general unsecured trade
creditors were issued initially to two trusts. These trusts will hold the shares for the benefit of our former general unsecured trade creditors and will distribute the shares once all claims are allowed or dismissed.



Cash Distributions to, and Agreements with, Former
Creditors. In September 2002, in addition to the payment of certain administrative claims arising from the bankruptcy proceedings, we delivered $29.1 million to HSBC Bank USA, as successor trustee for the 9.95% Senior Secured
Notes. In addition, we released our former general unsecured trade creditors from any preference claims we might have against them.



Aircraft and Engine Use Agreement. On September 30, 2002, we entered into a 24 month Aircraft and Engine Use
Agreement with the Kitty Hawk Collateral Liquidating Trust to make 12 Boeing 727-200 airframes and 33 aircraft engines available for operation by Kitty Hawk Aircargo. These airframes and aircraft engines had been pledged as collateral to
secure our former 9.95% Senior Secured Notes. The holders of our former 9.95% Senior Secured Notes formed the Kitty Hawk Collateral Liquidating Trust to manage these airframes and aircraft engines.



Aircraft Leases and Purchases.
On October 1, 2002, Kitty Hawk Aircargo entered into four operating leases for Boeing 727-200 freighter aircraft with affiliates of Pegasus Aviation, Inc., or Pegasus Aviation. Each of these leases expire in May 2004. In addition, in June 2002 and
December 2002, Kitty Hawk Aircargo purchased two Boeing 727-200 freighter aircraft from affiliates of Pegasus Aviation. Each of the six aircraft were previously leased and operated by us.



U.S. Postal Service Payment.
In August 2002, we received a payment of $30.9 million from the U.S. Postal Service related to the U.S. Postal Services August 2001 termination for convenience of our contract to provide air transportation and ground handling for
mail delivered to the Western U.S. and in settlement of specified claims between us and the U.S. government.



Repayment of Prior Bank Facilities.In September 2002, pursuant to a settlement reached with our then-existing bank group, we repaid all remaining
obligations due under our prior $100 million revolving credit facility and term loan. Immediately thereafter, the bank group released all liens on the collateral securing the revolving credit facility and term loan, which included certain airframes,
aircraft engines, accounts, parts, inventory, contract rights, general intangibles and other collateral. We have no further obligations to the bank group.



Receivables Purchase Facility. We entered into an agreement with KBK Financial, Inc. for a $5.0 million
receivables purchase facility, which may be increased to a $10.0 million facility if KBK Financial obtains a qualified participant.SeeItem 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations  Liquidity and Capital Resources for more information about this facility.



Registration Rights Agreement. We entered into a registration rights agreement with each of Everest Capital
Limited, Resurgence Asset Management, L.L.C. and Stockton LLC, who received significant amounts of our

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common stock under the plan of reorganization. Everest Capital Limited and Resurgence Asset Management also received significant amounts
of warrants to purchase our common stock under the plan of reorganization. The registration rights agreement provides them with demand and piggy-back registration rights for our common stock. The registration rights are currently exercisable.

Eagle Global Logistics

In July 2002, we filed a demand for binding arbitration
against EGL, Inc. d/b/a Eagle Global Logistics with the American Arbitration Association to resolve our claim to collect for freight transportation services rendered to EGL in the amount of approximately $4.0 million plus all interest,
attorneys fees and costs allowable by law. In August 2002, EGL filed an answer and counter-claim in the arbitration proceeding denying our claim and asserting a counter-claim for consequential damages in an unspecified amount, but in excess of
$1.0 million plus costs and attorneys fees, for an alleged breach of a contract by us. The arbitration proceeding, which will resolve both parties claims, is currently scheduled to begin in June 2003.

Other Proceedings

We are also subject to various other legal proceedings and claims which have arisen
in the ordinary course of business.

While the outcome of the legal proceedings and claims described above cannot be predicted with certainty, management does
not believe that the outcome of any of these legal matters will have a material adverse effect on our business.

ITEM 2.CHANGES IN SECURITIES AND USE OF PROCEEDS

See Item 1. Legal Proceedings  Bankruptcy Proceedings  Summary of
Principal Effects of the Plan of Reorganization for a description of cancellation of our previously issued common stock (CUSIP No. 498326 10 7) and 9.95% Senior Secured Notes due 2004 as of September 30, 2002 and the issuance of the new common
stock (CUSIP No. 498326 20 6) and warrants to purchase the new common stock.

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.

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ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits:

The following exhibits are filed herewith
or are incorporated by reference to exhibits previously filed with the Securities and Exchange Commission.



|Exhibit No. |  |   |  | Exhibit                                                                                                                                                                                                                                                                             
|----------- |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |   |  |                                                                                                                                                                                                                                                                                     
|2.1         |  |  |  | Debtors Final Joint Plan of Reorganization, dated August 2, 2002 (Exhibit 2.2 to the Companys Form 8-K dated August 20, 2002, and is incorporated herein by
reference).                                                                                                           
|            |  |   |  |                                                                                                                                                                                                                                                                                     
|2.2         |  |  |  | Order Confirming Debtors Final Joint Plan of Reorganization, dated August 5, 2002 (Exhibit 2.1 to Kitty Hawk, Inc.s Form 8-K dated August 20, 2002, and is
incorporated herein by reference).                                                                                     
|            |  |   |  |                                                                                                                                                                                                                                                                                     
|2.3         |  |  |  | Order Granting Debtors Motion to Modify Debtors Final Joint Plan of Reorganization, dated September 26, 2002 (Exhibit 2.3 to Kitty Hawk, Inc.s Form 10-K
dated March 28, 3003 and is incorporated herein by reference).                                                          
|            |  |   |  |                                                                                                                                                                                                                                                                                     
|2.4         |  |  |  | Order Modifying Debtors Final Joint Plan of Reorganization, dated January 31, 2003 (Exhibit 99.1 to Kitty Hawk, Inc.s Form 8-K dated February 7, 2003, and is
incorporated herein by reference).                                                                                  
|            |  |   |  |                                                                                                                                                                                                                                                                                     
|3.1         |  |  |  | Second Amended and Restated Certificate of Incorporation of Kitty Hawk, Inc. (Exhibit 99.1 to Kitty Hawk, Inc.s Form 8-K dated October 1, 2002, and is incorporated
herein by reference).                                                                                          
|            |  |   |  |                                                                                                                                                                                                                                                                                     
|3.2         |  |  |  | Certificate of Amendment of the Second Amended and Restated Certificate of Incorporation of Kitty Hawk, Inc., dated February 6, 2003 (Exhibit 3.2 to Kitty Hawk, Inc.s
amended Registration Statement on Form 8-A/A dated March 12, 2003, and is incorporated herein by reference).
|            |  |   |  |                                                                                                                                                                                                                                                                                     
|3.3         |  |  |  | Amended and Restated Bylaws of Kitty Hawk, Inc., dated August 30, 2002 (Exhibit 3.3 to Kitty Hawk, Inc.s amended Registration Statement on Form 8-A/A dated
March 12, 2003, and is incorporated herein by reference).                                                              
|            |  |   |  |                                                                                                                                                                                                                                                                                     
|4.1         |  |  |  | Specimen Common Stock Certificate (Exhibit 3.4 to Kitty Hawk, Inc.s amended Registration Statement on Form 8-A/A dated March 12, 2003, and is incorporated herein
by reference).                                                                                                   
|            |  |   |  |                                                                                                                                                                                                                                                                                     
|99.1*       |  |  |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                             
|            |  |   |  |                                                                                                                                                                                                                                                                                     
|99.2*       |  |  |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                             

______________

*

Each
document marked with an asterisk is filed herewith.

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(b)

Reports on Form 8-K:

On February 7, 2003, we filed a Current Report on Form 8-K reporting that we had filed a motion with the United States Bankruptcy Court for the Northern
District of Texas, Fort Worth Division requesting an order authorizing us to modify the our plan of reorganization to permit us to issue new common stock and warrants to purchase new common stock to certain former holders of our 9.95% Senior Secured
Notes that are non-U.S. citizens and to reduce the par value of the new common stock from $0.01 per share to $0.000001 per share. We also reported that the bankruptcy court entered an order on January 31, 2003 approving our modification to our plan
of reorganization.

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SIGNATURES

Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 14, 2003.



| |  | KITTY HAWK, INC.
| |  | ----------------
| |  | By:             
| |  |                 

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CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Robert W. Zoller, Jr., Chief Executive Officer and President of Kitty Hawk, Inc., certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Kitty Hawk, Inc.;

2.

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.

The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

(a)

designed such
disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly
report is being prepared;

(b)

evaluated the effectiveness of the
registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and

(c)

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;

5.

The registrants other certifying officers and I
have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):

(a)

all significant deficiencies in the design or operation of internal controls which
could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and

(b)

any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal controls; and

6.

The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



|             |  |    
|------------ |  | ---
|May 14, 2003 |  | By:
|             |  |    



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CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Drew Keith, Chief Financial Officer of Kitty Hawk, Inc., certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Kitty Hawk, Inc.;

2.

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.

The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

(a)

designed such
disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly
report is being prepared;

(b)

evaluated the effectiveness of the
registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and

(c)

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;

5.

The registrants other certifying officers and I
have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):

(a)

all significant deficiencies in the design or operation of internal controls which
could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and

(b)

any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal controls; and

6.

The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



|             |  |    
|------------ |  | ---
|May 14, 2003 |  | By:
|             |  |    

26