Kitty Hawk Expands Deal With Postal Service

Press Release

DALLAS--Kitty Hawk, Inc. (AMEX: KHK), today announced that its wholly owned subsidiary, Kitty Hawk Aircargo, Inc., has entered into contracts with the United States Postal Service ("USPS") to operate seven of its own aircraft in the daytime air and ground cargo holiday network (“C-NET”). C-NET is being managed by Kitty Hawk Cargo, Inc., a wholly owned subsidiary of Kitty Hawk, Inc., for the holiday season mail from November 28 through December 24, 2006. Based on successful performance of the contract, the total revenue to Kitty Hawk Aircargo, Inc. is estimated to be approximately $4.6 million. The contracts are in addition to the previously reported USPS award of $29.33 million to Kitty Hawk Cargo, Inc. to operate and manage the C-NET network.

As previously reported, the daytime C-NET will operate through Kitty Hawk's Fort Wayne, Indiana, sort facility and will be in addition to Kitty Hawk's own scheduled overnight air and ground freight network. The C-NET is anticipated to include, in addition to seven (7) of Kitty Hawk's own aircraft, approximately 130 trucks procured by Kitty Hawk, over 200 seasonal employees at Kitty Hawk's Fort Wayne sort facility and approximately 29 aircraft contracted by the USPS. Kitty Hawk is also responsible for the ground handling at all cities that are part of the C-NET.

About Kitty Hawk, Inc.

www.kittyhawkcompanies.com

As a recognized leader in customer service, Kitty Hawk is the premier provider of guaranteed, mission-critical, time-definite overnight air, second-morning air and time-definite expedited ground freight transportation to major business centers, international freight gateways and surrounding communities throughout North America, including, Alaska; Hawaii; Toronto, Canada; and San Juan, Puerto Rico. Kitty Hawk's scheduled freight network and award-winning, guaranteed overnight time-definite air or expedited ground products are ideal for heavy-weight (over 150 lbs.), high-value or high-security, special goods with unique dimension, perishable, animal and/or other shipments requiring special handling.

With more than 30 years experience in the aviation and air freight industries, Kitty Hawk plays a key connecting role in the global supply chain. Kitty Hawk serves the logistics needs of more than 550 freight forwarders, integrated carriers, domestic and international airlines and logistics companies with its extensive integrated air and ground network, fleet of Boeing 737-300SF and 727-200 cargo aircraft, as well as a 240,000-square-foot cargo warehouse, U.S. Customs clearance and sort facility at its Fort Wayne, Indiana hub.

In 2005, Kitty Hawk became the North American launch customer for the fuel-efficient and environmentally friendly Boeing 737-300SF cargo aircraft. In late 2005, Kitty Hawk launched its new coast-to-coast and border-to-border expedited ground network reaching key business centers throughout the US, Canada and Mexico. In early 2006, to manage the growing demand for its high customer service ground freight product Kitty Hawk formed Kitty Hawk Ground, Inc. In June 2006, Kitty Hawk Ground acquired and began integrating the majority of the assets of 20-year-old Air Container Transport (ACT), the dominant expedited airport-to-airport freight trucking company operating from Southwestern Canada to San Diego as well as additional cities as far east as Texas and Illinois.

Source: Kitty Hawk, Inc.