932110--3/20/2006--KITTY_HAWK

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Risks Relating to Our Business We derive a significant portion of our revenues from a limited number of customers, and the loss of their business or payment defaults by one or more of them could have a material adverse effect on our results of operations. Our inability to schedule the Boeing 737-300SF cargo aircraft in our operations to achieve sufficient utilization could have a material adverse effect on our results of operations. Our inability to execute upon our plans to expand our LTL ground freight network, or to manage or generate sufficient revenues from that new line of business, could have a material adverse effect on our results of operations. The as-needed nature of our scheduled freight business and the types of industries we serve subjects our business to significant market fluctuations that are beyond our control and a downward market fluctuation could have a material adverse effect on our results of operations. The U.S. freight transportation industry is highly competitive and, if we cannot successfully compete, our results of operations and profitability may be materially adversely affected. Our inability to attract sufficient business from customers at economical prices for our expanded ground freight network could impair our ability to compete in the LTL ground freight market and could have a material adverse effect on our results of operations and profitability. Our failure to comply with the financial ratios and other covenants in our Credit Facility could result in an event of default that could cause acceleration of the repayment of our indebtedness. The terms of our Credit Facility could restrict our operations. Writedowns of the value of our aircraft parts and supplies inventory could have a material adverse effect on our results of operations. If we lose access to, or sustain damage to, our Fort Wayne, Indiana facilities, our business would be interrupted, which could materially adversely affect our business and results of operations. Increases in the cost, or a reduction in the availability, of airframe or aircraft engine maintenance may result in increased costs. Increases in the cost, or decreases in the supply, of aircraft and diesel fuel could have a material adverse effect on our results of operations. Increases in the cost, or decreases in the supply, of ground handling and storage services could significantly disrupt our business. The unavailability of aircraft due to unscheduled maintenance, accidents and other events may result in the loss of revenue and customers. The unavailability of trucks and drivers, or increases in the cost of trucking services, may materially adversely affect our results of operations of our LTL ground freight network. Financial costs and operating limitations imposed by the unionization of our workforce could create material labor problems for our business. A failure of our computer systems could significantly disrupt our business. Aircraft accidents and the resulting repercussions could have a material adverse effect on our business and results of operations. Risks Relating to Government Regulation If we lose our authority to conduct flight operations, we will be unable to run our air freight business. Safety, training and maintenance regulations may hinder our ability to conduct operations or may result in fines or increased costs. If we improperly ship hazardous materials or contraband, we could incur substantial fines or damages. Department of Homeland Security and Transportation Security Administration regulations may result in unanticipated costs. The interests of our principal stockholders may be inconsistent with the interests of our other equity holders and may have an adverse effect on our stock price. Stock ownership by non-U.S. citizens could prevent us from operating our business. Risks Related to Our Common Stock The market price for our common stock may be volatile. Other companies may have difficulty acquiring us, even if doing so would benefit our stockholders.

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932110--3/20/2006--KITTY_HAWK_INC