Coming Out of the Clouds: Kitty Hawk Emerges From Bankruptcy.

Business Editors

FORT WORTH, Texas--(BUSINESS WIRE)--Oct. 1, 2002

Haynes and Boone, LLP announced today that its client Kitty Hawk, Inc. emerged from Chapter 11 bankruptcy effective Sept. 30, 2002. Haynes and Boone attorneys represented Kitty Hawk throughout its reorganization efforts, including obtaining confirmation of its Final Plan of Reorganization that was announced July 24, 2002.

In May 2000, Kitty Hawk, Inc. and its nine subsidiaries filed voluntary petitions for protection under Chapter 11 of the Bankruptcy Code. The petitions were filed the U.S. Bankruptcy Court, Northern District of Texas, Fort Worth Division.

"This case challenged us in every way imaginable," said John Penn, one of the Haynes and Boone partners leading the firm's Kitty Hawk team. "We even had to help the client deal with the aftermath of the unimaginable when the U.S. became a 'no fly zone' in September 2001. We had to deal with a myriad of issues that are rarely faced by many practitioners over their careers but were all addressed successfully by Kitty Hawk."

Since filing in May 2000, the company endured the recession in 2000, the U.S. Postal Service terminating its contract to award the largest contract in its history for mail transportation services to Federal Express during 2001, and numerous other disputes. According to Sarah

Foster, partner with Haynes and Boone's Kitty Hawk team, over the past twelve months, each of Kitty Hawk's primary interest groups sought to have the company liquidated. Nevertheless, Kitty Hawk steered through all of the adversities in the economy, the airline industry and reorganization process. In doing so, Kitty Hawk saved hundreds of jobs, reorganized its finances and transferred ownership to its creditors.

"With the current economic conditions of the airline industry, we are proud to be moving forward and out of bankruptcy," said Jim Reeves, Kitty Hawk's Chairman and CEO. "While in bankruptcy, Kitty Hawk reduced its overhead and operations to the size required in today's environment while always delivering the excellent service our customers expect. We would not have survived that process without our legal team's assistance."

According to Bob Albergotti, partner with Haynes and Boone's Kitty Hawk team and the lead Haynes and Boone partner on the California Deregulation team, Kitty Hawk is emerging from bankruptcy protection at an exciting time. With its financial restructuring, the company will have more options than it did before it filed for bankruptcy protection.

Haynes and Boone, LLP is an international law firm with nine offices throughout Texas, Washington, D.C. and Mexico City providing a full spectrum of legal services to clients around the world. With more than 400 attorneys, Haynes and Boone is ranked among the largest law firms in the nation by National Law Journal. AmLaw Tech Magazine Scoreboard ranked Haynes and Boone first in law firm technology in 2001. The firm has been recognized as one of the 25 "Best U.S. Law Firms at Which to Work" (Of Counsel, 2000), one of the "Best Corporate Law Firms in America" (Corporate Board Member Magazine, 2002) and recipient of the Minority Corporate Counsel Association's 2002 Thomas L. Sager Award for commitment to diversity.

Kitty Hawk provides scheduled overnight air freight services to approximately 47 U.S. cities operating through its Fort Wayne, Ind. hub. For more information on the Kitty Hawk, visit its site at www.kha.com.

This release contains forward-looking statements relating to future business expectations. Business plans may change as circumstances warrant. Actual results may differ materially as a result of factors over which the company has no control. Such factors include, but are not limited to: world-wide business and economic conditions; acquisitions, recruiting and new business solicitation efforts; product demand and the rate of growth in the air cargo industry; the impact of competitors and competitive aircraft and aircraft financing availability; the ability to attract and retain new and existing customers; jet fuel prices; normalized aircraft operating costs and reliability and regulatory actions.