Kitty Hawk Aircargo, Inc. Announces Contract with AvAero For FuelMizer; Kitty Hawk Aircargo Is The All-Cargo Launch Customer For AvAero's FuelMizer Modification.

DALLAS -- Dallas-based Kitty Hawk Aircargo, Inc., a subsidiary of Kitty Hawk, Inc. (AMEX:KHK) has executed a contract with Florida-based AvAero for FuelMizer modification kits for its new fleet of seven Boeing 737-300SF cargo aircraft. Specific terms were not disclosed, however, the agreement includes options for up to 13 additional aircraft. The first 737-300SF is scheduled for delivery to Kitty Hawk in a few weeks with remaining deliveries scheduled throughout 2005.

The FuelMizer is an FAA-approved modification that enhances aerodynamic effectiveness and improves the fuel efficiency of the Boeing 737-300SF. Based on engineering projections and actual test flights with other airlines, Kitty Hawk expects to realize as much as a four percent fuel savings. In typical use, the modification can reduce jet fuel consumption by thousands of gallons per year per aircraft. The FuelMizer modification will be installed at Kitty Hawk's DFW International Airport maintenance facility prior to each B737-300SF entering service.

"We are pleased to be both the launch customer for the freighter aircraft application for the FuelMizer, as well as the North American launch customer for the Boeing 737-300SF," said Robert W. Zoller, Kitty Hawk's president and CEO. "The 737-300SF is already an extremely efficient aircraft and that will be enhanced even further with the FuelMizer."

"I'm impressed with the management team at Kitty Hawk and their decision to maximize their operational environment by installing the AvAero Fuel Reduction Modification," said Robert Finn, president of AvAero. "The addition of Boeing 737-300SF's equipped with the FuelMizer will reduce their fuel burn significantly and have a positive impact on their profitability."

Kitty Hawk, Inc.

As a recognized leader in air cargo customer service, Kitty Hawk is the premier provider of guaranteed, mission-critical, scheduled overnight air freight transportation to major business centers throughout North America including, Alaska, Hawaii, Toronto, Canada, San Juan, Puerto Rico and four cities in Mexico. With more than 30 years experience in the aviation and airfreight industries, Kitty Hawk plays a key connecting role in the global supply chain. Kitty Hawk serves the logistics needs of more than 1,500 freight forwarders, integrated carriers, logistics companies and major airlines with its fleet of B727 freighter aircraft, its ground truck-network, as well as its 239,000 square-foot cargo warehouse, US Customs clearance and sort facility at its Fort Wayne, Ind. hub. In 2005, Kitty Hawk will become the North American launch customer for the fuel-efficient and environmentally-friendly Boeing 737-300SF aircraft. Kitty Hawk's extensive air-ground cargo network and award-winning, guaranteed overnight express service is ideal for heavy-weight shipments, special goods with unique dimensions, perishables, animals and other valuable shipments.

AvAero

Since 1994, AvAero has provided innovative products and solutions for the aviation industry. AvAero designs, engineers, manufactures and distributes products to help companies comply with FAA Airworthiness Directives and reduce operating costs of commercial aircraft. AvAero also offers its staff of DER, DAR, and DMIR services to other Aviation Engineering and Design firms for testing and certification of their products. All products offered by AvAero are certified by the FAA and are offered to countries under JAR 145 and/or the respective Civil Aviation Authority. Working members of the press can contact AvAero Media Relations at [e-mail] or call 727-791-7856.

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: changes in world wide business and economic conditions; loss of key suppliers or significant customers; limited operating flexibility due to the terms of our Credit Facility and our limited capital resources and liquidity; financial costs and operating limitations imposed by the unionization of our workforce; payment defaults by our customers; write-downs of the value of our parts, airframes or aircraft engines; changes in the cost of airframe our aircraft engine maintenance and in our maintenance reserves; changes in our business strategy or development plans; product demand and the rate of growth in the air cargo industry; the impact of competitors and competitive aircraft; the cost and availability of aircraft or replacement parts; the ability to attract and retain new and existing customers; changes in the cost and availability of jet fuel; changes in the cost and availability or ground handling and storage services; adverse litigation judgments or awards; increased foreign political instability and acts of war or terrorism; normalized aircraft operating costs and reliability; successful operational; financial and regulatory integration of new aircraft types; and changes in government regulation and policies. The Company undertakes no obligation to update or revise any forward-looking statements contained in this release for events or circumstances after the date on which such forward-looking statements are made. New factors emerge from time to time, and it is not possible for the Company to predict all such factors.