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SEC Letter 2 June 2005

June 2,
2005

Mr. David
R. Humphrey

Mail
Stop0305

Securities
and Exchange Commission

450 Fifth
Street

Washington,
D.C. 20549

      Re:

      Celadon
      Group, Inc.

      Annual
      Report on Form 10-K, as amended, for the year ended June 30,
      2004

      File
      No. 0-23192

Dear Mr.
Humphrey:

On behalf
of Celadon Group, Inc. (the “Company”), I have enclosed our response to your
request for supplemental information in your letter dated March 21,
2005.

The
following are the questions from the letter sent March 21, 2005 and the
Company’s response to the staff’s comments, directly beneath:

Item
7:   Management’s Discussion and Analysis - Overview and Results of
Operations, pages 11-13

      1.

      Comment:
      See
      the last paragraph under this heading (and also under Results of
      Operations - the pretax margin paragraph discussion) whereby you disclose
      what pre-tax income would have been excluding the impact of certain items.
      Please note that you may discuss the material items considered to have an
      impact on you pre-tax income; however, it is not appropriate to provide a
      non-GAAP measure, such as pre-tax income that excludes the impact on these
      items. We note you have incurred similar charges in the past and there is
      no demonstration that such charges will not continue in the near future.
      Please revise in future filings to exclude the non-GAAP financial measure.
      Reference is made to Question Nos. 8 and 9 of the Staff’s “Frequently
      Asked Questions Regarding the Use of Non-GAAP Financial Measures,” issued
      June 13, 2003.

      Response:
      The Company has reviewed Question Nos. 8 and 9 of the Staff’s “Frequently
      Asked Questions Regarding the Use of Non-GAAP Financial Measures,” issued
      June 13, 2003 and has concluded that all non-GAAP financial measures will
      be excluded from all future filings or appropriate reconciliations
      and explanations will accompany such financial measures in future filings.

Item
7:   Management’s Discussion and Analysis - Results of
Operations, pages 13-17

Fiscal
year ended June 30, 2004, compared with fiscal year ended June 30,
2003

      2.

      Comment:
      See the paragraph discussion of depreciation and amortization, and the
      fiscal 2004 impairment charge of $9.8 million. Expand to describe how and
      when you plan to dispose of the 48-foot trailers. Discuss how the
      impairment charge was determined for the approximately 1,600 trailers and
      whether the analysis was done at the reporting unit level (i.e.,
      Transportation segment) or some other unit grouping or an individual
      trailer by trailer basis. We refer you to SFAS No. 144, “Accounting for
      the Impairment of Disposal of Long-Lived Assets.” Also, indicate the
      amount, if any, of the impairment charge that includes any residual value
      guarantee obligation. Discuss whether or not you have ordered the
      approximately 1,300 new replacement trailers, and whether the 600 trailers
      on order at June 30, 2004, as disclosed under Liquidity and Capital
      Resources, are included within the 1,300 trailers. Also, disclose that the
      approximately 1,600 trailers have been reflected in your balance sheet as
      held for sale at a write-down value of $0.4 million, as indicated in Note
      3 to the audited financial statements.

      Response:
      The Company has reviewed SFAS No. 144, “Accounting for the Impairment or
      Disposal of Long-Lived Assets,” and has concluded that the accounting
      treatment for this transaction was proper; however, a more detailed
      discussion of the transaction should and will be incorporated into future
      filings. All but $0.4 million of the 48-foot trailers were disposed of in
      the nine-month period ending June 30, 2004 through equipment auctions and
      sales to equipment brokers, other trucking companies and equipment
      dealers. The remaining unsold trailers are included in the June 30, 2004
      balance sheet as held for sale at a write-down value of $0.4 million. The
      impairment charge was determined on a trailer by trailer basis after
      reviewing the then prevailing market prices for like equipment. The
      impairment charge does not include any residual value guarantee
      obligation. The 1,300 new replacement trailers, which did not include the
      600 trailers on order at June 30, 2004 (as disclosed under the Liquidity
      and Capital Resources), were ordered prior to June 30,
    2004.

Item
7:    Management’s Discussion and Analysis - Liquidity and
Capital Resources, pages 17-19

 Table
of Contractual Obligations

      3.

      Comment:
      We believe you should include scheduled interest payments in the table or,
      in the alternative, include additional disclosure regarding interest
      payments in a footnote to the table. See Section IV.A of FR-72 for
      guidance.

      Response:
      The Company has reviewed Section IV.A of FR-72 and agrees that scheduled
      interest payments should and will be incorporated into future filings in
      the table or additional disclosure regarding interest payments will be
      included in a footnote to the table.

In
addition to the Company’s responses to the SEC staff comments above, the Company
would like to acknowledge in writing, per the request of the SEC staff, the
following:

      ·

      the
      Company is responsible for the adequacy and accuracy of the disclosure in
      the Form 10-K filings;

      ·

      the
      SEC staff comments or changes to disclosure in response to staff comments
      do not foreclose the Commission from taking any action with respect to the
      filing; and

      ·

      the
      Company may not assert staff comments as a defense in any proceeding
      initiated by the Commission or any person under the federal securities
      laws of the United States.

Should
you have any questions, please do not hesitate to call me at (317)
972-7014.

Sincerely,

/s/ Paul
A. Will

Paul A.
Will

Executive
Vice President

Chief
Financial Officer and Treasurer