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corresp

April 25, 2005

Securities and Exchange Commission

Judiciary Plaza

450 Fifth Street, N.W.

Washington, D.C. 20549

    RE:

    Kitty Hawk, Inc.

    Form 10-K for the year ended December 31, 2004

    Filed March 10, 2005

    File No. 0-14275

Dear Ladies and Gentlemen:

On behalf of our client, Kitty Hawk, Inc. (“Kitty Hawk”), we submit the following responses to the
letter dated April 8, 2005, containing comments from the staff of the Securities and Exchange
Commission (the “Staff”) relating to Kitty Hawk’s Form 10-K for the year ended December 31, 2004
(the “Form 10-K”). Please be advised that the responses contained herein, and the information
provided herein, have been prepared by, and obtained from, Kitty Hawk.

We respectfully request that the Staff provide any further comments at its earliest convenience.
In this regard, we would appreciate receiving any additional comments by May 4, 2005, to permit
time to complete comments on the Form 10-K prior to the filing of Kitty Hawk’s Form 10-Q in order
to ensure compliance with these comments. For your convenience, the Staff’s comments have been
reproduced immediately preceding the Kitty Hawk’s response.

Item 1. Business

Aircraft Fleet

Owned Aircraft, page 7

    1.
    We note that based upon your company’s current fleet composition plan, you have determined
that it is uneconomical to perform the heavy maintenance required to place seven of the
company’s owned aircraft back into revenue service. As these aircraft are no longer in
revenue service, and it does not appear that these aircraft are classified as held-for-sale,
please describe to us their intended use. Also, in your response, please tell us:

    •
    Whether these aircraft have already been fully depreciated.

    •
    Whether you have evaluated these aircraft for impairment in accordance with SFAS No.
144 and the results of your impairment analysis.

    Response:

    Kitty Hawk has determined not to return seven of its owned Boeing 727-200 cargo aircraft to
revenue service under current conditions. At September 30, 2002 in connection with Kitty
Hawk’s Fresh Start Accounting, Kitty Hawk assigned $40,000 of book value to each of these
seven owned Boeing 727-200 cargo aircraft based on then-prevailing market values and began
depreciating six of them on a straight line basis over a life of twenty-seven months. The
one remaining Boeing 727-200 has been held for sale since September 30, 2002 as disclosed
in Note 2 to Kitty Hawk’s consolidated financial

    statements under caption “Assets Held for Sale” and has not been depreciated as Kitty Hawk
believes that the book value is less than the fair value of the parts on the aircraft.

    As of December 31, 2004, six of these aircraft were fully depreciated and, as a result, no
impairment analysis is necessary. These six aircraft are currently stored and Kitty Hawk
is evaluating its opportunities for these aircraft.

Boeing 737-300SF Cargo Aircraft Leases, page 8

    2.
    We note that on May 4, 2004, your company entered into leases for seven Boeing 737-300SF
aircraft, which you intend to recognize as operating leases. Paragraph 7c of SFAS No. 13
indicates that a lease should be recorded as a capital lease if the lease term is equal to 75
percent or more of the estimated economic life of the leased property. As each of these
aircraft has been leased for a 10 year term, which appears to be longer than the period over
which your company has historically depreciated its owned aircraft, per your significant
accounting policy disclosures, please tell us why these leases have been classified as
operating leases.

    Response:

    Kitty Hawk believes that the estimated economic life of each of the leased Boeing 737s is
in excess of 15 years and that the leases will qualify for treatment as operating leases,
not capital leases, as these aircraft are delivered during 2005.

    The useful life of a commercial jet aircraft is generally defined by the number of cycles
on the aircraft, rather than the age of the aircraft. One takeoff and landing equals one
cycle. Currently, the highest cycle aircraft flown by Kitty Hawk is a 1968 Boeing 727
cargo aircraft with approximately 58,000 cycles. Many airlines operate commercial jet
aircraft with even higher cycles. For example, Northwest Airlines has extended the life of
some of its commercial passenger jets to 114,000 cycles and Hawaiian Airlines recently
retired a commercial passenger jet with approximately 98,000 cycles. According to Boeing,
the Boeing 737’s design service objective is 75,000 cycles, with an upper limit of 100,000
cycles.

    Kitty Hawk’s seven leased Boeing 737s were manufactured between 1986 to 1991 and currently
have between 16,000 to 30,000 cycles each. Historically, Kitty Hawk has averaged 1,000
cycles per aircraft per year and believes that this level of annual usage will continue.
Based on Kitty Hawk’s typically annual cycles per aircraft per year and conservatively
assuming 60,000 cycles per Boeing 737, the useful life of the leased Boeing 737s would
range from 30 – 44 years.

    While Kitty Hawk believes that the useful life of the Boeing 737s can be estimated more
accurately on a cycle basis rather than an age basis, even on an age basis, Kitty Hawk
believes that, on their delivery dates, the remaining useful life of the leased Boeing 737s
will be in excess of 15 years. First, Kitty Hawk notes that many aircraft lessors assume a
thirty-five year average life when accounting for their larger commercial jet aircraft on
operating lease to airlines which is based on normal cycle utilization in passenger
configuration of approximately 6 cycles per day or twice the number of Kitty Hawk’s average
cycles per day. A thirty-five year lifespan per Boeing 737 regardless of cycle count would
yield a remaining useful life of 16 – 21 years. Second, Kitty Hawk currently operates
Boeing 727s that are up to thirty-seven years old, so a thirty-five year life span is

2

    consistent with Kitty Hawk’s current fleet age. Third, as a newer generation aircraft than
the Boeing 727, Kitty Hawk believes that the Boeing 737 will have a longer useful life than
the Boeing 727.

    With regard to the depreciation schedule for owned airframes per Note 2 to Kitty Hawk’s
consolidated financial statements, the schedule is for the remaining life of Kitty Hawk’s
Boeing 727s and is not indicative of the useful life of the leased Boeing 737s.

Item 5. Market for Registrant’s common Equity and Related Stockholder Matters, page 16

    3.
    We note the disclosure on page 16 indicating that the Company’s ability to pay dividends is
restricted under the terms of its Credit Facility. Please revise the notes to the Company’s
financial statements to disclose the nature and terms of the dividend restrictions imposed by
the Company’s Credit Facility. Refer to the requirements of Rule 4-08(e) of Regulation S-X.

    Response:

    Kitty Hawk will include this information in the notes to its consolidated financial
statements in its next Annual Report on Form 10-K.

Item 6. Selected Financial Data, page 17

    4.
    Please revise future filings to eliminate the column presenting combined predecessor and
successor financial data for the year ended December 31, 2002. The presentation of combined
data for this period is not considered appropriate due to the change in basis that resulted
from the adoption of fresh-start accounting upon emergence from bankruptcy.

    Response:

    Kitty Hawk will eliminate the column presenting combined predecessor and successor
financial information for the year ended December 31, 2002 in future SEC filings.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations

Critical Accounting Policies and Estimates, page 26

    5.
    We note that in the business section of your document, you state that your company offers
discount programs to your customers based upon the volume of freight shipped in the company’s
network and the timely payment of invoices. Please tell us and expand upon your disclosures
in the “Critical Accounting Policies and Estimates” and “Summary of Significant Accounting
Policies” sections of your document to discuss in further detail the significant terms of the
discount arrangements and how your company accounts for these discounts. Within your
response, please tell us whether reserves for these discounts are established at the point in
time when revenue is recognized, or whether alternative methods are used to estimate these
sales discounts.

3

    Response:

    At the beginning of each month, Kitty Hawk offers a discount off its published tariff to
customers who (i) shipped a specified minimum amount of freight in Kitty Hawk’s scheduled
freight network during the prior month and (ii) have a history of paying their invoices in
a timely manner. Kitty Hawk does not offer a discount program for timely payment of
outstanding, non-disputed invoices. Because the offered discount is solely for the
upcoming month, the discount is booked at the time revenue for that month is booked. Under
these circumstances, Kitty Hawk does not believe that its discount program is a critical
accounting policy and does not believe it needs to establish reserves for the discount
program; however, Kitty Hawk will clarify the operation of its discount program in the
business section of future SEC filings.

Other (Income) Expense, page 38

    6.
    You state that the company’s 2003 other income included the recovery of retroactive
adjustments on a workers compensation policy. Please explain in further detail the nature and
amounts of the “retroactive adjustments” recognized as other income / expense and explain why
this adjustment has not been classified as a component of operating income.

    Response:

    In 2003, Kitty Hawk’s other income included $221,000 related to the recovery of retroactive
adjustments on a workers compensation policy for policy years 1997 and 1998. Because the
retroactive adjustments related to pre-bankruptcy periods and because the adjustments
related in part to Kitty Hawk’s discontinued operations, Kitty Hawk does not believe it is
appropriate to include the retroactive adjustments in operating income.

Contractual Obligations, page 44

    7.
    Please reconcile your debt, non-aircraft operating lease and aircraft operating lease and use
agreement commitments reflected in the table on page 44 with the contractual commitment
disclosures provided in Notes 7, 9 and 10 to your audited financial statements.

    Response:

    The differences between the table on page 44 and the contractual commitments disclosed in
Notes 7, 9 and 10 arise for two reasons. First, the table on page 44 is current as of the
filing date of the Form 10-K and the notes to the consolidated financial statements are as
of December 31, 2004. After December 31, 2004, Kitty Hawk entered into an aircraft
maintenance agreement for its Boeing 737 cargo aircraft which is included in the table on
page 44, but not in Notes 7, 9 and 10. Second, the non-aircraft commitments in Note 10
include $1,308,000 for lease payment deferrals at Kitty Hawk’s Fort Wayne facility. This
amount was included under the heading “Debt” in the contractual commitments table on page
44. A reconciliation of the amounts in the table on page 44 to the amounts in Notes 7, 9
and 10 appears below.

4

Footnotes

(only includes commitments that existed at 12/31/04)

    Aircraft

    Non-Aircraft

    Debt

    Commitments

    Commitments

    F/N 7

    F/N 9

    F/N 10

    Total

    2005

    1,949

    8,976

    2,949

    15,879

    2006

    11,068

    2,868

    15,942

    2007

    9,920

    2,616

    14,543

    2008

    9,083

    2,224

    13,315

    2009

    9,083

    2,224

    13,316

    Thereafter

    48,184

    23,350

    71,534

    1,949

    96,314

    36,231

    134,494

Contractual Obligations Table

(as of March 9, 2005)

    Aircraft

    Non-Aircraft

    Debt

    Commitments

    Commitments

    Total

    1 year

    2,451

    10,099

    2,447

    14,997

    2-3 years

    806

    26,415

    4,678

    31,899

    4-5 years

    23,808

    4,448

    28,256

    Thereafter

    65,120

    23,350

    88,470

    3,257

    125,442

    34,923

    163,622

    Difference

    (1,308
    )

    (29,128
    )

    1,308

    (29,128
    )

    A

    B

    A

    A – Represents Fort Wayne lease deferrals. In the notes, this obligation is
included in Non-Aircraft Commitments. In the contractual obligations table, this obligation is included
as Debt.

    B – Represents the expected commitment under the Boeing 737 maintenance agreement which was signed on
March 7, 2005.

    Kitty Hawk will clarify the date of the contractual commitments table in future SEC
filings.

Item 8. Financial Statements and Supplementary Data

Consolidated Balance Sheets, page F-3

    8.
    We note that your company’s 2004 balance sheet includes “other accrued expenses” of $8.0
million, which represents approximately 57% of the company’s total current liabilities.
Please revise to separately disclose any items that exceed 5% of total current liabilities in
accordance with Rule 5-02 (20) of Regulation S-X.

5

    Response:

    In future SEC filings, Kitty Hawk will separately disclose in the notes to the consolidated
financial statements any items included in “other accrued expenses” that exceed 5% of Kitty
Hawk’s total current liabilities.

Consolidated Statements of Operations, page F-4

    9.
    We note that your company has recognized a gain or loss on the disposal of property and
equipment for each of the last three fiscal years. These gains and losses are currently
classified as “other, net” in the non-operating section of your Statement of Operations.
Paragraph 45 of SFAS No. 144 indicates that if a subtotal such as “Income from Operations” is
presented in an entity’s Statement of Operations, it shall include the amounts of gains and
losses from the sales of long-lived assets that are not a component of the entity. Please
revise your presentation in future filings accordingly.

    Response:

    In future SEC filings, Kitty Hawk will reclassify gains and losses from sales of long-lived
assets of Kitty Hawk’s continuing operations to a component of income from operations from
other, net.

2. Summary of Significant Accounting Policies

Property and Equipment, page F9

    10.
    We note the disclosure indicating that the Company determined at the end of 2004 that it will
not perform heavy maintenance on Pratt Whitney JT8D-9A aircraft for which maintenance reserves
had been established as it believes the Company has sufficient Pratt Whitney JT8D-9A aircraft
engines in serviceable condition and available for revenue service to support its fleet
composition plans. We also note that the Company does not plan to perform heavy maintenance
on the remaining Boeing 727-200 airframe for which a maintenance reserve exists. As a result
of these factors, we note that the Company reversed maintenance reserves associated with these
aircraft aggregating approximately $4.7 million as of December 31, 2004. Please tell us in
further detail the period or periods in which the maintenance reserves associated with the
Pratt Whitney JT8D-9A aircraft and the Boeing 727-200 airframe were originally established and
why their recognition at that time was appropriate. Additionally, please explain why you
believe the reversal of these reserves during 2004, represents a “change in estimate” rather
than the correction of an error that should be accounted for pursuant to paragraph 36 of APB
20. Your response should explain in detail the specific nature and timing of the events or
circumstances that resulted in these maintenance reserves no longer being required. Note that
we do not believe the timing of management’s review of these reser