Air shipping: financial woes force Kitty Hawk to cease network air freight and ground operations
Staff -- Logistics Management, 10/31/2007
DALLAS—Airfreight transportation provider Kitty Hawk Inc. said this week that the company—and all of its wholly-owned subsidiaries—will halt all scheduled network and air and ground operations, effective immediately. And it added that about 500 employees will be affected by these operations being shuttered and were laid off.
The company said in a statement that it would continue to operate its air cargo charter operations.
The reasons for this decision are driven by deteriorating financial conditions, which have occurred over the past year and a half, according to the Kitty Hawk statement. These reasons include: a 25 percent year-over-year decrease in demand for its air product and a 15 percent year-over-year decrease for its ground product. Also contributing to this decision were record high jet and diesel fuel prices, said Kitty Hawk.
Kitty Hawk Inc. and its subsidiaries filed voluntary petitions in the U.S. bankruptcy Court for the Northern District of Texas, Fort Worth Division, to address financial challenges and identify a strategic or financial advisor, according to the statement. But it said it was not able to secure new capital or a buyer for all or a portion of its assets.
This development leaves Kitty Hawk with a significantly reduced presence at Dallas/Fort Worth International Airport, its hub in Fort Wayne Indiana, and other locations, according to a report in the Dallas Morning News. The report added that Kitty Hawk reported net losses of $19.9 million in the first six months of 2006 and more than $34 million since January 2006.
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