Kalitta Air Eyes Domestic Venture
Kalitta Air is considering the launch of a new domestic air freight charter airline to replace Kitty Hawk Airlines, which ceased scheduled service in early November after failing to emerge from Chapter 11 bankruptcy.
On Jan. 9, officials of Kalitta Air briefed over 55 members of the Air Forwarders Association on a conference call on the proposed Aug. 15, 2008 launch of a nine aircraft charter airline based at Kitty Hawk's former facility at Ft. Wayne, Ind.
The fleet will consist of 727-200s, A300s and the possibility of a 70 Series DC8. The airline will operate four nights per week and include road feeder service to major cities. The airline will provide only overnight, first-come service.
Connie Kalitta, founder and CEO of Kalitta Air, will own and operate Kalitta Air Freight, but participating forwarders will be required to provide seed money upfront that will be returned if the venture does not get off the ground. If, however, the airline is launched but fails after a short time, the seed money will not be returned.
Each forwarder will also be required to pay a fixed monthly fee based on the16 cities served initially. No more specific information on the fee arrangement was provided.
The cost to Mr. Kalitta "will be in the range of $15 million for acquisition of assets (aircraft) and the associated start up costs," said the proposal.
The forwarders will be asked to form a working committee to work with the principles on the new airline. "In addition, we are asking them to participate in a rebate system that will be based on profit," said Bob Hunter, a Kalitta Air principal, who is spearheading the new venture, and will become president if the charter airline is launched. "If this business is profitable, the participants will participate in some of the profit," Hunter said.
Hunter stressed that the new venture, "will be a completely separate entity that has nothing to do with any of the other Kalitta companies," he said.
Robert W. Moorman