UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

            Form 10-KSB

(Mark One)
     [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934

     For the fiscal year ended December 31, 1998

     [   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

     For the transition period from ________ to __________

          Commission File Number: 333-28249

PRIME AIR, INC.
(Exact name of Registrant as specified in charter)

     NEVADA                                  Applied For
State or other jurisdiction of               I.R.S. Employer I.D. No.
incorporation or organization

8598 112 STREET, FT. SASKATCHEWAN, ALBERTA, CANADA      T8L 3V8
(Address of principal executive offices)               (Zip Code)

Issuer's telephone number, including area code:  (780) 998-3400

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class          Name of each exchange on which registered
     None                         N/A

Securities registered pursuant to Section 12(g) of the Act: None

Check whether the Issuer (1) has filed all reports required to be filed by 
section 13 or 15(d) of the Exchange Act during the past 12 months (or for such 
shorter period that the registrant was required to file such reports), and (2) 
has been subject to such fling requirements for the past 90 days.  (1)  Yes [X 
]  No [   ]       (2)  Yes  [X]    No  [   ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation 
S-B is not contained in this form, and no disclosure will be contained, to the 
best of registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-KSB or any amendment to 
this Form 10-KSB.     [N/A]

State issuer's revenues for its most recent fiscal year:     -0-

State the aggregate market value of the voting stock held by non-affiliates of 
the Registrant computed by reference to the price at which the stock was sold, 
or the average bid and asked prices of such stock, as of a specified date 
within the past 60 days:  The aggregate market value of the voting stock held 
by non-affiliates of the Registrant (17,241,220 shares) computed by using the 
closing sale price on April 7, 1999, was $4,310,305.

State the number of shares outstanding of each of the Issuer's classes of 
common equity as of the latest practicable date: At April 7, 1999, there were 
19,647,560 shares of the Registrant's Common Stock outstanding.

Documents Incorporated by Reference: Exhibits from the Registrant's 
registration statement on Form S-4 and from prior periodic reports are 
incorporated by reference into Item 13 of Part III.

FORWARD-LOOKING STATEMENTS

     Some of the information presented in or incorporated by reference into 
this report constitutes "forward-looking statements."  Although the Company 
believes that its expectations are based upon reasonable assumptions within 
the bounds of its knowledge of its proposed business and operations, it is 
possible that actual results may differ materially from its expectations.  
Factors that could cause actual results to differ from expectations include 
the inability of the Company to raise the additional capital necessary to 
commence its principal operations or the failure to consummate a definitive 
agreement with Voyager Airways Limited.

PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

     Prime Air, Inc. (the "Company") was incorporated in the State of Nevada 
on November 10, 1996, for the purpose of changing the domicile of the Company 
from the State of Delaware.  The predecessor to the Company was incorporated 
in the State of Delaware on April 4, 1995.  The change of domicile was 
completed on December 15, 1997.

     The Company is the parent of a wholly owned subsidiary, Prime Air, Inc. 
("Prime Air (BC)"), a company originally incorporated under the laws of the 
Province of British Columbia, Canada, on March 10, 1989, under the name "High 
Mountain Airlines Inc." for the purpose of establishing air service to serve 
the Whistler, British Columbia, Canada, area.  Prime Air (BC) has entered into 
a lease and operating agreement with the Village of Pemberton, British 
Columbia, Canada, to plan, develop, construct, manage, and operate a terminal 
facility at the Pemberton Airport.  Prime Air (BC) has constructed the basic 
terminal building and proposes to facilitate regular, scheduled air service to 
Pemberton Airport to serve the nearby resort community of Whistler.

     Prior to incorporation in the State of Delaware, the Company was 
originally incorporated pursuant to the laws of the State of Utah on August 
30,1993, under the name "Astro Enterprises, Inc."  (referred to hereafter as 
"the Utah Corporation"). The Utah corporation changed its name to "Prime Air, 
Inc." on June 28, 1994.

     In June 1994 the Utah Corporation originally incorporated as Astro 
Enterprises, Inc. entered into an agreement with Prime Air (BC), which 
agreement was designated as a "Merger Agreement."  Pursuant to the terms of 
this Agreement the shareholders of Prime Air (BC) exchanged all of the 
outstanding shares of Prime Air (BC) for a controlling number of shares of the 
Utah corporation, such that upon completion of the exchange, the shareholders 
of Prime Air (BC) owned approximately 90% of the outstanding shares of the 
Utah Corporation and Prime Air (BC) became a wholly owned subsidiary of the 
Utah Corporation.  The transaction was not a statutory merger.  Management 
believes that the closing of such agreement was effected on June 28, 1994.  In 
connection with the exchange of shares, the Utah Corporation effected a 
one-for-one hundred reverse split of its outstanding shares effective June 28, 
1994, immediately prior to such closing.  As a result of the stock-for-stock 
exchange, the former shareholders of Prime Air (BC) received 2,700,000 
post-reverse spit shares, the 170  existing shareholders of the Utah 
Corporation retained 120,000 post-reverse split shares, and the Worthington 
Company, an entity controlled by Mr. Paul Parshall, retained 180,000 
post-reverse split shares.  In addition, the Worthington Company received 
consulting fees totaling $70,000 US from Prime Air (BC) for services performed 
in connection with the reorganization.  Also, as a part of the reorganization, 
Mr. Parshall resigned as the sole director of the Utah Corporation and 
appointed Mr. Blaine Haug as the sole director.  Also in connection with the 
reorganization, the name of the Utah Corporation was changed to Prime Air, 
Inc. and the number of authorized shares of Common Stock of the Utah 
Corporation was changed to 25,000,000 shares, par value $0.001.   At the time 
of the stock-for-stock exchange between the Utah Corporation and Prime Air 
(BC), the Utah Corporation had no assets.  The reorganization was entered into 
because Prime Air (BC) wanted controlling interest in a public shell 
corporation.

      On or about April 4, 1995, the Utah Corporation effected a change of 
domicile to the State of Delaware by incorporating another corporation in such 
state, acquiring all of the assets and liabilities of the Utah Corporation, 
and issuing shares of the Delaware corporation to the shareholders of the Utah 
Corporation on a one-for-one basis.  The Utah Corporation was voluntarily 
dissolved by the State of Utah on May 18, 1995.  The change of domicile was 
initiated and completed based upon the recommendations of Mr. Paul Parshall, 
an officer and director of the Utah Corporation at such time.

     The original purpose of the Utah Corporation incorporated in 1993 as set 
forth in its articles of incorporation, was to acquire the assets and certain 
liabilities of another Utah corporation incorporated in 1985 and previously 
dissolved by the State of Utah on  May 1, 1990, and also incorporated under 
the  name "Astro Enterprises, Inc."  Current management of the Company, none 
of whom were affiliated with the Utah Corporation prior to the share exchange 
in June 1994, believe that the former management of the Utah Corporation at 
the time of its incorporation issued approximately 120,000 shares of the 
company's common stock to the shareholders of the corporation dissolved in 
1990 with the same name thus creating approximately 170 shareholders of the 
Utah Corporation.  Management does not believe that any other relationship 
existed between the two entities or with former management of the corporation 
dissolved in 1990 and known as Astro Enterprises, Inc.

     Commencing February 1998, the Company attempted to offer and sell up to 
2,000,000 units (the "Units"), each Unit consisting of one share of common 
stock of the Company and one Class A Warrant and one Class B Warrant.  The 
Units were offered by British West Indies Securities Company Limited as 
selling agent for the offering.  The offering terminated March 31, 1998, and 
no Units were sold.  The selling agreement with British West Indies Securities 
Company Limited also expired on such date.

     On April 23, 1998, the shareholders approved a forward split of the 
outstanding shares of common stock of the Company at the rate of two shares 
for each one share outstanding.  The forward stock split was effective on May 
15, 1998.  In addition, the shareholders approved a stock option plan on April 
23, 1998, known as the  1998 Stock Option and Stock Appreciation Right Plan 
(the "Plan").  The Plan provides for the issuance of options to acquire up to 
1,000,000 shares of common stock of the Company.  No options have been granted 
pursuant to the Plan.

     Commencing June 1998, the Company attempted to offer and sell up to 
8,000,000 common shares. This offering terminated August 31, 1998.  No shares 
were sold.

Airport Lease and Operating Agreement

     On October 29, 1993, Prime Air (BC) entered into a Lease and Operating 
Agreement (the "Airport Agreement") with the Corporation of the Village of 
Pemberton, British Columbia, Canada (hereinafter the "Village of Pemberton"), 
in which Prime Air (BC) agreed to undertake the planning, development, 
construction, management, and operation of a terminal facility at the 
Pemberton Airport.  In return the Village of Pemberton granted to Prime Air 
(BC) an exclusive lease involving certain lands located at the Pemberton 
Airport to enable Prime Air (BC) to undertake the planning, development, 
construction, management, and operation of a terminal facility.
     The Pemberton Airport is approximately 20 miles north of Whistler Resort 
on Highway 99.  Whistler Resort is a ski resort located at the base of 
Whistler Mountain and Blackcomb Mountain approximately 75 miles north of 
Vancouver, British Columbia, Canada.  The resort has approximately 6,800 
permanent residents and attracts approximately 1,900,000 visitors annually.  
Currently only ground transportation is available to the resort, except for 
private flights into Pemberton Airport.  The nearest airport facility to 
Whistler Resort is Pemberton Airport.  There is presently no regular air 
service into Pemberton Airport.

     The Airport Agreement provided that Prime Air (BC) must construct a 
terminal facility on or before October 21, 1994, which date was extended to 
June 1, 1996, by the Council for the Village of Pemberton.  Prior to such 
extended date, Prime Air (BC) completed the terminal facility at the Pemberton 
Airport.  The terminal constructed by Prime Air (BC) has a total square 
footage of 11,200 square feet, of which approximately 5,500 of interior space 
has been finished and is ready for its intended use as an airport terminal.  
The finished portion consists of an arrival and departure lounge, baggage 
holding area, office, two public washrooms with a total of 14 cubicles, 
reception area, and a utility room.  There is also a water and a waste 
treatment plant housed in a separate building.  The total construction costs 
of the facility were $644,740 ($592,949 for the terminal building, $20,989 for 
engineering and design, $18,699 for environmental work; and $12,103 for 
insurance and permits) and were financed through the sale of the Company's 
stock.  During calendar year 1996, the Company sold 1,510,558 shares of its 
common stock at $0.50 per share for total proceeds of $755,279.  The limited 
offering was conducted pursuant to Rule 504 of Regulation D promulgated by the 
Securities and Exchange Commission.  The offering was conducted for the 
purpose of raising funds for the completion of construction of the airport 
terminal facility at Pemberton.  At the time of such offering the Company was 
not subject to the reporting requirements of Section 13 or 15(d) of the 
Securities Exchange Act of 1934, as amended, and was not an investment 
company.  The aggregate offering price of all securities sold within the 
twelve months preceding the start of and during the offering did not exceed 
$1,000,000.  There is currently no debt against the terminal building.  The 
initial term of the Airport Agreement, and the right of Prime Air (BC) to 
operate the terminal facility, was two years with provisions allowing Prime 
Air (BC) to extend such initial term for addition terms totaling in the 
aggregate thirty years, provided that Prime Air (BC) shall continue to fulfill 
its obligations under the Airport Agreement, including the payment of rent in 
the amount of $100 per year for the first five years, and the payment of 
$2,500 per year thereafter, plus 5% of the gross receipts derived from the 
operation of the terminal facility.  The Airport Agreement also grants to 
Prime Air (BC) the option to lease and use certain other lands at the 
Pemberton Airport for fixed base operations.  The Airport Agreement may be 
terminated by the Village of Pemberton in the event of a material default by 
Prime Air (BC) or if Prime Air shall become bankrupt.  The terminal facilities 
shall become the property of the Village of Pemberton at the expiration of the 
Airport Agreement.  Prime Air (BC) has submitted a request under the Airport 
Agreement for a five year extension beginning October 31, 1999.  The Airport 
Agreement provides for two additional ten year extensions of the lease 
following the five year extension.

Air Service

     Prime Air (BC) initially intends to establish scheduled and charter 
passenger and cargo air service between Vancouver International Airport and 
Pemberton Airport.  Thereafter, Prime Air (BC) will seek to establish such 
services between Pemberton Airport and other Canadian and United States 
destinations.  Prime Air (BC) has entered into a Memorandum of Agreement dated 
January 5, 1995 (the "Voyageur Agreement"), with Voyageur Airways Limited, an 
Ontario corporation ("Voyageur") to provide the initial service by supplying, 
operating, and maintaining DeHavilland Dash-7 aircraft to provide scheduled 
and charter passenger and cargo service, from Vancouver International Airport, 
and thereafter from other Canadian and United States locations, to the 
Pemberton Airport.  The Voyager Agreement provides that Prime Air (BC) will 
operate the terminal facility at Pemberton Airport and the scheduled and 
charter passenger and cargo service, and will market the air services.  
Voyageur will provide the certifications, authorizations, expertise, 
facilities, personnel, and resources necessary to operate, maintain and 
service the aircraft.  The parties intend to negotiate and enter into a 
definitive agreement prior to commencing operations.

Government Regulation and Licensing

     Any corporation conducting commercial air service operations in Canada 
must possess a valid Operating Certificate and other licenses, permits, 
accreditations and certificates that are issued and administered by Transport 
Canada.  Qualification for the required Operating Certificate requires that:

     1.   the operator (being the entity actually providing the air service 
operations) must have at least one aircraft registered under its Operating 
Certificate.  This aircraft may either be owned directly or dry leased by the 
operator;

     2.   the aircraft utilized by the operator must be approved and certified 
in Canada;

     3.   in respect of a domestic Canadian air service, the operator must 
satisfy the statutory Canadian ownership criteria which essentially requires 
that 75% of the voting interest in the operator is controlled by Canadian 
citizens or permanent residents of Canada:

     4.   the management of the operator must include a chief pilot who holds 
appropriate Canadian certification;

     5.   all of the operator's pilots must meet proficiency standards and 
hold sufficient ratings to operate the type of aircraft being utilized;

     6.   the operator must demonstrate and certify that it will be able to 
carry out maintenance of its aircraft according to regulated standards.  Such 
maintenance can either be conducted directly by the operator or subcontracted 
to a qualified maintenance facility; and

     7.   an operations manual must be prepared for the operator and approved 
by Transport Canada.

     Voyageur will conduct all in-flight operations as an independent 
contractor to Prime Air (BC).  Management of Prime Air (BC) believes that 
Voyageur meets all of the criteria set forth above.

     Voyageur will be responsible for the carriage of full flight and ground 
risk insurance including aircraft hull and passenger and third party liability 
for the operations conducted by Voyageur.  Prime Air (BC) will be responsible 
for insuring the terminal building and property at the Pemberton Airport and 
for passenger liability at the airport terminal operation.

     Voyageur will be responsible for any environmental damage caused by the 
operation and maintenance of its aircraft.  Prime Air (BC) will be responsible 
for any environmental damage caused by the operation and maintenance of its 
aircraft.

Marketing

     Prime Air (BC) intends to commence a marketing program and hire market 
personnel as soon as sufficient funds are available.  Advertising and 
promotion would focus both on the Whistler area as the destination, and on 
creating an image of convenience, quality and reliability for the air 
service.  Final approval of all advertising and promotion would remain with 
Prime Air (BC).  The corporate name and logo would be used throughout the 
companies advertising materials in order to develop consumer and travel agency 
familiarity.

     Prime Air (BC) plans to prepare promotional materials that would 
introduce the new air service, first to travel agents and tour wholesalers, 
and then to the consumer.  Promotion would constitute a major portion of Prime 
Air (BC)'s overall marketing strategy.  Familiarization flights would be 
offered to select travel agencies, tour operators, and others, potentially in 
conjunction with the ski areas, hotels, Whistler's Trade and Convention 
Center, and the Whistler Resort Association.  The objective would be for the 
industry to become familiar enough with the service so that when a customer 
books travel to Whistler, the travel agent would suggest that the customer 
make airline reservations all the way to the Whistler area by using Prime Air 
(BC)'s services.

     Prime Air (BC) also plans to contact travel industry journals to 
introduce and promote the service.

     Prime Air (BC) also plans to focus much of its advertising on 
accessibility to Whistler.  Advertising would include direct mail to the 
travel industry and specific potential corporate clients, brochures, 
schedules, and various forms of media advertising, including magazines and 
newspapers.  Whenever possible, Prime Air (BC) would participate in 
cooperative advertising in order to develop and reinforce the consumer's 
associating Prime Air (BC) with easy access to Whistler.

     Prime Air (BC) intends also to provide hotels at Whistler and the 
Whistler Resort Association with schedule support materials to generate 
airline ticket sales in conjunction with hotel bookings.

     Prime Air (BC) plans to begin marketing and sales of its services in 
advance of operating its first flight. The objective would be to generate 
sales on all flights from the very beginning of flight operations.  Prime Air 
(BC) also plans to focus initially on creating awareness of the service within 
the travel industry.  Specifically, marketing staff would contact tour 
wholesalers, travel agencies, convention and meeting planners and other groups 
that currently book clients to Whistler.

     A major component of Prime Air (BC)'s sales strategy would include the 
integration of the flight schedules and fares into all of the major worldwide, 
computerized reservations systems. Such networks allow travel agencies to book 
their clients directly through the computerized system.  To do this properly, 
Prime Air (BC) would engage Voyageur management to provide the appropriate 
expertise in the development of flight schedules and fares, which would 
include assisting Prime Air (BC) in making the final selection of a 
computerized reservation system to join.

     In order to generate sales in the local Seattle and Vancouver markets, 
Prime Air (BC) intends to plan several types of promotional programs.  These 
would likely include ticket packages (purchasing tickets for ten flights for 
the price of nine), special introductory fares, and/or joint promotions with 
other advertisers in the area.

     Prime Air (BC) intends to maximize the use of the Internet as a tool to 
reach the consumer with specific marketing and sales related information about 
the service.  As more and more airlines and computerized reservations systems 
make their flight schedules and fares available on the Internet, management 
believes the general public will become more adept at using the Internet as a 
ready source of up-to-date marketing and sales related information about the 
product. The target market group for this air service would be frequent users 
of computers and the Internet.  Prime Air (BC) intends to seek the services of 
a marketing firm to exploit this new area of marketing potential.

Competition

     Prime Air (BC) will compete with other charter and airline companies 
based in the Vancouver and Seattle area which currently service customers 
whose final destination is Whistler Resort.  To a limited degree Prime Air 
(BC) will compete with buses chartered or owned by tour operators.  Most of 
these entities are more established companies having much greater financial 
resources, experience, and personnel resources than Prime Air (BC).

Employees

     The Company, including Prime Air BC, had two employees as of December 31, 
1998, consisting of Mr. Smith and Mr. Haug, who were employed part-time.

ITEM 2.  DESCRIPTION OF PROPERTY

     In addition to the Pemberton Airport facility described above, the 
Company maintains its principal executive offices at facilities shared with 
the business of the President of the Company, which facilities are furnished 
at no cost to the Company.

ITEM 3.  LEGAL PROCEEDINGS

     Neither the Company nor any of its properties is a party to any material 
pending legal proceedings or government actions, including any material 
bankruptcy, receivership, or similar proceedings.  Management of the Company 
does not believe that there are any material proceedings to which any 
director, officer or affiliate of the Company, or its subsidiary, any owner of 
record of beneficially of more than 5 percent of the Common Stock of the 
Company, or any associate of any such director, officer, affiliate of the 
Company, or its subsidiary, or security holder is a party adverse to the 
Company, or it subsidiary, or has a material interest adverse to the Company, 
or it subsidiary.

     In December 1994 the U.S. Securities and Exchange Commission filed a 
complaint in the United States District Court for the District of Columbia 
(Case Number 1:94CV02633) against an entity known as "Astro Enterprises, 
Inc.," and against Ernst Hiestand, Thomas Hiestand, Elizabeth Kuriger, Henry 
Strubin, Peter Thaler, and Leonard Gotshalk, all of whom were allegedly 
affiliated with such entity.  The basis for such complaint was the 
dissemination to the public from approximately March 1989 through May 1990, of 
false and misleading information concerning the business of such entity.  The 
entity referenced in such action was incorporated in the State of Utah on May 
23, 1985, and was involuntarily dissolved on May 1, 1990, for failure to file 
an annual report with the State of Utah.  In 1995 Mr. Paul Parshall executed a 
consent and settlement of the foregoing action, ostensibly as the president, 
director, and authorized agent of the entity named in such action.  Management 
does not believe such action in any way involved the Utah Corporation which 
was subsequently incorporated under the same name on August 30, 1993, and 
which subsequently changed its name to Prime Air, Inc. and changed its 
domicile to the State of Delaware.  Management does not believe there is or 
was any legal relationship between the "Astro Enterprises, Inc." incorporated 
on May 23, 1985, and the "Astro Enterprises, Inc." which was incorporated in 
1993 and was the predecessor to the Company.  In addition, management does not 
believe that Mr. Parshall was authorized to execute such consent on behalf of 
either entity.  Management is unaware whether Mr. Parshall ostensibly executed 
such consent on behalf of the original Astro Enterprises, Inc. or the predecesso
r to the Company by the same name.  However, the allegations contained in such 
action reference events all of which occurred prior to the incorporation of 
the predecessor to the Company in 1993.

     In May 1996 the Company entered into a settlement agreement and 
undertaking with the Alberta Securities Commission (file number 100164) in 
which the Company agreed to be more diligent in complying with the 
requirements of the Alberta Securities Act and the rules made thereunder.  In 
addition, the Company paid $2,000 to the commission toward the costs of the 
investigation conducted by the Commission.  In February 1996 the Company 
announced an offering of its common shares in Alberta newspapers.  Between 
February 1 and March 1, 1996, the Company received $93,040 from fifteen 
investors in Alberta.  The investors received an offering document which did 
not conform with the form of an offering memorandum required pursuant to the 
Alberta Securities Act and the distribution to the investors did not qualify 
for an exemption under such act.  Upon being contacted by the staff of the 
securities commission, the Company placed all investment monies in trust 
pending the disposition of the matter.  Thereafter the Company sent an 
offering memorandum in the required form and an offer of rescission to all of 
the investors.  After the return of monies to investors who either did not 
qualify for an exemption or who elected rescission, and the filing of a proper 
report with the securities commission, no further action was taken by the 
securities commission.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

     No matters were submitted to a vote of the shareholders during the 
quarter ended December 31, 1998.


PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Common Stock of the Company was quoted on the OTC Electronic Bulletin 
Board through approximately July 23, 1996, and from March 27, 1997 until 
present.  The table below sets forth for the periods indicated the high and 
low bid quotations as reported by the OTC Bulletin Board.  These quotations 
reflect inter-dealer prices, without retail market-up, mark-down, or 
commission and may not necessarily represent actual transactions.  Effective 
May 15, 1998, the outstanding shares of common stock of the Company were 
forward split on a two shares for each one share basis. The following table 
reflects the post-split prices:

                              Quarter        High       Low

FISCAL YEAR ENDED             First          $0.125     $0.125
DECEMBER 31, 1997             Second         $0.5625    $0.125          
                              Third          $0.406     $0.125
                              Fourth         $0.3438    $0.1406     

FISCAL YEAR ENDED             First          $0.3438    $0.1612     
DECEMBER 31, 1998             Second         $0.28125   $0.1875
                              Third          $0.28125   $0.07
                              Fourth         $0.26      $0.12

FISCAL YEAR ENDING
DECEMBER 31, 1999             First          $0.37      $0.25

     None of the shares of common stock is subject to outstanding options or 
warrants to purchase, or securities convertible into the common stock of the 
Company. As of March 31, 1999, the Company had 5,073,025 shares of its Common 
Stock, or approximately 25.8% of the total outstanding shares, which were 
control shares as defined in Rule 144 promulgated by the U.S. Securities and 
Exchange Commission pursuant to the Securities Act of 1933, as amended. None 
of the shares is being, nor have any shares proposed to be, publicly offered 
by the Company.

     As of March 31, 1999, there were approximately 320 holders of record of 
the Common Stock as reported to the Company by its transfer agent.

     No cash dividends have been declared or paid as yet on the Common Stock 
and the Board of Directors has not established a dividend policy.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The Company is a development stage company and conducts all operations 
through its wholly owned subsidiary, Prime Air (BC).  The Company has had no 
material revenues in the past. Operations are expected to commence in late 
1999.

     During the last four years, the operations have been funded from equity 
participation of the owners.  Total cash raised from equity funding from March 
1992 to December 31, 1994 was $349,808, $131,755 for 1995 and $756,763 for 
1996.  No funds were raised during 1997, but the Company did convert $130,751 
of debt into common stock of the Company.  During 1998, the Company converted 
$76,000 in debt into shares of common stock of the Company.

     The Company has realized a cumulative loss of $980,187 since March 1992, 
and anticipates similar losses until operations begin.

     The Company presently has no cash on hand to allow operations to 
commence.  The Company expects to pay approximately $70,000 to cover legal, 
insurance, and other essential expenses during the next 12 months whether 
operations commence or not. 

     Prime Air (BC)'s sole fixed obligation is the payment of $100 CAD per 
annum to the Village of Pemberton under the terms of its Airport Lease and 
Operating Agreement.
     The Company proposes to raise $6,000,000 during the next year through 
equity funding.  This funding will provide sufficient cash to start 
operations, make capital improvements to the Pemberton Airport and terminal 
building, and sustain flight operations for some time.

     An agreement dated October 30, 1998, was signed between the Company and 
Chanen Painter & Company Limited, Investment Bankers to attempt to raise 
capital on behalf of the Company, but no funds have yet been raised. [THE COPY 
OF THE AGREEMENT YOU FURNISHED TO ME IS NOT SIGNED.  CAN YOU FAX ME A SIGNED 
COPY?]

     Should operations commence during 1999, the Company anticipates hiring 
approximately six full-time employees during the next 12 months.

     While Prime Air has no current operations and hence very little internal 
Year 2000 risks, there is no way of knowing the effect the potential problem 
may have on the Company from external sources.  The Company has no funds to 
complete its initial evaluation of the problem, but intends to do so if funds 
are raised prior to the year-end.

ITEM 7.  FINANCIAL STATEMENTS

     The financial statements of the Company are attached to this annual 
report.


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

     On February 27, 1998, the Company engaged Rutherford & Company, Chartered 
Accountants, as independent auditors of the Company for the year ended 
December 31, 1997.  The decision to retain Rutherford & Company, and not to 
re-engage Orton & Company, the former independent auditor, was made by the 
Board of Directors on such date.  The decision not to re-engage Orton & 
Company did not involve a dispute with the Company over accounting policies or 
practices.  The report of Orton & Company  on the Company's financial 
statements for the year ended December 31, 1996, did not contain an adverse 
opinion or disclaimer of opinion, nor was it modified as to uncertainty, audit 
scope, or accounting principals.  In connection with the audit of the 
Company's financial statements for such year ended December 31, 1996, there 
were no disagreements with Orton & Company on any matters of accounting 
principles or practices, financial statement disclosure, or auditing scope or 
procedure which, if not resolved to the satisfaction of Orton & Company, would 
have caused such firm to make reference to the matter in its report.  Neither 
the Company, nor anyone on its behalf, consulted Rutherford & Company 
regarding the application of accounting principles to a specific completed or 
contemplated transaction, or the type of audit opinion that might be rendered 
on the Company's financial statements, and neither written nor oral advice was 
provided by Rutherford & Company that was an important factor considered by 
the Company in reaching a decision as to any accounting, auditing, or 
financial reporting issue.


PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND 
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     The officers and directors of the Company are as follows: 

          NAME                AGE   POSITIONS                DIRECTOR SINCE
          Blaine Haug         51    Chairman                 1994
          Royle Smith         49    President                --
          John Eberhard       54    Secretary and Director   1995
          Gregory Duffy       40    Treasurer and Director   1998

     The officers and directors of the subsidiary, Prime Air (BC), are as 
follows:

          NAME                AGE    POSITIONS                DIRECTOR SINCE
          Blaine Haug         51     President and Director   1989
          Richard T. Shrieves 44     Secretary and Director   1992

     Set forth below is the business experience and biographical information 
on each of the executive officers and directors of the Company and Prime Air 
(BC):

     BLAINE HAUG has been employed as the general manager of the Company since 
1989.  Mr. Haug currently holds an airline transport pilot license first 
issued in 1978 by Canada.

     ROYLE SMITH has been the president of Welcome Ford Sales Ltd., a Ford 
dealership located in Edmonton, Alberta, Canada, since 1981.

     JOHN EBERHARD has been a lawyer in Ontario, Canada, since 1973, and is 
a member of the Canadian Bar Association.  He is also a member of the Law 
Association of Upper Canada.  

     GREGORY DUFFY has been employed as general manager of Welcome Ford Sales 
Ltd. since 1991.

     RICHARD T. SHRIEVES has practiced law since 1980.

     There are no known arrangements or understandings between any of the 
foregoing individuals and any other person pursuant to which he or she was 
elected as a director.

     No remuneration was paid to the directors by the Company during 1998, 
except for reimbursement of out-of-pocket expenses incurred by such 
individuals on behalf of the Company.

     There are no arrangements known to management the effect of which would 
result in a change of control of the Company, nor has such a change of control 
occurred during 1998.

Compliance with Section 16(a) of the Exchange Act:

     The Company's common stock is not registered pursuant to Section 12(g) of 
the Securities Exchange Act of 1934, as amended, and therefore no disclosure 
is required pursuant to this item.

ITEM 10.  EXECUTIVE COMPENSATION

     The following table sets forth the aggregate executive compensation 
earned by or paid to the named executive officers by any person for all 
services rendered in all capacities to the Company for the fiscal years ended 
December 31, 1996, 1997, and 1998:

Name and Principal Position    Year          Restricted Stock Awards

Blaine Haug                    1996          $62,500(1)
Chairman                       1997          $50,000(2)
                               1998          $99,980(3)

Royle Smith                    1996          $173,438(4)
President                      1997          $62,500(5)
                               1998          $137,480(6)
          
     (1) These shares were issued to Mr. Haug as remuneration for management 
fees for 1996.  For purposes of this table only, the valuation of the 200,000 
pre-forward split shares of restricted stock is based upon the market value of 
the stock which was approximately $0.3125 on March 18, 1996, the date of the 
award.  The value of these shares is based solely upon the closing bid price 
of the shares on such date.  No dividends have been paid on these shares.  
Notwithstanding the valuation of the shares for purposes of this table, the 
Board of Directors valued the shares at a significant discount of the market 
value at the time of award based upon the limited trading volume of market 
shares, the relatively short operating history of the company and the risks 
associated therewith, the limited cash resources of the Company, and as an 
incentive to retain the continued services of this party.

     (2) These shares were issued to Mr. Haug as remuneration for management 
fees for 1997.  For purposes of this table only, the valuation of the 200,000 
pre-forward split shares of restricted stock is based upon the market value of 
the stock which was approximately $0.25 on April 3, 1997, the date of the 
award.  The value of these shares is based solely upon the closing bid price 
of the shares on such date.  No dividends have been paid on these shares.  
Notwithstanding the valuation of the shares for purposes of this table, the 
Board of Directors valued the shares at a significant discount of the market 
value at the time of award based upon the limited trading volume of market 
shares, the relatively short operating history of the company and the risks 
associated therewith, the limited cash resources of the Company, and as an 
incentive to retain the continued services of this party.

     (3) Of these shares, 400,000 post-forward split shares were issued to Mr. 
Haug effective March 31, 1998, as remuneration for management fees for 1998; 
and 200,000 post-forward split shares were issued to him on April 27, 1998, 
for consulting fees.  The valuation of 400,000 and the 200,000 shares of the 
restricted shares is based upon the market value of the stock which was 
approximately $0.1562 on March 31, 1998, the date of the award; and the 
valuation of 200,000 shares of the restricted shares is based upon the market 
value of the stock which was approximately $0.187 on April 27, 1998, the date 
of the award.  The aggregate value of these shares is based solely upon the 
closing bid price of the shares on such dates.  No dividends have been paid on 
these shares.  Notwithstanding the valuation of the shares for purposes of 
this table, the Board of Directors valued the shares at a significant discount 
of the market value at the time of award based upon the limited trading volume 
of market shares, the relatively short operating history of the company and 
the risks associated therewith, the limited cash resources of the Company, and 
as an incentive to retain the continued services of this party.

     (4) Of these shares, 100,000 per-forward split shares were issued to Mr. 
Smith on January 9, 1996, for accepting the office of Executive 
Vice-President; 300,000 pre-forward split shares were issued to him on January 
9, 1996, for consulting fees regarding the completion of the Pemberton Airport 
terminal facility; 200,000 pre-forward split shares were issued to him on 
March 18, 1996, as remuneration for management fees for 1996; and 25,000 
pre-forward split shares were issued to Welcome Ford Sales Ltd., a company 
controlled by him, on March 29, 1996, for administration fees rendered 
regarding the completion of the Pemberton Airport terminal facility.  The 
valuation of 100,000 and the 300,000 shares of the restricted shares is based 
upon the market value of the stock which was approximately $0.25 on January 9, 
1996, the date of the award; the valuation of 200,000 shares of the restricted 
shares is based upon the market value of the stock which was approximately 
$0.3125 on March 18, 1996, the date of the award; and the valuation of 25,000 
shares of the restricted shares is based upon the market value of the stock 
which was approximately $0.4375 on March 29, 1996, the date of the award.  The 
aggregate value of these shares is based solely upon the closing bid price of 
the shares on such dates.  No dividends have been paid on these shares.  
Notwithstanding the valuation of the shares for purposes of this table, the 
Board of Directors valued the shares at a significant discount of the market 
value at the time of award based upon the limited trading volume of market 
shares, the relatively short operating history of the company and the risks 
associated therewith, the limited cash resources of the Company, and as an 
incentive to retain the continued services of this party.

     (5) Of these shares, 100,000 pre-forward split shares were issued to Mr. 
Smith on April 3, 1997, and another 100,000 pre-forward split shares were 
issued on June 18, 1997, as remuneration for management fees for 1997.  The 
valuation of 100,000 awarded on April 3, 1997, is based upon the market value 
of the stock which was approximately $0.25 on such date, and the valuation of 
other 100,000 shares is based upon the market value of the stock which was 
approximately $0.375 on June 18, 1997, the date of the award.  The aggregate 
value of these shares is based solely upon the closing bid prices of the 
shares on such dates.  No dividends have been paid on these shares.  
Notwithstanding the valuation of the shares for purposes of this table, the 
Board of Directors valued the shares at a significant discount of the market 
value at the time of award based upon the limited trading volume of market 
shares, the relatively short operating history of the company and the risks 
associated therewith, the limited cash resources of the Company, and as an 
incentive to retain the continued services of this party.

     (6) Of these shares, 400,000 post-forward split shares were issued to Mr. 
Smith effective March 31, 1998, as remuneration for management fees for 1998; 
and 400,000 post-forward split shares were issued to him on April 27, 1998, 
for consulting fees.  The valuation of the restricted shares is based upon the 
market value of the stock which was approximately $0.1562 on March 31, 1998, 
the date of the award; and the valuation of 200,000 shares of the restricted 
shares is based upon the market value of the stock which was approximately 
$0.187 on April 27, 1998, the date of the award.  The aggregate value of these 
shares is based solely upon the closing bid price of the shares on such 
dates.  No dividends have been paid on these shares.  Notwithstanding the 
valuation of the shares for purposes of this table, the Board of Directors 
valued the shares at a significant discount of the market value at the time of 
award based upon the limited trading volume of market shares, the relatively 
short operating history of the company and the risks associated therewith, the 
limited cash resources of the Company, and as an incentive to retain the 
continued services of this party.

     Blaine Haug has a written employment agreement with the Company to act as 
assistant general manager of the company and which covers any and all services 
performed by him for the Company or any of its wholly or majority owned 
subsidiaries.  Mr. Haug will devote all of his time to the affairs of the 
Company and its subsidiary under this agreement.  The agreement provides that 
the Company will pay him $100,000 US per annum, payable in cash or in common 
stock of the company at a price of $0.50  per pre-forward split share for the 
year ended December 31, 1996, and for future years at a price mutually agreed 
by the parties.  The agreement expressly states that Mr. Haug will exercise 
the share option payment for 1996.  Therefore, the Company issued 200,000 
pre-forward split shares of Common Stock to Mr. Haug in lieu of any cash 
compensation for 1996.  Mr. Haug is also to receive reimbursement for all 
out-of-pocket expenses incurred in connection with his duties; to receive all 
reasonable travel expenses incurred in the course of his duties as assistant 
general manager; and to be permitted to participate in any profit sharing, 
deferred compensation, stock appreciation rights, stock option and other plans 
and programs adopted by the company.  If Mr. Haug is unable to perform his 
duties because of illness or mental or physical disability, he will receive 
compensation and benefits for one year.  The term of the agreement is from 
January 1, 1996, through December 31, 2000, renewable by mutual consent for 
successive five year periods.  The agreement also allows Mr. Haug to provide 
management services to any other person, firm, or corporation during the term 
of the agreement.  The Company may terminate the employment agreement upon 90 
days' written notice, but would be obligated to pay compensation through the 
remaining term of the agreement.  Mr. Haug may terminate the agreement upon 90 
days' written notice but would only receive compensation through the date of 
termination.  Upon Mr. Haug's death, his widow or estate would receive 
compensation for six months from the date of death.  If the employment 
agreement is terminated by the company because of illness or mental or 
physical disability, Mr. Haug would receive compensation and benefits for six 
months from such date.  Also, the employer may not amalgamate, merge, or 
consolidate with another person or corporation unless such other person or 
corporation either expressly assumes the agreement for a term of five years 
from the closing date or pays Mr. Haug his full compensation for a term of 
five years or $500,000.  (This provision has been waived by Mr. Haug for 
purposes of the Merger.)  The employment contract is deemed to provide 
personal services by Mr. Haug and therefore, the duties and obligations of Mr. 
Haug are not assignable by him, although he is permitted to assign all or a 
portion of his compensation.  The agreement contains an indemnity provision 
which requires the Company to indemnify and save harmless Mr. Haug, his heirs, 
successors and legal representatives, from expenses and costs associated with 
any action to which he is a party by reason of being or having been an 
assistant general manager of the company, if he acted honestly and in good 
faith with a view to the best interests of the company, and otherwise in 
accordance with the bylaws of the company.  The employment agreement is to be 
governed by and construed in accordance with the laws of the Province of 
British Columbia, and any controversy or claim relating to the agreement is to 
be settled by arbitration in accordance with the provisions of the Arbitration 
Act of British Columbia.

     Royle Smith has a written employment agreement with the Company to act as 
general manager of the company and which covers any and all services performed 
by him for the Company or any of its wholly or majority owned subsidiaries.  
Mr. Smith will devote approximately 75% of his time to the affairs of the 
Company and its subsidiary under this agreement.  The agreement provides that 
the Company will pay him $100,000 US per annum, payable in cash or in common 
stock of the company at a price of $0.50  per pre-forward split share for the 
year ended December 31, 1996, and for future years at a price mutually agreed 
by the parties.  The agreement expressly states that Mr. Smith will exercise 
the share option payment for 1996.  Therefore, the Company issued 200,000 
pre-forward split shares of Common Stock to Mr. Smith in lieu of any cash 
compensation for 1996.  Mr. Smith is also to receive reimbursement for all 
out-of-pocket expenses incurred in connection with his duties; to receive all 
reasonable travel expenses incurred in the course of his duties as assistant 
general manager; and to be permitted to participate in any profit sharing, 
deferred compensation, stock appreciation rights, stock option and other plans 
and programs adopted by the company.  If Mr. Smith is unable to perform his 
duties because of illness or mental or physical disability, he will receive 
compensation and benefits for one year.  The term of the agreement is from 
January 1, 1996, through December 31, 2000, renewable by mutual consent for 
successive five year periods.  The agreement also allows Mr. Smith to provide 
management services to any other person, firm, or corporation during the term 
of the agreement.  The Company may terminate the employment agreement upon 90 
days' written notice, but would be obligated to pay compensation through the 
remaining term of the agreement.  Mr. Smith may terminate the agreement upon 
90 days' written notice but would only receive compensation through the date 
of termination.  Upon Mr. Smith's death, his widow or estate would receive 
compensation for six months from the date of death.  If the employment 
agreement is terminated by the company because of illness or mental or 
physical disability, Mr. Smith would receive compensation and benefits for six 
months from such date.  Also, the employer may not amalgamate, merge, or 
consolidate with another person or corporation unless such other person or 
corporation either expressly assumes the agreement for a term of five years 
from the closing date or pays Mr. Smith his full compensation for a term of 
five years.  (This provision has been waived by Mr. Smith for purposes of the 
Merger.)  The employment contract is deemed to provide personal services by 
Mr. Smith and therefore, the duties and obligations of Mr. Smith are not 
assignable by him, although he is permitted to assign all or a portion of his 
compensation.  The agreement contains an indemnity provision which requires 
the Company to indemnify and save harmless Mr. Smith, his heirs, successors 
and legal representatives, from expenses and costs associated with any action 
to which he is a party by reason of being or having been an assistant general 
manager of the company, if he acted honestly and in good faith with a view to 
the best interests of the company, and otherwise in accordance with the bylaws 
of the company.  The employment agreement is to be governed by and construed 
in accordance with the laws of the Province of British Columbia, and any 
controversy or claim relating to the agreement is to be settled by arbitration 
in accordance with the provisions of the Arbitration Act of British Columbia.

     It is anticipated that if the proposed equity funding is successful, the
employment agreements with Mr. Haug and Mr. Smith would be terminated and that
such parties would receive compensation through the end of 1998 only.

     ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information furnished by current 
management concerning the ownership of common stock of the Company as of April 
1, 1998, of (i) each person who is known to the Company to be the beneficial 
owner of more than 5 percent of the Common Stock; (ii) all directors and 
executive officers; and (iii) directors and executive officers of the Company 
as a group:

                               Amount and Nature
Name and Address                 of Beneficial
of Beneficial Owner               Ownership(1)               Percent of Class

Phillip Johnston                 1,310,625(2)                6.67%
PMB7 Hibiscus Square Pond St.
Grand Turk
Turks and Caicos Island, BWI

Patricia Jarvis                  1,037,410                   5.28%
P.O. Box 1056
Renton, WA 98057

Blaine Haug                        650,000                   3.31%

Royle Smith                        966,000                   4.92%

John Eberhard                      415,340(3)                 2.1%

Gregory Duffy                      375,000                    1.9%

Officers and Directors
as a Group (4 persons)           2,406,340                  12.25%
___________

     (1) Unless otherwise indicated, this column reflects amounts as to which 
the beneficial owner has sole voting power and sole investment power.

     (2) Of  these  shares,   140,000  are  held   directly  of  record by 
Confederation Capital Corporation Ltd., and 1,170,625 are held directly of  
record by Dolphin Trading Ltd.

     (3) Of theses shares, 10,000 are beneficially  owned directly and of 
record  by Mr. Eberhard's wife, and 205,340 are held in  a brokerage account 
controlled  by Mr. Eberhard.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Pursuant to the terms of the employment agreement between the Company and 
Blaine Haug, an officer and a director of the Company, the Company issued 
200,000 pre-forward split shares of common stock of the Company to Mr. Haug 
for services rendered during the year ended December 31, 1996; 200,000 
pre-forward split shares for services rendered during the year ended December 
31, 1997; and 400,000 post-forward split shares for services rendered during 
the year ended December 31, 1998.

     Pursuant to the terms of the employment agreement between the Company and 
Royle Smith, an officer and a director of such entity, the Company issued 
200,000 pre-forward split shares of common stock of the company to Mr. Smith 
for services rendered during the year ended December 31, 1996; 200,000 
pre-forward split shares for services rendered during the year ended December 
31, 1997.  In addition, Mr. Smith was issued 100,000 pre-forward split shares 
on January 9, 1996, for accepting the office of Executive Vice-President, and 
300,000 pre-forward split shares were issued to him on January 9, 1996, for 
consulting services.  Also, 25,000 pre-forward split shares were issued to 
Welcome Ford Sales Ltd., a company controlled by Mr. Smith for administration 
fees.  In addition, during 1998, the Company issued 400,000 post-forward split 
stock to Mr. Smith pursuant to his employment agreement and 200,000 
post-forward split shares for consulting services.
     On or about January 3, 1996, the Company issued 370,336 shares of common 
stock to Confederation Capital Corporation Ltd., a company controlled by Mr. 
Phillip Johnston, a shareholder owning in excess of 5% of the outstanding 
stock, for previous money loaned to the company.  In addition, the Company 
issued 94,800 shares to such entity on April 3, 1997, for repayment of 
advances of $25,583 made by such entity to the Company.

     The Company entered into a consulting contract (the "Consulting 
Agreement") on June 10, 1996, with Silverthorn Investments, Ltd. (the 
"Consultant") in which the Company agreed to retain the services of the 
Consultant through June 1, 2000, unless earlier terminated as provided in the 
Consulting Agreement.  Pursuant to the terms of the Consulting Agreement, the 
Consultant is required to be available for a minimum of 60 business days per 
year to provide consulting and assistance as may be necessary to assist in 
facilitating the full operations of the Company's business.  In return, the 
Company has agreed to pay the Consultant $100 per hour for such services.  At 
the option of the Company 75% of the amount due may be paid to the Consultant 
in the form of common stock of the Company, based upon the average of the last 
three months closing bid prices for the common shares.  The Consultant is 
controlled by Matthew Smith who is also the assistant secretary of the 
Company.

ITEM 13.  EXHIBITS, LIST AND REPORTS ON FORM 8-K

     (a)(1)     Financial Statements.  The following financial statements are 
included in this report:

          Auditors' Report

          Comments by Auditor for U.S. Readers

          Consolidated Balance Sheets as of December 31, 1998 and 1997

          Consolidated Statements of Operations for the fiscal years ended 
           December 31, 1998 and 1997, and from inception to December 31, 1998

          Consolidated Statements of Cash Flows for the years ended December 
           31, 1998 and 1997, and from inception to December 31, 1998

          Consolidated Statements of Stockholders' Equity and Deficit from 
           inception to December 31, 1998

          Notes to Financial Statements

     (a)(2)     Exhibits.  The following exhibits are included as part of this 
report:

     EXHIBIT NO.     DESCRIPTION OF EXHIBIT                               PAGE

     2.1        Plan and Agreement of Merger dated March 10, 1997      *
     2.2        Merger Agreement dated June 29, 1994                   *
     3.1        Articles of Incorporation                              *
     3.2        Articles of Merger dated November 26, 1997             **
     3.4        Bylaws of the Company                                  *
     4.1        Stock Option Plan                                      ***
     10.1       Airport Lease and Operating Agreement, as amended      *
     10.2       Employment Agreement with Blaine Haug                  *
     10.3       Employment Agreement with Royle Smith                  *
     10.4       Consulting Agreement with Siverthorn Investments, Ltd. *
     10.5       Memorandum of Agreement with Voyageur Airways          *
     10.6       Addendum to Haug Employment Agreement                  *
     10.7       Addendum to Smith Employment Agreement                 *
     10.8       Investment Banking Agreement dated November 19, 1998   37
     23         Consent of auditor                                     44

          *Incorporated by reference from the Company's registration statement 
on Form S-4 filed with the Securities and Exchange Commission, file no. 
333-28249.

          **Incorporated by reference from Amendment No. 1 to the Company's 
annual report on Form 10-KSB for the year ended December 31, 1997, filed with 
the Securities and Exchange Commission, file no. 333-28249.

          ***Incorporated by reference from the Company's quarterly report on 
Form 10-QSB for the quarter ended March 31, 1998, filed with the Securities 
and Exchange Commission, file no. 333-28249.

     (b)  Reports on Form 8-K: No reports on Form 8-K were filed by the 
Company during the quarter ended December 31, 1998.

SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the 
registrant caused this report to be signed on its behalf by the undersigned, 
thereunto duly authorized.

                              PRIME AIR, INC.

Date: April 15, 1999               /s/ By  Royle Smith, President


     In accordance with the Exchange Act, this report has been signed below by 
the following person on behalf of the registrant and in the capacitates and on 
the dates indicated.


Date: April 14, 1999               /s/ John Eberhard, Director

Date: April 14, 1999               /s/ Blaine Haug, Director and Chairman

Date: April 14, 1999               /s/ Gregory Duffy, Director and Chief 
                                       Financial Officer

<PAGE>
PRIME AIR, INC.
(A Development Stage Company)
(A Nevada Corporation)

Consolidated Financial Statements
December 31, 1998 and 1997

Auditors' Report

Consolidated Balance Sheets

Consolidated Statements of  Operations 

Consolidated Statements of Shareholders' Equity and Deficit

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements
<PAGE>

Rutherford & Company
Chartered Accountants
________________________________________________
9511 Bates Road, Richmond, B.C.
CANADA V7A 1E3
Telephone (604)272-5454  Fax (604)272-5874


AUDITORS' REPORT

To the Shareholders of 
Prime Air, Inc. (A Nevada Corporation)

We have audited the consolidated balance sheets of Prime Air, Inc. (A 
Development Stage Company) as at December 31, 1998 and 1997 and the 
consolidated statements of operations, shareholders' equity and deficit and 
cash flows for the years then ended.  These financial statements are the 
responsibility of the company's management.  Our responsibility is to express 
an opinion on these financial statements based on our audits.

We have conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform an audit to 
obtain reasonable assurance whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the financial statements.  An audit 
also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial 
statement presentation.

In our opinion, these financial statements present fairly, in all material 
respects, the financial position of the company as at December 31, 1998 and 
1997 and the results of its operations and cash flows for the years then ended 
in accordance with generally accepted accounting principles.

     As reported in Note 1 to these financial statements, the results of 
operations and cash flows for the period from the date of inception of this 
organization as a development stage company on March 10, 1989 to December 31, 
1998 have been compiled from information provided by management.  We have not 
audited, reviewed or otherwise attempted to verify the accuracy or 
completeness of such information.  Readers are cautioned that these statements 
may not be appropriate for their purposes.

<PAGE>
"Rutherford & Company"
Richmond, Canada                              
April 15, 1999                                             
Chartered Accountants

Rutherford & Company
Chartered Accountants
________________________________________________
9511 Bates Road, Richmond, B.C.
CANADA V7A 1E3
Telephone (604)272-5454  Fax (604)272-5874


Comments by Auditor for U.S. Readers
on Canada-U.S. Reporting Difference

     In the United States, reporting standards for auditors require the 
addition of an explanatory paragraph (following the opinion paragraph) when 
the financial statements are affected by conditions and events that cast 
substantial doubt on the company's ability to continue as a going concern, 
such as those described in Note 2 to the financial statements.  Our report to 
the shareholders dated  April 15, 1999 is expressed in accordance with 
Canadian reporting standards which do not permit a reference to such events 
and conditions in the auditors' report when these are adequately disclosed in 
the financial statements.

"Rutherford & Company"
Richmond, Canada                              
April 15, 1999
Chartered Accountants
<PAGE>


PRIME AIR, INC.                         
(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS
(all figures in US dollars)
                                                  
                                   December 31          December 31     
                                     1998                 1997     

ASSETS                         
                                                  
Current Assets                      
 Cash and short-term deposits     $     7,433        $     11,388 
       Prepaid expenses                 3,091                 -
       GST recoverable                  5,116               1,587 
                                       15,640              12,975 

 Capital Assets (Note 4)              592,843             613,516 

                                  $   608,483        $    626,491 

LIABILITIES                    

Current Liabilities                                        
 Accounts payable and accruals    $    79,405        $     83,655 
 Notes and advances payable  
  (Note 5)                            109,754               3,495 
 Advances from related parties  
  (Note 6)                               -                  5,400 
                                      189,159              92,550 

SHAREHOLDERS' EQUITY                         

Capital Stock  (Note 7)                                        
 Authorized:                                         
  50,000,000 common shares with 
    a stated par value of 
   $ .001/share                                        
   3,000,000 preferred cumulative 
    convertible shares with a 
    stated par value of $ .001/share                                        
 Issued:                   
  18,013,110 common shares 
   (1997: 7,140,213)                   18,013               7,140 
                                             
 Share subscription receivable           -                    (20)

 Capital in excess of par value     1,381,498           1,355,740 
                                    1,399,511           1,362,860 
 Accumulated Deficit During         
  Development Stage                  (980,187)           (828,919)
                                      419,324             533,941 

                                $     608,483        $    626,491 

Approved on Behalf of the Board:                                        

                          Director

                          Director

    See Accompanying Notes To Financial Statements                    
<PAGE>                                             

PRIME AIR, INC.                    
(A Development Stage Company)                    

CONSOLIDATED STATEMENTS OF OPERATIONS                    
(all figures in US dollars)                         

                                      Year Ended          Year Ended     
                                     December 31         December 31     
                                        1998                 1997     

Administrative And General Expenses                                             

 Audit and accounting               $     27,685      $     23,826      
       Advertising                         3,949               -     
       Amortization                       20,673            21,603      
       Bad debts                           1,933               -     
       Consulting                          9,862            24,583      
       Insurance                           5,043             9,240 
       Interest and service charges        1,041             1,769 
       Legal costs                         9,840            34,192 
       Office and general                  8,737            10,176 
       Repairs and maintenance             5,047               -
       Rent - airport facility (Note 8)       67               279 
       Telephone and utilities            15,280            18,039 
       Transfer agent, listing and 
        filing fees                       13,825            13,636 
       Travel, promotion and 
        entertainment                     29,823            26,175 
                                         152,805           183,518 

Other Income (Expense)                                        

 Gain (loss) on foreign exchange 
  conversion                                 286           (10,199)
 Interest income                           1,251             4,020 
                                           1,537            (6,179)

Net Loss For Year                 $     (151,268)       $ (189,697)     

Net Loss Per Common Share         $      (0.0089)       $  (0.0138)     

Weighted Average Common Shares 
Outstanding                           16,943,937        13,792,450      
 (Giving effect to 2:1 share split)                                        

 See Accompanying Notes To Financial Statements                         
<PAGE>

PRIME AIR, INC.                         
(A Development Stage Company)    

CONSOLIDATED STATEMENTS OF CASH FLOWS                         
(all figures in US dollars)                         
                                      Year ended         Year ended     
                                      December 31        December 31     
                                        1998               1997     

NET INFLOW (OUTFLOW) OF CASH RELATED 
 TO THE FOLLOWING ACTIVITIES:                                             

OPERATING                                             
 Net loss                            $  (151,268)      $   (189,697)     
 Non-cash charge - amortization           20,673             21,603      
                                        (130,595)          (168,094)     

 Change in non-cash working capital  
  balances relating to operations        (10,870)           (12,306)
                                        (141,465)          (180,400)

FINANCING                                        
 Notes and advances payable              106,259             (5,572)
 Advances from related parties            (5,400)           (20,122)
 Issue of capital stock                   36,651            131,079 

                                         137,510            105,385 

INVESTING                                        
 Acquisition of capital assets              -               (14,911)

NET CASH INFLOW (OUTFLOW)                 (3,955)           (89,926)

CASH, BEGINNING OF YEAR                   11,388            101,314 

CASH, END OF YEAR                    $     7,433       $     11,388 

See Accompanying Notes To Financial Statements

<PAGE> 
PRIME AIR, INC.                                                       
(A Development Stage  Company)

Consolidated Statements of Shareholders' Equity and Deficit
(all figures in US dollars)
                                        Capital in                Accumulated
                                        Excess of       Share    Deficit During
                      Common Shares    (Less than)  Subscriptions  Development
                  Shares       Amount   Par Value     Receivable     Stage

Balance at 
Inception on
March 10, 1989       -     $       -    $    -      $       -     $     -

Issue of common 
shares for cash
at $ .001/share    630,237        630        -              -           -
                                                                 
Net loss for the 
year ended
March 31, 1990       -             -         -              -       (17,956)
                                                                 
Balance, 
March 31, 1990     630,237        630        -              -       (17,956)
                                                                 
Issue of common 
shares for cash 
at $ .001/share    157,559        158        -              -           -

Net loss for the 
year ended                                               
March 31, 1991       -             -         -              -       (49,419)

Balance, 
March 31, 1991     787,796        788        -              -       (67,375)
                                                                 
Net loss for the 
year ended
March 31, 1992       -             -         -              -       (10,990)
                                                                 
Balance, 
March 31, 1992     787,796        788        -              -       (78,365)
                                                                 
Issue of common 
shares for cash
at $ .277/share    132,088        132      36,499           -          -
at $ .214/share     17,069         17       3,628           -          -
                                                                 
Net loss for the 
year ended                                                         
March 31, 1993       -             -         -              -       (38,426)
                                                                 
Balance, 
March 31, 1993     936,953        937      40,127           -      (116,791)
                                                                 
Issue of common 
shares for services                                     
at nominal value    92,173         92         (92)          -          -
                                                                 
Issue of common 
shares for cash                                                 
at $ .001/share    300,000        300        -              -          -
at $ .109/share      3,340          3         361           -          -
at $ .154/share     23,634         24       3,619           -          -
at $ .280/share     19,401         19       5,400           -          -
at $ .330/share     23,161         23       7,624           -          -  
at $ .463/share     87,445         88      40,330           -          -
at $ .694/share     15,756         16      10,907           -          -
at $ .925/share      7,878          8       7,274           -          -
                                                                 
Net loss for the 
year ended                                                        
March 31, 1994        -            -         -              -       (36,272)
                                                                 
Balance, 
March 31, 1994   1,509,741    $ 1,510    $115,550      $    -     $(153,063)
                                                                 
See Accompanying Notes To Financial Statements             

<PAGE>                                                                 
PRIME AIR INC.                                        
(A Development Stage Company)                                        

Consolidated Statements of Shareholders' Equity and Deficit
(all figures in US dollars)                                             

                                        Capital in                Accumulated
                                        Excess of       Share    Deficit During
                      Common Shares    (Less than)  Subscriptions  Development
                  Shares       Amount   Par Value     Receivable     Stage

Balance Forward  1,509,741  $   1,510  $  115,550    $      -     $   (153,063)

Issue of common 
shares for 
services
at nominal value   937,478        937        (937)          -            -
  
Issue of common 
shares for cash
at $ .374/share    248,692        249      92,697           -            -
at $ .463/share    304,089        304     140,286           -            -
                                                                 
Net loss for the 
period ended
June 28, 1994         -            -         -              -          (40,947)
                                                                 
Balance, 
June 28, 1994    3,000,000      3,000     347,596           -         (194,010)
   
Share 
subscription 
at $ .367/share       -            -       (7,313)        (20)           -
 
Net loss for the 
year ended
December 31, 1994     -            -         -              -         (135,530)
 
Balance, 
December 31, 
1994             3,000,000      3,000     340,283         (20)        (329,540)

Issue of common 
shares for cash
and/or services 
at an average
of $ .234/share    562,550        563     131,192           -            -

Net loss for the 
period ended
December 31, 1995     -            -         -              -          (71,266)

Balance, 
December 31, 
1995             3,562,550      3,563    471,475          (20)        (400,806)

Issue of common 
shares for cash
at $ .500/share  1,510,558      1,511    753,769            -            -

Issue of common 
shares for 
services 
at nominal value 1,483,673      1,483        -              -            -
                                                                      
Net loss for the 
period ended                 
December 31, 1996     -            -         -              -        (238,416)
                                                                      
Balance, 
December 31, 
1996             6,556,781    $ 6,557 $1,225,244      $   (20)     $ (639,222)

                See Accompanying Notes To Financial Statements

<PAGE>
PRIME AIR INC.
(A Development Stage Company)

Consolidated Statements of Shareholders' Equity and Deficit
(all figures in US dollars)

                                        Capital in                Accumulated
                                        Excess of       Share    Deficit During
                      Common Shares    (Less than)  Subscriptions  Development
                  Shares       Amount   Par Value     Receivable     Stage
                                                                 
Balance Forward  6,556,781    $  6,557 $ 1,225,244    $  (20)     $  (639,222)

Issue of common 
shares for 
services                                                            
at nominal value   328,000         328        -            -            -

Issue of common 
shares for debt
settlements:   
at $ .500/share    124,252         124      62,001         -            -   
at $ .504/share     36,380          36      18,303         -            -     
at $ .530/share     94,800          95      50,192         -            -      
 
Net loss for the 
year ended
December 31, 1997     -              -        -            -         (189,697) 
    
Balance, 
December 31, 
1997             7,140,213       7,140   1,355,740       (20)        (828,919)
 
Issue of common 
shares for debt
settlements:
at $ .3935/share    10,000           10      3,863         -            -
at $ .4006/share    18,215           18      7,279         -            -

Issue of common 
shares for 
services                                                            
at nominal value 1,663,727        1,664        -           -            -
                 8,832,155        8,832  1,366,882       (20)        (828,919)

Two for one 
stock split, 
May 18, 1998     8,832,155        8,832     (8,832)        -            -
                17,664,310       17,664  1,358,050       (20)        (828,919)

Issue of common 
shares for debt
settlement:                   
at $ .25/share      64,800           65     16,135         -            -

Issue of common 
shares for 
services 
at nominal value   290,000          290        -           -            -
                                      
Transfer Agent 
adjustment          (6,000)          (6)       -           -            -

Write off of 
uncollectable 
share                                                            
subscription 
receivable            -              -        7,313       20            -

Net loss for the 
year ended
December 31, 1998     -              -          -          -         (151,268)

Balance, 
December 31, 
1998             18,013,110     $ 18,013 $1,381,498     $  -     $   (980,187)

See Accompanying Notes To Financial Statements 
<PAGE>


PRIME AIR, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997


1.  Incorporation, Principles of Consolidation and Accounting Presentation

The Company was incorporated under the laws of the State of Nevada, USA on 
November 10, 1996, the purpose of which was to change the domicile of the 
Company from the State of Delaware to the State of Nevada.  This change was 
approved by the shareholders of both corporations on November 26, 1997 and 
effected through a "plan and agreement of merger", with the surviving 
corporation being Prime Air, Inc. (Nevada).  The articles of merger were filed 
with the appropriate State authorities on December 15, 1997, which became the 
effective date of the merger.

The Delaware corporation was incorporated on April 4, 1996 and acquired all of 
the assets, liabilities and shareholders of a previous Utah corporation of the 
same name.  The Utah corporation had been reincorporated on August 30, 1993 as 
Astro Enterprises, Inc. and on June 28, 1994, pursuant to appropriate 
shareholder agreements, acquired all outstanding shares of Prime Air Inc. (a 
Canadian corporation) in exchange for shares of its capital stock on a .787796 
to 1 basis, thereby providing the shareholders of Prime Air Inc. with 90% of 
the outstanding capital stock of Astro Enterprises, Inc.  Astro Enterprises, 
Inc. then changed its name to Prime Air, Inc.  Following incorporation of the 
Delaware company, the Utah corporation was dissolved on May 15, 1996.

These consolidated financial statements include the accounts of the Company 
and its wholly-owned operating subsidiary, Prime Air Inc. (the Canadian 
corporation) and have been prepared in accordance with U.S. GAAP standards.

The results of operations and cash flows for the period from the date of 
inception of this organization as a development stage company on March 10, 
1989 to December 31, 1998 are presented herein for information purposes only.  
These amounts are unaudited and accordingly no audit opinion has been 
expressed thereon.

2.  Nature of Operations / Going Concern Considerations

The Company is presently in its developmental stage and currently has minimal 
sources of revenue to provide incoming cash flows to sustain future 
operations.  The Company's present activities relate to the construction and 
ultimate exclusive operation of an international passenger and cargo air 
terminal facility in the Village of Pemberton, British Columbia and the 
operation of scheduled flight services between that facility and certain major 
centers in Canada and the United States in conjunction with Voyageur Airways 
Limited.  Terminal building construction was substantially completed in May, 
1996. The future successful operation of the Company is dependent upon its 
ability to obtain the financing required to complete and operationalize the 
terminal facility and to commence operation thereof on an economically viable 
basis.  

These consolidated financial statements have been prepared on a "going 
concern" basis which assumes the Company will be able to realize its assets, 
obtain financing as required and discharge its liabilities and commitments in 
the normal course of business.

PRIME AIR, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997

3.  Significant Accounting Policies

Reporting Currency

All amounts in these consolidated financial statements are reported in U.S. 
funds.  Monetary assets and liabilities have been converted from Canadian 
funds where applicable utilizing the year-end closing exchange rate of $ 
1.5368 CDN/$1.00 U.S.  Transactions recorded throughout the year in the 
accounts of the Canadian subsidiary have been converted to their U.S. 
equivalent at actual amounts where available or by utilizing the average 
annual rate as posted by the Internal Revenue Service of the United States as 
follows:   $ 1.4831 CDN / $1.00 U.S. (1997: $1.3844 CDN / $1.00 U.S.). 

     Fair Value of Financial Instruments

In accordance with the requirements of Statement of Financial Accounting 
Standards No. 107, "Disclosure About Fair Value Of Financial Instruments", the 
carrying amounts reported on the balance sheets for cash and cash equivalents, 
namely, "cash and short-term deposits", approximate their fair market value.

     Receivables and Prepaid Expenses

All amounts reported as receivables or prepaid expenses have been recorded at 
their original values.  There have been no amounts written off as bad debts or 
provided for as an allowance against the recovery of these assets.

Capital Assets

     Air Terminal Construction Costs: Expenditures relating directly to the 
construction of the air terminal facility and related engineering and design 
have been recorded in the accounts of the Company at cost, net of amortization 
which is provided on a straight-line basis over the 30-year term of the 
property lease. 
     Furniture and Equipment: Furniture and equipment is stated at cost, net 
of amortization which is provided for at the rate of 20% per annum on the 
declining balance basis.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted 
accounting principals requires management to make estimates and assumptions 
that affect the reported amounts of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the financial statements and 
the reported amounts of revenues and expenses during the reporting periods.  
In these financial statements, assets, liabilities and results of operations 
involve significant reliance on management estimates.  Actual results could 
differ from the use of those estimates.


PRIME AIR, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997

3.    Significant Accounting Policies (continued)

     Income Taxes

The Company has adopted Statement of Financial Accounting Standards No. 109, 
"Accounting For Income Taxes", in the fiscal year ended December 31, 1998 and 
has applied the provisions of that statement on a retroactive basis to the 
previous fiscal year which resulted in no significant adjustment.
     
Statement of Financial Accounting Standards No. 109, "Accounting for Income 
Taxes", requires an asset and liability approach for financial accounting and 
reporting for income tax purposes.  This statement recognizes (a) the amount 
of taxes payable or refundable for the current year and (b) deferred tax 
liabilities and assets for future tax consequences of events that have been 
recognized in the financial statements or tax returns.

Deferred income taxes result from temporary differences in the recognition of 
accounting transactions for income tax and financial reporting purposes.  
There were no temporary differences at December 31, 1998 and earlier years and 
accordingly, no deferred tax liabilities have been recognized for all years.

The Company has cumulative net operating loss carryforwards of approximately 
$980,000 at December 31, 1998 and $ 830,000 at December 31, 1997.  No effect 
has been shown in the financial statements for these carryforwards as the 
likelihood of future tax benefit from such is not presently determinable.  The 
potential income tax benefits of the net operating loss carryforwards of 
approximately $  230,000 at December 31, 1997 and $195,000 at December 31, 
1997 (based upon current income tax rates) have been offset by valuation 
reserves of the same amount.  The net operating losses began to expire as of 
December 31, 1997.


PRIME AIR, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997

4.    Capital Assets

Capital assets consist of the following at December 31, 1998 and December 31, 
1997:

                                            December 31, 1998
                                               Accumulated        Net Book 
                                      Cost     Amortization       Value         
Air terminal construction costs    $ 652,083    $ 62,076         $ 590,007

Furniture and equipment                5,154       2,318             2,836
                                   $ 657,237    $ 64,394         $ 592,843

                                            December 31, 1997
                                               Accumulated        Net Book 
                                      Cost     Amortization       Value  
Air terminal construction costs    $ 652,083    $ 42,058         $ 610,025

Furniture and equipment                5,154       1,663             3,491
                                   $ 657,237    $ 43,721         $ 613,516
          
5.   Notes and Advances Payable

The notes and advances payable are unsecured, non-interest bearing and are 
without specific terms of repayment.

6.   Related Party Transactions

During the years ended December 31, 1998 and 1997, the Company paid  no 
remuneration to any director.

Directors had advanced funds to the Company in the amount of $ Nil as of 
December 31, 1998 (1997: $5,400). These advances were unsecured, non-interest 
bearing and without specific terms of repayment.  During the year ended 
December 31, 1998, the previously recorded advances of $5,400 were written off 
upon instructions of management.

<PAGE>
PRIME AIR, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997

7.  Capital Stock
     Authorized:
       50,000,000 common shares with a 
         stated par value of $ .001/share
        3,000,000 preferred cumulative 
         convertible shares with a stated 
         par value of $ .001/share
    Common Shares Issued:
                                      Number of Shares       Consideration
     To August 31, 1993
            - for cash                      300,000          $      300
     Prime Air Inc. share exchange
            - June 28, 1994               2,700,000             350,296
     During year ended December 31, 1995
            - for cash                      562,550             131,756     
     Balance at December 31, 1995         3,562,550             482,352

     During year ended December 31, 1996
            - for cash                    1,510,558             755,279
            - consulting and related 
               services                   1,483,673               1,483
                                          2,994,231             756,762     
     Balance, December 31, 1996           6,556,781           1,239,114 

     During the year ended 
      December 31, 1997
            - shares-for-debt settlements   255,432             130,751
            - consulting and related 
               services                     328,000                 328
                                            583,432             131,079
      Balance, December 31, 1997          7,140,213           1,370,193

During the year ended December 31, 1998
            - shares-for-debt settlements    93,015              27,370
            - consulting and related 
               services                   1,953,727               1,954
            - Transfer Agent correction      (6,000)                 (6)
                                          2,040,742              29,318
                                          9,180,955           1,399,511
             
            - Two for One" share split    8,832,155          ______-___

      Balance, December 31, 1998         18,013,110        $  1,399,511

<PAGE>
PRIME AIR, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997


7.    Capital Stock (continued)


The directors of the Company have authorized the issue of up to a further 
500,000 common shares in the form of a director, officer and employee stock 
options at a price to be determined.  The granting of these options is subject 
to the receipt of regulatory approval.

In July, 1996, management of the Company voluntarily halted trading of its 
common shares based upon the conclusion that information concerning the 
history of the Company provided by former management may not have been 
complete.  Adequate information was subsequently provided to the public by 
management and trading was recommenced on March 27, 1997.  The Company 
prepared and filed  a registration statement in connection with the change of 
domicile (referred to in Note 1) to register all of the outstanding common 
shares of capital stock in the Company.  This registration has been approved 
by the Securities and Exchange Commission and the change of domicile became 
effective on December 15, 1997.


8.    Lease Commitment

The Canadian subsidiary corporation has entered into an Airport Lease and 
Operating Agreement with The Corporation of The Village of Pemberton in 
British Columbia whereby it has been granted an exclusive and irrevocable 
lease over the lands and airport facilities associated with the Pemberton 
Airport.  The term of the Lease and Operating Agreement, including extension 
options relating thereto, is for a total of 30 years with terminal rent 
payable as follows:

   $ 67 US ($100 CDN) per annum for the initial six (6) years (1993 through 
1998) and thereafter;
 
   5% of gross receipts per annum derived from the operation of the terminal 
facilities, excluding amounts received in connection with the sale of airline 
tickets and other forms of transportation. The lease commitment amounts for 
1999 through 2003 cannot be quantified as the amount of gross receipts for 
those years cannot be determined and active operation of the terminal 
facilities has not yet commenced.  


EXHIBIT 10.8

CHANEN, PAINTER & COMPANY, LTD.
INVESTMENT BANKERS

INVESTMENT BANKING AGREEMENT

1.0 PARTIES AND RECITALS

     1.01     Chanen, Painter & Company, Ltd. ("Advisor"), is a State of 
Washington corporation engaged in the investment banking business.  It will 
have the option to conduct this agreement through its wholly owned and 
National Association of Securities Dealers regulated subsidiary, CCCP 
Securities, Ltd.

     1.02     Prime Air Inc. ("Client") is a State of Nevada Corporation 
formed to lock up and develop the airport rights on a lease basis with the 
municipality of Pemberton B.C. and therefore pursue revenue opportunities 
available with all air traffic and peripheral businesses.

2.0 DEFINITIONS

     2.01     "Financing Desired" Client desires Advisor to provide assistance 
and advice to it to obtain capital to finance its business activities.

     2.02     "Advisor's Services" means the styles of Advisor to Client as 
set forth in Article 3.0.

     2.03     "Business Plan" means the plan adopted and promulgated by Client 
as the plan for the conduct and growth of its business.

     2.04     "Documentation" means all materials used and shall include 
without limitation the Business Plan, Private Placement Memorandum, 
subscription agreements, due diligence materials, legal documentation and 
promotional materials.

     2.05     "Investment Banking Transaction" means any transaction by which 
equity capital, debt capital (a.k.a. phantom equity or structured debt, as 
opposed to commercial debt), operating funds or services with a definable 
value we acquired by or committed to Client, including, but not limited to: 
equity, debt, joint ventures, partnerships, strategic corporate alliances, 
research and development agreements, licensing agreements, royalty agreements, 
mergers, acquisitions, warrants, options, non-cash stock, asset transfers or 
any other form of equity investment or secured or unsecured finance 
transaction.  In addition, the following transaction(s) can also be included 
in the definition if they are assigned by Client to Advisor in writing; 
contact research; take or pay agreements; or set price manufacturing 
contracts.

     2.06     "Offering Materials" means materials prepared, collated or 
collected by Advisor for presentation to a potential investor, or a licensee, 
joint venture or long-term supply contractor in connection with an Investment 
Banking Transaction.

     2.07     "Product(s)" means all products and services marketed, or 
intended to be marketed, by Client.

3.0     SERVICES OF ADVISOR

     3.01 "Retention of Services"  The Client hereby retains the services of 
Advisor on an exclusive basis.

     3.02     "Description of Services"  Advisor will provide business advice 
to client on various components of Client's business including the structuring 
of Client's business to attract equity and/or debt financing and/or other 
services regarding Client's business activities.  Advisor will also help 
Client raise such debt or equity financing or facilitate other services in 
such amounts and kinds as may be mutually agreed upon.

     3.03     " Conditions of Services"  Advisor will provide the 
aforementioned services solely on a BEST EFFORTS BASIS with no guarantee of 
the success of some or all of the financing.

     3.04     "Syndication"  Advisor may syndicate its performance hereunder, 
with other National Association of Securities Dealers member firms, with prior 
written approval of Client.

     3.05     "Representations As To Product(s)"  Advisor shall make no 
representations to potential investors or third parties modifying the terms 
and conditions of Client's Product(s) warranty or warranties.  Advisor shall 
be entitled to rely on such Product(s) warranties as may be furnished to 
Advisor by Client or as my be provided in the Uniform Commercial Code and to 
inform potential investors and third parties of such warranties, if required 
in the course of performing its services hereunder.

     3.06     "Future Advisory Services" If an Investment Banking Transaction 
is successfully consummated within the initial term of this agreement, Advisor 
will have the right to be included as an investment banker in the next 
transaction at an amount up to five times that accomplished in the previous 
round of financing with terms that are competitive within the industry, and 
will have the continual right for each subsequent transaction if the previous 
transaction was successful, up to but not including, any initial public 
offering.

     3.07     "Board Representation"  Advisor will have the right to designate 
a representative to serve on Client's Board of Directors.  Said designated 
board member's services shall be compensated (or not compensated) in the same 
manner as other members of Client's Board of Directors.  Also, said designated 
board member shall be entitled to receive regular financial reports and 
statements as are provided to other members of Client's Board of Directors.

4.0     TERM, TERMINATION

     4.01     "Initial Term; Extension" The initial term of this Agreement 
shall be 9 months from the date at which time Client signs off on the Business 
Plan that will be used as a sales tool in this offering.  The term shall be 
automatically renewed for successive six month terms thereafter, unless 
written notice to the contrary is provided by one party to the other not less 
than thirty days prior to such automatic renewal.

     4.02     "Termination" Either party may terminate this Agreement by 
written notice to the other party for material breach hereof.

5.0     COMPENSATION

For service hereunder, Advisor shall receive compensation from Client as 
follow:

     5.01     "Compensation during Term"

(a)     Client agrees to a $35,000 retainer fee which is payable to Advisor 
upon signing of this Agreement.  This retainer is in consideration for due 
diligence work, time spent in pre-selling process, advising Client upon 
various parts of the business plan, and the Advisor's direct participation in 
writing portions of the business plan, offering memorandum and subscription 
agreements, along with other Advisory Services which includes representation 
in securing capital or strategic agreements.

(b)     For any equity Investment Banking Transaction that closes during the 
term of this Agreement, or which closes within one 1 year thereafter by 
registered (recorded in writing to Client within fifteen days following the 
term) potential investors who actively pursue making an investment during the 
term of this Agreement, Client shall pay Advisor a closing fee equal to nine 
percent (9%) of the first $1 million in cash (and/or the agreed upon value of 
non-cash consideration) received by Client, seven percent (7%) of the next $1 
million dollars of value, and five percent (5%) thereafter.  These percentages 
shall be applied to the aggregate of all sums invested.

(c)     For any debt Investment Banking Transaction that closed during the 
term of this agreement, or which closed one year thereafter due to a source of 
debt capital introduced by Advisor, Client shall pay Advisor a fee of one and 
one-quarter percent (1 1/4%).

     5.02     "Time of Compensation"  The closing statements as to such 
Investment Banking Transaction shall include the compensation due to Advisor 
and Advisor shall be entitled to attend such closing at its expense.  The 
closing compensation due (transaction fee) identified in 5.01(b) above will be 
paid to Advisor within two business days of closing (receipt of funds).  If 
periodic funds are received by Client, Advisor shall be paid by the first 
Friday following Clients receipt of funds.

     5.03     "Warrants"  Advisor shall receive warrants to purchase shares 
equal to four percent (4%) of equity securities of the issued and outstanding 
stock of the Client if the full offering (to be mutually agreed upon later) is 
raised, and a proportionate percentage of warrants for equity securities if a 
lesser amount of the offering is raised, all as provided below.  The exercise 
price of the warrants shall be at the same price as determined by the last 
investor of the round of financing subject to the terms of Client and 
Advisor's mutually agreed upon investment instruments and documentation.  The 
warrants shall be exercisable for a period of seven (7) years from the date 
granted, and shall be callable by the Company, after a reasonable opportunity 
for exercise by Advisor, if Client is selling all or substantially all of its 
assets of capital.

     5.04     "Expenses"  Client shall reimburse Advisor for documented, 
reasonable out of pocket expenses incurred by Advisor in connection herewith, 
including without limitation, reasonable expenses of outside professional and 
technical persons commissioned per prior mutual agreement between Client and 
Advisor, travel, entertainment, postage, express mail, long distance telephone 
calls and other out of pocket expenses.  All expenses in excess of $100 must 
be previously approved by Client in writing.  Expenses will be billed monthly 
with net thirty day terms.

6.0     CONFIDENTIALITY

     All information delivered by Client to Advisor shall be maintained as 
confidential by
Advisor.  Advisor shall use such information only in connection with the 
performance of its duties hereunder, provided Advisor shall not disclose any 
such confidential information to anyone without the express permission of 
Client or as required by law or court order.  All Offering Materials prepared 
for Client by Advisor shall be subject to review by Client and shall not be 
distributed if Client determines, in Client's sole discretion, that they would 
disclose Client's confidential information or are otherwise inappropriate.

7.0     OFFERING MATERIALS APPROVAL

     Advisor shall not distribute any Offering Materials to third parties 
unless and until the terms and materials have been reviewed and approved for 
such use by Client.

8.0     NO PARTNERSHIP OR JOINT VENTURE

     Nothing herein shall be construed to render one party liable for any 
present or future debts, obligations or liabilities of the other or to create 
a partnership or joint venture, or to render
one party the employee of the other.

9.0     ADVISOR REPRESENTATION AND WARRANTIES

     9.01     Advisor represents and warrants to Client that: (i) it is a 
Washington corporation in good standing and authorized to conduct its business 
and perform the services it has covenanted to perform for Client hereunder; 
(ii) it is in all material respects in compliance with provisions of all 
federal, state and local laws and regulations, and has all authorizations, 
approvals, and consents, orders, registrations, licenses, or permits of any 
court or governmental agencies or bodies which are required; (iii) its entry 
into this Agreement bas been authorized by its Board of Directors and that the 
officers of Advisor executing this Agreement have been duly authorized to do 
so for and on its behalf; and (iv) this Agreement, when duly executed by all 
parties, will constitute a valid and binding agreement, enforceable against it 
in accordance with its terms, and its entry into and performance hereunder 
does not violate any outstanding obligation, contractual or otherwise, which 
Advisor may owe to any third party, nor any order, writ, injunction, decree, 
judgement, statute, rule, law or ruling.  Advisor will provide Client with 
such documentation of the. foregoing as Client shall reasonably require and 
request in writing.

     9.02     Advisor hereby agrees to defend, indemnify and hold harmless 
Client, its directors, officers, sub-contractors and employees, successors and 
assigns from and against any and all claims, demands, suits at law or in 
equity, loss, damage, attorney's fees and liability of any kind due to, 
arising out of or resulting from a breach of any covenant, representation or 
warranty made by Advisor in this Agreement.

10.0     CLIENT REPRESENTATION AND WARRANTIES

     10.01     "Authority"  Client represents and warrants to Advisor that: 
(i) it is a legal corporation organized under the laws of the State of its 
organization and is in good standing and duly authorized to conduct its 
business and the transactions contemplated hereby; (ii) its entry hereunto has 
been authorized by its President executing this Agreement and has been duly 
authorized to do so for and on its behalf; and, (iii) this Agreement, when 
duly executed by all parties, will constitute a valid and binding agreement, 
enforceable against Client in accordance with its terms, and that its entry 
into and performance hereunder does not violate any outstanding obligation, 
contractual or otherwise, which Client way owe to any third party, nor any 
order, writ, injunction, decree, judgment, statute, rule, law or ruling.  
Client will provide Advisor with such documentation of the foregoing as 
Advisor shall reasonably require and request in writing.

     10.02     "Information"  Client represents and warrants to Advisor that: 
(i) all information and Documentation furnished by it to Advisor accurately 
will depict Client and its business and proposed business and will not, to 
Client's knowledge, contain material misstatements or omissions; that (ii) 
Offering Materials which Client approves as provided in Section 7.0 will 
accurately depict and represent Client and its business and proposed business, 
and will not contain any material misstatements or omissions of material facts 
which would tend to make the representations set forth therein materially 
false or misleading.

     10.03     "Public/Investor Communications"  Advisor retains the right to 
approve all written communications from Client to shareholders, prospective 
shareholders, and the general public including various media groups.

     10.04     "Hold Harmless"  Client hereby agrees to defend, indemnify and 
hold harmless Advisor, its directors, officers, sub-contractors and employees, 
successors and assigns from and against any and all claims, demands, suits at 
law or inequity, loss, damage, attorney's fees and liability of any kind due 
to, arising out of or resulting from a breach of any covenant, representation 
or warranty made by Client in this Agreement, or arising out of or resulting 
from any claim for or actual damage incurred by an investor in an Investment 
Banking Transaction, except to the extent such claim is based on Advisor's 
negligence or fault.  Client further acknowledges and agrees that Advisor 
shall have no liability of any nature whatsoever due to or arising from a 
breach of Client's warranties, express or implied, as to Client's Product(s) 
and/or Service(s), and Client agrees to defend, save, and hold Advisor 
harmless from any claim of whatever nature arising therefrom.

11.0     MISCELLANEOUS

     11.01     "Legal Compliance"  Both parties shall comply with all laws, 
rules, relations, orders, decrees, judgments and other governmental acts of 
the United States of America and any nations and their political subdivisions, 
agencies and instrumentalities that may be applicable to the parties or their 
activities hereunder, and each party shall require its affiliates and/or 
licensees to do the same.  Client shall take such steps as may be necessary 
with respect to compliance with foreign exchange regulation or other similar 
requirements to assure the right of Client to receive funds from foreign 
countries and to remit compensation payable hereunder to foreign countries, 
and shall keep Advisor informed of same.  Each party shall cooperate with the 
other in the preparation, execution, and delivery of documents and the 
performance of acts necessary or desirable for each party to comply with this 
Section.

     11.02     "Waiver" The failure of either party at any time to require 
performance by the other party of any provision hereof shall not affect in any 
way nor derogate the full right to require such performance at my time 
thereafter, nor shall the waiver by either party of a breach of any provision 
hereof be held to be a waiver of the provision itself.  No breach shall be 
excused unless such waiver or excuse of breach is in writing and signed by the 
waiving or excusing party.  No written waiver or excuse shall constitute a 
waiver or excuse of any other or subsequent breach.

     11.03     "Notice"  Notices given hereunder shall be in writing, although 
preliminary notice may be given by facsimile transmission, and shall be deemed 
received when personally delivered, (by overnight courier or otherwise) or 
seven days after mailing by certified or registered mail, return receipt 
requested, postage prepaid, to the following respective address:

Notice to Advisor:     Chanen, Painter & Company, Ltd.
                       29th Floor, US Bank Centre Building
                       1420 Fifth Avenue, Suite 2975
                       Seattle, Washington 98101

Notice to Client:      Prime Air, Inc.
                       7777 Perimeter Rd. M/S #7
                       Boeing Field
                       Seattle, Washington 98108
                       Blaine Haug, Chairman/CEO

Either party may change such notice address by giving notice of such change to 
the other party.

     11.04     "Arbitration"  Except when arbitration would result in 
non-joinder in the arbitration of another who could be joined in an 
appropriate court, any dispute under this Agreement shall be settled by 
arbitration in King County, State of Washington, pursuant to the Commercial 
Rules, then obtaining, of the American Arbitration Association.  The decision 
of the arbitrator shall be final and binding on the parties as to issues of 
fact, but either party may appeal all issues of law to m appropriate court of 
law.

     11.05     "Entire Agreement; Modification"  This Agreement supersedes any 
and all other agreements, either oral or written, between the parties and 
contains all of the covenants and agreements between the parties pertaining to 
its subject matter.  Each party acknowledges that no representations, 
inducements, promises or agreements, orally or otherwise, have been made by 
any party or anyone acting on behalf of any party which are not embodied 
herein.  No modification hereof shall be effective unless in writing and 
signed by both parties.

     11.06     "Effect of Partial Invalidity" If any provision of this 
Agreement not essential to its principal objectives is held by a court of 
competent jurisdiction to be invalid, void or unenforceable, the remaining 
provisions shall nevertheless continue in full force and effect without being 
impaired or invalidated in any way, and each party agrees to interpret and 
apply the Agreement to implement its intent to the extent permitted by law.

     11.07     "Survival"  All indemnities, covenants, representations and 
warranties contained in Sections 3.0, 4.0, 5.0, 6.0, 7.0, 8.0, 9.0, 10.0, and 
11.0 and their subparagraphs shall survive the expiration or termination 
hereof.

     11.08     "Effective Date" The Effective Date of this Agreement shall be 
November 19, 1998.  IN WITNESS WHEREOF, the undersigned have executed this 
Agreement

Chanen, Painter & Company, Ltd.                     Prime Air, Inc.

By:     /s/ J. Scott Painter                    By: /s/  Blaine Haug
               Principal                                 Chairman/CEO
<PAGE>
EXHIBIT 23

Rutherford & Company
Chartered Accountants
________________________________________________
9511 Bates Road, Richmond, B.C.
CANADA V7A 1E3
Telephone (604)272-5454  Fax (604)272-5874


ACCOUNTANTS' CONSENT

We hereby consent to the use of our audit report of Prime Air, Inc. (Nevada), 
dated April 15, 1999, for the years ended December 31, 1998 and 1997 in the 
Form 10K SB Statement for Prime Air, Inc. (Nevada).

We also consent to the use of our auditing firm as experts in the 10K SB 
Registration Statement for Prime Air, Inc. (Nevada).


April 15, 1999                          "Rutherford and Company"
Richmond, Canada                         CHARTERED ACCOUNTANTS