`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, 2000

[ ] 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

Suite 601 - 938 Howe Street, Vancouver, British
Columbia, CANADA                                     V6Z 1N9
(Address of principal executive offices)           (Zip Code)

Issuer's telephone number, including area code:  (604) 684-5700

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 (21,022,666 shares) computed by using the
closing sale price on April 20, 2000, was $1,051,133.
State the number of shares outstanding of each of the Issuer's classes of common equity as of the
latest practicable date: At April 20, 2000, there were 21,022,666 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.

Commencing October 1998, the Company engaged the Investment Banking firm of Chanen, Painter
& Company Ltd. for the purpose of providing equity financing to enable start up of air services.
That engagement was not completed and all associations thereto expired and were terminated in
February 2000.

The Company entered into a "Memorandum of Proposed Agreement" with 519222 Ontario
Limited, a corporate entity associated with Voyageur Airways Limited, which, subject to the final
approval of Voyageur and the Company, will allow a merger which combines 25% of the assets of
Voyageur with 70% of the assets of the Company.  That engagement was not completed, however,
Voyageur continues to work with the Company for the purpose of establishing an air service.
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 2,000,000 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 $641,972 ($590,181 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 property
taxes imposed by municipal authorities plus 5% of the gross receipts derived from the operation of
the terminal facility for each year thereafter. 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 one employee as of December 31, 2000, consisting of

Mr. Haug, who was 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 predecessor 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,
2000.

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

               Consolidated Financial Statements

                   December 31, 2000 and 1999






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




                                           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, 2000 and 1999 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, 2000 and 1999 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, 2000 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.


                                          "Rutherford & Company"
Richmond, Canada
April 21, 2000                            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
21, 2000 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 21, 2000                        Chartered Accountants




PRIME AIR, INC.
(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS
(all figures in US dollars)

                                                   December 31    December 31
                                                      2000           1999
ASSETS

Current Assets
  Cash and short-term deposits               $       2,605       $          472
  Prepaid expenses                                   1,467                1,448
  GST recoverable                                    1,490                4,462
                                                     5,562                6,382

Capital Assets (Note 4)                            542,432              565,024
                                                   -------              -------

                                             $     547,994       $      571,406
                                                   =======              =======
LIABILITIES

Current Liabilities
  Accounts payable and accruals              $     212,450       $      242,978
  Notes and advances payable  (Note 5)              15,184               39,161
                                                   -------              -------
                                                   227,634              282,139
                                                   =======              =======

SHAREHOLDERS' EQUITY

Capital Stock  (Note 6)
  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:
    21,022,666 common shares (1999: 19,647,560)     21,023              19,648

  Capital in excess of par value                 1,652,977           1,526,923
                                                 ---------           ---------
                                                 1,674,000           1,546,571
Accumulated Deficit During
  Development Stage                             (1,353,640)         (1,257,304)
                                                 ---------           ---------
                                                   320,360             289,267
                                                 ---------           ---------
                                               $   547,994         $   571,406
                                                 =========           =========

Approved on Behalf of the Board:
"Blaine Haug"        Director
"Wayne Koch"         Director

See Accompanying Notes To  Financial Statements


PRIME AIR, INC.
(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS
(all figures in US dollars)

                                                    Year Ended     Year Ended
                                                    December 31    December 31
                                                       2000           1999


Administrative And General Expenses

  Audit and accounting                            $     20,280   $     16,955
  Advertising                                            3,434          2,010
  Amortization                                          20,053         20,247
  Commissions and finders' fees                         11,361         19,050
  Consulting   (Note 7)                                   (209)        78,478
  Insurance                                              2,304          4,047
  Interest and service charges                           5,153          3,076
  Legal costs                                            9,681        111,895
  Office and general                                       410            524
  Repairs and maintenance                                2,171          1,602
  Rent and property taxes - airport facility (Note 8)    9,294          7,356
  Telephone and utilities                                4,051          8,001
  Transfer agent, listing and filing fees                6,277          6,122
  Travel, promotion and entertainment (recovered)        5,706         (7,692)
                                                        ------        -------
                                                        99,966        271,671
                                                        ------        -------

Other Expense (Income)                                      -              -

  Loss (gain) on foreign exchange conversion            (3,176)         5,672
  Interest income                                         (454)          (226)
                                                        ------        -------
                                                        (3,630)         5,446
                                                        ------        -------
Net Loss For The Year                             $     96,336    $   277,117
                                                        ======        =======


Net Loss Per Common Share                         $    (0.0048)   $   (0.0143)
                                                        ======        =======

Weighted Average Common Shares Outstanding          20,169,124     19,396,106
                                                        ======        =======


See Accompanying Notes To Financial Statements



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
                                                      2000               1999


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

OPERATING
  Net loss                                     $      (4,051)      $      (8,001)
  Non-cash charge - amortization                          -                   -
                                                      ------              ------
                                                      (4,051)             (8,001)

  Change in non-cash working capital
      balances relating to operations                (27,575)            165,870
                                                      ------              ------
                                                     (31,626)            157,869
                                                      ------              ------

FINANCING
  Notes and advances payable                         (23,977)            (70,593)
  Issue of capital stock                             127,429             147,060
                                                      ------              ------
                                                     103,452              76,467
                                                      ------              ------

INVESTING
  Recovery of terminal facility construction costs     2,539               7,572
                                                      ------              ------
NET CASH INFLOW (OUTFLOW)                             74,365             241,908

CASH, BEGINNING OF YEAR                              241,908                 -
                                                      ------              ------
CASH, END OF YEAR                                $   316,273         $   241,908
                                                      ======              ======

See Accompanying Notes To Financial Statements


PRIME AIR, INC.
(A Development Stage  Company)

Consolidated Statements of Shareholders' Equity and Deficit

                                                           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)

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 period 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 year 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 year ended
  December 31, 1996                      -            -            -              -         (238,416)
                                     --------      ------     ------          -------       --------
Balance, December 31, 1996          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 settlements:
   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)

Issue of common shares for
  debt settlements:
   at $ .20/share                     201,250         202     40,048              -                -
   at $ .25/share                     423,200         423    105,377              -                -

Issue of common shares for services
  at nominal value                  1,010,000       1,010          -              -                -

Net loss for the year ended
  December 31, 1999                         -           -          -               -        (277,117)

Balance, December 31, 1999         19,647,560      19,648  1,526,923               -      (1,257,304)

Issue of common shares for cash:
   at $ .08/share                     500,000         500     39,500               -               -

Issue of common shares for
  debt settlement:s:
   at $ .08/share                       4,100           4        324               -               -
   at $ .10/share                     871,006         871     86,230               -

Net loss for the year ended
  December 31, 2000                         -           -          -               -         (96,336)
                                     --------      ------     ------          -------       --------
Balance, December 31, 2000         21,022,666    $ 21,023 $1,652,977         $     -     $(1,353,640)
                                     ========      ======     ======          =======       ========




PRIME AIR, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000 and 1999


  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, 2000 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, 2000 and 1999


  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 $ 1.4978 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: $ 1.4852
CDN/$1.00 U.S. (1999: $1.4858 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, 2000 and 1999



  3.    Significant Accounting Policies (continued)

Income Taxes

The Company adopted Statement of Financial Accounting Standards No. 109, "Accounting For Income Taxes",
during the fiscal year ended December 31, 1998 and applied the provisions of that statement on a retroactive
basis to the previous fiscal years, which resulted in no significant adjustments.

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, 2000 and
earlier years and accordingly, no deferred tax liabilities have been recognized for all years.

The operating subsidiary Company has cumulative net operating loss carryforwards of approximately $ 793,000
at December 31, 2000 and $ 774,000 at December 31, 1999.  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 these net operating loss carryforwards of approximately $
145,000 at December 31, 2000 and $ 153,000 at December 31, 1999 (based upon current income tax rates)
have been offset by valuation reserves of the same amount.  Net operating losses expire after seven (7) years.
Operating losses of the US parent corporation have not been determined.




PRIME AIR, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000 and 1999



  4.    Capital Assets

Capital assets consist of the following at December 31, 2000 and December 31, 1999:

                                                          December 31, 2000
                                                        Accumulated        Net Book
                                              Cost      Amortization       Value

     Air terminal construction costs      $ 641,972    $ 101,434            $ 540,338

     Furniture and equipment                  5,154        3,260                1,894
                                          $ 647,126    $ 104,694            $ 542,432


                                                           December 31, 1999
                                                         Accumulated       Net Book
                                              Cost       Amortization      Value

     Air terminal construction costs      $ 644,511    $  81,800            $ 562,711

     Furniture and equipment                  5,154        2,841                2,313
                                          $ 649,665    $  84,641            $ 565,024


During the year ended December 31, 2000, a recovery of terminal facility construction costs in the amount of
$2,539 was realized.


  5.    Notes and Advances Payable

The notes and advances payable are unsecured, non-interest bearing and are without specific terms of
repayment.  Included therein is an amount of $11,846 which has been advanced to the Company by a
shareholder and/or a corporation controlled by that shareholder who is the beneficial owner of 2,245,226
shares of common stock of the Company, that holding representing 10.68% of the issued and outstanding
capital of the Company.



PRIME AIR, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000 and 1999

  6.    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

During the year ended December 31, 1999
     - shares-for-debt settlements                 624,450                146,050
     - consulting and related services           1,010,000                  1,010
                                                 1,634,450                147,060
  Balance, December 31, 1999                    19,647,560              1,546,571

During the year ended December 31, 2000
     - for-cash                                    500,000                 40,000
     - shares-for-debt settlements                 875,106                 87,429
                                                 1,375,106                127,429

  Balance, December 31, 2000                    21,022,666           $  1,674,000



PRIME AIR, INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000 and 1999

  6.    Capital Stock (continued)


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.

  7.   Related Party Transactions

During the years ended December 31, 2000 and 1999, no cash remuneration was paid to any director or
officer of the Company.  In past years the Company has adopted a policy of issuing "restricted" common
shares to certain directors and officers for services rendered, such shares being attributed a nominal value
of $ 0.001 per share.  During the year ended December 31, 2000, no such shares were issued (1999: 800,000
shares; 1998: 2,000,000 shares).

  8.    Rent, Property Taxes and 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 1999);
            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 2001 through 2005 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.

No lease payments were made during the year ended December 31, 2000 as there were no gross receipts
derived from operations. The Company, however, was obligated to pay property taxes imposed by municipal
authorities, such levies amounting to $9,294. for the year ended December 31, 2000 (1999: $7,356).







                                           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 21, 2000,
for the years ended December 31, 2000 and 1999 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).



                                     "Rutherford & Company"
Richmond, Canada
April 21, 2000                        CHARTERED ACCOUNTANTS`