<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q


[X]  Quarterly  report  pursuant  to section 13 or 15(d) of the  Securities
     Exchange Act of 1934 for the quarterly period ended September 30, 1996

                         Commission file number: 1-8306

                     AIR EXPRESS INTERNATIONAL CORPORATION
             (Exact name of registrant as specified in its charter)

                 Delaware                                36-2074327  
     (State or Other of Jurisdiction of     (I.R.S. Employer Identification No.)
      Incorporation or Organization)


                  120 Tokeneke Road, Darien, Connecticut 06820
                                 (203) 655-7900
  (Address of, Including Zip Code, and Telephone Number, Including Area Code,
                  of Registrant's Principal Executive Offices)

                                     NONE 
Former name, former address and former fiscal year, if changed since last report


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the  preceding 3 months (or for such shorter  period that the  registrant
was  required  to file such  reports)  and (2) has been  subject to such  filing
requirements for the past 90 days. Yes X No

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest  practicable  date  (applicable only to corporate
registrants).

The number of shares of common  stock  outstanding  as of  November  8, 1996 was
22,723,848 (Net of 27,305 Treasury Shares).


<PAGE>


                     AIR EXPRESS INTERNATIONAL CORPORATION
                   September 1996 Form 10-Q Quarterly Report

                               Table of Contents


                         Part I - Financial Information
                                                                       Page

Item 1.  Financial Statements

               Condensed Consolidated Balance Sheets as at
               September 30, 1996  and December 31, 1995 ..............  2

               Condensed Consolidated Statements of Operations -
               three months and nine months ended September 30, 1996
               and 1995..................................................3

               Consolidated Statements of Cash Flows -
               nine months ended September 30, 1996 and 1995.............4

               Notes to Condensed Consolidated Financial
               Statements................................................5

Item 2.  

         Management's Discussion and Analysis of Financial
         Condition and Results of Operations.............................8

                          Part II - Other Information


Item 1.  Legal Proceedings..............................................11

Item 6.  Exhibits and Reports on Form 8-K...............................11


<PAGE>

                                                                          Page 2
<TABLE>
<CAPTION>


             AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

                                                     Sept 30, 1996  Dec 31, 1995
                                                      (Unaudited)
Assets
Current Assets:
<S>                                                      <C>          <C>      
   Cash and cash equivalents .........................   $  41,461    $  54,463
   Accounts receivable, (less allowance for
    doubtful accounts of $4,580 and $4,695) ..........     304,058      268,289
   Other current assets ..............................       5,433        4,754
         Total current assets ........................     350,952      327,506
Investment in unconsolidated affiliates ..............      13,822       13,228
Property, plant and equipment (less accumulated
   depreciation and amortization of $49,253
   and $43,242) ......................................      60,592       54,149
Deposits and other assets ............................      12,521       12,999
Goodwill (less accumulated amortization
    of $9,895 and $8,269) ............................      81,666       78,961
         Total assets ................................   $ 519,553    $ 486,843

Liabilities and stockholders' investment

Current Liabilities:
   Current portion of long-term debt .................   $   3,091    $   2,690
   Bank overdrafts payable ...........................       1,216          620
   Transportation payables ...........................     144,939      149,536
   Accounts payable ..................................      45,901       41,625
   Accrued liabilities ...............................      51,326       45,556
   Income taxes payable ..............................      13,079       10,581
         Total current liabilities ...................     259,552      250,608
   Long-term debt ....................................       8,790       82,762
   Other liabilities .................................       5,058        5,907
         Total liabilities ...........................     273,400      339,277

Stockholders' Investment:
   Capital stock-
   Preferred (authorized 1,000,000 shares,
    none outstanding) ................................        --           --
   Common, $.01 par value (authorized 40,000,000
    shares, issued 22,737,184 and 18,577,880 shares) .         227          186
   Capital surplus ...................................     136,043       60,164
   Cumulative translation adjustments ................     (16,780)     (12,539)
   Retained earnings .................................     127,335      100,372
                                                           246,825      148,183

Less: 27,305 and 25,279 shares of treasury
  stock, at cost .....................................        (672)        (617)
   Total stockholders' investment ....................     246,153      147,566
   Total liabilities and stockholders' investment ....   $ 519,553    $ 486,843
</TABLE>


                  The accompanying notes are an integral part
                         of these financial statements.

<PAGE>

                                                                          Page 3
<TABLE>
<CAPTION>



             AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)

(In thousands, except
 per share data)
                                 Three Months Ended       Nine Months Ended
                                    September 30,            September 30,      
                                 1996         1995         1996           1995  
<S>                               <C>          <C>         <C>           <C>

Revenues ...................   $ 340,928    $ 314,269    $ 956,375    $ 893,618

Operating expenses:
  Transportation ...........     228,814      219,124      645,385      627,746
  Terminal .................      61,317       51,663      169,458      143,192
  Selling, general and
   administrative ..........      35,457       31,468      100,411       89,836

Operating profit ...........      15,340       12,014       41,121       32,844

Other income (expense):
  Interest, net ............         258       (1,096)      (1,557)      (2,563)
    Other, net .............       1,260        1,007        3,287        2,422
                                   1,518          (89)       1,730         (141)

Income before provision
 for income taxes ..........      16,858       11,925       42,851       32,703

Provision for income taxes .       6,232        4,651       16,369       12,759
Net income .................   $  10,626    $   7,274    $  26,482    $  19,944

Income per common share:
    Primary ................   $     .48    $     .39    $    1.28    $    1.10
    Fully diluted ..........   $     .46    $     .36    $    1.21    $    1.03

Weighted average number
 of common shares (000's):
    Primary ................      22,358       18,835       20,731       18,182
    Fully diluted ..........      23,123       22,173       23,074       21,529
</TABLE>


                  The accompanying notes are an integral part
                         of these financial statements.

<PAGE>

                                                                          Page 4
<TABLE>
<CAPTION>


             AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                  (Unaudited)
(Dollars in thousands)

                                                          1996           1995
<S>                                                    <C>             <C>     
Cash flows from operating activities:
   Net income .........................................$ 26,482        $ 19,944
   Adjustments to reconcile net income to net
    cash provided by operating activities:
       Depreciation and amortization ..................   7,214           5,272
       Amortization of goodwill .......................   1,754           1,405
       Amortization of bond discount ..................     115             115
       Deferred income taxes ..........................     357            (727)
       Undistributed earnings of affiliates ...........    (983)         (1,042)
       Gains on sales of assets, net ..................    (129)           (193)

   Changes in assets and liabilities, net of
    business acquisitions:
      (Increase) in accounts receivable, net .......... (17,372)        (16,299)
       Decrease (increase) in other current assets.....     216          (1,947)
       Decrease in other assets .......................   1,734             652
      (Decrease) increase in transportation payables .. (12,577)          2,904
      (Decrease) increase in accounts payable .........  (5,042)          9,338
       Increase (decrease) in accrued liabilities .....   4,895         (12,058)
       Increase in income taxes payable ...............   1,940           1,100
      (Decrease) increase in other liabilities ........  (1,189)            119
            Total adjustments ......................... (19,067)        (11,361)

         Net cash provided by operating activities ....   7,415           8,583

Cash flows from investing activities:
   Business acquisitions, net of cash acquired ........  (7,386)         (1,176)
   Sale of marketable securities ......................      --          19,981
   Losses from hedging activities .....................  (1,320)         (1,533)
   Proceeds from sales of assets ......................     381             491
   Capital expenditures ...............................  (8,959)        (18,591)
   Investment in unconsolidated affiliates ............     (71)           (346)

         Net cash used by investing activities ........ (17,355)         (1,174)

Cash flows from financing activities:
   Net borrowings (repayments) in bank overdrafts
     payable ..........................................     646            (243)
   Additions to long-term debt ........................     290           2,976
   Payment of long-term debt ..........................  (1,297)         (2,205)
   Issuance of common stock ...........................   1,479           1,343
   Payment of cash dividends ..........................  (3,218)         (2,322)
   Purchase of treasury stock .........................     (55)           (990)

         Net cash used by financing activities ........  (2,155)         (1,441)

Effect of foreign currency exchange rates on cash .....    (907)            288

Net (decrease) increase in cash and cash equivalents .. (13,002)          6,256

Cash and cash equivalents at beginning of period ......  54,463          44,168

Cash and cash equivalents at end of period ............$ 41,461        $ 50,424
</TABLE>


                  The accompanying notes are an integral part
                         of these financial statements.

<PAGE>

                                                                         Page 5


             AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


A.   The  consolidated  balance  sheet at September 30, 1996,  the  consolidated
     statements of operations for the three-month  and nine-month  periods ended
     September 30, 1996 and 1995, and the consolidated  statements of cash flows
     for the  nine-month  periods  ended  September  30, 1996 and 1995 have been
     prepared by the Company  without audit.  In the opinion of management,  all
     adjustments necessary to present fairly the financial position,  results of
     operations,  and cash flows for the interim periods have been made. Certain
     items in the September 30, 1995 financial statements have been reclassified
     to conform to the classification of September 30, 1996.

     Certain  information  and  footnote   disclosures,   normally  included  in
     financial   statements  prepared  in  accordance  with  generally  accepted
     accounting principles, have been condensed or omitted.  Accordingly,  these
     condensed  consolidated  financial statements should be read in conjunction
     with the  consolidated  financial  statements and notes thereto included in
     the Company's annual report to stockholders for the year ended December 31,
     1995.  The results of operations for the three and nine month periods ended
     September  30,  1996  are not  necessarily  indicative  of the  results  of
     operations expected for the full year ending December 31, 1996.


B.     Interest, net is as follows:
<TABLE>
<CAPTION>

                                        Three Months Ended     Nine Months Ended
                                           September 30,         September 30,  
                                         1996       1995        1996       1995 

<S>                                     <C>       <C>           <C>       <C>   
         Interest expense ...........   $(355)    $(1,516)    $(3,367)  $(4,470)
         Interest income ............     613         420       1,810     1,907
                                        $ 258     $(1,096)    $(1,557)  $(2,563)
</TABLE>


C.    Other, net is as follows:
<TABLE>
<CAPTION>

                                       Three Months Ended     Nine Months Ended
                                          September 30,          September 30, 
                                         1996      1995        1996        1995

<S>                                     <C>       <C>         <C>        <C>   
         Equity in earnings of
           unconsolidated affiliates ...$  600    $  563      $1,780     $1,366
         Foreign exchange gains ........   631       406       1,378        841
         Other .........................    29        38         129        215
                                        $1,260    $1,007      $3,287     $2,422
</TABLE>

<PAGE>

                                                                          Page 6


D.    Supplemental disclosures of cash flow information:
<TABLE>
<CAPTION>
                                        Three Months Ended     Nine Months Ended
                                           September 30,          September 30, 
                                          1996      1995         1996      1995 
<S>                                      <C>       <C>        <C>       <C>    
       Interest and income taxes paid:

       Interest ........................ $  216    $2,477     $ 2,776   $ 5,186
       Income tax.......................  3,703     3,592       9,825    11,039
                                         $3,919    $6,069     $12,601   $16,225
</TABLE>

Non cash investing and financing activities:

On July 8,  1996,  as a result of  Debenture  conversions,  the  Company  issued
3,290,756 shares of its Common Stock valued at approximately  $74.5 million (See
Note F).

In June 1995,  as part of the Radix  acquisition,  the  Company  issued  979,887
shares of Common Stock valued at approximately $23.9 million. Subsequently, upon
finalization of the acquisition,  the Common Stock issued was reduced to 954,608
(See Note E).


E.    Acquisitions:

During the first nine months of 1996,  the Company  acquired  four  companies in
separate  transactions.  Three  were  accounted  for as  purchases  and one as a
pooling of interest.  In March 1996, the Company acquired all of the outstanding
stock of the Profreight  group of companies,  a customs broker and air and ocean
forwarder in South Africa.  In May 1996, the Company  purchased the business and
certain assets of John V. Carr & Son, Inc, a U.S. customs broker with 32 offices
in 25  U.S.  and 2  Canadian  cities.  In May  1996,  the  Company  acquired  an
additional  50.0%  of the  outstanding  stock of AEI  Finland  Oy  bringing  its
ownership of this Finland based air and ocean forwarder to approximately  90.0%.
The total paid for the three acquisitions was approximately  $11.6 million.  The
total  cost  in  excess  of  net  assets  acquired  for  these  acquisitions  of
approximately  $4.9  million is being  amortized  over 40 years.  The results of
operations  of these  purchases  are included in the  Consolidated  Statement of
Operations  from the dates of  acquisitions.  Additionally,  in April 1996,  the
Company  acquired Lusk Shipping  Company,  Inc., a New Orleans,  Louisiana based
ocean  forwarder and customs broker for 750,000  shares of the Company's  Common
Stock. The acquisition was accounted for as a pooling of interest.  The combined
effect of these  acquisitions  did not have a material  pro forma  impact on the
Company's results of operations or financial position.

On June 8, 1995, the Company acquired Radix Ventures, Inc. ("Radix") for 954,608
shares of Common Stock valued at approximately  $23.3 million and $.5 million in
cash. The acquisition was accounted for as a purchase. Accordingly, the purchase
price was  allocated  on the basis of the  estimated  fair  market  value of the
assets  acquired  and the  liabilities  assumed.  This  allocation  resulted  in
goodwill of approximately  $26.4 million.   Radix's  results  of  operations are
included  in the  consolidated  statement  of income from the  acquisition  date
forward.  The following  unaudited pro forma summary combines the results of the
<PAGE>
                                                                          Page 7


Company and Radix's results of operations as if the  acquisition  occurred as of
January  1,  1995.  The pro forma  information  is  provided  for  informational
purposes only. It is based upon historical  information and does not necessarily
reflect  the  actual  results  that would have  occurred  nor is it  necessarily
indicative of the future results of operations.
<TABLE>
<CAPTION>
                                         Nine Months Ended 
                                         September 30, 1995
<S>                                              <C>     
                    Revenues ...............  $928,528

                    Net Income .............  $ 20,005

                    Income per share:
                        Primary ............  $   1.07
                        Fully diluted ......  $   1.00
</TABLE>

F.    Debt Conversion:                                        

On July 8, 1996, the Company  completed its announced  redemption for all of its
$74,750,000 outstanding 6.0% Convertible Subordinated Debentures ("Debentures").
The outstanding  Debentures were  convertible into the Company's Common Stock at
$22.71 per share or 44.03  common  shares for each  $1,000  principal  amount of
Debentures. As a result,  $74,735,000 of the Debentures were converted resulting
in the issuance of 3,290,756 shares of Common Stock with the remainder  redeemed
for cash. The impact of cash redemptions was immaterial to the Company's results
of  operations.  The  conversion  resulted in Common  Stock and Capital  Surplus
increasing  approximately  $74,362,000,  net of related  conversion and deferred
costs.


G.    Revolving Credit Loan:

In June 1996,  the Company  entered  into a $75.0  million  unsecured  Revolving
Credit Loan Agreement (the  "Agreement").  The Agreement with a syndicated group
of U.S.  banks has a three  year  maturity  which  expires in June 1999 with the
option to extend  annually on the  anniversary  date.  The  interest  charged on
borrowings  is the bank's prime rate, or London  Interbank  Offered Rate (LIBOR)
plus .25% to .50% per annum.  The Company is required to pay an annual  facility
fee at a variable rate of .12% to .25% on the maximum amount available under the
Agreement.  Among the various covenants contained in this Agreement, the Company
is to maintain certain ratios and balances as to minimum net worth,  debt to net
worth  and  fixed  charge  coverage.  The  Company  is in  compliance  with  all
conditions of the Agreement.


H.    Subsequent Event:

On November  12,  1996,  the Company  announced  the  acquisition  of Muller Air
Freight B.V. and associated companies ("Muller").  Muller,  established in 1947,
provides  airfreight,  ocean freight,  warehousing and  distribution and related
logistics services.  Headquartered in Schiphol Airport, the Netherlands,  Muller
reported  gross  revenues of $35 million in 1995 and employs a staff of 140 with
eight offices  throughout the  Netherlands.  The Company expects to finalize the
acquisition before December 31, 1996.


<PAGE>
                                                                          Page 8

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations

Results of Operations

     The following  table sets forth the gross revenues and net revenues  (gross
revenues minus transportation  expenses) for each of the Company's three service
categories:   airfreight  forwarding,  ocean  freight  forwarding,  and  customs
brokerage and other  services,  and the Company's  internal  operating  expenses
(terminal, selling, general and administrative expenses) and operating profit:
<TABLE>
<CAPTION>

                                          Three Months Ended   Nine Months Ended
                                             September 30,       September 30, 
                                              1996      1995      1996     1995 
<S>                                           <C>      <C>       <C>      <C>   
Gross Revenues:
  Airfreight ...............................  $255.3   $245.8    $733.5   $714.6
  Ocean Freight ............................    50.5     46.2     139.9    120.2
  Customs Brokerage and Other ..............    35.1     22.3      83.0     58.8
    Total Gross Revenues ...................  $340.9   $314.3    $956.4   $893.6

Net Revenues:
  Airfreight ...............................  $ 67.0   $ 62.5    $198.7   $179.1
  Ocean freight ............................    13.3     10.5      37.8     28.6
  Customs Brokerage and Other ..............    31.8     22.2      74.5     58.1
    Total Net Revenues .....................   112.1     95.2     311.0    265.8

Internal Operating Expenses:
  Terminal .................................    61.3     51.7     169.5    143.2
  Selling, general and administrative ......    35.5     31.5     100.4     89.8
    Total Internal Operating Expenses ......    96.8     83.2     269.9    233.0

Operating Profit ...........................  $ 15.3   $ 12.0    $ 41.1   $ 32.8
</TABLE>

     Consolidated  gross  revenues  for the third  quarter and nine months ended
September 30, 1996 increased 8.5% to $340.9 million and 7.0% to $956.4  million,
respectively,  over the comparable 1995 periods.  The increase in gross revenues
for the quarter and nine months  included the negative  effect of  approximately
$3.0 million and $12.4  million,  respectively,  resulting  from a stronger U.S.
dollar when converting foreign currency revenues into U.S. dollars for financial
reporting   purposes.   Consolidated   net  revenues   (gross   revenues   minus
transportation  expenses)  for the third  quarter  and first nine months of 1996
increased  17.8% to $112.1  million and 17.0% to $311.0  million,  respectively,
over the comparable 1995 periods.

     Gross  airfreight  revenues for the third  quarter and first nine months of
1996 increased 3.9% to $255.3 million and 2.6% to $733.5 million,  respectively,
over the comparable 1995 periods.  The increase in gross airfreight revenues for
both the quarter and nine months was due to increases in shipments, total weight
of cargo shipped and the impact from acquisitions not included in the comparable
1995 periods. For the quarter,  shipments increased 3.1% and the weight of cargo
shipped  increased  12.0%  over the third  quarter  of 1995.  For the first nine
months  of 1996,  shipments  increased  2.5%  and the  weight  of cargo  shipped

<PAGE>

                                                                          Page 9


increased  5.0% over the first nine months of 1995.  Airfreight net revenues for
the third quarter of 1996  increased  7.2% to $67.0 million over the  comparable
1995  period.  For the  first  nine  months  of 1996,  airfreight  net  revenues
increased 10.9% to $198.7 million over the comparable 1995 period.  The increase
in  net  revenues  from   airfreight   operations  was   attributable  to  lower
transportation  costs,  mainly due to improved product mix,  allowing for better
utilization  of  airfreight  containers,  and reduced  airline  rates in certain
markets.

     Ocean freight gross revenues for the third quarter and first nine months of
1996 increased 9.3% to $50.5 million and 16.4% to $139.9 million,  respectively,
over the comparable 1995 periods. Ocean freight net revenues for the quarter and
first nine months of 1996  increased  26.7% to $13.3  million and 32.2% to $37.8
million,  respectively,  over the comparable 1995 periods.  The increase in both
the gross and net ocean freight revenues was attributable to increased  shipping
volumes.  The higher shipping  volumes were due to the impact from  acquisitions
not  included  in the  comparable  1995  periods  and the  Company's  continuing
penetration into the ocean freight market.

     Customs  brokerage and other gross  revenues for both the third quarter and
first nine months of 1996  increased  57.4% to $35.1  million and 41.2% to $83.0
million,  respectively,  over the comparable 1995 periods. Customs brokerage and
other net revenues for the third quarter and first nine months of 1996 increased
43.2% to $31.8  million  and  28.2% to  $74.5  million,  respectively,  over the
comparable  1995  periods.  The  increase  in both  the  gross  and net  customs
brokerage and other  revenues was mainly  attributable  to the  acquisitions  of
Profreight  (acquired March 1996), Lusk Shipping Co. (acquired April 1996), John
V. Carr & Son (acquired May 1996), and Radix (acquired June 1995), (See Note E).
 
     Internal   operating   expenses   (terminal,   selling,   and  general  and
administrative  expenses)  increased  $13.6 million or 16.3% for the quarter and
$36.9  million  or 15.8% for the first nine  months of 1996 over the  comparable
1995  periods.  These  increases  were  mainly  attributable  to the  additional
expenses  incurred  in  connection  with  greater  shipping  volumes  and to the
inclusion of expenses of acquired  companies not included in the comparable 1995
periods.

     Operating  profit for the third quarter of 1996  increased  $3.3 million or
27.5%  over the  third  quarter  of 1995.  For the  first  nine  months of 1996,
operating  profit  increased  $8.3  million  or 25.3% over the  comparable  1995
period.

     Interest,  net increased $1.4 million in the third quarter of 1996 compared
to the third quarter of 1995. For the first nine months of 1996,  interest,  net
increased  $1.0 million  compared to the first nine months of 1995 (See Note B).
These increases were mainly the result of the Debenture redemptions (See Note F)
and the  corresponding  elimination of the  associated  interest  expense.  As a
result of the redemptions, the Company's pre tax interest expense will be reduce
by approximately $1.2 million in the fourth quarter of 1996.

<PAGE>

                                                                         Page 10


     The  effective  income  tax rate for the third  quarter  of 1996  decreased
approximately 2.0% to 37.0% compared to the third quarter of 1995. For the first
nine  months of 1996,  the  effective  income  tax rate  decreased  .8% to 38.2%
compared  to the  first  nine  months  of  1995.  These  decreases  were  mainly
attributable to the reduced losses incurred by certain foreign  subsidiaries for
which there were no tax benefits available.


Liquidity and Capital Resources 

     At  September  30,  1996,   the   Company's   working   capital   increased
approximately  $14.5 million to $91.4 million from $76.9 million at December 31,
1995. The increase was mainly attributable to the increase in profits.

     Capital  expenditures  decreased  approximately  $9.6  million  from  $18.6
million  for the first nine  months of 1995 to $9.0  million  for the first nine
months of 1996. The decrease was primarily due to  expenditures  incurred during
the first nine months of 1995 for the Company's  new warehouse and  distribution
facility in Singapore which was completed  during the third quarter of 1995. The
$9.0 million for capital  expenditures  was primarily for facility  improvements
and  management   information  systems.   Capital  expenditures  for  1996  will
approximate  $13.0 million which will be primarily for improvement and expansion
of facilities and management information systems.

     On July 8, 1996,  the Company  completed the redemption for all of its 6.0%
Convertible  Subordinated  Debentures  (See Note F). As a result,  the Company's
Stockholders'    Investment   increased    approximately   $74.4   million   and
correspondingly  its debt to equity ratio (total long- term debt as a percentage
of stockholders'  investment)  decreased from 57.9% at December 31, 1995 to 4.8%
at September 30, 1996.

     During  the second  quarter  of 1996,  the  Company  secured a $75  million
revolving  credit  facility (See Note G). At September 30, 1996, the Company was
utilizing  approximately  $2.3 million under this facility for letters of credit
issued  in  connection  with the  Company's  insurance  programs.  Additionally,
various of the Company's foreign  subsidiaries  maintained  overdraft facilities
with  foreign  banks,   aggregating   approximately   $13.9  million,  of  which
approximately $1.2 million was outstanding.

     During  the  second  quarter  of 1996,  the  Company's  Board of  Directors
authorized  a 20.0%  increase in the  quarterly  cash  dividend  from five cents
($.05) to six cents ($.06) per share.

     Management  believes  that the  Company's  available  cash and  sources  of
credit,  together with cash  generated  from  operations,  will be sufficient to
satisfy its anticipated  needs for working  capital,  capital  expenditures  and
dividends.

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                                                                         Page 11

PART II - OTHER INFORMATION

Item 1. - Legal Proceedings
The Company  believes that there are no legal  proceedings,  other than ordinary
routine  litigation  incidental  to the  business of the  Company,  to which the
Company or any of its subsidiaries is a party. Management is of the opinion that
the ultimate outcome of existing legal proceedings, if adverse, would not have a
material effect on the Company's consolidated financial position.


Item 6. -  Exhibits and Reports on Form 8-K

   a) Exhibits:

   Exhibit 11 - Computation of Earnings per Common Share.

   Exhibit 27 - Financial Data Schedule.

   b) Reports on Form 8-K:

   None

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                                                                         Page 12

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                        Air Express International Corporation
                                                    (Registrant)


Date:     November 13, 1996            /s/       Dennis M. Dolan 
                                                 Dennis M. Dolan
                                                Vice President and
                                              Chief Financial Officer
                                            (Principal Financial Officer)


Date:     November 13, 1996            /s/      Walter L. McMaster
                                                Walter L. McMaster
                                             Vice President - Controller
                                            (Principal Accounting Officer)

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