<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 March 31, 1998

                         Commission file number: 1-8306

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

                Delaware                              36-2074327                
    (State or Other 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 May 11,  1998 was
34,752,917 (Net of 140,086 Treasury Shares).

                                                                             

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                      AIR EXPRESS INTERNATIONAL CORPORATION
                      March 1998 Form 10-Q Quarterly Report

                                Table of Contents


                         Part I - Financial Information
                                                                       Page

Item 1.  Financial Statements

           Condensed Consolidated Balance Sheets as at
           March 31, 1998 and December 31, 1997.........................  2

           Condensed Consolidated Statements of Operations -
           three months ended March 31, 1998 and 1997...................  3

           Consolidated Statements of Cash Flows -
           three months ended March 31, 1998 and 1997...................  4

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


Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations............................  7


                         Part II - Other Information


Item 1.  Legal Proceedings.............................................. 10

Item 6.  Exhibits and Reports on Form 8-K............................... 10

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                                                                          Page 2

<TABLE>

             AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

                                                    March 31,1998   Dec 31,1997
                                                     (Unaudited)
Assets
<S>                                                      <C>          <C>      
Current Assets:
   Cash and cash equivalents .........................   $  68,367    $  67,576
   Accounts receivable, (less allowance for
    doubtful accounts of $4,295 and $4,224) ..........     362,464      366,159
   Other current assets ..............................       7,474        8,344
         Total current assets ........................     438,305      442,079
Investment in unconsolidated affiliates ..............      26,522       19,174
Restricted funds .....................................      12,149       15,957
Property, plant and equipment (less accumulated
 depreciation and amortization of $60,912
 and $57,235) ........................................      63,631       60,441
Deposits and other assets ............................      19,959       17,386
Goodwill (less accumulated amortization
 of $12,977 and $12,424) .............................      81,895       83,104
         Total assets ................................   $ 642,461    $ 638,141

Liabilities and stockholders' investment

Current Liabilities:
   Current portion of long-term debt .................   $   2,686    $   2,654
   Bank overdrafts payable ...........................          -           315
   Transportation payables ...........................     173,586      174,125
   Accounts payable ..................................      59,796       58,373
   Accrued liabilities ...............................      58,641       61,263
   Income taxes payable ..............................       7,623       10,168
         Total current liabilities ...................     302,332      306,898
   Long-term debt ....................................      30,925       31,008
   Other liabilities .................................       8,721        8,673
         Total liabilities ...........................     341,978      346,579

Stockholders' Investment:
   Capital stock-
   Preferred (authorized 1,000,000 shares,
    none outstanding) ................................          -            -
   Common, $.01 par value (authorized 40,000,000
    shares, issued 34,844,927 and 34,676,626 shares ..         348          347
   Additional paid-in capital ........................     145,418      142,674
   Cumulative translation adjustments ................     (30,684)     (28,961)
   Retained earnings .................................     188,882      180,887
                                                           303,964      294,947
Less: 135,755 and 132,388 shares of treasury stock,
       at cost .......................................      (3,481)      (3,385)
   Total stockholders' investment ....................     300,483      291,562
   Total liabilities and stockholders' investment ....   $ 642,461    $ 638,141

</TABLE>


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

<PAGE>

                                                                         Page 3
<TABLE>

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

(In thousands, except
 per share data)

                                                         Three Months Ended
                                                              March 31,      
                                                         1998          1997  

<S>                                                    <C>              <C>     
Revenues .....................................         $372,376         $351,155

Operating expenses:
 Transportation ..............................          254,523          238,724
 Terminal ....................................           67,126           64,126
 Selling, general and
  administrative .............................           37,571           36,018
Operating profit .............................           13,156           12,287

Other income:
 Interest, net ...............................              357              208
 Other, net ..................................            2,055            1,278
                                                          2,412            1,486

Income before provision
 for income taxes ............................           15,568           13,773

Provision for income taxes ...................            5,838            5,234
Net income ...................................         $  9,730         $  8,539

Income per common share:
     Basic ...................................         $    .28         $    .25
     Diluted .................................         $    .28         $    .25

Weighted average number
  of common shares (000's):
     Basic ...................................           34,639           34,184
     Diluted .................................           35,381           34,883

</TABLE>

                   The accompanying notes are an integral part
                         of these financial statements.
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                                                                          Page 4
<TABLE>

             AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997


(Dollars in thousands)

                                                           1998           1997 
<S>                                                        <C>             <C> 
Cash flows from operating activities:
   Net Income ..........................................   $  9,730    $  8,539
   Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation and amortization ...................      3,436       3,041
       Amortization of goodwill ........................        622         652
       Deferred income taxes ...........................     (1,490)     (1,000)
       Equity in earnings of unconsolidated
        affiliates .....................................     (1,069)       (712)
       Gains on sales of assets, net ...................         (8)        (27)

   Changes in assets and liabilities:
       Decrease in accounts receivable, net ............      2,117       7,837
       Decrease (increase) in other current assets .....        862        (550)
      (Increase) in other assets .......................       (619)       (741)
      (Decrease) increase in transportation payables ...       (536)      6,514
       Increase in accounts payable ....................      1,939       2,302
      (Decrease) in accrued liabilities ................     (2,429)     (2,411)
      (Decrease) in income taxes payable ...............     (1,501)       (182)
       Increase in other liabilities ...................         78          54
         Total adjustments .............................      1,402      14,777

       Net cash provided by operating activities .......     11,132      23,316

Cash flows from investing activities:
   Restricted funds ....................................      3,808           -
   Other investing activities ..........................          -          41
   Proceeds from sales of assets .......................        283         295
   Capital expenditures ................................     (6,787)     (3,110)
   Investment in unconsolidated affiliates .............     (7,040)     (1,179)

       Net cash used in investing activities ...........     (9,736)     (3,953)

Cash flows from financing activities:
    Net repayments in bank overdrafts payable ..........       (366)     (1,745)
    Payment of long-term debt ..........................        (39)       (662)
    Issuance of common stock ...........................      1,847         837
    Payment of cash dividends ..........................     (1,728)     (1,364)
    Purchase of treasury stock .........................        (96)          -

       Net cash used by financing activities ...........       (382)     (2,934)

Effect of foreign currency exchange rates on cash ......       (223)       (600)

Net increase in cash and cash equivalents ..............        791      15,829

Cash and cash equivalents at beginning of period .......     67,576      46,516

Cash and cash equivalents at end of period .............   $ 68,367    $ 62,345

</TABLE>

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

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                                                                         Page 5

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


A.   The  consolidated  balance  sheet  at  March  31,  1998,  the  consolidated
     statements of operations for the  three-month  periods ended March 31, 1998
     and 1997, and the consolidated statements of cash flows for the three-month
     periods ended March 31, 1998 and 1997 were 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  were  made.  Certain  items in the  March  31,  1997
     financial  statements were reclassified to conform to the classification of
     March 31, 1998 financial statements.

     Certain  information  and  footnote   disclosures,   normally  included  in
     financial   statements  prepared  in  accordance  with  generally  accepted
     accounting  principles,  were  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,
     1997.

     Statements   included   herein   which   are  not   historical   facts  are
     forward-looking  statements.  These  statements are based upon  information
     available to the Company on the date hereof.  Inherent in these  statements
     are a variety of risks and other factors, both known and unknown, which may
     cause the  Company's  actual  results  to differ  materially  from those in
     forward-looking statements. Accordingly, the realization of forward-looking
     statements  is not  certain,  and all such  statements  should be evaluated
     based upon the applicable  risks and  uncertainties  affecting the Company.
     Consequently,  the results of operations for the  three-month  period ended
     March 31, 1998 are not necessarily  indicative of the results of operations
     expected for the full year ending December 31, 1998.


B.   Interest, net was as follows:
<TABLE>
                                                             Three Months Ended
                                                                   March 31,   
                                                             1998         1997 

<S>                                                       <C>           <C>   
        Interest expense .........................          $(323)       $(383)
        Interest income ..........................            680          591
                                                            $ 357        $ 208
</TABLE>

C.    Other, net was as follows:
<TABLE>
                                                            Three Months Ended
                                                                  March 31,   
                                                             1998         1997 

 <S>                                                       <C>           <C>   
       Equity in earnings of
         unconsolidated affiliates ................        $1,574      $  712
        Foreign exchange gains ....................            473        539
        Other .....................................              8         27
                                                           $2,055      $1,278
</TABLE>
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                                                                         Page 6


D.    Supplemental disclosures of cash flow information:
<TABLE>
                                                            Three Months Ended
                                                                   March 31,    
                                                              1998        1997 
 <S>                                                          <C>         <C>   
         Interest and income taxes paid:
            Interest ...............................       $  222      $  264
            Income taxes ...........................        4,465       4,818
                                                           $4,687      $5,082
</TABLE>


E.    Comprehensive income:
<TABLE>
                                                            Three Months Ended
                                                                  March 31,    
                                                              1998        1997 
<S>                                                        <C>         <C>    
         Net income .................................      $ 9,730     $ 8,539

         Other comprehensive income:
           Translation of foreign currency
            financial statements ....................        (1,861)    (2,024)
           Income tax benefit .......................           138        681
                                                             (1,723)    (1,343)
         Comprehensive income .......................       $ 8,007    $ 7,196
</TABLE>

<PAGE>

                                                                         Page 7


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


Results of Operations

     The Company  considers  its total  business to  represent a single  segment
comprised  of  three  major  services:   airfreight  forwarding,  ocean  freight
forwarding,  and customs  brokerage and other  services,  all of which are fully
integrated.  The following  table sets forth the gross revenues and net revenues
(gross revenues minus  transportation  expenses) for each of these three service
categories,  as well as the Company's  internal operating expenses (terminal and
selling, general and administrative expenses) and operating profit:

<TABLE>
                                                            Three Months Ended
                                                                  March 31,    
                                                          1998            1997  
<S>                                                         <C>           <C>     
Gross Revenues:
  Airfreight .......................................        $  291.5    $  272.7
  Ocean freight ....................................            43.2        44.3
  Customs brokerage and other ......................            37.7        34.2
    Total Gross Revenues ...........................        $  372.4    $  351.2

Net Revenues:
  Airfreight .......................................        $   74.6    $   69.4
  Ocean freight ....................................            12.5        13.3
  Customs brokerage and other ......................            30.8        29.7
    Total Net Revenues .............................           117.9       112.4

Internal Operating Expenses:
  Terminal .........................................            67.1        64.1
  Selling, general and administrative ..............            37.6        36.0
    Total Internal Operating Expenses ..............           104.7       100.1

Operating Profit ...................................        $   13.2    $   12.3
</TABLE>

     Consolidated  gross revenues for the first quarter of 1998 increased  $21.2
million  (6.0%) over the first  quarter of 1997.  The  increase in revenues  was
negatively  impacted  by  approximately  $20.4  million  due to the  effect of a
stronger U.S. dollar when converting foreign currency revenues into U.S. dollars
for financial  reporting  purposes.  Consolidated  net revenues  increased  $5.5
million (4.9%) over the comparable 1997 period.  The increases in gross revenues
were comprised of a $18.8 million (6.9%) increase in airfreight  revenues,  $1.1
million (2.5%)  decrease in ocean freight  revenues,  and a $3.5 million (10.2%)
increase in customs brokerage and other revenues.  The increases in net revenues
were comprised of a $5.2 million (7.5%)  increase in airfreight net revenues,  a
$.8 million  (6.0%)  decrease in ocean freight net revenues,  and a $1.1 million
(3.7%)  increase in customs  brokerage and other net revenues.  The increases in
gross and net revenues from airfreight services were attributable to an increase
of 3.8% in the number of international shipments and a corresponding increase of
13.9% in the total weight of cargo shipped.  The gross margin (net revenues as a
percentage of gross revenues) for airfreight services increased  marginally over
the first  quarter of 1997 to 25.6%.  Excluding the effects from the sale of the


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                                                                         Page 8


Company's 60.0% ownership in a foreign subsidiary,  which occurred subsequent to
the first quarter of 1997,  ocean freight gross revenues  increased $3.2 million
(8.0%) over the first quarter of 1997,  while net revenues  remained  unchanged.
The  increases  in gross  and net  revenues  from  customs  brokerage  and other
services  were  mainly  due to the  Company's  continuing  efforts to expand its
customs brokerage activities to existing and new customers.

     Internal  operating  expenses  increased $4.6 million (4.6%) over the first
quarter of 1997. The increase was mainly due to the additional expenses incurred
in  connection  with  the  greater  shipping  volumes.  As  percentage  of gross
revenues,  internal  operating  expenses  declined  .4% from 28.5% for the first
quarter of 1997 to 28.1% for the first quarter of 1998.

     Consolidated  operating  profit for the first quarter of 1998 increased $.9
million (7.3%) over the first quarter of 1997. The increase  reflects  increases
in operating profit in the Company's foreign operations.

     Other,  net  increased  $.8  million  over the first  quarter of 1997.  The
increase was mainly  attributable to the results from equity  investments in two
foreign joint  ventures  which were acquired  subsequent to the first quarter of
1997.

     The effective  income tax rate for the first  quarter of 1998  decreased to
37.5% from 38.0% for the first  quarter of 1997.  The  decrease  was largely the
result of a shift in the mix of  worldwide  earnings  to  countries  with  lower
effective  tax rates  along with  reduced  losses  incurred  by certain  foreign
subsidiaries for which there were no tax benefits available.

<PAGE>

                                                                          Page 9

Liquidity and Capital Resources

     At March 31, 1998, cash and cash equivalents  increased  approximately  $.8
million to $68.4 million from $67.6 million at December 31, 1997.  For the first
quarter of 1998, the Company's  primary  sources of cash were $11.1 million from
operating  activities and $3.8 million from restricted funds;  while its primary
uses were for: investments in unconsolidated affiliates of $7.0 million, capital
expenditures  of $6.8 million and dividend  payments of $1.7 million.  Cash flow
provided by operating  activities  decreased  approximately  $12.2  million when
compared with the first  quarter of 1997.  The decrease  resulted  mainly from a
decline  in  transportation  payables  coupled  with  an  increase  in  accounts
receivable.  Working  capital  increased  marginally  in the  quarter  to $136.0
million.

     Capital expenditures increased approximately $3.7 million from $3.1 million
for the first  quarter of 1997 to $6.8  million  for the first  quarter of 1998.
Approximately  $3.8  million  of  the  capital   expenditures   relates  to  the
construction of a freight  terminal at New York's John F. Kennedy  International
Airport,  with the remaining  balance primarily for improvement and expansion of
facilities and management information services.

     At March  31,  1998,  the  Company  had  available  for  future  borrowings
approximately $71.8 million of its $75.0 million revolving credit facility.  The
Company  utilized  approximately  $3.2 million  under this  facility  mainly for
letters  of  credit   issued  in  connection   with  its   insurance   programs.
Additionally, various of the Company's foreign subsidiaries maintained overdraft
facilities with foreign banks, aggregating  approximately $22.7 million, none of
which was utilized.

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


Year 2000

     In 1997,  the Company  undertook an  assessment  to determine the impact of
year 2000  compliance  on its  computer  systems.  This  assessment  resulted in
preliminary  plans to prepare the Company for year 2000  readiness.  These plans
include  remediation  of certain  systems and the upgrading and  replacement  of
certain other of the Company's  systems.  In accordance  with Issue 96-14 of the
Emerging Issues Task Force of the Financial  Accounting  Standards Board,  which
requires the costs associated with modifying computer software for the year 2000
to be  expensed as  incurred,  the Company  will  expense the costs  incurred to
remediate the applicable  systems.  These costs are estimated to be in the range
of $5.0 to $7.0 million.  The estimated  costs will vary as the  remediation and
testing of the  Company's  systems  progresses.  The Company  believes  that the
remediation,  upgrade and replacement of its systems will be ready for year 2000
prior to any impact on its operations. If, however, the remediation,  upgrade or
replacement  of the Company's  systems is not completed  timely,  and negatively
impacts the  Company's  year 2000  readiness,  the Company's  operations  may be
materially affected.


<PAGE>

                                                                        Page 10



PART II - OTHER INFORMATION


Item 1. - Legal Proceedings

     The Company is involved in various legal proceedings  generally  incidental
to its  business.  While the  result of any  litigation  contains  an element of
uncertainty,  the  Company  presently  believes  that the  outcome  of any known
pending or threatened legal  proceeding or claim, or all of them combined,  will
not have a material  adverse effect on its results of operations or consolidated
financial position.

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

    a) Exhibits:

       Exhibit 10 - Revolving Credit Agreement

       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 11


                                   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:  May 14, 1998                   /s/            Dennis M. Dolan            
                                                     Dennis M. Dolan
                                                  Vice President and
                                                 Chief Financial Officer
                                               (Principal Financial Officer)
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