**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 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, 2008**





o 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 000-51516





**UNIVERSAL
      TRAVEL GROUP**


(Exact
      name of
      registrant as specified in its charter)




**Nevada**
            **90-0296536**(State
                or
                other jurisdiction of incorporation or organization)
            (IRS
                Employer
                Identification Number)







Shennan
      Road,
      Hualian Center room 301 - 309


Shenzhen,
      People’s Republic of China


(Address
      of
      principal executive offices)





**86
      755
      836 68489** ****


(Issuer’s
      telephone
      number, including area code)





**Not
      Applicable**


(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
      Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
      12 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 o





Indicate
      by check
      mark whether the registrant is a large accelerated filer, an accelerated filer,
      a non-accelerated filer, or a smaller reporting company. See the definitions
      of
“large accelerated filer,” “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.


Large
      accelerated
      filer o
      Accelerated filer o Non-accelerated
      filer
      (Do not check if a smaller reporting company) o Smaller reporting
      company x





Indicate
      by check
      mark whether the registrant is a shell company (as defined in Rule 12b-2 of
      the
      Exchange Act).


Yes o
      No x





As
      of May 13, 2008, the registrant had outstanding 37,031,256 shares of common
      stock, $0.001 par value per share.







**Special
      Note Regarding Forward Looking Statements**





The
      Company desires
      to take advantage of the “safe harbor” provisions of the Private Securities
      Litigation Reform Act of 1995. This report contains a number of forward-looking
      statements that reflect management’s current views and expectations with respect
      to our business, strategies, future results and events and financial
      performance. All statements made in this report other than statements of
      historical fact, including statements that address operating performance, events
      or developments that management expects or anticipates will or may occur in
      the
      future, including statements related to distribution channels, volume growth,
      revenues, profitability, adequacy of funds from operations, statements
      expressing general optimism about future operating results and non-historical
      information, are forward looking statements. In particular, the words “believe,”
“expect,” “intend,” “ anticipate,” “estimate,” “may,” “will,” variations of such
      words, and similar expressions identify forward-looking statements, but are
      not
      the exclusive means of identifying such statements and their absence does not
      mean that the statement is not forward-looking. These forward-looking statements
      are subject to certain risks and uncertainties, including those discussed below
      and more fully in our Report on Form 10-K filed in respect of the year ended
      December 31, 2007. Our actual results, performance or achievements could differ
      materially from historical results as well as those expressed in, anticipated
      or
      implied by these forward-looking statements. We do not undertake any obligation
      to revise these forward-looking statements to reflect any future events or
      circumstances.





Readers
      should not
      place undue reliance on forward-looking statements, which are based on
      management’s current expectations and projections about future events, are not
      guarantees of future performance, are subject to risks, uncertainties and
      assumptions and apply only as of the date of this report. Our actual results,
      performance or achievements could differ materially from the results expressed
      in, or implied by, these forward-looking statements. We undertake no obligation
      to publicly update or revise any forward-looking statements, whether as a result
      of new information, future events or otherwise.





2


**PART
      I.
      FINANCIAL INFORMATION**





**Item
      1.
      Financial Statements**




**TABLE
      OF
      CONTENTS**


Report
                of
                Independent Registered Public Accounting Firm
            3ConsolidatedBalance
                Sheets
            4ConsolidatedStatements
                of
                Income
            5ConsolidatedStatements
                of
                Cash Flows
            6-7ConsolidatedStatements
                of
                Stockholders’ Equity
            8Notes
                to
                Consolidated Financial Statements
            9-17




3




***MORGENSTERN,
      SVOBODA & BAER, CPA’s, P.C.***




*CERTIFIED
      PUBLIC ACCOUNTANTS*


40
      Exchange Place, Suite 1820


New
      York, N.Y.10005


TEL:
      (212) 925-9490


FAX:
      (212) 226-9134


E-MAIL:
      MSBCPAS@gmail.com




Report
      of
      Independent Registered Public Accounting Firm








Board
      of Directors
      and Stockholders of


Universal
      Travel
      Group





We
      have reviewed
      the accompanying consolidated balance sheets of Universal Travel Group, Inc.
      as
      of March 31, 2008 and the consolidated statements of operations for the three
      months ended March 31, 2008 & 2007 and consolidated statements of cash flows
      and shareholders equity for the three months then ended. These financial
      statements are the responsibility of the Company's management.





We
      conducted our
      review in accordance with standards of the Public Company Accounting Oversight
      Board (United States). A review of interim financial information consists
      principally of applying analytical procedures and making inquiries of persons
      responsible for financial and accounting matters. It is substantially less
      in
      scope than an audit conducted in accordance with standards of the Public Company
      Accounting Oversight Board (United States), the objective of which is the
      expression of an opinion regarding the financial statements taken as a whole.
      Accordingly, we do not express such an opinion.





Based
      on our
      reviews, we are not aware of any material modifications that should be made
      to
      the accompanying interim financial statements referred to above for them to
      be
      in conformity with accounting principles generally accepted in the United States
      of America.





We
      have previously
      audited, in accordance with auditing standards of the Public Company Accounting
      Oversight Board (United States), the consolidated balance sheet of Universal
      Travel Group, Inc. as of December 31, 2007 and the related consolidated
      statements of income retained earnings and comprehensive income, and
      consolidated statements of cash flows for the year then ended; and in our report
      dated March 18, 2008 we expressed an unqualified opinion on those financial
      statements. In our opinion, the information set forth in the accompanying
      consolidated balance sheet as of December 31, 2007, is fairly stated, in all
      material respects, in relation to the consolidated balance sheet from which
      it
      has been derived.




Morgenstern,
      Svoboda & Baer CPA’s P.C.


Certified
      Public
      Accountants





New
      York,
      N.Y.


May
      6,
      2008




4




**UNIVERSAL
                TRAVEL GROUP****CONSOLIDATED
                BALANCE SHEET****S****MARCH
                31, 2008 and DECEMBER 31, 2007****ASSETS**
            
            2008
            
            2007**Current
                Assets**Cash
                and cash equivalents
            
            $
            6,391,248
            
            
            
            $
            2,671,684Accounts
                receivable, net
            
            
            4,945,013
            
            
            
            
            5,403,820Other
                receivables and deposits, net
            
            
            546,259
            
            
            
            
            1,297,426Refundable
                acquisition deposit
            
            
            -
            
            
            
            
            1,453,050Due
                from shareholders
            
            
            134,837
            
            
            
            
            1,444,818Trade
                deposit
            
            
            3,589,149
            
            
            
            
            2,650,744Advances
            
            
            641,757
            
            
            
            
            616,861Prepaid
                expenses
            
            
            606,058
            
            
            
            
            713,668Total
                Current Assets
            
            
            16,854,321
            
            
            
            
            16,252,071Property
                & equipment, net
            
            
            120,170
            
            
            
            
            127,393Intangible
                assets
            
            
            10,239
            
            
            
            
            18,626Goodwill
            
            
            13,526,809
            
            
            
            
            13,526,80913,657,218
            
            
            
            
            13,672,828**Total
                Assets**
            
            $
            30,511,539
            
            
            
            $
            29,924,899**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                LiabilitiesNotes
                payable - bank
            
            $
            1,212,207
            
            
            
            $
            1,288,554Note
                payable
                - others
            
            
            599,737
            
            
            
            
            1,576,750Accounts
                payable and accrued expenses
            
            
            3,260,782
            
            
            
            
            3,604,666Customer
                deposits
            
            
            1,012,841
            
            
            
            
            1,132,886Income
                tax payable
            
            
            353,894
            
            
            
            
            664,995Total
                Current Liabilities
            
            
            6,439,461
            
            
            
            
            8,267,851**Stockholders'
                Equity**Common
                stock, $.001 par value, 70,000,000shares
                authorized,37,031,256
                and 36,809,036 issued and outstanding
            
            
            37,032
            
            
            
            
            36,810Additional
                paid in capital
            
            
            9,201,306
            
            
            
            
            8,601,534Other
                comprehensive income
            
            
            896,335
            
            
            
            
            545,164Statutory
                reserve
            
            
            372,144
            
            
            
            
            372,144Retained
                earnings
            
            
            13,565,261
            
            
            
            
            12,101,396Total
                Stockholders' Equity
            
            
            24,072,078
            
            
            
            
            21,657,048Total
                Liabilities and Stockholders' Equity
            
            $
            30,511,539
            
            
            
            $
            29,924,899





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





5




**UNIVERSAL
                TRAVEL GROUP****CONSOLIDATED
                STATEMENTS OF INCOME****FOR
                THE THREE MONTHS ENDED****MARCH
                31****,**




**2008**
            
            **2007**Gross
                revenues
            
            $
            10,076,304
            
            $
            6,961,140Cost
                of
                services
            
            
            7,232,758
            
            
            4,705,678Gross
                Profit
            
            
            2,843,546
            
            
            2,255,462Selling,general
                and administrative expenses
            
            
            855,522
            
            
            751,794Stock
                based
                compensation
            
            
            110,012
            
            
            633,3601,103,835
            
            
            1,385,154**Income
                from operations**
            
            
            1,878,012
            
            
            870,308Other
                Income (Expense)Loss
                on asset disposal
            
            
            (1,104
            )
            
            -Other
                income
            
            
            2,874
            
            
            10,100Interest
                income
            
            
            1,415Interest
                expense
            
            
            (36,707
            )
            
            (980
            )Total
                Other Income (Expense)
            
            
            (33,522
            )
            
            9,120**Income
                before income taxes**
            
            
            1,844,490
            
            
            879,428Provision
                for income taxes
            
            
            380,625
            
            
            225,818**Net
                income**
            
            $
            1,463,865
            
            $
            653,610Net
                income
                per common shareBasic
            
            $
            .040
            
            $
            .020Diluted
            
            $
            .039
            
            $
            .020Weighted
              average
              common shares outstandingBasic
            
            
            36,920,146
            
            
            32,692,142Diluted
            
            
            37
              220,146
            
            
            32,692,142


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




6




**UNIVERSAL
                TRAVEL GROUP****CONSOLIDATED
                STATEMENTS OF CASH FLOWS****FOR
                THE THREE MONTHS ENDED****MARCH
                31****,**




**2008**
            
            **2007****CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                Income
            
            $
            1,463,865
            
            $
            653,610Adjustments
                to reconcile net income to net cashprovided
                by operating activities:Depreciation
                and amortization
            
            
            19,489
            
            
            18,961Loss
                on asset disposal
            
            
            1,105Stock
                based compensation
            
            
            110,102
            
            
            633,360(Increase)
                / decrease in assets:Accounts
                receivable
            
            
            458,807
            
            
            (1,563,798
            )Other
                receivable
            
            
            751,167
            
            
            (509,696
            )Advances
            
            
            (24,896
            )
            
            (974,229
            )Due
                from shareholder
            
            
            1,309,981
            
            
            197,011Prepaid
                expenses
            
            
            (2,492
            )
            
            (403,365
            )Trade
                deposits
            
            
            (938,405
            )
            
            86,812Deposits
            
            
            -
            
            
            (386,325
            )Increase
                / (decrease) in current liabilities:Accounts
                payable and accrued expenses
            
            
            (343,884
            )
            
            1,557,715Customer
                deposits
            
            
            (120,045
            )
            
            -Income
                tax payable
            
            
            (311,101
            )
            
            (38,089
            )Total
                Adjustments
            
            
            909,828
            
            
            (1,381,643
            )**Net
                cash provided by(used in) operating activities**
            
            
            2,373,693
            
            
            (728,033
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES**Purchase
                of property & equipment
            
            
            (5,647
            )
            
            (11,118
            )Proceeds
                from
                asset disposal
            
            
            663
            
            
            -Acquisition
                deposits
            
            
            1,453,050
            
            
            2,881,823Paid
                for
                acquisition - net of cash acquired
            
            
            -
            
            
            (2,982,200
            )**Net
                cash used by Investing activities**
            
            
            1,448,066
            
            
            (111,495
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**(Repayments)Proceeds
                from bank loan - net
            
            
            (76,347
            )
            
            1,148,380Proceeds
                of equity financing
            
            
            599,994
            
            
            -Note
                payable - others
            
            
            (977,019
            )
            
            -**Net
                cash provided by financing activities**
            
            
            (453,372
            )
            
            1,148,380Effect
                of exchange rate changes on cash and cash equivalents
            
            
            351,171
            
            
            1,632Net
                change in cash and cash equivalents
            
            
            3,719,558
            
            
            310,484**Cash
                and cash equivalents, beginning balance**
            
            
            2,671,684
            
            $
            1,043,555**Cash
                and cash equivalents, ending balance**
            
            $
            6,391,242
            
            $
            1,354,039




**SUPPLEMENTAL
                  DISCLOSURES:**Cash
                  paid during the year for:Interest
                  payments
              
              $
              36,707
              
              $
              980Income
                  Taxes
              
              $
              691,726
              
              $
              263,907Other
                  non-cash transactionsPurchased
                  Goodwill
              
              
              
              
              $
              (3,621,513
              )Fair
                  value of
                  assets purchased less cash acquired
              
              
              
              
              
              (360,687
              )Acquisition
                  financed with stock issuance
              
              
              
              
              
              1,000,000Acquisition
                  paid for with cash - net of acquired
              
              
              
              
              $
              (2,982,200
              )




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





7





**UNIVERSAL
                TRAVEL GROUP****CONSOLIDATED
                STATEMENT OF STOCKHOLDERS' EQUITY****FOR
                THE THREE MONTHS ENDED MARCH 31,
                2008**




Additional
            
            
            
            Other
            
            
            
            
            
            TotalCommon
                Stock
            
            Paid-In
            
            
            
            Comprehensive
            
            Retained
            
            Statutory
            
            Stockholders'Shares
            
            Amount
            
            Capital
            
            
            
            Income
            
            Earnings
            
            Reserve
            
            EquityBalance
                December 31, 2007
            
            
            36,809,036
            
            $
            36,810
            
            
            
            
            $
            8,601,534
            
            $
                545, 164
            $12,101,396
            
            
            
            $
            372,144
            
            
            
            
            $
            21,657,048Foreign
                currency translation adjustments
            
            
            
            
            
            
            
            
            
            
            
            
            
            351,171
            
            
            
            
            
            
            
            
            
            
            
            351,171Equity
                Financing
            
            
            222,220
            
            
            222
            
            
            
            
            
            599,772
            
            
            
            
            
            
            
            
            
            
            
            
            
            599,994Income
                for the three months ended 3/31/2008
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,463,865
            
            
            
            
            
            
            
            
            
            
            1,463,865Balance
                March 31, 2008
            
            
            37,031,256
            
            $
            37,032
            
            
            
            
            $
            9,201,306
            
            $
                896,335
            $$
                13,565,261
            
            
            
            $
            372,144
            
            
            
            
            $
            24,072,078




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




8


**UNIVERSAL
      TRAVEL GROUP**


**NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31** **,
      2008**





**Note
      1 -** **ORGANIZATION**





Universal
      Travel
      Group was incorporated on January 28, 2004 under the laws of the State of
      Nevada. Full Power Enterprise Global Limited - BVI was incorporated under the
      laws of the British Virgin Islands. Shenzhen  Yuzhilu
      Aviation
      Service Co., Ltd was incorporated on March 9, 1998 under the laws of the
      People's Republic of China (PRC). Shenzhen Speedy Dragon Enterprises Limited
      was
      incorporated in August of 2002 under the laws of the People's Republic of China
      (PRC), Xian Golden Net Travel Serve Services was incorporated on July 25, 2001
      under the laws of the People's Republic of China, Xian City, Shanghai Lanbao
      Travel Service Co., Ltd, was established in 2002 under the laws of Shanghai
      China. Foshan Overseas International Travel Service Co., Ltd. was incorporated
      in 1990 under the laws of the People's Republic of China. Full Power Enterprise
      Global Limited owns 100% of the Shenzhen Yuzhilu Aviation Service Co., Ltd.
      Collectively the four corporations are referred to herein as the
      Company.





The
      Company is now
      engaged in the travel business, including airline ticketing, hotel reservation
      services and air cargo transportation services, technological solutions to
      travel reservations, and tour planning and tour guide services.





**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES**





Basis
      of
      Presentation





The
      accompanying
      consolidated financial statements have been prepared in conformity with
      accounting principles generally accepted in the United States of America. The
      Company's functional currency is the Chinese Renminbi; however the accompanying
      consolidated financial statements have been translated and presented in United
      States Dollars.





Translation
      Adjustment


As
      of March 31,
      2008 and December 31, 2007 the accounts of Universal Travel Group were
      maintained, and its financial statements were expressed, in Chinese Yuan
      Renminbi (CNY). Such financial statements were translated into U.S. Dollars
      (USD) in accordance with Statement of Financial Accounts Standards (SFAS) No.
      52, Foreign Currency Translation with the CNY as the functional currency.
      According to the Statement, all assets and liabilities were translated at the
      current exchange rate, stockholders equity are translated at the historical
      rates and income statement items are translated at the average exchange rate
      for
      the period. The resulting translation adjustments are reported under other
      comprehensive income in accordance with SFAS No. 130, Reporting Comprehensive
      Income as a component of shareholders equity. Transaction gains and losses
      are
      reflected in the income statement.





Use
      of Estimates





The
      preparation of
      financial statements in conformity with generally accepted accounting principles
      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 period. Actual results could differ
      from those estimates.





Principles
      of
      Consolidation





The
      consolidated
      financial statements include the accounts of Universal Travel Group and its
      wholly owned subsidiaries Shenzhen Yuzhilu Aviation Service Co., Ltd, Shenzhen
      Speedy Dragon Enterprises Limited, Shanghai Lanbao Travel Service Co., Ltd,
      Xian
      Golden Net Travel Serve Services, Ltd., Foshan Overseas International Travel
      Service Co. Ltd. and Full Power Enterprise Global Limited collectively referred
      to herein as the Company. All material inter-company accounts, transactions
      and
      profits have been eliminated in consolidation.





9


**UNIVERSAL
      TRAVEL GROUP**


**NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31** **,
      2008**




**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**





Risks
      and
      Uncertainties





The
      Company is
      subject to substantial risks from, among other things, intense competition
      associated with the industry in general, other risks associated with financing,
      liquidity requirements, rapidly changing customer requirements, limited
      operating history, foreign currency exchange rates and the volatility of public
      markets.





Contingencies





Certain
      conditions
      may exist as of the date the financial statements are issued. These conditions
      may result in a future loss to the Company but which will only be resolved
      when
      one or more future events occur or fail to occur. The Company’s management and
      legal counsel assess such contingent liabilities, and such assessment inherently
      involves an exercise of judgment. In assessing loss contingencies related to
      legal proceedings that are pending against the Company or unasserted claims
      that
      may result in such proceedings, the Company’s legal counsel evaluates the
      perceived merits of any legal proceedings or unasserted claims as well as the
      perceived merits of the amount of relief sought or expected to be
      sought.





If
      the assessment
      of a contingency indicates that it is probable that a material loss has been
      incurred and the amount of the liability can be estimated, then the estimated
      liability would be accrued in the Company’s financial statements. If the
      assessment indicates that a potential material loss contingency is not probable
      but is reasonably possible, or is probable but cannot be estimated, then the
      nature of the contingent liability, together with an estimate of the range
      of
      possible loss if determinable and material would be disclosed.





Loss
      contingencies
      considered to be remote by management are generally not disclosed unless they
      involve guarantees, in which case the guarantee would be disclosed.





Cash
      and Cash
      Equivalents





Cash
      and cash
      equivalents include cash on hand and cash in time deposits, certificates of
      deposit and all highly liquid debt instruments with original maturities of
      three
      months or less.







Accounts
      Receivable





The
      Company
      maintains reserves for potential credit losses on accounts receivable.
      Management reviews the composition of accounts receivable and analyzes
      historical bad debts, customer concentrations, customer credit worthiness,
      current economic trends and changes in customer payment patterns to evaluate
      the
      adequacy of these reserves. Terms of the sales vary. Reserves are recorded
      primarily on a specific identification basis. Allowance for doubtful accounts
      amounted to $ 76,076 and $73,115 as of March 31, 2008 and December 31,
      2007, respectively.





Property,
      Plant
& Equipment




Property
      and
      equipment are stated at cost. Expenditures for maintenance and repairs are
      charged to earnings as incurred; additions, renewals and betterments are
      capitalized. When property and equipment are retired or otherwise disposed
      of,
      the related cost and accumulated depreciation are removed from the respective
      accounts, and any gain or loss is included in operations. Depreciation of
      property and equipment is provided using the straight-line method for
      substantially all assets with estimated lives of:




10




**UNIVERSAL
      TRAVEL GROUP**


**NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31** **,
      2008**




**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**




Furniture
                and
                Fixtures
            5
                yearsTransportation
                equipment
            5
                yearsOffice
                equipment
            5
                yearsLeasehold
                Improvements
            5
                - 10
                years




As
      of March 31, 2008 and December 31, 2007 Property, Plant & Equipment consist
      of the following:





2008
            
            2007Furniture
                & fixture
            
            $
            18,247
            
            
            18,247Transportation
                equip
            
            
            183,024
            
            
            301,308Office
                equipment
            
            
            182,651
            
            
            177,004Leasehold
                improve
            
            
            31,374
            
            
            31,374415,296
            
            
            527,933Accumulated
                depreciation
            
            
            (295,126
            )
            
            (400,540
            )$
            120,170
            
            
            127,393





Long-Lived
      Assets




The
      Company adopted
      Statement of Financial Accounting Standards No. 144, Accounting for the
      Impairment or Disposal of Long-Lived Assets (SFAS 144), which addresses
      financial accounting and reporting for the impairment or disposal of long-lived
      assets and supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived
      Assets and for Long-Lived Assets to be Disposed Of, and the accounting and
      reporting provisions of APB Opinion No. 30, Reporting the Results of Operations
      for a Disposal of a Segment of a Business. The Company periodically evaluates
      the carrying value of long-lived assets to be held and used in accordance with
      SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived
      assets used in operations when indicators of impairment are present and the
      undiscounted cash flows estimated to be generated by those assets are less
      than
      the assets carrying amounts. In that event, a loss is recognized based on the
      amount by which the carrying amount exceeds the fair market value of the
      long-lived assets. Loss on long-lived assets to be disposed of is determined
      in
      a similar manner, except that fair market values are reduced for the cost of
      disposal. Based on its review, the Company believes that, as of September 30,
      2007 and December 31, 2006 there were no significant impairments of its
      long-lived assets.





Fair
      Value of
      Financial Instruments





Statement
      of
      financial accounting standard No. 107, Disclosures about Fair Value of Financial
      Instruments, requires that the Company disclose estimated fair values of
      financial instruments. The carrying amounts reported in the statements of
      financial position for current assets and current liabilities qualifying as
      financial instruments are a reasonable estimate of fair value.





Revenue
      Recognition





The
      Company’s
      revenue recognition policies are in compliance with Staff accounting bulletin
      (SAB) 104. Revenue is recognized at the date the price is fixed or determinable,
      the delivery is completed, no other significant obligations of the Company
      exist
      and collectability is reasonably assured. Payments received before all of the
      relevant criteria for revenue recognition are satisfied are recorded as unearned
      revenue.




11


**UNIVERSAL
      TRAVEL GROUP**


**NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**




**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES** **(CONTINUED)**




Advertising


Advertising
      expenses consist primarily of costs of promotion for corporate image and product
      marketing and costs of direct advertising. The Company expenses all advertising
      costs as incurred.




Income
      Taxes


The
      Company
      utilizes SFAS No. 109, Accounting for Income Taxes, which requires the
      recognition of deferred tax assets and liabilities for the expected future
      tax
      consequences of events that have been included in the financial statements
      or
      tax returns. Under this method, deferred income taxes are recognized for the
      tax
      consequences in future years of differences between the tax bases of assets
      and
      liabilities and their financial reporting amounts at **** each
      period end
      based on enacted tax laws and statutory tax rates applicable to the periods
      in
      which the differences are expected to affect taxable income. Valuation
      allowances are established, when necessary, to reduce deferred tax assets to
      the
      amount expected to be realized.




Statement
      of
      Cash Flows


In
      accordance with
      SFAS No. 95, Statement of Cash Flows, cash flows from the Company’s operations
      is based upon the local currencies. As a result, amounts related to assets
      and
      liabilities reported on the statement of cash flows will not necessarily agree
      with changes in the corresponding balances on the balance sheet.




Intangibles


Intangible
      assets
      are amortized using the straight-line method over their estimated period of
      benefit. Evaluation of the recoverability of intangible assets is made annually
      to take into account events or circumstances that warrant revised estimates
      of
      useful lives or that indicate that impairment exists. All of our intangible
      assets are subject to amortization. No impairments of intangible assets have
      been identified during any of the periods presented.





Concentration
      of
      Credit Risk


Financial
      instruments that potentially subject the Company to concentrations of credit
      risk are cash, accounts receivable and other receivables arising from its normal
      business activities. The Company places its cash in what it believes to be
      credit-worthy financial institutions. The Company has a diversified customer
      base, most of which are in China. The Company controls credit risk related
      to
      accounts receivable through credit approvals, credit limits and monitoring
      procedures. The Company routinely assesses the financial strength of its
      customers and, based upon factors surrounding the credit risk, establishes
      an
      allowance, if required, for uncollectible accounts and, as a consequence,
      believes that its accounts receivable credit risk exposure beyond such allowance
      is limited.





Recent
      accounting pronouncements





In
      February 2006,
      FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial
      Instruments.  SFAS No. 155 amends SFAS No 133, Accounting for Derivative
      Instruments and Hedging Activities, and SFAF No. 140, Accounting for Transfers
      and Servicing of Financial Assets and Extinguishments of Liabilities. SFAS
      No.
      155, permits fair value re-measurement for any hybrid financial instrument
      that
      contains an embedded derivative that otherwise would require bifurcation,
      clarifies which interest-only strips and principal-only strips are not subject
      to the requirements of SFAS No. 133, establishes a requirement to evaluate
      interest in securitized financial assets to identify interests that are
      freestanding derivatives or that are hybrid financial instruments that contain
      an embedded derivative requiring bifurcation, clarifies that concentrations
      of
      credit risk in the form of subordination are not embedded derivatives, and
      amends SFAS No. 140 to eliminate the prohibition on the qualifying
      special-purpose entity from holding a derivative financial instrument that
      pertains to a beneficial interest other than another derivative financial
      instrument. This statement is effective for all financial instruments acquired
      or issued after the beginning of the Company’s first fiscal year that begins
      after September 15, 2006.





In
      March 2006, the
      FASB issued FASB Statement No. 156, Accounting for Servicing of Financial
      Assets - an amendment to FASB Statement No. 140. Statement 156 requires
      that an entity recognize a servicing asset or




12




**UNIVERSAL
      TRAVEL GROUP**


**NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**




**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**





servicing
      liability
      each time it undertakes an obligation to service a financial asset by entering
      into a service contract under certain situations. The new standard is effective
      for fiscal years beginning after September 15, 2006. The Company does not
      expect its adoption of this new standard to have a material impact on its
      financial position results of operations or cash flows.





In
      September, 2006,
      FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement defines fair
      value, establishes a framework for measuring fair value in generally accepted
      accounting principles (GAAP), and expands


disclosures
      about
      fair value measurements. This Statements applies under other accounting
      pronouncements that require or permit fair value measurements, the Board having
      previously concluded in those accounting pronouncements that fair value is
      the
      relevant measurement attribute. Accordingly, this Statement does not require
      any
      new fair value measurements. However, for some entities, the application of
      this
      Statement will change current practice. This Statement is effective for
      financial statements issued for fiscal years beginning after November 15, 2007,
      and interim periods within those fiscal years. The management is currently
      evaluating the effect of this pronouncement on financial
      statements.





In
      September 2006,
      FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit Pension and
      Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106,
      and 132(R).’ This Statement improves financial reporting by requiring an
      employer to recognize the over funded or under funded status of a defined
      benefit postretirement plan (other than a multiemployer plan) as an asset or
      liability in its statement of financial position and to recognize changes in
      that funded status in the year in which the changes occur through comprehensive
      income of a business entity or changes in unrestricted net assets of a
      not-for-profit organization. This Statement also improves financial reporting
      by
      requiring an employer to measure the funded status of a plan as of the date
      of
      its year-end statement of financial position, with limited exceptions. An
      employer with publicly traded equity securities is required to initially
      recognize the funded status of a defined benefit postretirement plan and to
      provide the required disclosures as of the end of the fiscal year ending after
      December 15, 2006. An employer without publicly traded equity securities is
      required to recognize the funded status of a defined benefit postretirement
      plan
      and to provide the required disclosures as of the end of the fiscal year ending
      after June 15, 2007. However, an employer without publicly traded equity
      securities is required to disclose the following information in the notes to
      financial statements for a fiscal year ending after December 15, 2006, but
      before June 16, 2007, unless it has applied the recognition provisions of this
      Statement in preparing those financial statements.





a.
            A
                brief
                description of the provisions of this
                Statement


b.
            The
                date that
                adoption is required


c.
            The
                date the
                employer plans to adopt the recognition provisions of this Statement,
                if
                earlier.





The
      requirement to
      measure plan assets and benefit obligations as of the date of the employer’s
      fiscal year-end statement of financial position is effective for fiscal years
      ending after December 15, 2008. The management is currently evaluating the
      effect of this pronouncement on financial statements.





The
      Company
      believes that the adoption of these standards will have no material impact
      on
      its financial statements.





In
      February, 2007,
      FASB issued SFAS 159 ‘The Fair Value Option for Financial Assets and Financial
      Liabilities’ - Including an Amendment of FABS Statement No. 115. This statement
      permits entities to choose to measure many financial instruments and certain
      other items at fair value. This statement is expected to expand the use of
      fair
      value measurement, which is consistent with the Board’s long-term measurement
      objectives for accounting for financial instruments. This statement is effective
      as of the beginning of an entity’s first fiscal year that begins after November
      15, 2007. The management is currently evaluating the effect of this
      pronouncement on financial statements.




13




**UNIVERSAL
      TRAVEL GROUP**


**NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**




**Note
      2 -** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**





Merger
      and
      Corporate Restructure





On
      June 26, 2006
      the company entered into an agreement and plan of merger with Full Power
      Enterprises Global Limited, a holding company that owns all of the issued and
      outstanding shares of Shenzhen YuzhiLu Aviation Service Company Limited, the
      operating Company. In substance the agreement is a recapitalization of Shenzhen
      YuzhiLu Aviation Service Company’s capital structure.





For
      accounting
      purposes, the company accounted for the transaction as a reverse acquisition
      and
      with Full Power Enterprises Global Limited being the surviving entity. The
      Company did not recognize goodwill or any intangible assets in connection with
      the transaction. Prior to the Agreement, the company was an inactive corporation
      with no significant assets and liabilities.





The
      accompanying
      financial statements present the historical financial condition, results of
      operations and cash flows of the operating company prior to the merger.





**Note
      3 -** **TRADE
      DEPOSITS AND ADVANCES**




Trade
      deposits
      represents amount held by Airlines and deposits. As of March 31, 2008 and
      December 31, 2007 the Company had paid $3,589,149 and $2,650,744 as trade
      deposits respectively.





During
      the
      year,  the
      Company entered
      into a co-operation agreement with an unrelated company, to assist that
      company  in
      their business
      development by participating in that business operations and providing working
      capital funding. As of March 31, 2008 and December 31, 2007 the Company has
      advanced this company $641,757 and $616,861 respectively.





**Note
      4 -** **COMPENSATED
      ABSENCES**




Regulation
      45 of
      local PRC labor law entitles employees to annual vacation leave after 1 year
      of
      service. In general all leave must be utilized annually, with proper
      notification. Any unutilized leave is cancelled.





**Note
      5 -** **INCOME
      TAXES**





The
      Company through
      its subsidiary Shenzhen  Yuzhilu
      Aviation
      Service Co. is governed by the Income Tax Laws of the PRC. Operations in the
      United States of America have incurred net accumulated operating losses for
      income tax purposes.




Pursuant
      to the PRC
      Income Tax Laws, the Enterprise Income Tax (EIT) the Company has a varying
      statutory rate of 25%.





The
      following is a
      reconciliation of income tax expense as of March 31, 2008 and 2007.




**2008**
            
            **2007**Current
            
            
            
            
            $
            380,625
            
            $
            225,818Deferred
            
            
            
            
            
            -
            
            
            -Total
            
            
            
            
            $
            380,625
            
            $
            225,818


14




**UNIVERSAL
      TRAVEL GROUP**


**NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**




**Note
      6 -** **COMMITTMENTS**




The
      Company leases
      various office facilities under month-to-month arrangements. Rental expense
      for
      leases consisted of $ 83,589 and $24,891 for the three months ended March 31,
      2008 and 2007 respectively. The Company has future minimum lease obligations
      as
      of March 31, 2008 as follows:





2009
      $
      204,323


2010
      $
      19,633


Total
      $ 223,956





**Note
      7 -
      NOTES PAYABLE**





The
      following table
      summarizes notes payable as of March 31, 2008:





Lender
            Due
                Date
            Interest
                Rate
            OutstandingChina
                Construction Bank
            July
                29,
                2008
            8.55%
                per
                Annum
            $
                1,212,207





On
      September 20,
      2007, the Company entered into a share exchange agreement with Foshan Overseas
      International Travel Service Co.(“FOI”), Led,, and the shareholders of FOI. The
      shareholders of FOI received a promissory note from the Company totaling
      $3,153,500. The promissory note bears no interest, with a maturity date of
      one
      year. Balance at March 31, 2008 is $ 599,737.





**Note
      8 -** **COMMON
      STOCK**





In
      January 2007 the
      company adopted the Universal Travel Group 2007 Equity Incentive Plan. Under
      the
      terms of this Plan the Company issued 3,770,000 shares of the Company’s stock,
      valued at $1,583,400, for services rendered during the period from October
      2,
      2006 through February 28, 2007. As of December 31, 2007 the financial Statements
      include a charge $633,360 with the remaining $950,040 being expensed as of
      December 31, 2006.





Pursuant
      to a
      share exchange agreement, the Company issued 714,285 shares of newly issued
      shares of Common Stock to the former shareholders of Shenzhen Speedy Dragon
      Enterprises Limited. The shares were valued at $1,000,000, which was the fair
      value of the shares at the date of the exchange agreement. This amount is
      included in the cost of net assets and goodwill purchased.





Pursuant
      to a
      share exchange agreement, the Company issued 151,765 shares of newly issued
      shares of Common Stock to the former shareholders of Xian Golden Net Travel
      Serve Services, Inc. The shares were valued at $258,000, which was the fair
      value of the shares at the date of the exchange agreement. This amount is
      included in the cost of net assets and goodwill purchased.





Pursuant
      to a
      share exchange agreement, the Company issued 600,000 shares of newly issued
      shares of Common Stock to the former shareholders of Shanghai Lanbao Travel
      Services Co., Ltd. The shares were valued at $1,092,000, which was the fair
      value of the shares at the date of the exchange agreement. This amount is
      included in the cost of net assets and goodwill purchased.





Pursuant
      to a
      share exchange agreement, the Company issued 1,122,986 shares of newly issued
      shares of Common Stock and a promissory note to the former shareholders of
      Foshan Overseas International Travel Service Co., Ltd.. The shares were valued
      at $ 3,346,500, which was the fair value of the shares at the date of the
      exchange agreement. This amount is included in the cost of net assets and
      goodwill purchased.




15





**UNIVERSAL
      TRAVEL GROUP**


**NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**





**Note
      9 -** **STOCK
      WARRANTS, OPTIONS, AND COMPENSATION**





On
      February 4, 2008, under the terms of an equity financing commitment, the company
      issued 220,220 shares of common stock at the closing price of $2.70. The
      proceeds of $599,994 were paid directly to the shareholders of Foshan Overseas
      International Travel Service Co, for amount due them under Note obligation
      of
      the company.





On
      May 7, 2007, the
      Company issued, to a newly appointed Board member, an option grant to purchase
      100,000 shares of common stock at the closing price at $ 1.95. The exercisable
      period is two years from issuance.





On
      September 6,
      2007, the Company issued, to a newly appointed Board member, an option grant
      to
      purchase 100,000 shares of common stock at the closing price at $ 2.85. The
      options are exercisable until June 1, 2017.





On
      December 7,
      2007, the Company issued, to another newly appointed Board member, an option
      grant to purchase 100,000 shares of common stock at the closing price of $
      3.75.
      The options are exercisable until November 1, 2017.





Stock
      options---
      The option holder has no voting or dividend rights. The company records the
      expense of the stock options over the related vesting period. The options were
      valued using the Black-Scholes option-pricing model at the model at the date
      of
      grant stock option pricing





Three
                  months
                  ended March 31, 2008Expected
                  Volatility
              
              126%Expected
                  term
                  (in yearsRichard
                  P.
                  Randall
              
              9Richard
                  M.
                  Cohen
              
              9James
                  Treacy
              
              9Expected
                  dividends
              
              -Risk-free
                  rate of return (weighted average)
              
              3%Weighted
                  average grant-date fair value
              
              $
              1.95-3.75




Expected
      volatility
      is based on the historical volatility of the Company’s stock price. The expected
      term represents the estimated average period of time that the options remain
      outstanding. No dividend payouts were assumed, as the Company has no plans
      to
      declare dividends during the expected term of the stock options. The risk-free
      rate of return reflects the weighted average interest rate offered for zero
      coupon treasury bonds over the expected term of the options. Revaluation of
      the
      value of these options, as required by EITF 96-18, resulted in a service period
      expense of $110,012 for the three months ending March 31, 2008.




Total
              Exercise
                  Price
              Remaining
                  Life
              AggregateIntrinsicValueOutstanding,
                  December 31, 2007
              300,000
              -
              -
              -Granted
                  in
                  2008
              -
              -
              -
              -Exercised
                  in
                  2008
              -
              -
              -
              -Outstanding,
                  March 31, 2008
              300,000


16




**UNIVERSAL
      TRAVEL GROUP**


**NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS**


**March
      31, 2008**





**Note
      10 -** **OTHER
      COMPREHENSIVE INCOME**





Balances
      of related
      after-tax components comprising accumulated other comprehensive income, included
      in stockholders equity, at March 31, 2008 are as follows:





Foreign
                Currency Translation Adjustment
            
            Accumulated
                Other Comprehensive IncomeBalance
                December 31, 2007
            
            $
            545,164
            
            $
            545,164Changes
                for 3 months ended March 31, 2008
            
            
            351,171
            
            
            351,171Balance
                at March 31, 2008
            
            $
            896,335
            
            $
            896,335




**Note
      11 -** **CURRENT
      VULNERABILITY DUE TO CERTAIN RISK FACTORS**


The
      Company’s
      operations are carried out in the PRC. Accordingly, the Company’s business,
      financial condition and results of operations may be influenced by the
      political, economic and legal environments in the PRC, and by the general state
      of the PRC's economy. The Company’s business may be influenced by changes in
      governmental policies with respect to laws and regulations, anti-inflationary
      measures, currency conversion and remittance abroad, and rates and methods
      of
      taxation, among other things.





**Note
      12 -** **MAJOR
      CUSTOMERS AND CREDIT RISK**


The
      Company derives
      its income from various Airlines. Most revenue is cleared thru IATA, a
      centralized reporting platform.




17




**Item
      2.
      Management’s Discussion and Analysis or Plan of Operation**





The
      following discussion should be read in conjunction with the Consolidated
      Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q.




**OVERVIEW**




In
      June 2006,
      Universal Travel Group (the “Company”) shifted its business to the travel
      service industry in China through the acquisition of Full Power Enterprises
      Global Limited ("FPEG") a holding corporation formed under the laws of the
      British Virgin Island which owned all of the capital stock of Shenzhen Yu Zhi
      Lu
      Aviation Service Company Limited ("YZL"). For financial reporting purposes,
      the
      acquisition of FPEG was treated as an acquisition by the accounting acquiree
      (YZL) accounted for as a recapitalization.





YZL,
      a company
      organized under the laws of China, is primarily engaged in China domestic and
      international airline ticketing services and cargo transportation agency
      services as well as international lines through Hong Kong, Macao and Taiwan.
      Additionally, YZL provides hotel reservations, packaged tours, and air delivery
      services. The three main activities of YZL developed over the years include
      Air
      Tickets Booking, both online and through customer service representatives,
      Hotel
      Booking, and Tour Routing for Customers. YZL also owns an aviation network
      (www.cnutg.com) that provides a complete air tickets sales network.





YZL
      initiates
      advertising or promotion activities on the company's services, including
      roadside billboards, brochures, internet ads, cell phone messages ads,
      newspapers and magazines ads.





On
      April 10, 2007,
      we, acting through YZL, acquired Shenzhen Speedy Dragon Enterprise Limited
      (“SSD”) in exchange for 714,285 shares of our common stock and an interest-free
      promissory note in the principal amount of $3,000,000, payable no later than
      April 10, 2008.





SSD,
      organized
      under the laws of China, is engaged in the business of air freight forwarding.
      SSD, located in Shenzhen City, is a cargo logistics company providing
      commercial, point-to-point parcel and container transportation services within
      China. It also operates as an international and domestic freight forwarding
      agency for Chinese civil aviation companies and provides railway and express
      delivery services.





SSD
      relies upon a
      fleet of more than 200 vehicles owned and operated by third parties, and manages
      warehouses totaling 40,000 square meters (approximately 430,556 square feet),
      which it uses to stage, transfer, and store packages in transit. The annual
      volume of its air cargo transportation accounted for approximately 30% of the
      total air cargo market in Shenzhen, China.





On
      August 6, 2007,
      the Company acquired Xi’an Golden Net Travel Serve Service Company Limited
      (“XGN”) in exchange for 151,765 shares of the Company’s common stock and
      interest-free promissory notes in the aggregate principal amount of $1,542,000,
      payable no later than August 6, 2008. As a result of the acquisition, XGN became
      a wholly-owned subsidiary of YZL and an indirect wholly-owned subsidiary of
      the
      Company.





XGN,
      organized
      under the laws of China, was established in 2001 and focuses on the domestic
      tourism market and provides air tickets, train tickets and other travel-related
      services, including servicing individuals and groups attending conferences
      and
      exhibits, arrangements for business studies, academic exchanges, travel
      adventures, cultural education, sports competition, and theatrical performances.
      XGN also specializes in central plains tours of the Xi’an. Since 2005, XGN has
      been a leader in forming joint ventures with travel agencies in Tibet, Xinjiang,
      Shanxi and Inner Mongolia that focused on western plains routes to achieve
      a
“Find one agency, tour the entire Chinese west” service concept. XGN provides
      its customers with a one-stop shopping service.





18


On
      August 8, 2007,
      the Company acquired Shanghai Lanbao Travel Service Company Limited (“SLB”) in
      exchange for 600,000 shares of the Company’s common stock and interest-free
      promissory notes in the aggregate principal amount of $2,828,000, payable no
      later than August 8, 2008. As a result of the acquisition, SLB became a
      wholly-owned subsidiary of YZL and an indirect wholly-owned subsidiary of the
      Company.





SLB,
      organized
      under the laws of China, was established in 2002 and its core business focus
      is
      a centralized real-time booking system providing consumers and travel related
      businesses with hotel bookings, air ticket and tourism information via the
      internet and mobile phone text-messaging technology. It owns and manages the
      award winning China Booking Association website, http://www.cba-hotel.com/ ,
      which receives
      about 200,000 visitors daily.





On
      October 29,
      2007, the Company acquired Foshan Overseas International Travel Service Co.,
      Ltd. (“FOI”) in exchange for 1,122,986 shares of the Company’s common stock and
      interest-free promissory notes in the aggregate principal amount of $3,153,500,
      payable no later than October 29, 2008. As a result of the acquisition, FOI
      became a wholly-owned subsidiary of YZL and an indirect wholly-owned subsidiary
      of the Company.




FOI,
      organized
      under the laws of China, was established in 1990, its core business focuses
      on
      both domestic and international tourism business, as well as packages airfare,
      hotel and conference reservations with ground transportation in China. Foshan
      is
      recognized as a local market leader, with the second largest business volume
      in
      its territory. For three consecutive years, the company has been recognized
      as
      one of the 100 outstanding enterprises by the China Tourism Bureau and in 2004
      was voted one of the most credible enterprises in the country.  Last
      year the
      company served more than 120,000 people with packaged tours and conferences.
      Foshan reported audited sales revenues of $11.9 million in FY 2006 with a net
      income of $930,000.




RESULTS
      OF
      OPERATIONS





The
      following table
      presents certain consolidated statements of operations information derived
      from
      the consolidated statements of income for the three months ended March 31,
      2008
      and 2007.


Three
                months Ended March
                31, 2008
              
              Three
                months Ended March
                31, 2007Revenues
              
              $
              10,076,304
              
              $
              6,961,140Cost
                  of
                  Services
              
              $
              7,232,758
              
              $
              4,705,678Gross
                  Profit
              
              $
              2,843,546
              
              $
              2,255,462SG&
                  A
              
              $
              855,522
              
              $
              751,794Stock
                  based
                  compensation
              
              $
              110,012
              
              $
              633,360Interest
                  expense
              
              
              ($36,707
              )
              
              ($980
              )Income
                  from
                  Operations
              
              $
              1,878,012
              
              $
              870,308




19


Revenue
      and gross
      margin by business segment:




Air-Ticketing
              
              Cargo
              
              Hotel
              
              Packaged
                Tour
              
              TotalSales
              
              $
              1,428,880
              
              $
              3,123,926
              
              $
              612,478
              
              $
              4,911,020
              
              $
              10,076,304Cost
                  of
                  Services
              
              $
              73,501
              
              $
              2,608,620
              
              $
              194,672
              
              $
              4,355,965
              
              $
              7,232,758Gross
                  Profit
              
              $
              1,355,379
              
              $
              515,306
              
              $
              417,806
              
              $
              555,055
              
              $
              2,843,546


Revenue
      Analysis:


Air-ticketing(%
              
              Cargo(%)
              
              Hotel(%)
              
              Packaged
                Tour(%)
              
              Total(%)Sales
              
              
              14
              %
              
              31
              %
              
              6
              %
              
              49
              %
              
              100
              %Cost
                  of
                  Services
              
              
              1
              %
              
              36
              %
              
              3
              %
              
              60
              %
              
              100
              %Gross
                  Profit
              
              
              48
              %
              
              18
              %
              
              15
              %
              
              19
              %
              
              100
              %


*Revenues* for the three
      months ended March 31, 2008 were $10,076,404 compared to $6,961,140 for the
      three months ended March 31, 2007, an increase of approximately 45%. This
      increase is attributable to both the organic growth of our air-ticketing, hotel
      reservation and packaged tour businesses and the integration of the four
      subsidiaries acquired in 2007. The factors impacting our growth included a
      general expansion in the Chinese travel market, as well as the implementation
      of
      an aggressive growth strategy which, combined with the expansion of our
      geographic presence through acquisitions, allowed us to capture greater market
      share. The increase in revenues was achieved despite record snowstorms during
      the first quarter of 2008 which significantly disrupted travel within
      China.





*Cost
      of
      services* for the three
      months ended March 31, 2008 was $7,232,758 compared to $4,705,678 for the three
      months ended March 31, 2007. This increase was primarily due to the effect
      of
      the Company’s acquisitions of its air cargo, hotel reservation and packaged tour
      businesses during 2007.





*Gross
      Profit* for the three
      months ended March 31, 2008 was $2,843,546 compared to $2,255,462 for the three
      months ended March 31, 2007, an increase of approximately 26%. The increase
      in
      gross profit reflects the Company's organic growth in its air-ticketing,
      hotel reservation and packaged tour  business segments and expansion
      through acquisitions, as well as revenue growth created by exploiting
      cross-marketing and cross-selling opportunities among the Company’s acquired
      business units.





*Gross
      profit
      margin* for the three
      months ended March 31, 2008 was 28% compared to 32% for the three months
      ended March 31, 2007. This decrease is primarily due to the fact that the
      packaged tour and air cargo business units acquired by the Company involve
      a
      high cost of services reflecting, respectively, the costs of obtaining tour
      packages and cargo space for resale to customers.  Therefore such
      acquired businesses represent a higher ratio of cost of services to
      revenues than the mix of businesses that existed prior to such
      acquisitions.





*Selling,
      general and administrative expenses* (“SG&A”) for
      the three months ended March 31, 2008 totaled $855,522 compared to $751,794
      for
      the three months ended March 31, 2007. SG&A was approximately 8% of revenues
      in three months ended March 31, 2008 as compared to 11% for three months ended
      March 31, 2007. The increase in SG&A reflects the acquisitions of four
      subsidiaries in 2007, and the decrease in SG&A as a percentage of revenues
      reflects the fact that the acquired packaged tour and air cargo
      businesses involve a high proportion of selling expenses which are
      reflected as cost of services, resulting in a relatively low ratio of SG&A
      to revenues.





*Stock
      based
      compensation* reflects
      the value
      of stock options issued to our independent directors and shares of common
      stock issued to outside consultants. The significant decrease in stock
      based compensation from the three months ended March 31, 2008 compared to the
      three months ended March 31, 2007 reflects the termination of certain consulting
      arrangements under which compensation was payable to our outside consultants
      in
      shares of common stock.




20




*Interest
      expense* for the three
      months ended March 31, 2008 totaled $36,707 compared to $980 for the three
      months ended March 31, 2007. The increase in interest expense primarily reflects
      the fact that the Company entered into a loan financing to help pay down the
      indebtedness incurred in connection with the acquisitions consummated during
      2007.





*Net
      income* was $1,463,865 or
      15% of Revenues for the three months ended March 31, 2008, compared to $653,610
      or 9% of Revenues for the three months ended March 31, 2007. The increase in
      net
      income reflects the continued growth in the Company's business including
      growth in the hotel reservation and packaged tour businesses
      acquired in 2007. The increase in net income as a percentage of revenues
      primarily reflects the fact that stock based compensation had decreased 83%.




LIQUIDITY
      AND
      CAPITAL RESOURCES





Cash
      for operations
      and liquidity needs are funded primarily through cash flows from operations
      and
      short-term borrowings. Cash and cash equivalents were $6,391,248 at March 31,
      2008. Current assets and current liabilities as of March 31, 2008, were
      $16,854,321 and $6,439,461, yielding working capital of $9,814,866. We believe
      that the funds available to us from operations are adequate to meet our
      operating needs in 2008 and satisfy the debt incurred in connection with the
      acquisition of FOI ($599,737). For the three months ended March 31, 2008, net
      cash provided by operating activities was approximately $2,373,693, which
      resulted primarily from our core business operations.





Capital
      expenditures





Total
      capital
      expenditures for the three months ended March 31, 2008 were $5,647 for
      purchase of fixed assets, primarily machinery and equipment. We have no plans
      for material capital expenditures during 2008.




Working
      Capital
      Requirements





Historically
      operations and short term financing have been sufficient to meet our cash needs.
      We believe that we will be able to generate revenues from operations to provide
      the necessary cash flow to meet anticipated working capital requirements for
      at
      least the following 12 months. However, our actual working capital needs for
      the
      long and short term will depend upon numerous factors, including operating
      results, competition, the opportunity to acquire or start-up new businesses,
      and
      the availability of credit facilities, none of which can be predicted with
      certainty. If necessary, we will seek to raise capital for the maintenance
      and
      expansion of our operations through the issuance of debt or equity. There can
      be
      no assurance that such financing will be available or, if available, will be
      on
      terms acceptable to the Company. Future expansion will be limited by the
      availability of financing.




Off-Balance
      Sheet
      Arrangements





We
      have not entered into any off-balance sheet financing arrangements and have
      not
      established any special purpose entities. We have not guaranteed any debt or
      commitments of other entities or entered into any options on non-financial
      assets.





Seasonality





Our
      business is
      seasonal due to customers' travel patterns and changes in demand for cargo
      shipments. We typically experience higher sales and gross profit in the second
      and third quarters of our fiscal year (which ends December 31 of each year)
      and
      lower sales and gross profit in the first and fourth quarters. These seasonal
      sales cycles could lead to volatility in revenues and earnings.





21


Foreign
      Exchange
      Risk





Information
      regarding foreign exchange risk is discussed in Item 3. “Quantitative and
      Qualitative Disclosures About Market Risk.”





**Item
      3.
      Quantitative and Qualitative Disclosures About Market Risk.**





We
      currently do not hold or use any derivative or other financial instruments
      that
      expose us to substantial market risk and we have no foreign exchange
      contracts.





We
      are exposed to foreign exchange risk arising from fluctuations in the exchange
      rate between U.S. Dollars and Renminbi. Our operations are located in the
      People’s Republic of China and substantially all of our revenues and assets are
      denominated in Renminbi; however our reporting currency is the U.S. Dollar
      and
      some of our expenses are denominated in U.S. Dollars. As a result, our financial
      results are potentially subject to the impact of changes in value between U.S.
      Dollars and Renminbi. If the Renminbi depreciates relative to the U.S. Dollar,
      the value of our revenues, earnings and assets as reported in our financial
      statements will decline.





**Item
      4.
      Controls and Procedures.**





We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in our reports filed pursuant to the
      Exchange Act is recorded, processed, summarized and reported within the
      time


periods
      specified
      in the SEC's rules, regulations and related forms, and that such information
      is
      accumulated and communicated to our principal executive officer and principal
      financial officer, as appropriate, to allow timely decisions regarding required
      disclosure.








Based
      on an
      evaluation of our disclosure controls and procedures as of March 31, 2008,
      and
      the financial statements contained in this report, our principal executive
      officer and our principal financial officer have determined that our disclosure
      controls and procedures were effective as of the end of the period covered
      by
      this report.





There
      were no
      changes in our internal control over financial reporting (as such term is
      defined in Rule 13A-15(F) under the Exchange Act during our quarter ended March
      31, 2008, that materially affected or are reasonably likely to materially affect
      our internal control over financial reporting.





**PART
      II—OTHER INFORMATION**




**Item 1. 
      Legal Proceedings**





We
      are not a party to any legal proceedings, nor are we aware of any threatened
      or
      contemplated proceedings which are expected to result in a material adverse
      effect on our financial position, or results of operation.





**Item
      1A.
      Risk Factors.**





There
      have been no
      material changes in our business, operations or prospects that would require
      a
      change to the Risk Factor disclosure included in our most recent Annual Report
      on Form 10-K, except as set forth below:





The
      unrest in
      Tibet may negatively impact the Chinese travel industry.





Recently,
      political
      unrest has developed in the region of Tibet. There can be no assurance that
      this
      turmoil will not lead to a reduction in travel by Chinese citizens and by
      foreigners that might otherwise travel to this and other regions of
      China ,
      which could adversely affect our results of operations





**Item 2. 
      Unregistered Sales of Equity Securities and Use of
      Proceeds**





On
      February 7, 2008, the Company issued an aggregate of 222,220 shares of its
      common stock to three Chinese financial institutions, Total Shine Group Limited,
      Victory High Investments Limited and Think Big Trading Limited, at an aggregate
      purchase price of $599,994.




22


Such
      shares of
      common stock were issued in reliance on the exemption from registration
      contained in Regulation S promulgated under the Securities Act of 1933, as
      amended (the “Securities Act”), on the basis of the written representations,
      warranties, covenants and agreements made by the purchasers of the shares,
      including without limitation representations that each such purchaser was not
      a
“U.S. person” as defined in Rule 902(k) of Regulation S, and based on the
      following additional facts and circumstances: (1) at the time the shares were
      offered to the purchasers, each of them was located outside the U.S., (2) at
      the
      time the Company issued the shares to the purchasers, the Company reasonably
      believed that each of such purchasers was outside the United States, (3) the
      Company did not engage in any “directed selling efforts” within the meaning of
      Rule 902(c) of Regulation S and (4) the Company implemented the applicable
      “offering restrictions” as defined in Rule 902(g) of Regulation S and complied
      with the applicable conditions set forth in Rule 903(b) of Regulation
      S.





**Item 3. Defaults
      Upon Senior Securities.**





None.





**Item 4. Submission
      of Matters to a Vote of Security Holders.**





None.





**Item 5. Other
      Information.**





As
      disclosed in our Annual Report on Form 10-K for the year ended December 31,
      2007, in February 2008 we had received commitments from three Chinese financial
      institutions for $3,500,000 in financing. On February 7, 2008 the Company sold
      222,220 shares of its common stock to such institutions for an aggregate
      consideration of $599,994. On May 7, 2008 the Company terminated its agreement
      with such financial institutions due to their failure to provide the remaining
      amount according to the agreement.





**Item
                6. Exhibits**
              
              The
                following
                exhibits are filed as part of this report:Exhibit
              No.
            Description
              of
              Exhibit


31.1--
            Certification
                of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities
                Exchange Act of 1934as
                adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.31.2--
            Certification
                of Vice President of Corporate Finance pursuant to Rule 13a-14(a)
                under
                the Securities Exchange Act of 1934as
                adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1--
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.32.2--
            Certification
                of Vice President of Corporate Finance pursuant to 18 U.S.C. Section
                1350
                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.




23




SIGNATURES





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





Dated:  May
      13,
      2008




UNIVERSAL
              TRAVEL GROUPBy:
            /s/
              Jiangping JiangJiangping
                Jiang
              Chairman
                and
                Chief Executive Officer
              (Principal
                Executive Officer)


By:
            /s/ Huijie
              GaoHuijie
                Gao
              Vice
                President of Corporate Finance
              (Principal
                Financial Officer)




24




**EXHIBIT
                INDEX**Exhibit
                No.
            Description
                of Exhibit31.1--
            Certification
                of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities
                Exchange Act of 1934as
                adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.31.2--
            Certification
                of Vice President of Corporate Finance pursuant to Rule 13a-14(a)
                under
                the Securities Exchange Act of 1934as
                adopted
                pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1--
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.32.2--
            Certification
                of Vice President of Corporate Finance pursuant to 18 U.S.C. Section
                1350
                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.





25