FORM 10-Q
                                
                                
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                                
[ x ]     Quarterly Report Pursuant to Section 13 or 15(d) of the
          Securities Exchange Act of 1934
          For the quarterly period ended March 31, 1999

[   ]     Transition Report Pursuant to Section 13 or 15(d) of
          the Securities Exchange Act of 1934
                                
                                
                     Commission File Number
                             0-25732
                                
                                
                         ATLAS AIR, INC.
     (Exact name of registrant as specified in its charter)



          Delaware                        84-1207329
(State of other jurisdiction of         (IRS Employer
 incorporation or organization)          Identification No.)

                                
                                
                                
            538 Commons Drive, Golden, Colorado 80401
       (Address of principal executive offices) (Zip Code)
                                
                                
                         (303) 526-5050
      (Registrant's telephone number, including area code)



Indicated 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.

                                   [ x ]   Yes         [   ]   No

As  of  May 3, 1999 the Registrant had 34,289,156 shares of  $.01
par value Common Stock outstanding.


                ATLAS AIR, INC. AND SUBSIDIARIES
                                
                                
                              INDEX
                                                                 
                                                                 
                                                                 
PART I.   FINANCIAL INFORMATION

     Item 1.   Consolidated Financial Statements

               Consolidated Balance Sheets-
                  March 31, 1999 and December 31, 1998

               Consolidated Statements of Operations-
                  Three Months Ended March 31, 1999 and 1998

               Consolidated Statements of Cash Flows-
                  Three Months Ended March 31, 1999 and 1998

               Notes to Consolidated Financial Statements

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

PART II.  OTHER INFORMATION

     Item 1.   Legal Proceedings

     Item 6.   Exhibits and Reports on Form 8-K

               Exhibit 27 - Financial Data Schedule

               Signatures


                ATLAS AIR, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
                                
                   CONSOLIDATED BALANCE SHEETS
                (In thousands, except share data)
                                
                                       March 31,      December 31,
                                         1999            1998
                                      (Unaudited)    
                             ASSETS
Current assets:                                                  
<S>                                     <C>            <C>
  Cash and cash equivalents             $  325,927     $  449,627
  Short-term investments                    22,069         22,187
  Accounts receivable and other, net        71,538         86,234
       Total current assets                419,534        558,048
Property and equipment:                                          
  Flight equipment                       1,630,978      1,527,921
  Other                                     12,727         11,584
                                         1,643,705      1,539,505
  Less accumulated depreciation          (160,470)      (146,311)
        Net property and equipment       1,483,235      1,393,194
Other assets:                                                    
  Debt issuance costs, net of                                    
   accumulated amortization                                      
   of $9,771 and $10,413                    28,806         32,224
  Deposits and other                         2,994          5,403
                                            31,800         37,627
            Total assets               $ 1,934,569    $ 1,988,869
                                                                 
              LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:                                             
  Current portion of long-term debt      $  65,248     $  155,452
  Accounts payable and accrued                                   
   liabilities                              89,202        100,051
  Income tax payable                           179          8,034
       Total current liabilities           154,629        263,537
Long-term debt, net of current                                   
 portion                                 1,146,132      1,166,460
Other liabilities                          292,512        235,308
Deferred income tax liability               40,487         39,674
Commitments and contingencies                                    
Stockholders' equity:                                            
  Preferred Stock, $1 par value;                                 
   10,000,000 shares authorized;
   no shares issued                             --             --
  Common Stock, $0.01 par value;                                 
   50,000,000 shares authorized;
   34,394,414 and 33,819,882 shares                              
   issued, respectively                        344            338
  Additional paid-in capital               192,583        178,131
  Retained earnings                        111,182        108,892
  Deferred compensation -                                        
   Restricted Stock                          (707)             --
  Treasury Stock, at cost; 128,793                               
   and 164,403 shares, respectively        (2,593)        (3,471)
       Total stockholders' equity          300,809        283,890
           Total liabilities and                                
            stockholders' equity       $ 1,934,569    $ 1,988,869
                                                     
The accompanying notes are an integral part of these consolidated
                      financial statements.
</TABLE>

                ATLAS AIR, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
                                
              CONSOLIDATED STATEMENTS OF OPERATIONS
            (In thousands, except per share amounts)
                           (Unaudited)

                                            Three Months Ended
                                                March 31,
                                            1999         1998
Revenues:                                                       
<S>                                       <C>         <C>
  Contract services                       $135,378    $  77,611
  Charters, scheduled services and other     2,461        2,023
       Total operating revenues            137,839       79,634
                                                               
Operating expenses:                                            
  Flight crew salaries and benefits         11,361        6,757
  Other flight-related expenses             10,829        6,519
  Maintenance                               30,271       20,521
  Aircraft and engine rentals               11,505        1,241
  Fuel and ground handling                   3,075        2,002
  Depreciation and amortization             19,167       12,230
  Other                                     14,924        8,821
       Total operating expenses            101,132       58,091
Operating income                            36,707       21,543
Other income (expense):                                        
  Interest income                            4,574        1,661
  Interest expense                         (24,888)     (14,775)
                                           (20,314)     (13,114)
Income before income taxes                  16,393        8,429
Provision for income taxes                  (6,147)      (3,119)
Income before extraordinary item and                           
 cumulative effect of a change in                              
 accounting principle                       10,246        5,310
                                                               
Extraordinary Item:                                            
  Loss from extinguishment of debt, net                        
   of applicable tax benefit of $3,872      (6,593)          --
                                                               
Cumulative effect of a change in                               
 accounting principle:
  Write-off of start-up costs, net of                          
   applicable tax benefit of $850           (1,416)          --
                                                               
Net income                                  $2,237       $5,310
                                                               
Basic earnings per share:                                      
  Income before extraordinary item and                         
  cumulative effect of a change in                             
  accounting principle                       $0.30        $0.16
  Extraordinary item                         (0.19)          --
  Cumulative effect of a change in                             
   accounting principle                      (0.04)          --
  Net income                                 $0.07        $0.16
  Weighted average common shares            33,950       33,716
                                                               
Diluted earnings per share:                                    
  Income before extraordinary item and                         
   cumulative effect of a change in                            
   accounting principle                      $0.30        $0.16
  Extraordinary item                         (0.19)          --
  Cumulative effect of a change in                             
   accounting principle                      (0.04)          --
  Net income                                 $0.07        $0.16
  Weighted average common shares            34,327       33,834
                                                      
      The accompanying notes are an integral part of these
               consolidated financial statements.
</TABLE>

                ATLAS AIR, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
                                
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (In thousands)
                           (Unaudited)

                                                    
                                           Three Months Ended
                                                March 31,
                                            1999         1998
Operating activities:                                 
<S>                                      <C> <C>      <C> <C>
Net income                               $   2,237    $   5,310
Adjustments to reconcile net income to                         
 net cash provided by operating
 activities:
  Depreciation and amortization             19,167       12,372
  Amortization of debt issuance costs,                         
   lease financing costs and other             612        1,254
  Non-cash portion of extraordinary                            
   loss                                      2,491           --
  Write-off of start-up costs                2,266           --
  Change in deferred income tax payable        813          756
  Changes in operating assets and                              
   liabilities:
    Accounts receivable and other           14,696        9,275
    Deposits and other                       2,409         (214)
    Accounts payable and accrued                                
     expenses                              (10,849)      (8,819)
    Income tax payable                      (7,855)       2,054
                                                               
      Net cash provided by operating                           
       activities                           25,987       21,988
                                                               
Investment activities:                                         
Purchase of property and equipment         (85,808)     (63,205)
Purchase of short-term investments          (4,882)     (23,722)
Maturity of short-term investments           5,000      106,996
     Net cash (used in) provided by                            
      investing activities                 (85,690)      20,069
                                                               
Financing activities:                                          
Issuance of Common Stock                    14,458        1,035
Purchase of Treasury Stock                    (107)        (120)
Issuance of Treasury Stock                     230          161
Net proceeds from debt issuance and                            
 lease financing                            36,474        6,801
Principal payments on notes payable       (114,523)      (7,660)
Debt issuance costs and deferred lease                          
 costs                                        (529)     (21,630)
       Net cash (used in) financing                             
        activities                         (63,997)     (21,413)
                                                               
Net (decrease) increase in cash           (123,700)      20,644
Cash and cash equivalents at beginning                         
 of period                                 449,627       41,334
Cash and cash equivalents at end of                            
 period                                  $ 325,927    $  61,978
                                                      
                                
      The accompanying notes are an integral part of these
               consolidated financial statements.
</TABLE>

                ATLAS AIR, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           (Unaudited)
                                
                                
                                
1.   Unaudited Consolidated Financial Statements

      In  the  opinion of management, the accompanying  unaudited
consolidated   financial  statements  contain   all   adjustments
(consisting only of normal recurring items) necessary to  present
fairly  the financial position of Atlas Air, Inc. and its wholly-
owned subsidiaries (collectively, the "Company" or "Atlas") as of
March  31, 1999 and the results of operations and cash flows  for
the   periods   presented.   Certain  information  and   footnote
disclosures normally included in financial statements prepared in
accordance  with  generally accepted accounting  principles  have
been condensed or omitted pursuant to the Securities and Exchange
Commission's  rules and regulations.  The results  of  operations
for  the periods presented are not necessarily indicative of  the
results  to  be expected for the full year.  Management  believes
the  disclosures made are adequate to ensure that the information
is  not  misleading, and suggests that these financial statements
be  read  in  conjunction with the Company's  December  31,  1998
audited  financial statements included in its  Annual  Report  on
Form 10-K.

2.   Reclassifications

     Certain prior year amounts have been reclassified to conform
to current year presentation.

3.   Recently Issued Accounting Standards
     
     In  March 1998, the Accounting Standards Executive Committee
("AcSEC")   of   the  American  Institute  of  Certified   Public
Accountants  ("AICPA") issued Statement of Position ("SOP")  98-1
"Accounting  for  the  Costs of Computer  Software  Developed  or
Obtained  for Internal Use."  SOP 98-1 is effective for financial
statements  for fiscal years beginning after December  15,  1998.
This  statement was adopted in the first quarter of 1999 and  did
not  have  a material impact on the financial statements  of  the
Company.
     
     In  April 1998, the AcSEC issued SOP 98-5 "Reporting on  the
Costs of Start-up Activities."  SOP 98-5 provides guidance on the
financial reporting of start-up costs and organization costs  and
requires  such  costs to be expensed as incurred.  In  accordance
with  SOP  98-5,  initial application should be reported  as  the
cumulative effect of a change in accounting principle.  SOP  98-5
is  effective for financial statements for fiscal years beginning
after  December  15,  1998.  During 1998,  the  Company  deferred
certain start-up costs related to the introduction of new  Boeing
747-400  freighter aircraft into its fleet.  This  statement  was
adopted in the first quarter of 1999 and the net of tax effect of
its  application  was  a  one-time charge of  approximately  $1.4
million.  In 1999, the Company expects to continue to incur costs
associated with the introduction of additional new Boeing 747-400
freighter aircraft into its fleet.
     
     In  June  1998,  the  Financial Accounting  Standards  Board
issued  Statement of Financial Accounting Standards ("SFAS")  No.
133   "Accounting   for   Derivative  Instruments   and   Hedging
Activities."   SFAS No. 133 establishes accounting and  reporting
standards  requiring that every derivative instrument  (including
certain  derivative instruments embedded in other  contracts)  be
recorded  on  the balance sheet as either an asset  or  liability
measured  at its fair value.  SFAS No. 133 requires that  changes
in  the  derivative's  fair  value  be  recognized  currently  in
earnings  unless  specific  hedge accounting  criteria  are  met.
Special  accounting for qualifying hedges allows  a  derivative's
gains and losses to offset related results on the hedged item  in
the  income statement, and requires that a company must  formally
document,  designate and assess the effectiveness of transactions
that  receive  hedge accounting.  SFAS No. 133 is  effective  for
fiscal years beginning after June 15, 1999 and may be implemented
as  of  the beginning of any fiscal quarter after June 15,  1998.
We  have not yet quantified the impact, if any, of adopting  SFAS
No.  133 on our financial statements and have not determined  the
timing  of or method of adoption of SFAS No. 133.  However,  SFAS
No.   133  could  increase  volatility  in  earnings  and   other
comprehensive income.

4.   Short-Term Investments

      Proceeds  from the public offering of the Company's  Common
Stock  in  May  1996,  plus additional funds,  were  invested  in
various held-to-maturity securities, as defined in SFAS No.  115,
"Accounting   for   Certain  Investments  in  Debt   and   Equity
Securities," which requires investments in debt securities to  be
classified  as  held-to-maturity and measured at  amortized  cost
only  if  the  reporting enterprise has the positive  intent  and
ability  to  hold  those securities to maturity.   The  following
table  sets  forth  the  aggregate fair value,  gross  unrealized
holding    gains,   gross   unrealized   holding   losses,    and
amortized/accreted cost basis by major security type as of  March
31, 1999 (in thousands):
<TABLE>
<CAPTION>
                                    Gross         Gross    (Amorti-
                      Aggregate   Unrealized   Unrealized   zation)
                        Fair       Holding       Holding       
    Security Type       Value       Gains        Losses    Accretion
                                                           
Included in cash and                                                
 cash equivalents:
<S>                   <C>        <C>       <S> <C>       <C>      <C>
  Commercial Paper    $  57,189  $         --  $         5 $      57
  Corporate Bonds        16,900            --           --        --
  Market Auction                                                    
   Preferreds           194,775            --           --        --
     Totals           $ 268,864  $         --  $         5 $      57
                                                               
Included in short-                                         
 term investments:
    U.S.   Government                                      
Agencies              $  10,000  $         --  $        -- $      --
  Market Auction                                                    
   Preferreds            12,000            --           --        --
     Totals           $  22,000  $         --  $        -- $      --
</TABLE>
In  addition, accrued interest on cash equivalents and short-term
investments  at  March  31,  1999  was  approximately   $554,000.
Interest  earned on these investments and related maturities  are
reinvested in similar securities.

5.   Commitments and Contingencies

     In  June  1997, the Company entered into the Boeing Purchase
Agreement  to  purchase 10 new 747-400 freighter aircraft  to  be
powered by engines acquired from GE, with options to purchase  up
to 10 additional 747-400 aircraft. The Company arranged leveraged
lease financing for the four 747-400 freighter aircraft that were
delivered  in  July, August, October and December 1998  and  debt
financing for an additional aircraft delivered in December  1998.
In  April  1999, the Company arranged financing (to  be  obtained
through  leveraged  leases or secured debt  financings)  for  the
remaining five aircraft, four of which are scheduled for delivery
in  1999  and one in 2000.  See discussions of EETCs  1998-1  and
EETCs  1999-1  below.   In February 1999, the  Company  exercised
options for two additional 747-400 freighter aircraft, which  are
scheduled for delivery in 2000.  The Company has not yet arranged
financing  for these two aircraft.  The Boeing Purchase Agreement
requires  that  the Company pay pre-delivery deposits  to  Boeing
prior to the delivery date of each 747-400 freighter aircraft  in
order to secure delivery of the 747-400 freighter aircraft and to
defray  a  portion  of  the manufacturing costs.   Based  on  the
current  expected  firm aircraft delivery schedule,  the  Company
expects the maximum total amount of pre-delivery deposits at  any
time outstanding will be approximately $162.3 million, which  was
paid  as  of  June  30,  1998.  There were  approximately  $129.6
million  of pre-delivery deposits outstanding at March  31,  1999
which were included in flight equipment.  The Company expects  to
pay  an additional $21.9 million in 1999 in pre-delivery deposits
in  accordance with the firm order pre-delivery deposits schedule
for seven aircraft, including the two option aircraft.  Upon each
delivery, Boeing refunds to the Company the pre-delivery deposits
associated  with  the delivered 747-400 freighter  aircraft.   In
addition,  the Boeing Purchase Agreement provides for a  deferral
of  a  portion  of  the pre-delivery deposits (deferred  aircraft
obligations)  for  which the Company accrues  and  pays  interest
quarterly  at  6-month LIBOR, plus 2.0%.  As of March  31,  1999,
there   was  $219.4  million  of  deferred  aircraft  obligations
included in other liabilities, and the combined interest rate was
approximately 7.08%.

     In  February  1998,  the Company completed  an  offering  of
$538.9  million of Enhanced Equipment Trust Certificates  ("EETCs
1998-1").   The  EETCs 1998-1 are not direct obligations  of,  or
guaranteed by, the Company and therefore are not included in  its
consolidated  financial  statements  until  such  time  that  the
Company draws upon the proceeds to take delivery and ownership of
an  aircraft.  The cash proceeds from the EETCs 1998-1 were  used
to  finance  (through four leveraged leases and one secured  debt
financing)  the  acquisition  of  the  first  five  new   747-400
freighter  aircraft  from  Boeing which  were  delivered  to  the
Company  during the period July 1998 through December  1998.   In
connection  with  the secured debt financing,  the  Company  took
ownership  of  the aircraft and executed equipment notes  in  the
aggregate  amount  of  $107.9 million  with  a  weighted  average
interest rate of 7.6%.
     
     In  January 1999, the Company used a portion of the proceeds
from the previous issuance of $150 million of 9 3/8% Senior Notes
to  redeem  at 108% all of its $100 million of 12 1/4%  Equipment
Notes  due  2002.   In  the first quarter of  1999,  the  Company
recorded  a  $6.6 million one-time extraordinary  loss  from  the
extinguishment  of  debt,  net of an applicable  tax  benefit  of
approximately  $3.9  million.  The extinguishment  of  this  debt
eliminated liens on three 747-200 freighter aircraft.
     
     In January 1999, the Company purchased a Boeing Business Jet
("BBJ") from Boeing for approximately $32 million and immediately
delivered  the  BBJ  to  a third-party for  installation  of  the
interior business configuration.  Shortly thereafter, the Company
entered  into  a sale leaseback transaction with  GE  Capital  to
finance  the  BBJ.  This aircraft will be used to  transport  the
Company's executives on business trips throughout the world.  The
Company's Chairman, President and CEO has agreed to share in  the
acquisition costs and capital improvement costs of the BBJ.
     
     In  February  1999, the Company filed a $650  million  shelf
registration  statement (the "$650 million  Shelf  Registration")
with  the  Securities and Exchange Commission, which was declared
effective   shortly   thereafter.    The   $650   million   Shelf
Registration  provided  for  debt  or  equity  financing,  or   a
combination  of both, the net proceeds from which were  available
for  general  corporate purposes, including but not  limited  to,
repayment  of  indebtedness, capital expenditures, repurchase  of
common  stock and acquisitions.  In April 1999, the $650  million
Shelf  Registration was used to issue $543.6 million of  Enhanced
Equipment  Trust Certificates (see Note 7).  Shortly  thereafter,
the remainder of the $650 million Shelf Registration was replaced
by a new $250 million Shelf Registration (see Note 7).
     
     In  November 1998, the Company entered into a contract  with
Boeing  to re-engine the only two Pratt & Whitney ("P&W") powered
aircraft in its fleet from P&W engines to GE engines, in order to
improve  the  performance  of the aircraft  and  to  improve  the
standardization  of  its  fleet.  The  Company  acquired  the  GE
engines  and  other parts required for such re-engineing  from  a
third-party.    The  Company  believes  that  these  re-engineing
efforts  will result in no material financial impact due  to  the
recent  sale  of the P&W engines, coupled with the value  derived
from  the unused parts associated with the acquisition of the  GE
engines.   These two aircraft are expected to be re-delivered  to
the  Company, one each in the second and third quarters of  1999.
On  a prospective basis, and as a result of the re-engineing, the
Company also expects to incur lower maintenance costs related  to
these  two  aircraft compared to the costs it has experienced  to
date.

     Under the FAA's Directives issued under its "Aging Aircraft"
program,   the   Company   is  subject  to   extensive   aircraft
examinations  and  will  be  required  to  undertake   structural
modifications  to its fleet to address the problem  of  corrosion
and  structural fatigue.  In November 1994, Boeing issued Nacelle
Strut  Modification Service Bulletins which have  been  converted
into Directives by the FAA.  Five of the Company's Boeing 747-200
aircraft  will  have  to  be brought into compliance  with  these
Directives  by  March  2000  at  an  estimated  total   cost   of
approximately  $2.5 million.  As part of the FAA's overall  aging
aircraft  program,  it  has issued Directives  requiring  certain
additional  aircraft  modifications  to  be  accomplished.    The
Company   estimates  that  the  modification  costs  per  747-200
aircraft  will  range between $2 million and $3 million.   Twelve
aircraft  of the 747-200 fleet have already undergone  the  major
portion  of  such  modifications.  The remaining  eleven  747-200
aircraft will require modification prior to the year 2009.  Other
Directives  have been issued that require inspections  and  minor
modifications to Boeing 747-200 aircraft.  The newly manufactured
747-400  freighter  aircraft were delivered  to  the  Company  in
compliance  with all existing FAA Directives at their  respective
delivery  dates.  On December 3, 1998, the FAA issued a Directive
ordering  Boeing 747 operators to change fuel pump procedures  to
prevent dry tank operation that could result in ignition  of  the
center fuel or horizontal stabilizer tanks.  Compliance with this
Directive may adversely impact the Company's customers' operating
costs  and  schedules.  It is possible that additional Directives
applicable  to the types of aircraft or engines included  in  its
fleet could be issued in the future, the cost  of which could  be
substantial.
     
     In March 1997, Air Support International, Inc. ("ASI") filed
a  complaint  against  the Company in the  U.S.  District  Court,
Eastern District of New York alleging actual and punitive damages
of approximately $13.5 million arising from the Company's refusal
to  pay  commissions  which ASI claims it is owed  for  allegedly
arranging  certain  ACMI  Contracts.   The  Company  intends   to
vigorously defend against all of ASI's claims.

6.   Stockholders' Equity
     
     In January 1999, the Company announced a 3-for-2 stock split
in  the form of a stock dividend to stockholders of record at the
close  of  business  on January 25, 1999.  The  new  shares  were
delivered  on February 8, 1999.  The share data and earnings  per
share  data  for  all  periods presented  in  these  consolidated
financial  statements  have been restated to  reflect  the  stock
split.
     
7.   Subsequent Events

     In  April 1999, the Company completed an offering of  $543.6
million  Enhanced Equipment Trust Certificates ("EETCs  1999-1"),
which represented a substantial portion of the $650 million Shelf
Registration.  The EETCs 1999-1 are not direct obligations of, or
guaranteed by, the Company and therefore are not included in  its
consolidated  financial  statements  until  such  time  that  the
Company draws upon the proceeds to take delivery and ownership of
an aircraft.  The cash proceeds from the EETCs 1999-1 transaction
were  deposited with an escrow agent and will be used to  finance
(through either leveraged leases or secured debt financings)  the
acquisition cost of five of the remaining seven firm new  747-400
freighter aircraft from Boeing scheduled to be delivered in  1999
and  2000.  In connection therewith, the Company intends to  seek
certain owner participants who will commit lease equity financing
to be used in leveraged leases for some of these aircraft.
     
     In  April  1999, the Company filed a new $250 million  shelf
registration  statement (the "$250 million  Shelf  Registration")
with the Securities and Exchange Commission as a replacement  for
the  $106.4  million of funds remaining under  the  $650  million
Shelf  Registration. The $250 million Shelf Registration provides
for  debt or equity financing, or a combination of both, the  net
proceeds  from  which  will be available  for  general  corporate
purposes,   including   but   not  limited   to,   repayment   of
indebtedness,  capital expenditures, repurchase of  common  stock
and  acquisitions.   The  $250  million  Shelf  Registration  was
declared effective May 10, 1999.
     
     In  April  1999, the Company received notification from  the
National  Mediation Board ("NMB") that Atlas' crew  members  have
voted  to  be  represented  by the Air  Line  Pilots  Association
("ALPA").   The  Company  expects  its  labor  costs  to  decline
initially  since  its  Profit  Sharing  Plan  excludes  from  the
category  of  eligible employees, those employees who  have  been
certified  by the NMB for representation.  In response to  ALPA's
claims that such an exclusion violates the Railway Labor Act, the
Company  on  May  6, 1999, filed an action in the  United  States
District Court for the District of Columbia seeking a declaratory
judgment confirming, inter alia, the enforceability of the Plan's
exclusion.   On May 10, 1999, ALPA filed a counterclaim  in  that
action,  alleging  that the exclusion of  its  members  from  the
Company's Profit Sharing Plan violates the Railway Labor Act, and
seeking  restoration of profit sharing pay and punitive  damages.
The Company believes ALPA's claim to be without merit and intends
to vigorously defend against the counterclaim.

             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

      The  cargo operations of our airline customers are seasonal
in  nature,  with  peak activity occurring traditionally  in  the
second half of the year, and with a significant decline occurring
in  the  first  quarter.  This reduction  in  cargo  activity  is
largely due to the decrease in shipping that occurs following the
December  and first quarter holiday seasons associated  with  the
celebration  of  Christmas  and the Chinese  New  Year.   Certain
customers  have, in the past, elected to use that period  of  the
year  to  exercise their contractual options to cancel a  limited
number (generally not more than 5% per year) of guaranteed  hours
with us, and are expected to continue to do so in the future.  As
a  result, our revenues typically decline in the first quarter of
the   year   as   our  contractual  aircraft  utilization   level
temporarily  decreases.   We  seek to  schedule,  to  the  extent
possible,  our major aircraft maintenance activities during  this
period to take advantage of any unutilized aircraft time.

       The  aircraft  acquisitions  and  lease  arrangements  are
described  in  Note  6  of  our December  31,  1998  Consolidated
Financial Statements.  The timing of when an aircraft enters  our
fleet  can  affect  not  only annual performance,  but  can  make
quarterly  results vary, thereby affecting the  comparability  of
operations  from period to period.  In addition,  the  number  of
aircraft  utilized from period to period as spare or  maintenance
back-up aircraft may also cause quarterly results to vary.

      The table below sets forth selected financial and operating
data  for the first quarter of 1999 and the four quarters of  the
year ended December 31, 1998 (dollars in thousands).
<TABLE>
<CAPTION>
                                       1999             1998
                                       1st              1st
                                     Quarter          Quarter

     <S>                              <C>               <C>
     Total operating revenues         $137,839          $79,634
     Operating expenses                101,132           58,091
     Operating income                   36,707           21,543
     Other income (expense)           (20,314)         (13,114)
     Net income                          2,237  (1)       5,310
     Block hours                        23,931           15,388
     Average aircraft operated            27.0             17.0
     Operating margin                    26.6%            27.1%

          (1)  After extraordinary item and cumulative effect of
     a change in accounting principle
</TABLE>

Operating Revenues and Results of Operations

      Total  operating revenues for the quarter ended  March  31,
1999  increased to $137.8 million from $79.6 million for the same
period  in  1998,  or approximately 73%.  The average  number  of
aircraft  in our fleet during the first quarter of 1999 was  27.0
compared  to  17.0 during the same period in 1998.   Total  block
hours  for  the  first quarter of 1999 were  23,931  compared  to
15,388  for the same period in 1998, an increase of approximately
56%, principally reflecting the increase in the size of our fleet
period  over  period.   Revenue  per  block  hour  increased   by
approximately  11%  to  $5,760 for  the  first  quarter  of  1999
compared  to  $5,175 for the first quarter  of  1998.   This  was
substantially  due  to  the increase in  the  number  of  747-400
freighter aircraft in our fleet and the increase in the volume of
charter  operations period over period, for which  the  rate  per
block  hour  was  higher in order to offset additional  operating
costs  borne  by us under such arrangements.  Charter  operations
are  performed on an ad hoc basis and are dependent upon  surplus
availability  of our aircraft and customer demand.  Additionally,
the  revenue per block hour for the 747-400 aircraft in the first
quarter  of  1999 was higher than that for the 747-200  aircraft,
reflecting  the higher pricing structure of the 747-400  customer
contracts.

      Our operating results improved by approximately 70% from  a
$21.5  million operating profit for the first quarter of 1998  to
an  operating  profit of $36.7 million for the first  quarter  of
1999.   Results  of  operations were favorably  impacted  by  the
substantial increase in the size of our fleet and the newer  747-
400  freighter  aircraft, slightly offset by higher  flight  crew
salaries  and benefits, and other flight related expenses  period
over  period.   In  the  first quarter of 1999,  we  recorded  an
approximate   $6.6   million   extraordinary   loss   from    the
extinguishment of the $100 million 12 1/4% Senior Notes,  net  of
an  applicable  tax benefit of approximately  $3.9  million.   In
addition,  we  recorded a one-time charge of  approximately  $1.4
million,  net  of an applicable tax benefit of approximately  $.9
million, associated with the write-off of start-up costs  related
to the introduction of new Boeing 747-400 freighter aircraft into
our  fleet,  as required upon adoption of SOP 98-5 (as  defined).
Net  income  of  $5.3  million for  the  first  quarter  of  1998
decreased  to a net income of $2.2 million for the first  quarter
of  1999, due to the extraordinary loss and the one-time  charge.
Net  income before extraordinary item and cumulative effect of  a
change in accounting principle for the first quarter of 1999  was
$10.2 million.

Operating Expenses

       Our  principal  operating  expenses  include  flight  crew
salaries    and   benefits;   other   flight-related    expenses;
maintenance; aircraft and engine rentals; fuel costs  and  ground
handling; depreciation and amortization; and other expenses.

      Flight crew salaries and benefits include all such expenses
for  our  pilot  work force.  Flight crew salaries  and  benefits
increased to $11.4 million in the first quarter of 1999  compared
to  $6.8  million in 1998, due to the increase in the  number  of
aircraft  in  our  fleet  and  aircraft  block  hours   and,   in
particular, to the initial increased crewing requirements of  our
new   747-400  aircraft.   While  actual  expense  increased   by
approximately  68% quarter over quarter, on a  block  hour  basis
this  expense increased by approximately 8% to $475 per hour  for
the  first quarter of 1999 from $439 per hour for the same period
in 1998.

      Other  flight-related expenses include hull  and  liability
insurance on our aircraft, crew travel and meal expenses, initial
and recurrent crew training costs and other expenses necessary to
conduct our flight operations.

      Other flight-related expenses increased to $10.8 million in
the  first quarter of 1999 from $6.5 million in the first quarter
of  1998,  or  approximately 66%.  On a block hour  basis,  other
flight-related expenses increased approximately 7%  to  $453  per
block hour for the first quarter of 1999 from $424 per block hour
for the same period in 1998.  This increase was primarily due  to
the impact of added training and travel costs associated with the
introduction of the 747-400 freighter aircraft into our fleet  in
the  second  half of 1998 and preparation for the four additional
new 747-400 freighter aircraft to be delivered this year.

      Maintenance  expenses include all expenses related  to  the
upkeep  of  the  aircraft, including maintenance,  labor,  parts,
supplies  and  maintenance reserves.  The costs of  C  Checks,  D
Checks  and engine overhauls not otherwise covered by maintenance
reserves are capitalized as they are incurred and amortized  over
the  life of the maintenance event.  In addition, in January 1995
we  contracted  with KLM for a significant part  of  our  regular
maintenance  operations and support on a fixed  cost  per  flight
hour  basis.  Effective October 1996, certain additional aircraft
engines  were  accepted into the GE engine  maintenance  program,
also on a fixed cost per flight hour basis, pursuant to a 10 year
maintenance  agreement.  During 1998, we  entered  into  separate
long-term  contracts  with  Lufthansa Technik  for  the  airframe
maintenance and with GE for the engine maintenance of the 747-400
freighter aircraft, effective with the introduction of  the  747-
400 freighter aircraft into our fleet in the second half of 1998.

      Maintenance expense increased to $30.3 million in the first
quarter of 1999 from $20.5 million in the same period of 1998, or
approximately  48%, primarily due to the increased  size  of  our
fleet.   On a block hour basis, maintenance expense decreased  by
approximately  5% in the first quarter of 1999  compared  to  the
first quarter of 1998, primarily reflecting the lower maintenance
costs associated with the new 747-400 aircraft.

      Aircraft  and  engine rentals include the cost  of  leasing
aircraft  and  spare engines, as well as the cost  of  short-term
engine  leases  required  to replace  engines  removed  from  our
aircraft for either scheduled or unscheduled maintenance and  any
related short-term replacement aircraft lease costs.

      Aircraft and engine rentals were $11.5 million in the first
quarter  of 1999 compared to $1.2 million in the same  period  of
1998,  or  an increase of approximately 827%.  During  the  first
quarter  of 1999, we leased four 747-400 and one 747-200 aircraft
as  compared to the first quarter of 1998 in which we leased  one
747-200 aircraft.

     Because of the nature of our ACMI Contracts (Aircraft, Crew,
Maintenance  and  Insurance) with our  airline  customers,  under
which  we  are responsible for the ownership cost and maintenance
of  the  aircraft and for supplying aircraft crews and insurance,
our  airline customers bear all other operating expenses.   As  a
result,  we incur fuel and ground handling expenses only when  we
operate  on our own behalf either in scheduled services,  for  ad
hoc  charters or for ferry flights.  Fuel expenses for  our  non-
ACMI  Contract services include both the direct cost of  aircraft
fuel  as  well as the cost of delivering fuel into the  aircraft.
Ground  handling expenses for non-ACMI Contract services  include
the  costs associated with servicing our aircraft at the  various
airports to which we operate.

      Fuel  and  ground handling costs increased by approximately
54%  to  $3.1  million for the first quarter of  1999  from  $2.0
million for the first quarter of 1998.  This was primarily due to
increased  charter  activity during the first  quarter  of  1999,
partially offset by a decrease in scheduled service and other non-
ACMI block hours quarter over quarter.

      Depreciation and amortization expense includes depreciation
on   aircraft,  spare  parts  and  ground  equipment,   and   the
amortization of capitalized major aircraft maintenance and engine
overhauls.

      Depreciation  and amortization expense increased  to  $19.2
million  in the first quarter of 1999 from $12.2 million  in  the
same  period  of  1998,  or  approximately  57%.   This  increase
primarily  reflected an increase of approximately  38%  in  owned
aircraft  for the first quarter of 1999 over the same  period  in
1998.   In  addition,  there  was  an  increase  in  spare  parts
associated  with  the  introduction  of  the  747-400   freighter
aircraft into our fleet in the second half of 1998.

      Other operating expenses include salaries, wages, benefits,
travel   and  meal  expenses  for  non-crew  members  and   other
miscellaneous operating costs.

      Other operating expenses increased to $14.9 million in  the
first  quarter  of 1999 from $8.8 million in the same  period  of
1998,  or  approximately  69%, reflecting  the  increase  in  our
operations.   On a block hour basis, these expenses increased  to
$624 per hour in the first quarter of 1999 from $573 per hour  in
the  same period of 1998, or 9%.  This increase in cost  was  due
primarily  to  additional personnel and other resources  required
for the expansion of our fleet and operations.

Other Income (Expense)

      Other  income  (expense) consists of  interest  income  and
interest  expense.  Interest income increased to $4.6 million  in
the first quarter of 1999 from $1.7 million in the same period of
1998,  primarily  due  to the investment of   proceeds  from  our
issuance  of  $175 million of 9 1/4% Senior Notes in April  1998,
$150  million  of 9 3/8% Senior Notes in November  1998  and  the
return  of  deposits  and  proceeds from  financing  the  747-400
freighter aircraft deliveries in the third and fourth quarters of
1998.   Interest expense increased to $24.9 million in the  first
quarter of 1999 from $14.8 million in the same period of 1998, or
approximately  68%.   This increase resulted from  the  financing
associated with the purchase of five additional aircraft  in  the
second  half of 1998 and the issuance of $175 million of  9  1/4%
Senior  Notes  in April 1998 and $150 million of  9  3/8%  Senior
Notes in November 1998.

Income Taxes

      Pursuant to the provisions of SFAS No. 109 "Accounting  for
Income  Taxes,"  we have recorded a tax provision  based  on  tax
rates in effect during the period.  Accordingly, we accrued taxes
at  the rate of 37.5% during the first quarter of 1999 and  37.0%
during  the  first  quarter of 1998.  Due to significant  capital
costs,  which  are  depreciated at an accelerated  rate  for  tax
purposes,  a  significant portion of our tax provision  in  these
periods is deferred.

Liquidity and Capital Resources

     At  March  31,  1999,  we had cash and cash  equivalents  of
approximately   $325.9   million,   short-term   investments   of
approximately  $22.1 million and working capital of approximately
$264.9  million. During the first quarter of 1999, cash and  cash
equivalents  decreased  approximately $123.7  million,  primarily
reflecting  the purchase of flight and other equipment  of  $85.8
million,  principal reductions of indebtedness of $114.5  million
and debt issuance costs of $0.5 million; partially offset by cash
provided   from  operations  of  $26.0  million,  proceeds   from
equipment  financings  of $36.5 million, net  proceeds  from  the
maturity  and purchase of short-term investments of $0.1 million,
net  proceeds from the issuance of common stock of $14.4  million
and  net  proceeds from the issuance of treasury  stock  of  $0.1
million.

     In  June 1997, we entered into the Boeing Purchase Agreement
to  purchase 10 new 747-400 freighter aircraft to be  powered  by
engines  acquired  from GE, with options to  purchase  up  to  10
additional   747-400  aircraft.  We  arranged   leveraged   lease
financing  for  the  four 747-400 freighter  aircraft  that  were
delivered  in  July, August, October and December 1998  and  debt
financing for an additional aircraft delivered in December  1998.
In  April  1999,  we arranged financing (to be  obtained  through
leveraged  leases or secured debt financings) for  the  remaining
five  aircraft, four of which are scheduled for delivery in  1999
and one in 2000.  See discussions of EETCs 1998-1 and EETCs 1999-
1  below.    In  February  1999, we  exercised  options  for  two
additional  747-400 freighter aircraft, which are  scheduled  for
delivery  in 2000.  We have not yet arranged financing for  these
two aircraft.  The Boeing Purchase Agreement requires that we pay
pre-delivery  deposits to Boeing prior to the  delivery  date  of
each  747-400 freighter aircraft in order to secure  delivery  of
the  747-400  freighter aircraft and to defray a portion  of  the
manufacturing costs.  Based on the current expected firm aircraft
delivery  schedule, we expect the maximum total  amount  of  pre-
delivery  deposits at any time outstanding will be  approximately
$162.3  million, which was paid as of June 30, 1998.  There  were
approximately $129.6 million of pre-delivery deposits outstanding
at  March  31, 1999 which were included in flight equipment.   We
expect to pay an additional $21.9 million in 1999 in pre-delivery
deposits  in accordance with the firm order pre-delivery deposits
schedule  for seven aircraft, including the two option  aircraft.
Upon  each  delivery,  Boeing  refunds  to  us  the  pre-delivery
deposits   associated  with  the  delivered   747-400   freighter
aircraft.   In  addition, the Boeing Purchase Agreement  provides
for  a  deferral  of  a  portion  of  the  pre-delivery  deposits
(deferred  aircraft  obligations) for which  we  accrue  and  pay
interest quarterly at 6-month LIBOR, plus 2.0%.  As of March  31,
1999,  there  was $219.4 million of deferred aircraft obligations
included in other liabilities, and the combined interest rate was
approximately 7.08%.

     In February 1998, we completed an offering of $538.9 million
of  Enhanced Equipment Trust Certificates ("EETCs 1998-1").   The
EETCs 1998-1 are not direct obligations of, or guaranteed by,  us
and  therefore  are  not  included in our consolidated  financial
statements until such time that we draw upon the proceeds to take
delivery  and  ownership of an aircraft.  The cash proceeds  from
the  EETCs  1998-1  have  been  used  to  finance  (through  four
leveraged  leases and one secured debt financing) the acquisition
of  the  first  five new 747-400 freighter aircraft  from  Boeing
which  were  delivered to us during the period July 1998  through
December 1998.  In connection with the secured debt financing, we
took  ownership of the aircraft and executed equipment  notes  in
the  aggregate  amount of $107.9 million with a weighted  average
interest rate of 7.6%.
     
     In February 1999, we filed a $650 million shelf registration
statement  (the  "$650  million  Shelf  Registration")  with  the
Securities and Exchange Commission, which was declared  effective
shortly thereafter.  The $650 million Shelf Registration provided
for  debt or equity financing, or a combination of both, the  net
proceeds   from  which  were  available  for  general   corporate
purposes,   including   but   not  limited   to,   repayment   of
indebtedness,  capital expenditures, repurchase of  common  stock
and acquisitions.
     
     In  April  1999, we completed an offering of $543.6  million
Enhanced  Equipment  Trust Certificates ("EETCs  1999-1"),  which
represented  a  substantial portion of  the  $650  million  Shelf
Registration.  The EETCs 1999-1 are not direct obligations of, or
guaranteed  by,  us  and  therefore  are  not  included  in   our
consolidated  financial statements until such time that  we  draw
upon  the proceeds to take delivery and ownership of an aircraft.
The   cash  proceeds  from  the  EETCs  1999-1  transaction  were
deposited  with  an  escrow agent and will  be  used  to  finance
(through either leveraged leases or secured debt financings)  the
debt  portion  of the acquisition cost of five of  the  remaining
seven  firm new 747-400 freighter aircraft from Boeing  scheduled
to be delivered to us in 1999 and 2000.  In connection therewith,
we  intend  to  seek certain owner participants who  will  commit
lease  equity  financing to be used in leveraged leases  of  such
aircraft.
     
     In   April   1999,  we  filed  a  new  $250  million   shelf
registration  statement (the "$250 million  Shelf  Registration")
with the Securities and Exchange Commission as a replacement  for
the  $106.4  million of funds remaining under  the  $650  million
Shelf Registration.  The $250 million Shelf Registration provides
for  debt or equity financing, or a combination of both, the  net
proceeds  from  which  will be available  for  general  corporate
purposes,   including   but   not  limited   to,   repayment   of
indebtedness,  capital expenditures, repurchase of  common  stock
and  acquisitions.   The  $250  million  Shelf  Registration  was
declared effective May 10, 1999.
     
     In  January 1999, we used a portion of the proceeds from the
previous  issuance  of  $150 million of 9 3/8%  Senior  Notes  to
redeem at 108% all of our $100 million of 12 1/4% Equipment Notes
due  2002.   We  recorded  an approximate $6.6  million  one-time
extraordinary loss from the  extinguishment of debt, which is net
of  an  applicable tax benefit of approximately $3.9 million,  in
the  first quarter of 1999 associated with this redemption.   The
extinguishment  of this debt eliminated liens  on  three  747-200
freighter aircraft.
     
     In  January 1999, we purchased a Boeing Business Jet ("BBJ")
from   Boeing  for  approximately  $32  million  and  immediately
delivered  the  BBJ  to  a third-party for  installation  of  the
interior business configuration.  Shortly thereafter, the Company
entered  into  a sale leaseback transaction with  GE  Capital  to
finance  the  BBJ.  This aircraft will be used to  transport  our
executives on business trips throughout the world.  Our Chairman,
President  and  CEO has agreed to share in the acquisition  costs
and capital improvement costs of the BBJ.
     
     In  January 1999, we announced a 3-for-2 stock split in  the
form  of a stock dividend to stockholders of record at the  close
of  business on January 25, 1999.  The new shares were  delivered
on  February 8, 1999.  The share data and earnings per share data
for   all  periods  presented  in  these  consolidated  financial
statements have been restated to reflect the stock split.
     
     In  November 1998, we entered into a contract with Boeing to
re-engine  the only two Pratt & Whitney ("P&W") powered  aircraft
in  our fleet from P&W engines to GE engines, in order to improve
the   performance   of   the  aircraft   and   to   improve   the
standardization  of our fleet.  We acquired the  GE  engines  and
other  parts  required for such re-engineing from a  third-party.
We  believe  that these re-engineing efforts will  result  in  no
material  financial  impact due to the recent  sale  of  the  P&W
engines,  coupled  with the value derived from the  unused  parts
associated  with  the acquisition of the GE engines.   These  two
aircraft are expected to be re-delivered to us, one each  in  the
second  and third quarters of 1999.  On a prospective basis,  and
as  a  result of this re-engineing, we also expect to incur lower
maintenance costs related to these two aircraft compared  to  the
costs we have experienced to date.
     
      Due  to  the contractual nature of our business, management
does  not  consider our operations to be highly working  capital-
intensive in nature.  Because most of the non-ACMI costs normally
associated with operations are borne by and directly paid for  by
our  customers, we do not incur significant costs in  advance  of
the  receipt  of corresponding revenues.  Moreover,  ACMI  costs,
which  are  our  responsibility,  are  generally  incurred  on  a
regular, periodic basis on either a flight hour or calendar month
basis.   These costs are largely matched by revenue receipts,  as
our  contracts require regular payments from our customers  based
upon  current flight activity, generally every two to four weeks.
As  a result, we have not had a requirement for a working capital
facility.

     Under the FAA's Directives issued under its "Aging Aircraft"
program, we are subject  to  extensive aircraft examinations  and
will  be  required to undertake structural modifications  to  our
fleet to address the problem of corrosion and structural fatigue.
In  November  1994,  Boeing  issued  Nacelle  Strut  Modification
Service  Bulletins which have been converted into  Directives  by
the  FAA.   Five of our Boeing 747-200 aircraft will have  to  be
brought into compliance with such Directives by March 2000 at  an
estimated total cost of approximately $2.5 million.  As  part  of
the   FAA's  overall  aging  aircraft  program,  it  has   issued
Directives requiring certain additional aircraft modifications to
be accomplished.  We estimate that the modification costs per 747-
200  aircraft  will  range  between $2 million  and  $3  million.
Twelve  aircraft in our 747-200 fleet have already undergone  the
major  portion of such modifications.  The remaining eleven  747-
200  aircraft will require modification prior to the  year  2009.
Other  Directives have been issued that require  inspections  and
minor  modifications  to  Boeing  747-200  aircraft.   The  newly
manufactured 747-400 freighter aircraft were delivered to  us  in
compliance  with all existing FAA Directives at their  respective
delivery  dates.  On December 3, 1998, the FAA issued a Directive
ordering  Boeing 747 operators to change fuel pump procedures  to
prevent dry tank operation that could result in ignition  of  the
center fuel or horizontal stabilizer tanks.  Compliance with this
Directive may adversely impact our customers' operating costs and
schedules.   It is possible that additional Directives applicable
to  the types of aircraft or engines included in our fleet  could
be issued in the future, the cost of which could be substantial.

      From  time  to  time  we engage in discussions  with  third
parties  regarding possible acquisitions of aircraft  that  could
expand  our  operations.  We are currently  in  discussions  with
third-parties for the possible acquisition of additional aircraft
for delivery in 1999 and beyond.

      We  believe  that cash on hand and the cash flow  generated
from  our  operations,  combined with the proceeds  of  the  $175
million of 9 1/4% Senior Notes, the $543.6 million of  EETCs 1999-
1 and the $150 million of 9 3/8% Senior Notes, will be sufficient
to  meet  our normal ongoing liquidity needs for the next  twelve
months.

Year 2000

     We  have  performed  a  review of our  internal  information
systems  for  Year  2000 ("Y2K") automation  problems  through  a
company-wide effort, assisted by Y2K experienced consultants,  to
address  internal  Y2K system issues and, jointly  with  industry
trade  groups, issues related to key business partners which  are
common  to other air carriers.  As a result, we do not anticipate
that  Y2K  compliance will have a material financial impact.   We
have completed the first phase of this project, which included an
inventory  of our computer network environment and an  assessment
of  the  effort  involved to bring our internal  computer  system
environment to full Y2K compliance.  Due to our relatively modern
systems,  advanced  client  server,  development  and  data  base
architecture,  and our partial reliance on vendor representations
regarding Y2K  compliant third-party systems, related remediation
efforts  are  believed to be minimal and achievable.  Third-party
hardware  and  software used by us are, for the  most  part,  Y2K
compliant; those that are not compliant have broad customer bases
and  available  software upgrades.  A limited number  of  systems
remain  to  be reviewed for compliance, but are not  of  material
significance.  Initial review of our 747-200 and 747-400 aircraft
computer  systems  indicate that most  all  of  the  systems  are
compliant,  and  those  not  that are  not  compliant  are  being
addressed  by Boeing sub-contractors.  A limited number  of  non-
critical systems need further analysis.

     We have begun an ongoing program to review the status of key
supplier/business  partner  Y2K  compliance  efforts.   While  we
believe  we  are taking all appropriate steps to assure  our  Y2K
compliance,  we are dependent on key business partner  compliance
to some extent.  We plan to have all company-controllable systems
Y2K  tested and compliant by mid-1999. We anticipate that  third-
party   and  supplier/business  partner  systems  will  be  fully
addressed  by  mid-1999  in the form of  compliance  remediation,
plans  for  timely remediation, or contingency  plans.   The  Y2K
problem  is  pervasive  and complex, as  virtually  every  global
computer  operation will be affected in some way.   Consequently,
no  assurance  can  be  given that all  company-used  third-party
systems   and   suppliers/business  partners  can   achieve   Y2K
compliance.   The  Company expects that  the  costs  incurred  to
become Y2K compliant will not exceed $300,000.

Forward-looking Information

     Certain statements included or incorporated by reference  in
this Form 10-Q constitute "forward looking statements" within the
meaning  of Section 27A of the Securities Act of 1933, as amended
(the "Securities Act"), and Section 2lE of the Exchange Act. Such
forward-looking  statements  involve  known  and  unknown  risks,
uncertainties  and  other  factors which  may  cause  our  actual
results,  levels  of  activity, performance  or  achievements  or
industry  results,  to be materially different  from  any  future
results,   levels   of  activity,  performance  or   achievements
expressed  or  implied  by  such forward-looking  statements.  In
addition,  forward-looking statements generally can be identified
by  the use of forward-looking terminology such as "may", "will",
"expect",  "intend",  "estimate",  "anticipate",  "believe",   or
"continue"  or  the  negative thereof or  variations  thereon  or
similar  terminology. Although we believe that  the  expectations
reflected  in such forward-looking statements are reasonable,  we
can  give no assurance that such expectations will prove to  have
been  correct. Important factors that could cause actual  results
to  differ  materially from our expectations are disclosed  under
"Risk  Factors" and elsewhere in our Form 10-K for  December  31,
1998.
     
     To  the  extent that any of the statements contained  herein
relating  to  our  expectations, assumptions  and  other  Company
matters  are forward-looking, they are made in reliance upon  the
safe  harbor  provisions  of  the Private  Securities  Litigation
Reform  Act  of  1995.   Such statements  are  based  on  current
expectations  that  involve a number of uncertainties  and  risks
that  could cause actual results to differ materially from  those
projected in the forward-looking statements, including,  but  not
limited to, risks associated with:

-    worldwide business and economic conditions;

-     product  demand  and the rate of growth in  the  air  cargo
  industry;

-     the  impact  of  competitors and competitive  aircraft  and
  aircraft financing availability;

-      the  ability  to  attract  and  retain  new  and  existing
  customers;

-    normalized aircraft operating costs and reliability;

-    management of growth and complying with FAA policies;

-    the continued productivity of our workforce;

-    dependence on key personnel; and

-    other regulatory requirements.

  As  a  result of the foregoing and other factors, no  assurance
can  be  given as to our future results and achievements. Neither
we  nor  any other person assumes responsibility for the accuracy
and completeness of these statements.


                ATLAS AIR, INC. AND SUBSIDIARIES
                                
                                
                   PART II. OTHER INFORMATION
                                
                                
                                
ITEM 1.                       LEGAL PROCEEDINGS

     
     In  April  1999, we received notification from the  National
Mediation  Board ("NMB") that our crew members have voted  to  be
represented  by  the  Air Line Pilots Association  ("ALPA").   We
expect  our  labor  costs to decline initially since  our  Profit
Sharing  Plan  excludes from the category of eligible  employees,
those   employees  who  have  been  certified  by  the  NMB   for
representation.   In  response to  ALPA's  claims  that  such  an
exclusion  violates the Railway Labor Act, on  May  6,  1999,  we
filed  an  action  in the United States District  Court  for  the
District  of  Columbia seeking a declaratory judgment confirming,
inter  alia, the enforceability of the Plan's exclusion.  On  May
10, 1999, ALPA filed a counterclaim in that action, alleging that
the  exclusion  of  its  members from  our  Profit  Sharing  Plan
violates the Railway Labor Act, and seeking restoration of profit
sharing pay and punitive damages.  We believe ALPA's claim to  be
without  merit  and  intend  to  vigorously  defend  against  the
counterclaim.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K


a.        Exhibits

               Exhibit 27 - Financial Data Schedule

b.        Reports filed on Form 8-K

               None.

                           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.




                         ATLAS AIR, INC.
                          (Registrant)
                                
                                
                                
                                
Date:  May 13, 1998     By:   /s/ Stephen C. Nevin
                              Stephen C. Nevin
                              Vice President and
                                Chief Financial Officer
                              Principal Accounting Officer