UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-QSB

                                   (Mark One)

[X]     QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR 15(d) OF THE SECURITIES
        EXCHANGE  ACT  OF  1934

        For  the  quarter  ended  June  30,  2004

                                       OR

[ ]     TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE
         SECURITIES  EXCHANGE  ACT  OF  1934

For  the  transition  period  from  ________  to  __________

                        Commission File Number: 333-28249

                                 PRIME AIR, INC.
               (Exact name of Registrant as specified in charter)

             Nevada                                        Not  Applicable
             ------                                    -----------------------
State  or  other  jurisdiction  of                    I.R.S.  Employer  I.D. No.
incorporation  or  organization

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

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

Check  whether  the  Issuer  (1)  has  filed all reports required to be filed by
section  13  or  15(d) of the Exchange Act of 1934 during the past 12 months (or
for  such shorter period that the registrant was required to file such reports),
and (2) has been subject to such fling requirements for the past 90 days.
Yes [X]     No  [  ]

State the number of shares outstanding of each of the Issuer's classes of common
equity  as  of  the  latest  practicable  date:  At  June  30,  2004, there were
30,822,000  shares  of  the  Registrant's  Common  Stock  outstanding.


<PAGE>

                                     PART 1

ITEM  1.     FINANCIAL  STATEMENTS

Prime  Air,  Inc.
(A  Development  Stage  Company)

June  30,  2004



Consolidated  Balance  Sheets

Consolidated  Statements  of  Operations

Consolidated  Statements  of  Cash  Flows

Notes  to  the  Consolidated  Financial  Statements


                                        2
<PAGE>

<TABLE>
<CAPTION>
                                                   PRIME  AIR,  INC.
                                             (A Development Stage Company)
                                              CONSOLIDATED BALANCE SHEETS
                                               (Expressed in US dollars)



                                                                                             June 30,     December 31,
                                                                                               2004           2003
                                                                                            (unaudited)     (audited)
                                                                                           ------------  --------------
<S>                                                                                        <C>           <C>
ASSETS

Current Assets
  Cash                                                                                     $    53,040   $       2,691
  Prepaid expenses and deposits                                                                  4,455           5,382
  Other receivables                                                                              1,818           1,292
                                                                                           ------------  --------------

Total Current Assets                                                                            59,313           9,365

Property and Equipment (Note 3)                                                                477,982         508,158
                                                                                           ------------  --------------

Total Assets                                                                               $   537,295   $     517,523
                                                                                           ============  ==============



LIABILITIES

Current Liabilities
  Accounts payable                                                                         $    52,452   $      78,436
  Accrued liabilities                                                                            7,500          10,500
  Due to related parties (Note 5)                                                               72,989          39,248
  Notes and advances payable  (Note 4)                                                             744          22,408
                                                                                           ------------  --------------

Total Liabilities                                                                              133,685         150,592
                                                                                           ------------  --------------

Contingencies and Commitments (Notes 1 and 7)

STOCKHOLDERS' EQUITY

Preferred Stock, 5,000,000 cumulative and convertible preferred shares authorized with a
par value of $0.001, none issued                                                                     -               -

Common Stock, 150,000,000 common shares authorized with a par value of $0.001,
30,822,000 and 27,084,000 issued and outstanding, respectively                                  30,822          27,084

Additional Paid In Capital                                                                   4,598,382       4,412,694

Accumulated other comprehensive income                                                          42,778          58,586

Deficit accumulated during the development stage                                            (4,268,372)     (4,131,433)
                                                                                           ------------  --------------

Total Stockholders' Equity                                                                     403,610         366,931
                                                                                           ------------  --------------

Total Liabilities and Stockholders' Equity                                                 $   537,295   $     517,523
                                                                                           ============  ==============
</TABLE>

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


                                        3
<PAGE>

<TABLE>
<CAPTION>
                                                         PRIME AIR, INC.
                                                  (A Development Stage Company)
                                              CONSOLIDATED STATEMENTS OF OPERATIONS
                                                    (Expressed in US dollars)
                                                           (unaudited)



                                                      *                *                *              *         From inception
                                                      *                *                *              *           March 10,
                                                Three months     Three months      Six months       Six months        1989
                                                ended June 30    ended June 30    ended June 30    ended June 30    to June 30
                                                    2004             2003             2004            2003            2004
                                               ---------------  ---------------  ---------------  ------------  ----------------
<S>                                            <C>              <C>              <C>              <C>           <C>
Revenue
  Rental income                                $        1,089   $            -   $        3,222   $         -   $         5,586

Expenses
  Flight operations                            $            -   $            -   $            -   $         -   $       114,720
  Advertising and promotion                             1,099                -            1,481             -            41,942
  Amortization                                          5,554            5,347           11,286        10,289           175,819
  Consulting                                            2,714            5,000            2,714        14,000            42,448
  Consulting to related parties                        30,000           15,000           52,500        30,000         2,852,196
  General and administrative                           23,385            5,578           31,760         9,817           801,567
  Professional fees                                    39,031            1,075           51,670         2,068           356,330
                                               ---------------  ---------------  ---------------  ------------  ----------------

                                                      101,783           32,000          151,411        66,174         4,385,022
                                               ---------------  ---------------  ---------------  ------------  ----------------

Loss from Operations                                 (100,694)         (32,000)        (148,189)      (66,174)       (4,379,436)

Gain on Settlement of Debt                             11,250                -           11,250             -           111,064
                                               ---------------  ---------------  ---------------  ------------  ----------------

Net Loss for the Period                        $      (89,444)  $      (32,000)  $     (136,939)  $   (66,174)  $    (4,268,372)

Other Comprehensive Income
  Foreign currency translation adjustments            (11,287)          29,275          (15,808)       51,069            42,778
                                               ---------------  ---------------  ---------------  ------------  ----------------

Comprehensive Loss                             $     (100,731)  $       (2,725)  $     (152,747)  $   (15,105)  $    (4,225,594)
                                               ===============  ===============  ===============  ============  ================


Net Loss Per Common Share - Basic and diluted           (0.00)           (0.00)           (0.00)        (0.00)
                                               ===============  ===============  ===============  ============

Weighted Average Common Shares Outstanding         28,676,000       23,319,000       27,902,000    23,319,000
                                               ===============  ===============  ===============  ============
</TABLE>

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


                                        4
<PAGE>

<TABLE>
<CAPTION>
                                            PRIME  AIR,  INC.
                                      (A Development Stage Company)
                                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (Expressed in US dollars)
                                               (unaudited)



                                                                                Six Months    Six Months
                                                                                  Ended         Ended
                                                                                 June 30,      June 30,
                                                                                   2004          2003
                                                                               ------------  ------------
<S>                                                                            <C>           <C>

CASH FLOWS TO OPERATING ACTIVITIES

  Net loss for the period                                                      $  (136,939)  $   (66,174)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Gain on settlement of debt                                                     (11,250)            -
    Amortization                                                                    11,286        10,289

Changes in operating assets and liabilities:

    (Increase) decrease in accounts receivable                                        (577)        1,916
    Decrease in deposits and prepaid expenses                                          730             -
    Increase in due to related parties                                              58,752        30,000
    Increase in accounts payable and accrued liabilities                            65,624        22,641
                                                                               ------------  ------------

Net Cash Provided by (Used In) Operating Activities                                (12,374)       (1,328)
                                                                               ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES

  Proceeds from sale of property and equipment                                         434             -
  Purchase of property and equipment                                                  (362)            -
                                                                               ------------  ------------

Net Cash Provided by Investing Activities                                               72             -
                                                                               ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES

  Proceeds from notes and advances payable                                               -         1,379
  Proceeds from issuance of common stock                                            63,000             -
                                                                               ------------  ------------

Net Cash Provided by Financing Activities                                           63,000         1,379
                                                                               ------------  ------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                               (349)           53
                                                                               ------------  ------------

INCREASE IN CASH                                                                    50,349           104

CASH, BEGINNING OF PERIOD                                                            2,691           512
                                                                               ------------  ------------

CASH, END OF PERIOD                                                            $    53,040   $       616
                                                                               ============  ============


NON-CASH FINANCING ACTIVITIES
  Common stock issued for debt                                                 $   126,426   $         -


SUPPLEMENTAL DISCLOSURES
  Interest paid                                                                $         -   $         -
  Income taxes paid                                                            $         -   $         -
</TABLE>

    (The accompanying notes are an integral part of the consolidated financial
                                   statements)


                                        5
<PAGE>

                                 PRIME AIR, INC.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                            (Expressed in US dollars)
                                   (unaudited)

1.     Development  Stage  Company

The  Company  was incorporated under the laws of the State of Nevada on November
10, 1996, for the purpose of changing the domicile of the Company from the State
of Delaware to the State of Nevada. This change was approved by the shareholders
of  both  corporations  on  November  26,  1997 and effected through a "Plan and
Agreement  of  Merger"  with  the  surviving  corporation  being Prime Air, Inc.
(Nevada).  The  articles  of  merger  were  filed  with  the  appropriate  State
authorities on December 15, 1997, which became the effective date of the merger.

The  Delaware  Corporation was incorporated on April 4, 1995, for the purpose of
changing  the  domicile  of  the  Company from the State of Utah to the State of
Delaware by acquiring all of the assets and liabilities of the Utah Corporation,
and  issuing  shares of the Delaware Corporation to the shareholders of the Utah
Corporation  on  a  one  for  one  basis.  The  Utah Corporation was voluntarily
dissolved  by  the  State  of  Utah  on  May  18,  1995.

The  Utah  Corporation was incorporated on August 30, 1993 as Astro Enterprises,
Inc.  ("Astro").  On  June  28,  1994,  pursuant  to  appropriate  shareholder
agreements,  the  Utah  Corporation acquired all outstanding shares of Prime Air
(BC)  Inc.,  a  private  Canadian  corporation  ("the  Canadian Corporation") in
exchange  for  shares  of  its  capital  stock  on a .787796 to 1 basis, thereby
providing  the  shareholders  of  the  Canadian  Corporation  with  90%  of  the
outstanding  common  shares of Astro.  The acquisition was a capital transaction
in substance and therefore was accounted for as a recapitalization of Astro. The
Canadian  Corporation was incorporated on March 10, 1989. Astro then changed its
name  to  Prime  Air,  Inc.,  which  subsequently was acquired as a wholly owned
subsidiary  by  the  Delaware  Corporation,  as  described  above.  Prior to the
acquisition,  Astro  had  no  principal  operations  and had nominal net assets.

The  Company is a development stage company as defined by Statement of Financial
Accounting  Standards ("SFAS") No. 7. In a development stage company, management
devotes  most  of  its activities in developing a market for its products and/or
services.  The Company is presently in its developmental stage and currently has
minimal  sources  of  revenue  to  provide incoming cash flows to sustain future
operations.  The  Company's  present  activities  relate to the construction and
ultimate  exclusive  operation  of  an  international  passenger  and  cargo air
terminal  facility  in  the  Village  of  Pemberton,  British  Columbia  and the
operation  of  scheduled flight services between that facility and certain major
centers  in  Canada  and  the United States in conjunction with Voyageur Airways
Limited.  Terminal  building  construction  was  substantially  completed in May
1996.

The  future successful operation of the Company is dependent upon its ability to
obtain  the  financing  required  to complete the terminal facility and commence
operations on an economically viable basis. The ability of the Company to emerge
from  the  development  stage  with  respect  to  any planned principal business
activity  is  dependent  upon  its successful efforts to raise additional equity
financing  and/or  attain profitable operations. Management believes the Company
will  be  able to generate sufficient funds to meet its obligations for a period
of  at  least  twelve  months from the balance sheet date. There is no guarantee
that  the  Company will be able to raise any equity financing or sell any of its
services at a profit. There is substantial doubt regarding the Company's ability
to  continue  as  a  going  concern.


2.     Summary  of  Significant  Accounting  Policies

a)     Basis  of  Presentation

These  consolidated financial statements include the accounts of the Company and
its  wholly-owned  operating  subsidiary,  Prime  Air  Inc.  (the  Canadian
corporation).  All  intercompany transactions and balances have been eliminated.

b)     Year  End

The  Company's  fiscal  year  end  is  December  31.

c)     Use  of  Estimates

The  preparation  of  consolidated  financial  statements  in  conformity  with
accounting  principles  generally  accepted  in  the  United  States  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 periods. Actual results could differ from those estimates.

d)     Cash  and  Cash  Equivalents

The  Company  considers  all  highly  liquid  instruments with maturity of three
months  or  less  at  the  time  of  issuance  to  be  cash  equivalents.


                                        6
<PAGE>

                                 PRIME AIR, INC.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                            (Expressed in US dollars)
                                   (unaudited)

2.     Summary  of  Significant  Accounting  Policies  (Continued)

e)     Other  Comprehensive  Income  (Loss)

Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  130,  "Reporting
Comprehensive  Income,"  establishes  standards for the reporting and display of
comprehensive  loss  and  its components in the financial statements. As at June
30,  2004  and 2003, the Company's only component of comprehensive income (loss)
were  foreign  currency  translation  adjustments.

f)     Property  and  Equipment

Property  and  equipment  is  carried  at  cost  less  accumulated amortization.
Amortization is computed on the following methods over the estimated useful life
of  the  asset  at  the  following  annual  rates:

Air  terminal  -  Straight-line over 30-year term of land and airport facilities
lease

Furniture  and  equipment  -  20%  Declining-balance

Computer  equipment  -  30%  Declining-balance

g)     Long-Lived  Assets

In  accordance  with SFAS No. 144, "Accounting for the Impairment or Disposal of
Long  Lived  Assets",  the  carrying value of long-lived assets is reviewed on a
regular  basis  for  the  existence  of  facts or circumstances that may suggest
impairment.  The  Company  recognizes  impairment  when  the sum of the expected
undiscounted  future  cash  flows is less than the carrying amount of the asset.
Impairment  losses, if any, are measured as the excess of the carrying amount of
the  asset  over  its  estimated  fair  value.

h)     Foreign  Currency  Translation

The  functional  currency  of  the Company's Canadian subsidiary is the Canadian
dollar.  The  financial  statements  of this subsidiary are translated to United
States  dollars  in  accordance  with SFAS No. 52 "Foreign Currency Translation"
using period-end rates of exchange for assets and liabilities, and average rates
of  exchange  for the year for revenues and expenses. Translation gains (losses)
are  recorded in accumulated other comprehensive income (loss) as a component of
stockholders' equity. Foreign currency transaction gains and losses are included
in  current  operations.

i)     Revenue  Recognition

The  Company  recognizes  revenue  in  accordance  with  Securities and Exchange
Commission  Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial
Statements". Revenue is recognized only when the price is fixed or determinable,
persuasive  evidence  of  an  arrangement  exists, the service is performed, and
collectibility  is  reasonably  assured.  The  Company  receives income from the
rental  of  the  air  terminal  located  in  Pemberton,  BC,  Canada.

j)     Basic  and  Diluted  Net  Income  (Loss)  Per  Share

The  Company  computes  net  income (loss) per share in accordance with SFAS No.
128,  "Earnings per Share" which requires presentation of both basic and diluted
earnings  per  share  (EPS)  on  the  face of the income statement. Basic EPS is
computed  by  dividing  net  income  (loss)  available  to  common  shareholders
(numerator)  by  the weighted average number of shares outstanding (denominator)
during  the  period.  Diluted  EPS gives effect to all dilutive potential common
shares outstanding during the period including stock options, using the treasury
stock method, and convertible preferred stock, using the if-converted method. In
computing  Diluted  EPS,  the  average  stock  price  for  the period is used in
determining  the  number  of shares assumed to be purchased from the exercise of
stock options or warrants. Diluted EPS excludes all dilutive potential shares if
their  effect  is  anti  dilutive.

k)     Stock-Based  Compensation

The  Company  records  stock-based compensation in accordance with SFAS No. 123,
"Accounting  for  Stock-Based  Compensation". Common stock issued by the Company
for  services  is  recognized  as  compensation expense based on the fair market
value  of  the  stock  award  or  fair  market  value  of the goods and services
received,  whichever is more reliably measurable. The Company does not currently
have  a  stock  option  plan.


                                        7
<PAGE>

                                 PRIME AIR, INC.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                            (Expressed in US dollars)
                                   (unaudited)

2.     Summary  of  Significant  Accounting  Policies  (Continued)

l)     Financial  Instruments

The  fair  values  of  cash, prepaid expenses, other receivables, notes payable,
advances  payable,  accounts  payable  and accrued liabilities were estimated to
approximate their carrying values due to the immediate or short-term maturity of
these  financial  instruments.  The  Company's  operations  are  in  Canada  and
virtually  all  of  its  assets  and  liabilities are giving rise to significant
exposure  to  market risks from changes in foreign currency rates. The financial
risk  is  the  risk  to the Company's operations that arise from fluctuations in
foreign  exchange  rates and the degree of volatility of these rates. Currently,
the  Company  does  not  use  derivative  instruments  to reduce its exposure to
foreign  currency  risk.

m)     Income  Taxes

The  Company utilizes the liability method of accounting for income taxes as set
forth  in  SFAS  No.  109,  "Accounting  for  Income Taxes". Under the liability
method, deferred taxes are determined based on the temporary differences between
the  financial  statement  and tax bases of assets and liabilities using enacted
tax  rates.  A  valuation  allowance is recorded when it is more likely than not
that  some  of  the  deferred  tax  assets  will  not  be  realized.

n)     Recent  Accounting  Pronouncements

In December 2003, the Securities and Exchange Commission issued Staff Accounting
Bulletin  No.  104,  "Revenue  Recognition" (SAB 104), which supersedes SAB 101,
"Revenue Recognition in Financial Statements". The primary purpose of SAB 104 is
to  rescind accounting guidance contained in SAB 101 related to multiple element
revenue  arrangements,  which was superseded as a result of the issuance of EITF
00-21,  "Accounting  for Revenue Arrangements with Multiple Deliverables". While
the  wording  of  SAB 104 has changed to reflect the issuance of EITF 00-21, the
revenue  recognition  principles  of  SAB  101  remain  largely unchanged by the
issuance  of  SAB 104. The adoption of SAB 104 did not have a material impact on
the  Company's  financial  statements.

In  January  2003  the  FASB  issued  FIN 46, Consolidation of Variable Interest
Entities  (FIN  46),  which  was  amended  in  December 2003. FIN 46 requires an
investor  with  a  majority of the variable interests (primary beneficiary) in a
variable  interest  entity  ("VIE")  to consolidate the entity and also requires
majority  and  significant  variable  interest  investors  to  provide  certain
disclosures. A VIE is an entity in which the voting equity investors do not have
a  controlling  financial  interest  or  the  equity  investment  at  risk  is
insufficient  to  finance  the  entity's activities without receiving additional
subordinated  financial  support  from  the  other  parties.  Development  stage
entities that have sufficient equity invested to finance the activities they are
currently engaged in and entities that are businesses, as defined in FIN 46, are
not  considered  VIE's.  The provisions of FIN 46 were effective immediately for
all arrangements entered into with new VIE's created after January 31, 2003. For
arrangements  entered  into  with  VIE's  created  before  January 31, 2003, the
provisions  of  FIN  46  are  effective at the end of the first reporting period
ending  after  March  15,  2004.  The  Company  does  not  have  VIE's.

In  May  2003,  the  FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments  with  Characteristics of both Liabilities and Equity". SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments  with  characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). The requirements of SFAS No.
150  apply  to issuers' classification and measurement of freestanding financial
instruments,  including  those  that  comprise  more  than one option or forward
contract.  SFAS  No.  150  does  not  apply  to  features that are embedded in a
financial  instrument  that is not a derivative in its entirety. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and  otherwise  is  effective  at  the  beginning  of  the  first interim period
beginning  after  June  15,  2003,  except  for  mandatory  redeemable financial
instruments  of  non-public  entities.  It is to be implemented by reporting the
cumulative  effect  of  a  change  in  an  accounting  principle  for  financial
instruments  created before the issuance date of SFAS No. 150 and still existing
at  the  beginning  of  the  interim  period  of  adoption.  Restatement  is not
permitted.  The  adoption of this standard did not have a material effect on the
Company's  results  of  operations  or  financial  position.

o)     Reclassifications

Certain  amounts  and/or  disclosures  in  the prior year consolidated financial
statements  have  been  reclassified  or  disclosure revised to conform with the
current  year  presentation.


                                        8
<PAGE>

                                 PRIME AIR, INC.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                            (Expressed in US dollars)
                                   (unaudited)

2.     Summary  of  Significant  Accounting  Policies  (Continued)

p)     Interim  Financial  Statements

These  interim  unaudited  financial  statements  have been prepared on the same
basis  as  the  annual  financial  statements  and in the opinion of management,
reflect  all  adjustments,  which  include  only  normal  recurring adjustments,
necessary  to  present  fairly  the  Company's  financial  position,  results of
operations  and  cash flows for the periods shown. The results of operations for
such  periods  are not necessarily indicative of the results expected for a full
year  or  for  any  future  period.

3.     Property  and  Equipment
<TABLE>
<CAPTION>
                                                              December 31,
                                    June 30, 2004                 2003
                         ----------------------------------   ------------
                            *       Accumulated   Net Book      Net Book
                           Cost    Amortization     Value         Value
                         --------  -------------  ---------   ------------
<S>                      <C>       <C>            <C>         <C>
Air terminal             $662,005  $     185,435  $ 476,570   $ 506,489
Computer equipment          1,107            495        612         747
Furniture and equipment     5,344          4,544        800         922

                         $668,456  $     190,474  $ 477,982   $ 508,158
</TABLE>

4.     Notes  and  Advances  Payable

The  notes  and  advances  payable  are  unsecured, non-interest bearing and are
without  specific  terms  of  repayment.

5.     Related  Party  Transactions

a)     Included  in due to related parties is an amount of $19,500 (December 31,
2003  - $12,846) which has been advanced to the Company by a shareholders and/or
a corporation controlled by that shareholder.  This shareholder controls 100% of
the  related  corporation.  During  the  six  months  ended  June 30, 2004, cash
advances  of  $19,500 were made.  This amount is unsecured, non-interest bearing
and  has  no  specific  terms  of  repayment.

b)     Included  in due to related parties is an amount of $35,050 (December 31,
2003 - $26,402) which represents consulting fees and expenses incurred on behalf
of  the  Company  by  directors  and  officers.  These  amounts  are  unsecured,
non-interest  bearing  and  have  no  specific  terms  of  repayment.

6.     Common  Shares

a)     During  the  three  month  period ended June 30, 2004, the Company issued
1,220,000  shares  of  common  stock  at  $0.05  per  share for cash proceeds of
$61,000.

b)     During  the  three  month  period ended June 30, 2004, the Company issued
20,000  shares  of  common stock at $0.10 per share for cash proceeds of $2,000.

c)     During  the  three  month  period ended June 30, 2004, the Company issued
2,408,000  shares  of  common  stock  at  $0.05 per share for debt settlement of
$131,179  which  resulted  in  debt  settlement  gain  of  $11,250.

d)     During  the  three  month period ended March 31, 2004, the Company issued
50,000  shares of common stock at $0.05 per share for debt settlement of $2,497,
and  issued 40,000 shares of common stock at $0.10 per share for debt settlement
of  $4,000.

7.     Commitments

The  Company's  wholly  owned Canadian subsidiary ("subsidiary") entered into an
Airport Lease and Operating Agreement ("the "Agreement") with The Corporation of
The  Village  of Pemberton in British Columbia in 1993 whereby it was granted an
exclusive and irrevocable lease over the lands and airport facilities associated
with the Pemberton Airport. The initial lease term commenced on October 29, 1993
and  ended  on  October  31,  1996.  The  subsidiary  exercised  its  option for
extensions  of  the  Agreement,  which  currently  expires  in 2004, however the
Company  has two ten-year options for extension available, which require written
notice within six months prior to the expiry of the Extension Term.  The Company
plans to file written notice with the Village of Pemberton to exercise the first
10  year  option  extension.


                                        9
<PAGE>

                                 PRIME AIR, INC.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                            (Expressed in US dollars)
                                   (unaudited)


7.     Commitments  (continued)

Rent  payable  under  the  Agreement  is based on 5% of gross receipts per annum
derived  from  the  operation  of  the  terminal  facilities,  excluding amounts
received  in  connection  with  the  sale  of airline tickets and other forms of
transportation.  The  Company  paid  rent  expense  of  $165  for the year ended
December  31,  2003  (2002: NIL), which represented 5% of gross rental receipts.
The  lease  commitment amounts for 2003 through 2007 cannot be quantified as the
amount  of  gross  receipts  for  those  years  cannot  be determined and active
operation  of  the  terminal facilities has not yet commenced.  The Company paid
property taxes imposed by municipal authorities amounting to $9,383 for the year
ended December 31, 2003 (2002: $9,859). The Village of Pemberton in the event of
a material default or bankruptcy by the Company may terminate the Agreement. The
terminal facilities shall become the property of the Village of Pemberton at the
expiration  of  the  Agreement.

8.     Subsequent  Events

a)     The  Company  issued  429,200  shares  of  common stock to settle debt of
$36,460,  resulting  in  a  gain  on  settlement  of  debt  of  $15,000.

b)     The  Company issued 60,000 shares of common stock for consulting services
to  be rendered for the three month period ended October 2004, and issued 60,000
shares  of  common  stock for accounting services to be rendered over a one year
term.

c)     The  Company  issued  350,000  shares  of  common  stock to directors for
services  to  be  rendered  for  the  three  month  period ended September 2004.


                                       10
<PAGE>

ITEM  2.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION

General

Management's  Discussion  and  Analysis  of  Financial  Condition and Results of
--------------------------------------------------------------------------------
Operation
---------

Some  of  the  information presented in this report constitutes "forward-looking
statements."  Although the Company believes that its expectations are based upon
reasonable  assumptions  within  the  bounds  of  its  knowledge of its proposed
business  and  operations,  it  is  possible  that  actual  results  may  differ
materially  from  its  expectations.  Factors that could cause actual results to
differ  from  expectations  include  the  inability  of the Company to raise the
additional capital necessary to commence its principal operations or the failure
to  consummate  a  definitive  agreement  with  Voyageur  Airways  Limited.

The  Company is the parent of a wholly owned subsidiary, Prime Air, Inc. ("Prime
Air  (BC)"), a company originally incorporated under the laws of the Province of
British  Columbia,  Canada,  on  March  10,  1989, under the name "High Mountain
Airlines  Inc."  for  the  purpose  of  establishing  air  service  to serve the
Whistler,  British  Columbia,  Canada,  area.  Prime Air (BC) has entered into a
lease  and  operating agreement with the Village of Pemberton, British Columbia,
Canada,  to plan, develop, construct, manage, and operate a terminal facility at
the  Pemberton  Airport.

To  the present date, Prime Air (BC) has constructed the basic terminal building
and  proposes  to facilitate regular, scheduled air service to Pemberton Airport
to  serve  the nearby resort community of Whistler.  However, sufficient funding
has  not  been  secured  to  provide  for  costs  for  completion  of  certain
infrastructure  items  including  landing lights, airside and groundside related
equipment,  advance  marketing  and  working  capital  requirements.

The  results  of  the  operations  for  the  quarter  ended  June  30, 2004 show
substantially  greater  expenses  incurred  than the same period of the previous
year.  Because the Company is in its "development stage," these figures will not
be  representative  of  the  Company's  future  operations.

Results  of  Operations

Six  months  ended  June  30,  2004  compared  to  June  30,  2003.

During the six months ended June 30, 2004, the Company earned revenues of $3,222
from  the  rental of retail space at its terminal facility.  No similar revenues
were  earned  during  the  same  period  of  the  prior  year.

Total  expenses for the six months ended June 30, 2004 were $151,411 compared to
$66,174  for  the  six  months  ended  for  June  30,  2003.

During  the  six  months  ended June 30, 2004, the Company incurred professional
expenses,  consulting  fees to related parties, and general expenses of $51,670,
$52,500 and $31,760, respectively, compared to professional expenses, consulting
fees  to  related  parties,  and general expenses of $2,068, $30,000 and $9,817,
respectively for the same period of the prior year.  During the six months ended
June 30, 2004, professional expenses increased primarily in accounting and legal
fees  in  an  effort  to  bring  the Company in compliance with its SEC filings.
Consulting  fees  to  related parties increased due to the increased activity of
two  directors who are providing consulting services to the Company, and general
and  administrative  expenses  increased  due  to  the Company's anticipation of
operations  for  chartered  flights.


                                       11
<PAGE>

Liquidity  and  Capital  Resources

As  of  June  30,  2004,  the  Company's  negative working capital was ($74,372)
compared  to  a  negative working capital of ($141,227) as of December 31, 2003.

The  Company  currently  has  limited revenues and will not generate substantial
revenue  until  it begins its operation at Pemberton.  Historically, the Company
has funded its operations through loans from related parties and issuance of its
common  stock.  No  assurance  can  be  given  that  the Company will be able to
continue  to  receive  such  loans  for  its  operations.

ITEM  3.     CONTROLS  AND  PROCEDURES

We  carried  out an evaluation, under the supervision and with the participation
of  our management, including our Executive Officer and Chief Financial Officer,
of  the effectiveness of the design and operation of our disclosure controls and
procedures  (as  defined  by  Exchange  Act Rule 13a-15(e)) as of the end of our
second  fiscal quarter pursuant to Exchange Act Rule 13a-15(b).  Based upon that
evaluation,  our  Chief  Executive Officer and Chief Financial Officer concluded
that  our  disclosure  controls  and  procedures  are effective in ensuring that
information  required  to  be  disclosed by us in reports that we file or submit
under  the  Exchange  Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.

There  have  been  no  changes  in our internal control over financial reporting
identified  in connection with our evaluation as of the end of the second fiscal
quarter  that occurred during such quarter that have materially affected, or are
reasonably  likely  to  materially  affect,  our internal control over financial
reporting.

                                     PART II

ITEM  1.     LEGAL  PROCEEDINGS

Neither  the  Company  nor  any  of  its  properties  is  a  party  to any legal
proceedings.

ITEM  2.     CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

During  the  three  months  ended  June 30, 2004, the Company sold the following
unregistered  shares.

1.     On  May 4, 2004, the Company issued 100,000 shares of its common stock at
$.05  per  share  to one subscriber.  The issuance of the shares was exempt from
registration  pursuant  to  Section  4(2).

2.     On  May  4, 2004, the Company issued 20,000 shares of its common stock at
$.10  per  share  to one subscriber.  The issuance of the shares was exempt from
registration  pursuant  to  Section  4(2).

3.     On  May  4,  2004, the Company issued 2,005,000 shares of common stock at
$0.05  per  share  to  four  persons  in  settlement  of $99,851 in debt and for
services  rendered.  The  issuances  of the shares were exempt from registration
pursuant  to  Regulation  S  and  Section  4(2).


                                       12
<PAGE>

4.     On May 27, 2004, the Company issued 120,000 shares of its common stock at
$.05  per  share  to one subscriber.  The issuance of the shares was exempt from
registration  pursuant  to  Section  4(2).

5.     On  May  31  2004,  the  Company issued 178,000 shares of common stock at
$0.05  per share to three persons in settlement of $8,829 for services rendered.
The issuances of the shares were exempt from registration pursuant to Regulation
S.

6.     On  June  16  2004,  the Company issued 225,000 shares of common stock at
$0.05  per  share  for  $11,250  in consulting services to three directors.  The
issuances  were  exempt  from  registration pursuant to Regulation S and Section
4(2).

7.     On June 28, 2004, the Company issued 1,000,000 shares of its common stock
at  $.05 per share to one subscriber.  The issuance was exempt from registration
pursuant  to  Regulation  S.

ITEM  3.     DEFAULTS  UPON  SENIOR  SECURITIES

None

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITIES  HOLDERS

No matters were submitted to a vote of the shareholders during the quarter ended
June  30,  2004.

ITEM  5.     OTHER  INFORMATION

None

ITEM  6.     EXHIBITS  AND  REPORTS  ON  FORM  8-K

(A)     Exhibits

Exhibit  No.
------------

31.1 Certification by the Principal Executive Officer Pursuant to Section 302 of
     the  Sarbanes-Oxley  Act

31.2 Certification  by  the Principal Accounting Officer Pursuant to Section 302
     of  the  Sarbanes-Oxley  Act

32   Certification by the Principal Executive and Financial Officers Pursuant to
     Section  906  of  the  Sarbanes-Oxley  Act

(B)     Reports  on  Form  8-K.

1.   Form  8-K  filed  June  23,  2004  announcing  Dr.  Albert  Bruno  as  CEO.

2.   Form  8-K  filed July 15, 2004 announcing Jan Gossing as a director and CFO


                                       13
<PAGE>

                                    SIGNATURE

Pursuant  to  the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Form 10-QSB to be signed on its
behalf  by  the  undersigned, thereunto duly authorized, in the City of Seattle,
Washington,  on  the  16th  day  of  August,  2004.

                               Prime  Air,  Inc.

                               By:  /s/ Dr.  Albert  Bruno
                                    ----------------------------
                                    Dr.  Albert  Bruno
                                    Chief  Executive  Officer
                                    (Principal  Executive  Officer)


                               By:  /s/ Jan Gossing
                                    ----------------------------
                                    Jan Gossing
                                    Chief Financial Officer
                                    (Principal Accountant and Financial Officer)


                                       14
<PAGE>