UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB/A
                                 AMENDMENT NO. 1

                                   (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, 2002

                                       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                                      Applied  For
----------------------------------               ---------------------------
State  or  other  jurisdiction  of               I.R.S.  Employer  I.D.  No.
incorporation  or  organization

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

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

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
          Title of each class Name of each exchange on which registered

                                    None N/A

        SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE

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. (1)
Yes  [X  ]  No  [  ]  (2)  Yes  [X]  No  [  ]

Check  if  disclosure of delinquent filers in response to Item 405 of Regulation
S-B  is  not contained in this form, and no disclosure will be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-QSB or any amendment to
this  Form  10-QSB.  [N/A]


<PAGE>

                                  FORM 10-QSB/A

                                 AMENDMENT NO. 1

                                EXPLANATORY NOTE

This  Amendment  No. 1 to the Registrant's Quarterly Report on Form 10-QSB/A for
the  quarterly  period ended June 30, 2002 is being filed to include information
pursuant  to recommendations for supplemental information and comments requested
by  the  United  States  Securities And Exchange Commission dated June 30, 2002.

In  general  terms, the United States Securities And Exchange Commission request
for  supplemental  information  or  clarification with respect to Form 10-KSB to
December  31,  2001  and  Form  10-QSB  for the quarter ended March 31, 2002.  A
response  was  completed  and filed responding to all items, this "Amendment" to
the  Form  10-QSB  for  the  June 30, 2002 quarter end responds to the financial
treatment  of  most  notably,  three  items  as  follows:

     i)   (item  41) "Restate the periods prior to May 19, 1998 to reflect the 2
          for  1  stock  split. Also, restate the information in Note 6. Capital
          Stock  in  this  regard."

     ii)  (item  31) "We note (in the Statement of Stockholders' Equity and Note
          7)  that  Common  shares  issued  as consideration for the services of
          related parties have been recorded at nominal amounts. It appears that
          some  of  the  shares may have been issued in a later period than when
          the  services  were  performed.  These  services should be recorded at
          at their  fair  value in the period when the services are rendered and
          --------------------- the  obligation accrued. The Common shares later
          issued  in settlement of these obligations should be recorded based on
          that  fair  value."

     iii) (item  34) "Please provide a column showing information for the period
          from inception through the December 31, 2001 (June 30, 2002). Refer to
          paragraph  11(b)  of  SFAS  7.  Label  this  column  as  "Unaudited".

                                      (iii)
<PAGE>

TABLE  OF  CONTENTS
-------------------
<TABLE>
<CAPTION>

                                PRIME AIR, INC.
                               INDEX
                                                                             PAGE NO.
<S>               <C>                                                        <C>
                  AMENDMENT                                                     II
ITEM 1            Description                                                    4
                  General                                                        4
ITEM 2            Description of Property                                        6
ITEM 3            Legal Proceedings                                              7
ITEM 4            Submission of Matters to a Vote of Security Holders            7

                                    PART II
ITEM 5            Market for Common Equity and Related Stockholder Matters       7
ITEM 6            Management's Discussion and Analysis or Plan of Operation      8
ITEM 7            Financial Statements                                       11-23

                                    PART III
ITEM 8            Exhibits and Reports on Form 8-K                              24
                  Signatures                                                    25
</TABLE>

FORWARD-LOOKING  STATEMENTS

Some  of  the  information  presented  in or incorporated by reference into 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.


                                        3
<PAGE>

                                     PART I

ITEM  1.     DESCRIPTION  OF  BUSINESS

GENERAL

The  following  discussion  should  be  read  in  conjunction with the unaudited
financial  statements  and  notes  thereto  included  in  this Amended Quarterly
Report,  and with the audited financial statements and notes thereto included in
the  Annual  Report  on  form  10-KSB/A for the year ended December 31, 2001 and
10-KSB  for  the  year  ended December 31, 2002 as filed with the Securities and
Exchange  Commission  for  the  fiscal  years  as  stated.  above.

Prime  Air,  Inc.  (the  "Company")  was  incorporated in the State of Nevada on
November  10, 1996, for the purpose of changing the domicile of the Company from
the  State  of  Delaware. The predecessor to the Company was incorporated in the
State  of  Delaware  on  April  4, 1995. The change of domicile was completed on
December  15,  1997.

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."  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.
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.

Prior  to  incorporation  in  the  State of Delaware, the Company was originally
incorporated  pursuant to the laws of the State of Utah on August 30,1993, under
the  name  "Astro  Enterprises,  Inc."  (referred  to  hereafter  as  "the  Utah
Corporation").  The  Utah  corporation  changed its name to "Prime Air, Inc." on
June  28,  1994.  Such  further  description  of  the  Utah  Corporation and all
relevant  information  is  included  in the Annual Report on form 10-K/A for the
year  ended  December 31, 2001 and 10-K for the year ended December 31, 2002 and
all  other  previous material filed with the Securities and Exchange Commission.

The  Company  entered  into  a  "Memorandum  of  Proposed Agreement" with 519222
Ontario  Limited,  a  corporate entity associated with Voyageur Airways Limited,
which,  subject  to the final approval of Voyageur and the Company, will allow a
merger  which  combines  25% of the assets of Voyageur with 70% of the assets of
the  Company.  That  engagement  was not completed.   Although no formal written
Agreement is in place with respect to obligations and responsibilities, Voyageur
remains  materially  supportive  and  continues to work with the Company for the
purpose  of  establishing  an  air  service.

AIRPORT  LEASE  AND  OPERATING  AGREEMENT

On October 29, 1993, Prime Air (BC) entered into a Lease and Operating Agreement
(the  "Airport  Agreement")  with  the  Corporation of the Village of Pemberton,
British  Columbia,  Canada  (hereinafter  the  "Village of Pemberton"), in which
Prime  Air  (BC)  agreed  to  undertake the planning, development, construction,
management,  and  operation  of a terminal facility at the Pemberton Airport. In
return  the  Village  of  Pemberton granted to Prime Air (BC) an exclusive lease
involving  certain  lands located at the Pemberton Airport (registered under the
Land  Title  Act, KN056037 under Parcel Identification Number 002-606-801, being
that  part  of  District  Lot 4769, Lillooet District, Except Plan KAP 44479) to


                                        4
<PAGE>

enable  Prime  Air  (BC)  to  undertake the planning, development, construction,
management, and operation of a terminal facility.  Such further information with
respect  to  the  Airport Lease and Operating Agreement is contained in material
previously  filed  and  as  stated  above.

Subsequent to the reporting date of this document, a Memorandum of Understanding
has  been completed between Prime Air, Inc., and Galvin Flying Service, Inc., of
Seattle  Washington.  A  news  release  dated  September  30,  2003 was prepared
announcing the foundation of this relationship.  Further, two commercial tenants
have  entered into month to month agreements with Prime Air, both tenants are in
aviation  related businesses.  Management continues to meet with individuals and
businesses  with  respect to developing the prospect of charter or scheduled air
service  operations.  No commitments, to the date of this Amended reporting have
been  received  with  respect  to  this  item.

The  Pemberton  Airport  is  approximately  20 miles north of Whistler Resort on
Highway  99.  Whistler  Resort  is  a ski resort located at the base of Whistler
Mountain  and  Blackcomb  Mountain  approximately  75  miles north of Vancouver,
British Columbia, Canada. The resort has approximately 8,000 permanent residents
and  attracts  approximately  3,000,000 visitors annually. Currently only ground
transportation  is  available  to  the  resort,  except for private flights into
Pemberton  Airport. The nearest airport facility to Whistler Resort is Pemberton
Airport.  There  is  presently  no  regular  air service into Pemberton Airport.

AIR  SERVICE

Prime  Air  (BC)  initially intends to establish scheduled and charter passenger
and  cargo  air  service  between  Vancouver International Airport and Pemberton
Airport. Thereafter, Prime Air (BC) will seek to establish such services between
Pemberton  Airport  and other Canadian and United States destinations. Prime Air
(BC)  has  entered  into  a  Memorandum  of Agreement dated January 5, 1995 (the
"Voyageur  Agreement"),  with  Voyageur  Airways Limited, an Ontario corporation
("Voyageur")  to  provide  the  initial  service  by  supplying,  operating, and
maintaining  DeHavilland  Dash-7  aircraft  to  provide  scheduled  and  charter
passenger  and  cargo  service,  from  Vancouver  International  Airport,  and
thereafter  from  other  Canadian  and United States locations, to the Pemberton
Airport.  The  Voyager  Agreement  provides that Prime Air (BC) will operate the
terminal  facility  at Pemberton Airport and the scheduled and charter passenger
and  cargo  service, and will market the air services. Voyageur will provide the
certifications,  authorizations, expertise, facilities, personnel, and resources
necessary  to  operate, maintain and service the aircraft. The parties intend to
negotiate  and enter into a definitive agreement prior to commencing operations.

GOVERNMENT  REGULATION  AND  LICENSING

Any  corporation  conducting  commercial  air  service operations in Canada must
possess  a  valid  Operating  Certificate  and  other  licenses,  permits,
accreditations  and  certificates  that are issued and administered by Transport


                                        5
<PAGE>

Canada.  All  such  authorities  and  approvals  shall  be the responsibility of
Voyageur  Airways  Limited

MARKETING

Prime Air (BC) intends to commence a marketing program and hire market personnel
as  soon  as  sufficient  funds  are  available.

COMPETITION

Prime  Air  (BC)  will compete with other charter and airline companies based in
the  Vancouver  and  Seattle  area which currently service customers whose final
destination  is Whistler Resort. To a limited degree Prime Air (BC) will compete
with buses chartered or owned by tour operators. Most of these entities are more
established  companies  having much greater financial resources, experience, and
personnel  resources  than  Prime  Air  (BC).

EMPLOYEES

The  Company,  including  Prime  Air  BC,  had one employee as of June 30, 2002,
consisting  of  Mr.  Haug,  who  was  employed  part-time.

ITEM  2.     DESCRIPTION  OF  PROPERTY

     The  Pemberton  Airport  facility,  and  supporting Lease agreement is more
particularly  described  as  follows:

 "Terminal  Lease"  means  the  exclusive  and irrevocable lease of the Terminal
Lands  granted  by  Pemberton  to  Prime  Air  pursuant  to  the  agreement;

 "Terminal  Facilities"  means  the  airline  terminal  building and  associated
facilities  constructed  on  the  Terminal  Lands  by  Prime  Air;

 "Terminal  Lands"  means  a  portion  of the Lands which portion shall be large
enough  to  locate  the  Terminal Facilities thereon and shall be configured and
located  as  necessary  to  accommodate  the  Terminal  Facilities;

 "Airline Business" means the scheduled and chartered commuter and cargo airline
service  which  Prime Air is engaged in planning, implementing and operating and
which  it  currently  proposes will provide and chartered airline service to the
Airport  from  Seattle,       Washington,  Portland,  Oregon, Vancouver, British
Columbia  and  other  locations;

 "Airport"  means  the Pemberton Airport located in Pemberton, British  Columbia
as  more  particularly  shown  in  the  survey  documents provided in the Lease;

 "Airport  Facilities" means, collectively, the Runway, Parking Apron, MLS, NDB,
('ME  and all other buildings, structures, improvements and equipment located on
the Lands or owned by Pemberton and used in connection with the operation of the
Airport  or  the  use  thereof  by  any  of  aircraft.


                                        6
<PAGE>

     Additionally,  the  Company  maintains  its  principal executive offices at
facilities  shared  with  the  business  of  the President of the Company, which
facilities  are  furnished  at  no  cost  to  the  Company.

ITEM  3.     LEGAL  PROCEEDINGS

Neither the Company nor any of its properties is a party to any material pending
legal  proceedings  or  government  actions,  including any material bankruptcy,
receivership, or similar proceedings. Management of the Company does not believe
that  there  are  any  material  proceedings  to  which any director, officer or
affiliate of the Company, or its subsidiary, any owner of record of beneficially
of  more  than 5 percent of the Common Stock of the Company, or any associate of
any  such  director,  officer,  affiliate  of the Company, or its subsidiary, or
security  holder  is  a party adverse to the Company, or it subsidiary, or has a
material  interest  adverse  to  the  Company,  or  it  subsidiary.

Reference  to legal proceedings in 1994 and prior years is described in material
previously  filed  and  as  stated  above.

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,  2002.

     PART  I  I

ITEM  5.     MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS

State  the  aggregate market value of the voting stock held by non-affiliates of
the  Registrant  computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the  past  60  days:  The  aggregate  market  value  of the voting stock held by
non-affiliates  of  the  Registrant  (22,898,666  shares)  computed by using the
closing  sale  price  on April 9, 2002, was $1,839,892, however, trading through
market  makers  and  through  other  electronic  means  has  ceased  pending
reinstatement of approval to market maker representation, therefore no value can
be  stated  as  it  would apply to normal trading activities until reinstatement
occurs.

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,  2002, there were
22,898,666  shares  of  the  Registrant's  Common  Stock  outstanding.


                                        7
<PAGE>

ITEM  6.     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 or incorporated by reference into 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.  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.  Management  estimates  the
requirement  for  a  commitment  of  approximately  $3,000,000  to  provide  a
satisfactory  start  up  of  the  British  Columbia  operation.

The  results of the operations for the quarter ended June 30, 2002 show costs at
approximately  35%  less  than  the  same  period of the previous year, however,
because  of  the "development stage" nature of the company, those figures may be
representative  of  the continuing nature of the Company on a current basis, but
not  representative  of  the company if it is successful at securing funding for
the  Whistler,  British  Columbia  component  of  its  intended  operation.


                                        8
<PAGE>

QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK
----------------------------------------------------------------

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  future successful operation of the Company is dependent upon its ability to
obtain  the  financing required to complete and operate the terminal facility in
Pemberton, British Columbia and to commence air service operations to Pemberton,
British  Columbia  on  an  economically  viable  basis.

The  financial statements of the Company have been prepared on a "going concern"
basis  which  assumes  the  Company  will  be able to realize its assets, obtain
financing  as  required  and  discharge  its  liabilities and commitments in the
normal  course  of business.  Other than a commitment from management to provide
funds  for  minimal operational requirements, there is no present commitment for
funds  adequate to provide for operational items necessary to complete the start
up  of  air  service  activities.

THE PAST YEAR/QUARTER.  Due to the Company's negative working capital,  the year
2001  and the current operating quarter remain difficult. The Company has sought
to  minimize  operating  costs.  The  overriding  constraint has been cash flow.

RESULTS  OF  OPERATIONS

The  Company  has  not  yet  initiated  air  operations.

LIQUIDITY  AND  CAPITAL  RESOURCES

As  of  June  30,  2002,  the Company's negative working capital was ($227,613).

ADDITIONAL  FACTORS  THAT  MAY  AFFECT  FUTURE  RESULTS

NO SALES REVENUES; UNCERTAIN PROFITABILITY; DEVELOPMENT STAGE COMPANY. Since its
inception,  the  Company  has  been  principally  engaged  in  developmental and
organizational activities. To date, the Company has not yet initiated activities
which  would  bring revenues to the air terminal facility and, consequently, has
had  no  sales revenues.  No sales revenues are expected until, and only if, the
Company  secures  adequate  funds  to  complete  the  infrastructure required to
commence  either  charter  or  scheduled  commercial  air  service  activities.

The  Company  is in the development stage, and its business is subject to all of
the  risks  inherent  in  the  establishment  of  a new business enterprise. The
likelihood  of  success  of  the  Company  must  be  considered  in light of the
problems,  expenses,  complications  and  delays  frequently  encountered  in
connection  with  the  formation  of  a  new  business,  the  development of new
products,  the  competitive  and  regulatory environment in which the Company is
operating  and  the  possibility  that  its  activities  will  not result in the
development  of  any  commercially  viable activities. There can be no assurance
that  the  Company's  activities  will  ultimately  result in the development of
commercial  charter  or  scheduled  air  service.

NEED  FOR  FUTURE  FINANCING.  The  Company will be required to raise additional
funds through public or private financing including grants that may be available
to  complete  the  infrastructure  requirements to allow air service operations.
There  can  be  no  assurance,  however, that the Company will be able to obtain
additional  financing on terms favorable to it, if at all. If adequate funds are
not  available  to  satisfy  short-term  or  long-term capital requirements. The
failure  of  the  Company  to obtain any other acceptable financing would have a


                                        9
<PAGE>

material  adverse  effect  on  the  plans and operations of the Company. Without
additional  financing,  the  Company would become unable to maintain its current
operations  and  would be unable to carry out its business plan. The Company has
no current understandings or commitments to obtain any additional financing from
the  sale  of its securities or otherwise. Additional financing from the sale of
its  securities  may  result  in  dilution  of  the  Company's  then  current
stockholders.

DEPENDENCE  UPON  A  KEY OFFICER; ATTRACTION AND RETENTION OF KEY PERSONNEL. The
business of the Company is highly dependent upon the active participation of its
founder  and Chief Executive Officer, Blaine Haug. The loss or unavailability to
the  Company  of  Mr. Haug would have a material adverse effect on the Company's
business  prospects  and  potential earning capacity. The recruitment of skilled
airline  personnel  is  critical  to  the  Company's  success.  There  can be no
assurance  that  it  will  be  able  to attract and retain such personnel in the
future.  There  is  no  key  man  life  insurance  on  Mr.  Haug.

The  process of obtaining required regulatory approvals required to commence air
service  operations  can  be  time-consuming  and expensive and other regulatory
requirements  can  be  burdensome.  Moreover, there can be no assurance that the
required  regulatory  clearances  will  be  obtained

ITEM  7.     FINANCIAL  STATEMENTS

     The  financial  statements  attached  hereto  and included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the  Securities  and  Exchange  Commission.  Certain  information  and  footnote
disclosures  normally  included  in  financial statements prepared in accordance
with  generally  accepted  accounting principles have been condensed or omitted.

However,  in  the  opinion  of  management,  all adjustments (which include only
normal  recurring  accruals)  necessary to present fairly the financial position
and results of operations for the periods presented have been made.  The results
for interim periods are not necessarily indicative of trends or of results to be
expected  for  the  full  year.  These  financial  statements  should be read in
conjunction  with  the  financial  statements  and notes thereto included in the
Company's  annual  report on Form 10-KSB/A for the year ended December 31, 2001.


                                       10
<PAGE>

<TABLE>
<CAPTION>

                                          PRIME  AIR,  INC.
                                (A  DEVELOPMENT  STAGE  COMPANY)
                                   CONSOLIDATED BALANCE SHEETS
                                   (all figures in US dollars)

                                                          June 30       June 30      December 31
                                                            2002          2001          2001
                                                        (Unaudited)   (Unaudited)    (Audited)
                                                        ------------  ------------  -------------
<S>                                                     <C>           <C>           <C>
                                           ASSETS
Current Assets
  Cash and short-term deposits . . . . . . . . . . . .  $     1,053   $       310   $      2,089
  Prepaid expenses . . . . . . . . . . . . . . . . . .          236             -          1,550
  Goods and Services Tax recoverable . . . . . . . . .        1,216         1,534          1,148
                                                        ------------  ------------  -------------
                                                              2,505         1,844          4,787

Capital Assets (Note 4). . . . . . . . . . . . . . . .      517,104       532,648        523,278
                                                        ------------  ------------  -------------

                                                        $   519,609   $   534,492   $    528,065
                                                        ============  ============  =============

                                        LIABILITIES
Current Liabilities
  Accounts payable and accruals. . . . . . . . . . . .  $   198,129   $   211,135   $    230,305
  Notes and advances payable  (Note 5) . . . . . . . .       31,989        25,115         14,989
                                                        ------------  ------------  -------------
                                                            230,118       236,250        245,294
                                                        ------------  ------------  -------------

                                    SHAREHOLDERS' EQUITY
Capital Stock  (Note 6)
  Authorized:
    50,000,000 common shares with a
        stated par value of $.001/share
      3,000,000 preferred cumulative convertible
        shares with a stated par value of $.001/share
  Issued:
    22,898,666 common shares (2001: 21,022,666). . . .       22,899        21,023         21,979

  Capital in excess of par value . . . . . . . . . . .    2,157,992     2,162,334      2,123,792
                                                        ------------  ------------  -------------
                                                          2,180,891     2,183,357      2,145,771
Accumulated Deficit During
  Development Stage. . . . . . . . . . . . . . . . . .   (1,891,400)   (1,885,115)    (1,863,000)
                                                        ------------  ------------  -------------
                                                            289,491       298,242        282,771
                                                        ------------  ------------  -------------

                                                        $   519,609   $   534,492   $    528,065
                                                        ============  ============  =============
</TABLE>

Approved  on  Behalf  of  the  Board:

"Blaine  Haug"  Director
--------------
"Wayne  Koch"    Director
--------------

                         See Accompanying Notes To Financial Statements


                                       11
<PAGE>

<TABLE>
<CAPTION>

PRIME  AIR,  INC.
(A  Development  Stage  Company)
CONSOLIDATED  STATEMENTS  OF  OPERATIONS
(all  figures  in  US  dollars)



                                                      -                -                -                -         From Inception
                                                Three Months      Six Months      Three Months      Six Months     March 10, 1989
                                                Ended June 30    Ended June 30    Ended June 30    Ended June 30     To June 30
                                                    2002             2002             2001             2001             2002
                                                 (Unaudited)      (Unaudited)      (Unaudited)      (Unaudited)      (Unaudited)
                                               ---------------  ---------------  ---------------  ---------------  ---------------
<S>                                            <C>              <C>              <C>              <C>
Administrative And General Expenses
  Flight operations . . . . . . . . . . . . .                                                                      $      114,720
  Audit and accounting. . . . . . . . . . . .  $        1,937   $        1,937                -                -          108,495
  Advertising . . . . . . . . . . . . . . . .               -                -                -                -           18,083
  Amortization. . . . . . . . . . . . . . . .           3,087            6,174            4,916            9,784          136,492
  Association membership fees . . . . . . . .               -                -                -                -            5,768
  Automotive. . . . . . . . . . . . . . . . .                                                                              19,164
  Bad debts . . . . . . . . . . . . . . . . .                                                                               1,933
  Commissions and finders' fees . . . . . . .               -                -                -                -           22,311
  Consulting. . . . . . . . . . . . . . . . .               -              920                -                -          651,069
  Insurance . . . . . . . . . . . . . . . . .           1,125            1,350              722            1,437           31,575
  Interest and service charges. . . . . . . .              67              143               39               97           15,494
  Legal costs . . . . . . . . . . . . . . . .               -                -            6,046            6,411          181,941
  Management remuneration . . . . . . . . . .                                                                              77,287
  Office and general. . . . . . . . . . . . .               -                -            1,322            1,652          165,009
  Repairs and maintenance . . . . . . . . . .               -               93                -               68           10,448
  Rent and property taxes - airport facility.               -                -                -                -           60,799
  Telephone and utilities . . . . . . . . . .           2,041            1,955            1,078            1,516           91,950
  Transfer agent, listing and filing fees . .           1,480            2,636              987            3,279           62,766
  Travel, promotion and entertainment . . . .               -                -                -                -          108,223
                                               ---------------  ---------------  ---------------  ---------------  ---------------
                                                        9,737           15,208           15,110           24,244        1,883,527
                                               ---------------  ---------------  ---------------  ---------------  ---------------

  Loss (gain) on foreign exchange conversion.          (1,010)          (1,008)           2,781           (2,129)           1,720
  Interest income . . . . . . . . . . . . . .                                                                               6,153
                                               ---------------  ---------------  ---------------  ---------------  ---------------
                                                       (1,010)          (1,008)           2,781           (2,129)           7,873
                                               ---------------  ---------------  ---------------  ---------------  ---------------

Net Loss For The Period . . . . . . . . . . .  $        8,727   $       14,200   $       17,891   $       22,115   $    1,891,400
                                               ===============  ===============  ===============  ===============  ===============


Net Loss Per Common Share . . . . . . . . . .         (0.0004)         (0.0006)         (0.0009)         (0.0011)         (0.0870)
                                               ===============  ===============  ===============  ===============  ===============


Weighted Average Common Shares Outstanding. .      22,898,666       22,898,666       21,022,666       21,022,666       21,586,358
                                               ===============  ===============  ===============  ===============  ===============
</TABLE>

                 See Accompanying Notes To Financial Statements


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                    PRIME AIR, INC.
                                             ( A Development Stage Company)
                               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND DEFICIT
                                             (  all figures in US dollars )

                                                                                                         Accumulated
                                                                      Capital in                       Deficit During
                                                                       Excess of        Share            Development
                                            Common  Shares            (Less than)    Subscriptions          Stage
                                        Shares          Amount         Par Value       Receivable     (Unaudited-Note 1)
                                      -----------  ----------------  -------------  ---------------  -------------------
<S>                                   <C>          <C>               <C>            <C>              <C>
Balance at Inception on
   March 10, 1989. . . . . . . . . .           -   $             -   $          -   $            -   $                -
Issue of common shares for cash
   at $.001/share. . . . . . . . . .   1,260,474             1,260           (630)               -                    -
Net loss for the year ended
   March 31, 1990. . . . . . . . . .           -                 -              -                -              (17,956)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, March 31, 1990. . . . . . .   1,260,474             1,260           (630)               -              (17,956)

Issue of common shares for cash
   at $.001/share. . . . . . . . . .     315,118               315           (157)               -                    -
Net loss for the year ended
   March 31, 1991. . . . . . . . . .           -                 -              -                -              (49,419)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, March 31, 1991. . . . . . .   1,575,592             1,575           (787)               -              (67,375)
Net loss for the year ended
   March 31, 1992. . . . . . . . . .           -                 -              -                -              (10,990)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, March 31, 1992. . . . . . .   1,575,592             1,575           (787)               -              (78,365)
Issue of common shares for cash
   at $.277/share. . . . . . . . . .     264,176               264         36,367                -                    -
   at $.214/share. . . . . . . . . .      34,138                34          3,611                -                    -
Net loss for the year ended
   March 31, 1993. . . . . . . . . .           -                 -              -                -              (38,426)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, March 31, 1993. . . . . . .   1,873,906             1,873         39,191                -             (116,791)

Issue of common shares for services
   at nominal value. . . . . . . . .     184,346               184           (184)               -                    -

Issue of common shares for cash
   at $.001/share. . . . . . . . . .     600,000               600           (300)               -                    -
   at $.109/share. . . . . . . . . .       6,680                 7            357                -                    -
   at $.154/share. . . . . . . . . .      47,268                47          3,596                -                    -
   at $.280/share. . . . . . . . . .      38,802                39          5,380                -                    -
   at $.330/share. . . . . . . . . .      46,322                46          7,601                -                    -
   at $.463/share. . . . . . . . . .     174,890               175         40,243                -                    -
   at $.694/share. . . . . . . . . .      31,512                32         10,891                -                    -
   at $.925/share. . . . . . . . . .      15,756                16          7,266                -                    -
Net loss for the year ended
   March 31, 1994. . . . . . . . . .           -                 -              -                -              (36,272)
                                      -----------  ----------------  -------------  ---------------  -------------------
Balance, March 31, 1994. . . . . . .   3,019,482   $         3,019   $    114,041   $            -   $         (153,063)
                                      -----------  ----------------  -------------  ---------------  -------------------
</TABLE>
                 See Accompanying Notes To Financial Statements


                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                    PRIME AIR, INC.
                                             ( A Development Stage Company)
                               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND DEFICIT
                                             (  all figures in US dollars )

                                                                                                         Accumulated
                                                                      Capital in                       Deficit During
                                                                       Excess of        Share            Development
                                            Common  Shares            (Less than)    Subscriptions          Stage
                                        Shares          Amount         Par Value       Receivable     (Unaudited-Note 1)
                                      -----------  ----------------  -------------  ---------------  -------------------
<S>                                   <C>          <C>               <C>            <C>              <C>
Balance Forward. . . . . . . . . . .   3,019,482   $         3,019   $    114,041   $            -   $         (153,063)

Issue of common shares for services
   at nominal value. . . . . . . . .   1,874,956             1,875         (1,875)               -                    -

Issue of common shares for cash
   at $.374/share. . . . . . . . . .     497,384               498         92,448                -                    -
   at $.463/share. . . . . . . . . .     608,178               608        139,982                -                    -
Net loss for the year ended
   June 28, 1994 . . . . . . . . . .           -                 -              -                -              (40,947)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, June 28, 1994 . . . . . . .   6,000,000             6,000        344,596                -             (194,010)

Share subscription at $.367/share. .           -                 -         (7,313)             (20)                   -

Net loss for the year ended
   December 31, 1994 . . . . . . . .           -                 -              -                -             (135,530)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, December 31, 1994 . . . . .   6,000,000             6,000        337,283              (20)            (329,540)

Issue of common shares for cash
   and/or services at an average
   of $.234/share. . . . . . . . . .   1,125,100             1,125        130,630                -                    -

Net loss for the year ended
   December 31, 1995 . . . . . . . .           -                 -              -                -              (71,266)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, December 31, 1995 . . . . .   7,125,100             7,125        467,913              (20)            (400,806)

Issue of common shares for cash
   at $.50/share . . . . . . . . . .   3,021,116             3,021        752,259                -                    -

Issue of common shares for services
   at fair value . . . . . . . . . .   2,967,346             2,967        145,400                -                    -

Net loss for the year ended
   December 31, 1996 . . . . . . . .           -                 -              -                -             (385,300)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, December 31, 1996 . . . . .  13,113,562   $        13,113   $  1,365,572   $          (20)  $         (786,105)
                                      -----------  ----------------  -------------  ---------------  -------------------
</TABLE>
                 See Accompanying Notes To Financial Statements


                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                    PRIME AIR, INC.
                                             ( A Development Stage Company)
                               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND DEFICIT
                                             (  all figures in US dollars )

                                                                                                         Accumulated
                                                                      Capital in                       Deficit During
                                                                       Excess of        Share            Development
                                            Common  Shares            (Less than)    Subscriptions          Stage
                                        Shares          Amount         Par Value       Receivable     (Unaudited-Note 1)
                                      -----------  ----------------  -------------  ---------------  -------------------
<S>                                   <C>          <C>               <C>            <C>              <C>
Balance Forward. . . . . . . . . . .  13,113,562   $        13,113   $  1,365,572   $          (20)  $         (786,105)

Issue of common shares for services
   at fair value . . . . . . . . . .     656,000               656         32,472                -                    -

Issue of common shares for
   debt settlements:
   at $.500/share. . . . . . . . . .     248,504               249         61,876                -                    -
   at $.504/share. . . . . . . . . .      72,760                73         18,266                -                    -
   at $.530/share. . . . . . . . . .     189,600               189         50,098                -                    -

Net loss for the year ended
   December 31, 1997 . . . . . . . .           -                 -              -                -             (222,169)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, December 31, 1997 . . . . .  14,280,426            14,280      1,529,284              (20)          (1,008,274)
                                      -----------  ----------------  -------------  ---------------  -------------------

Issue of common shares for
   debt settlements:
   at $.3935/share . . . . . . . . .      20,000                20          3,853                -                    -
   at $.4006/share . . . . . . . . .      36,430                37          7,260                -                    -

Issue of common shares for services
   at fair value . . . . . . . . . .   3,327,454             3.327        163,046                -                    -
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, May 17, 1998. . . . . . . .  17,664,310            17,664      1,702,115              (20)          (1,008,274)

Issue of common shares for
   debt settlements:
   at $.25/share . . . . . . . . . .      64,800                65         16,135                -                    -
Issue of common shares for services
   at fair value . . . . . . . . . .     290,000               290         14,210                -                    -

Transfer Agent adjustment. . . . . .      (6,000)               (6)             -                -                    -

Write off of uncollectable share
   subscription receivable . . . . .           -                 -          7,313               20                    -

Net loss for the year ended
   December 31, 1998 . . . . . . . .           -                 -              -                -             (330,188)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, December 31, 1998 . . . . .  18,013,110   $        18,013   $  1,739,773   $            -   $       (1,338,462)
                                      -----------  ----------------  -------------  ---------------  -------------------
</TABLE>
                 See Accompanying Notes To Financial Statements


                                       15
<PAGE>

<TABLE>
<CAPTION>
                                                    PRIME AIR, INC.
                                             ( A Development Stage Company)
                               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND DEFICIT
                                             (  all figures in US dollars )

                                                                                                         Accumulated
                                                                      Capital in                       Deficit During
                                                                       Excess of        Share            Development
                                            Common  Shares            (Less than)    Subscriptions          Stage
                                        Shares          Amount         Par Value       Receivable     (Unaudited-Note 1)
                                      -----------  ----------------  -------------  ---------------  -------------------
<S>                                   <C>          <C>               <C>            <C>              <C>
Balance Forward. . . . . . . . . . .  18,013,110   $        18,013   $  1,739,773   $            -   $       (1,338,462)
Issue of common shares for
   debt settlements:
   at $.20/share . . . . . . . . . .     201,250               202         40,048                -                    -
   at $.25/share . . . . . . . . . .     423,200               423        105,377                -                    -
Issue of common shares for services
   at fair value . . . . . . . . . .   1,010,000             1,010         49,490                -                    -
Net loss for the year ended
   December 31, 1999 . . . . . . . .           -                 -              -                -             (326,607)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, December 31, 1999 . . . . .  19,647,560            19,648      1,934,688                -           (1,665,069)

Issue of common shares for cash
   at $.08/share . . . . . . . . . .     500,000               500         39,500                -                    -
Issue of common shares for
   debt settlements:
   at $.08/share . . . . . . . . . .       4,100                 4            324                -                    -
   at $.10/share . . . . . . . . . .     871,006               871         86,230                -                    -
Net loss for the year ended
   December 31, 2000 . . . . . . . .           -                 -              -                -             (116,336)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, December 31, 2000 . . . . .  21,022,666            21,023      2,062,742                -           (1,781,405)

Issue of common shares for cash
   at $.08/share . . . . . . . . . .     300,000               300         23,700                -                    -
Issue of common shares for
   debt settlement
   at $.08/share (Note 7). . . . . .     250,000               250         19,750                -                    -
Issue of common shares for services
   at fair value (Note 7). . . . . .     400,000               400         19,600                -                    -
Transfer Agent adjustment. . . . . .       6,000                 6              -                -                    -

Net loss for the year ended
   December 31, 2001 . . . . . . . .           -                 -              -                -              (81,595)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, December 31, 2001 . . . . .  21,978,666   $        21,979   $  2,123,792   $            -   $       (1,877,200)

Issue of common shares for . . . . .     920,000               920         20,000                -                    -
   services at fair value

Net loss for the six months  ended
   June 30, 2002 . . . . . . . . . .           -                 -              -                -              (14,200)
                                      -----------  ----------------  -------------  ---------------  -------------------

Balance, June 30, 2002 . . . . . . .  22,898,666   $        22,899   $  2,143,792   $            -   $       (1,891,400)
                                      ===========  ================  =============  ===============  ===================
</TABLE>
                 See Accompanying Notes To Financial Statements


                                       16
<PAGE>

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


                                                                                                             From Inception
                                                                                                             March 10, 1989
                                         Three Months      Six Months      Three Months      Six Months            to
                                         Ended June 30    Ended June 30    Ended June 30    Ended June 30       June 30
                                             2002             2002             2001             2001              2002
                                         (Unaudited)       (Unaudited)      (Unaudited)      (Unaudited)      (Unaudited)
                                        ---------------  ---------------  ---------------  ---------------  ---------------


NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES:
<S>                                     <C>              <C>              <C>              <C>              <C>

OPERATING
  Net loss . . . . . . . . . . . . . .  $       (8,727)  $      (14,200)  $      (17,891)  $      (22,115)  $    (1,891,400)
  Non-cash charge - amortization . . .           3,087            6,174            4,916            9,784           130,318
                                        ---------------  ---------------  ---------------  ---------------  ---------------
                                                (5,640)          (8,026)         (12,975)         (12,331)       (1,761,082)


  Change in non-cash working capital
      balances relating to operations.           1,043            1,246              609           (9,783)           (1,452)
                                        ---------------  ---------------  ---------------  ---------------  ---------------
                                                (4,597)          (6,780)         (12,366)         (22,114)       (1,762,534)
                                        ---------------  ---------------  ---------------  ---------------  ---------------


FINANCING
  Notes and advances payable . . . . .           4,973          (15,176)           9,986           19,819           230,118

  Issue of capital stock . . . . . . .                           20,920                -                -         2,180,891
                                        ---------------  ---------------  ---------------  ---------------  ---------------
                                                 4,973            5,744            9,986           19,819         2,411,009
                                        ---------------  ---------------  ---------------  ---------------  ---------------

INVESTING
  Capital assets . . . . . . . . . . .                                                                            (647,422)
                                        ---------------  ---------------  ---------------  ---------------  ---------------

NET CASH INFLOW (OUTFLOW). . . . . . .             376           (1,036)          (2,380)          (2,295)            1,053

CASH, BEGINNING OF YEAR. . . . . . . .             677            2,089            2,690            2,605                 0
                                        ---------------  ---------------  ---------------  ---------------  ---------------

CASH, END OF PERIOD. . . . . . . . . .  $        1,053   $        1,053   $          310   $          310   $         1,053
                                        ===============  ===============  ===============  ===============  ===============
</TABLE>

                              See Accompanying Notes To Financial Statements


                                       17
<PAGE>

                                 PRIME AIR, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2002 and 2001


1.     INCORPORATION,  PRINCIPLES  OF  CONSOLIDATION AND ACCOUNTING PRESENTATION

The  Company  was  incorporated  under  the  laws of the State of Nevada, USA on
November  10,  1996,  the  purpose  of  which  was to change 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, 1996 and acquired all of
the  assets,  liabilities and shareholders of a previous Utah corporation of the
same  name.  The  Utah corporation had been reincorporated on August 30, 1993 as
Astro  Enterprises,  Inc.  and  on  June  28,  1994,  pursuant  to  appropriate
shareholder  agreements,  acquired  all  outstanding shares of Prime Air Inc. (a
Canadian  corporation)  in exchange for shares of its capital stock on a .787796
to 1 basis, thereby providing the shareholders of Prime Air Inc. with 90% of the
outstanding  capital  stock  of Astro Enterprises, Inc.  Astro Enterprises, Inc.
then  changed  its  name  to  Prime  Air,  Inc.  Following  incorporation of the
Delaware  company,  the  Utah  corporation  was  dissolved  on  May  15,  1996.

These  consolidated financial statements include the accounts of the Company and
its wholly-owned operating subsidiary, Prime Air Inc. (the Canadian corporation)
and  have  been  prepared  in  accordance  with  U.S.  GAAP  standards.

The  accompanying  unaudited  condensed consolidated financial statements do not
include  all  of  the  information  and  notes required by accounting principles
generally  accepted  in  the  United  States  of  America for complete financial
statements  and  should  be  read in conjunction with the Company's consolidated
financial  statements  included  in  the Annual Report on Form 10-K for the year
ended  December  31, 2001, filed with the Securities and Exchange Commission. In
the  opinion  of  management,  all  adjustments  considered necessary for a fair
presentation  have  been included. Operating results for the three and six-month
periods  ended  June  30,  2002  and  2001 are not necessarily indicative of the
results  that  may  be  expected  for  a  full  year.

2.     NATURE  OF  OPERATIONS  /  GOING  CONCERN  CONSIDERATIONS

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  future successful operation of the Company is dependent upon its ability to
obtain  the  financing  required  to  complete  and  operationalize the terminal
facility  in  Pemberton, British Columbia and to commence air service operations
to  Pemberton,  British  Columbia  and  to  Mammoth Mountain in California on an
economically  viable  basis.

These  consolidated financial statements have been prepared on a "going concern"
basis  which  assumes  the  Company  will  be able to realize its assets, obtain
financing  as  required  and  discharge  its  liabilities and commitments in the
normal  course  of  business.

3.     SIGNIFICANT  ACCOUNTING  POLICIES

Reporting  Currency
-------------------

All  amounts  in  these  consolidated  financial statements are reported in U.S.
funds.  Monetary  assets and liabilities have been converted from Canadian funds
where  applicable  utilizing  the  year-end  closing  exchange  rate of $ 1.5906
CDN/$1.00 U.S.  Transactions recorded throughout the year in the accounts of the
Canadian  subsidiary  have  been  converted  to  their U.S. equivalent at actual
amounts where available or by utilizing the average annual rate as posted by the
Internal  Revenue  Service  of  the United States as follows: $ 1.5484 CDN/$1.00
U.S.  (2000:  $1.4852  CDN/ $1.00 U.S.). Exchange rates at June 30, 2002 had not
materially  changed  from  the  December  31,  2001  stated  rate.


                                       18
<PAGE>

                                 PRIME AIR, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2002 and 2001

Fair  Value  of  Financial  Instruments
---------------------------------------

In  accordance  with  the  requirements  of  Statement  of  Financial Accounting
Standards  No.  107, "Disclosure About Fair Value Of Financial Instruments", the
carrying  amounts  reported on the balance sheets for cash and cash equivalents,
namely,  "cash  and short-term deposits", "prepaid expenses", "GST recoverable",
[GST  being  an  acronym  for  Goods  and  Services Tax) , "accounts payable and
accrued  liabilities"  and  "notes  and advances payable" approximate their fair
market  value.

Receivables  and  Prepaid  Expenses
-----------------------------------

All  amounts  reported  as receivables or prepaid expenses have been recorded at
their  original  values.  There have been no amounts written off as bad debts or
provided  for  as  an  allowance  against  the  recovery  of  these  assets.

Capital  Assets
---------------

Air  Terminal  Construction  Costs:  Expenditures  relating  directly  to  the
----------------------------------
construction  of  the  air  terminal facility and related engineering and design
have  been  recorded in the accounts of the Company at cost, net of amortization
which is provided on a straight-line basis over the 30-year term of the property
lease.

Furniture  and  Equipment:  Furniture  and  equipment  is stated at cost, net of
-------------------------
amortization which is provided for at the rate of 20% per annum on the declining
balance  basis.

Use  of  Estimates  in  the  Preparation  of  Financial  Statements
-------------------------------------------------------------------

The  preparation  of  financial statements in conformity with generally accepted
accounting principals requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  and  disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
the  reported amounts of revenues and expenses during the reporting periods.  In
these  financial  statements,  assets,  liabilities  and  results  of operations
involve  significant  reliance  on  management  estimates.  Actual results could
differ  from  the  use  of  those  estimates.

Income  Taxes
-------------

The  Company  adopted  Statement  of  Financial  Accounting  Standards  No. 109,
"Accounting  For  Income  Taxes", during the fiscal year ended December 31, 1998
and  applied  the  provisions  of  that  statement on a retroactive basis to the
previous  fiscal  years,  which  resulted  in  no  significant  adjustments.

Statement  of  Financial  Accounting  Standards  No. 109, "Accounting for Income
Taxes",  requires  an  asset and liability approach for financial accounting and
reporting  for income tax purposes.  This statement recognizes (a) the amount of
taxes  payable  or  refundable  for  the  current  year  and  (b)  deferred  tax
liabilities  and  assets  for  future  tax consequences of events that have been
recognized  in  the  financial  statements  or  tax  returns.

Deferred  income  taxes  result from temporary differences in the recognition of
accounting  transactions for income tax and financial reporting purposes.  There
were  no  temporary  differences  at  December  31,  2001  and earlier years and
accordingly,  no  deferred  tax  liabilities have been recognized for all years.

The  operating  subsidiary  Company  has  cumulative  net  operating  loss carry
forwards  of  approximately
$668,000 at December 31, 2001 and $ 790,000 at December 31, 2000.  No effect has
been  shown  in  the  financial  statements  for  these  carry  forwards  as the
likelihood  of  future tax benefit from such is not presently determinable.  The
potential  income  tax  benefits  of  these net operating loss carry forwards of
approximately  $ 118,000 at December 31, 2001 and $ 144,000 at December 31, 2000
(based  upon current income tax rates) have been offset by valuation reserves of
the  same amount.  Net operating losses expire after seven (7) years.  Operating
losses  of  the  US  parent  corporation  have  not  been  determined.


                                       19
<PAGE>

                                 PRIME AIR, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2002 and 2001


4.    CAPITAL  ASSETS

Capital  assets  consist of the following at June 30, 2002 and 2001 and December
31,  2001:

                                                      June  30,  2002
                                          --------------------------------------
                                                       Accumulated     Net  Book
                                            Cost      Amortization       Value
                                          --------------------------------------
     Air  terminal  construction  costs   $  641,972   $ 126,337      $  518,522

     Furniture  and  equipment                 5,154       3,685           1,418
                                          --------------------------------------
                                          $  647,126   $ 130,022      $  517,104
                                          ======================================

                                                      June  30,  2002
                                          --------------------------------------
                                                       Accumulated     Net  Book
                                            Cost      Amortization       Value
                                          --------------------------------------
     Air  terminal  construction  costs   $  641,972   $ 111,218      $  530,754

     Furniture  and  equipment                 5,154       3,260           1,894
                                          --------------------------------------
                                          $  647,126   $ 114,178      $  532,648
                                          ======================================

                                                    December  31,  2001
                                          --------------------------------------
                                                       Accumulated     Net  Book
                                            Cost      Amortization       Value
                                          --------------------------------------
     Air  terminal  construction  costs   $  641,972   $  120,267     $  521,705

     Furniture  and  equipment                 5,154        3,581          1,573
                                          --------------------------------------
                                          $  647,126   $  123,848     $ 523,278
                                          ======================================

5.    NOTES  AND  ADVANCES  PAYABLE

The  notes  and  advances  payable  are  unsecured, non-interest bearing and are
without  specific  terms of repayment.  Included therein is an amount of $11,846
which  has  been  advanced  to the Company by a shareholder and/or a corporation
controlled  by  that shareholder who is the beneficial owner of 2,245,226 shares
of  common  stock of the Company, that holding representing  9.80% of the issued
and outstanding capital of the Company. $17,000 has been advanced to the Company
as  a  deposit  towards  shares  to  be  subscribed.


                                       20
<PAGE>

<TABLE>
<CAPTION>
                                     PRIME AIR, INC.
                              (A Development Stage Company)
                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2002 and 2001
6.  CAPITAL  STOCK
    Authorized:
       150,000,000  common  shares  with  a  stated  par  value  of  $.001/share
         5,000,000  preferred  cumulative  convertible shares with a stated par value of
           $.001/share
                                                       Number  of  Shares  Consideration
                                                       ------------------  -------------
<S>                                                  <C>                  <C>
Common Shares Issued:
       To August 31, 1993
              - for cash. . . . . . . . . . . . . .              600,000   $        300
        Prime Air Inc. share exchange
              - June 28, 1994 . . . . . . . . . . .            5,400,000        350,296
        Share subscription. . . . . . . . . . . . .                              (7,313)
        During year ended December 31, 1995
              - for cash. . . . . . . . . . . . . .            1,125,100        131,755
                                                       ------------------  -------------
        Balance at December 31, 1995. . . . . . . .            7,125,100        475,038
                                                       ------------------  -------------

        During year ended December 31, 1996
              - for cash. . . . . . . . . . . . . .            3,021,116        755,280
              - for consulting and related services            2,967,346        148,367
                                                       ------------------  -------------
                                                               5,988,462        903,647
                                                       ------------------  -------------
        Balance, December 31, 1996. . . . . . . . .           13,113,562      1,378,685
                                                       ------------------  -------------

        During the year ended December 31, 1997
              - shares-for-debt settlements . . . .              510,864        130,751
              - consulting and related services . .              656,000         32,800
                                                       ------------------  -------------
                                                               1,166,864        163,551
                                                       ------------------  -------------
        Balance, December 31, 1997. . . . . . . . .           14,280,426      1,542,236
                                                       ------------------  -------------

        During the year ended December 31, 1998
              - shares-for-debt settlements . . . .               93,015         27,370
              - consulting and related services . .            3,617,454        180,873
              - transfer agent correction . . . . .               (6,000)            (6)
              - write off of uncollectible share. .                               7,313
                                                       ------------------  -------------
                                                               3,732,684        215,550
                                                       ------------------  -------------
        Balance, December 31, 1998. . . . . . . . .           18,013,110      1,757,786
                                                       ------------------  -------------

        During the year ended December 31, 1999
              - shares-for-debt settlements . . . .              624,450        146,050
              - consulting and related services . .            1,010,000         50,500
                                                       ------------------  -------------
                                                               1,634,450        196,550
                                                       ------------------  -------------
        Balance, December 31, 1999. . . . . . . . .           19,647,560      1,954,336
                                                       ------------------  -------------

        During the year ended December 31, 2000
              - for-cash. . . . . . . . . . . . . .              500,000         40,000
              - shares-for-debt settlements . . . .              875,106         87,429
                                                       ------------------  -------------
                                                               1,375,106        127,429
                                                       ------------------  -------------
        Balance, December 31, 2000. . . . . . . . .           21,022,666     $2,081,765
                                                       ------------------  -------------
</TABLE>


                                       21
<PAGE>

<TABLE>
<CAPTION>
                                 PRIME AIR, INC.
                          (A Development Stage Company)

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             March 31, 2002 and 2001

6.    CAPITAL  STOCK  (CONTINUED)


                                                       Number  of  Shares  Consideration
                                                       ------------------  -------------
<S>                                                  <C>                  <C>
         Balance, December 31, 2000 . . . . . .               21,022,666  $   2,081,765
                                                       ------------------  -------------

         During year ended December 31, 2001
              - for cash. . . . . . . . . . . . . .              300,000         24,000
              - shares-for-debt settlements . . . .              250,000         20,000
              - consulting and related services . .              400,000         20,000
              - Transfer Agent correction . . . . .                6,000              6
                                                       ------------------  -------------
                                                                 956,000         64,406
                                                       ------------------  -------------
         Balance, December 31, 2001 . . . . . . . .           21,978,666      2,145,771
                                                       ------------------  -------------

         During  six  months  ended  June  30,  2002
              - consulting and related services                  920,000         20,920
         Balance, June  30, 2002. . . . . . . . . .           22,898,666  $   2,180,891
                                                       ==================  ==============
</TABLE>

7.   RELATED  PARTY  TRANSACTIONS

During the years ended December 31, 2001 and 2000, no cash remuneration was paid
to  any  director or officer of the Company.  The Company has adopted the policy
of  issuing  "restricted"  common  shares  to certain directors and officers for
services  rendered.  Specifically  billed  amounts  have  been settled by way of
"shares-for-debt"  arrangements,  the  share  value  thereof being determined by
securities regulations.  In addition, further shares have been issued to certain
directors  and  officers  for services provided to the Company of a more general
nature,  these  shares  being  attributed  a nominal value of $ 0.001 per share.
During  the year ended December 31, 2001, an officer and director of the Company
received  250,000  common  shares  by  way  of  a  debt  settlement  covering an
obligation  of  $20,000 and another director and officer received 400,000 common
shares  with  an  attributed value of $400 for general management and consulting
services.  During  the  year  ended  December 31, 2000, shares issued to related
parties  consisted of debt settlements only, such issuances being 871,006 common
shares  covering  obligations  of  $87,100.

On  January 28, 2002, the Board of Directors authorized the issuance of  800,000
"restricted"  common  shares  to  directors  and  officers  of  the  Company  in
recognition  of  services  provided  thereto  to  December 31, 2001, and 120,000
"restricted"  common  shares  in settlement of debts for services.  These shares
were  issued from Treasury on February 13, 2002.  The fair value of these shares
is  $35,120.  Due  to  the  restricted  nature of these shares, the "fair market
value"  cannot  be  determined  or  reasonably  estimated.


                                       22
<PAGE>

                                PRIME AIR, INC.
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2002 and 2001


8.    RENT,  PROPERTY  TAXES  AND  LEASE  COMMITMENT

The  Canadian  subsidiary  corporation  has  entered  into  an Airport Lease and
Operating  Agreement with The Corporation of The Village of Pemberton in British
Columbia whereby it has been granted an exclusive and irrevocable lease over the
lands and airport facilities associated with the Pemberton Airport.  The term of
the Lease and Operating Agreement, including extension options relating thereto,
is  for  a  total  of  30  years  with  terminal  rent  payable  as  follows:

     -    $  67  US  ($100  CDN)  per  annum for the initial six (6) years (1993
          through  1999);

       and  thereafter

     -    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 lease
          commitment  amounts  for 2001 through 2005 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.

No  lease payments were made during the years ended December 31, 2001 or 2000 as
there  were  no  gross  receipts  derived  from  operations  in those years. The
Company,  however,  was  obligated  to  pay  property taxes imposed by municipal
authorities,  such  levies  amounting to $8,426. for the year ended December 31,
2001  (2000:  $9,294).


                                       23
<PAGE>

                                    PART III


ITEM  8.     EXHIBITS  AND  REPORTS  ON  FORM  8-K

(A)     Reports  on  Form  8-K.

     None

(B)     Index  to  Exhibits.

     The  following  is  a  list  of  all exhibits filed as part of this Report:

    EXHIBIT    DESCRIPTION OF
    NUMBER     DOCUMENT
    -------    --------

      *1       Power  of  Attorney  (included  on  signature  page).

*Filed  herewith.


                                       24
<PAGE>

                                   SIGNATURES

Pursuant  to  the requirements of Section 13 or 15(d) 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, in the City of Vancouver,
province  of  British  Columbia,  on  the  20th  day  of  October  2003.
Prime  Air,  Inc.

                                                  By:  /s/  Blaine  Haug
                                                       -----------------
                                                       Blaine  Haug
                                                       Chairman of the Board and
                                                       Chief  Executive  Officer

KNOW  ALL  MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes  and  appoints  Blaine  Haug  and  Wayne  Koch,  and  each  of  them
individually,  his  true and lawful attorney-in-fact, proxy and agent, with full
power  of  substitution  and  resubstitution, for him and in his name, place and
stead, in any and all capacities, to act on, sign any and all amendments to this
Quarterly  Report  on  Form  10-QSB/A,  and  to file the same, with all exhibits
thereto  and  other  documents  in connection therewith, with the Securities and
Exchange  Commission,  granting unto said attorneys-in-fact, proxies and agents,
and  each  of them individually, full power and authority to do and perform each
and  every  act  and thing necessary and appropriate to be done in and about the
premises,  as  fully  as  he  might  or  could  do  in person, hereby approving,
ratifying  and confirming all that said attorneys-in-fact, proxies and agents or
any  of his, her or their substitute or substitutes, may lawfully do or cause to
be  done  by  virtue  hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has  been  signed below by the following persons on behalf of the Registrant and
in  the  capacities  indicated.

     SIGNATURE(S)                       TITLE(S)                      DATE
     ------------                       --------                      ----
     /s/  Blaine  Haug          Chairman of the Board and       October 20, 2003
     -----------------          Chief  Executive  Officer
     Blaine  Haug

     /s/ Wayne Koch          Treasurer                          October 20, 2003
     --------------
     Wayne  Koch


                                       25
<PAGE>