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  September  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 September 30, 2004, there were
31,774,200  shares  of  the  Registrant's  Common  Stock  outstanding.


<PAGE>

                                     PART 1

ITEM  1.     FINANCIAL  STATEMENTS

Prime  Air,  Inc.
(A  Development  Stage  Company)

September  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)



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

Current Assets
  Cash                                                                                     $        9,185   $       2,691
  Prepaid expenses and deposits                                                                     3,901           5,382
  Other receivables                                                                                 2,743           1,292
                                                                                           ---------------  --------------
Total Current Assets                                                                               15,829           9,365

Property and Equipment (Note 3)                                                                   501,469         508,158
                                                                                           ---------------  --------------

Total Assets                                                                               $      517,298   $     517,523
                                                                                           ===============  ==============



LIABILITIES

Current Liabilities
  Accounts payable                                                                         $       51,610   $      78,436
  Accrued liabilities                                                                               7,075          10,500
  Due to related parties (Note 5)                                                                  40,860          39,248
  Notes and advances payable  (Note 4)                                                              1,500          22,408
                                                                                           ---------------  --------------

Total Liabilities                                                                                 101,045         150,592
                                                                                           ---------------  --------------

Contingencies and Commitments (Notes 1 and 8)

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,
31,774,200 and 27,084,000 issued and outstanding, respectively                                     31,774          27,084

Additional Paid In Capital                                                                      4,648,040       4,412,694

Stock Subscriptions Receivable (Note 6 (a))                                                        (5,000)              -

Accumulated other comprehensive income                                                             68,169          58,586

Deficit accumulated during the development stage                                               (4,326,730)     (4,131,433)
                                                                                           ---------------  --------------

Total Stockholders' Equity                                                                        416,253         366,931
                                                                                           ---------------  --------------

Total Liabilities and Stockholders' Equity                                                 $      517,298   $     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)


                                    Three months     Three months      Nine months      Nine months      From inception
                                        ended            ended            ended            ended         March 10, 1989
                                    September 30,    September 30,    September 30,    September 30,    to September 30,
                                        2004             2003             2004             2003               2004
<S>                                <C>              <C>              <C>              <C>              <C>
                                   ---------------  ---------------  ---------------  ---------------  ------------------
Revenue
  Rental income                    $        1,154   $            -   $        4,376   $            -   $           6,740
                                   ---------------  ---------------  ---------------  ---------------  ------------------

Expenses
  Flight operations                             -                -                -                -             114,720
  Advertising and promotion                   846                -            2,327                -              42,788
  Amortization                              5,854            5,504           17,140           15,793             181,673
  Consulting                               15,075                -           17,789           14,000              57,523
  Consulting to related parties
    (Note 5(c))                            17,500           15,000           70,000           45,000           2,869,696
  General and administrative               21,847           10,658           53,607           20,475             930,410
  Professional fees                        15,890            1,106           67,560            3,174             372,220
                                   ---------------  ---------------  ---------------  ---------------  ------------------

                                           77,012           32,268          228,423           98,442           4,569,030
                                   ---------------  ---------------  ---------------  ---------------  ------------------

Loss from Operations                      (75,858)         (32,268)        (224,047)         (98,442)         (4,562,290)

Gain on Settlement of Debt                 17,500          106,996           28,750          106,996             235,560
                                   ---------------  ---------------  ---------------  ---------------  ------------------

Net Income (Loss) for the Period          (58,358)          74,728         (195,297)           8,554          (4,326,730)

Other Comprehensive Income
  Foreign currency translation
    adjustments                            25,391              160            9,583           51,229              68,169
                                   ---------------  ---------------  ---------------  ---------------  ------------------

Comprehensive Income (Loss)        $      (32,967)  $       74,888   $     (185,714)  $       59,783   $      (4,258,561)
                                   ===============  ===============  ===============  ===============  ==================


Net Loss Per Common Share -
  Basic and diluted                             -                -            (0.01)               -
                                   ===============  ===============  ===============  ===============

Weighted Average Common
  Shares Outstanding                   31,555,000       23,483,000       29,120,000       22,983,000
                                   ===============  ===============  ===============  ===============
</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)



                                                                                 Nine Months      Nine Months
                                                                                    Ended            Ended
                                                                                September 30,    September 30,
                                                                                    2004             2003
<S>                                                                            <C>              <C>
                                                                               ---------------  ---------------
CASH FLOWS TO OPERATING ACTIVITIES

  Net loss for the period                                                      $     (195,297)  $        8,554
  Adjustments to reconcile net loss to net cash used in operating activities:
    Gain on settlement of debt                                                        (28,750)        (106,996)
    Shares issued for services                                                         20,650                -
    Amortization                                                                       17,140           15,793

Changes in operating assets and liabilities:

    (Increase) decrease in accounts receivable                                         (1,364)           1,875
    (Increase) decrease in deposits and prepaid expenses                                1,515           (4,198)
    Increase in due to related parties                                                 39,302           45,000
    Increase (decrease) in accounts payable and accrued liabilities                    84,240            9,463
                                                                               ---------------  ---------------

Net Cash Used In Operating Activities                                                 (60,564)         (30,509)
                                                                               ---------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES

  Proceeds from sale of property and equipment                                            435                -
  Purchase of property and equipment                                                   (1,829)               -
                                                                               ---------------  ---------------

Net Cash Used In Investing Activities                                                  (1,394)               -
                                                                               ---------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES

  Proceeds from notes and advances payable                                              1,500            1,411
  Proceeds from issuance of common stock                                               64,000           50,000
                                                                               ---------------  ---------------

Net Cash Provided by Financing Activities                                              65,500           51,411
                                                                               ---------------  ---------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                 4,952           (1,189)
                                                                               ---------------  ---------------

INCREASE IN CASH                                                                        6,494           19,713

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

CASH, END OF PERIOD                                                            $        9,185   $       20,225
                                                                               ===============  ===============


NON-CASH FINANCING ACTIVITIES
  Common stock issued for debt                                                 $      150,386   $       80,000
  Common stock issued for services                                             $       20,650   $            -


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 "Accounting and Reporting by Development
Stage  Enterprises".  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.
The  Company's  fiscal  year  end  is  December  31.

b)     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.

c)     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)

d)     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
September  30,  2004  and  2003,  the  Company's only component of comprehensive
income  (loss)  were  foreign  currency  translation  adjustments.

e)     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

f)     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.

g)     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.

h)     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.

i)     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.

j)     Stock-Based  Compensation

The  Company  records  stock-based compensation in accordance with SFAS No. 123,
"Accounting  for  Stock-Based  Compensation". All transactions in which goods or
services  are  the consideration received for the issuance of equity instruments
are  accounted  for based on the fair value of the consideration received or the
fair  value  of  the  equity  instrument  issued,  whichever  is  more  reliably
measurable.  Equity instruments issued to employees and the cost of the services
received as consideration are measured and recognized based on the fair value of
the  equity  instruments  issued.  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)

k)     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.

l)     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.

m)     Recent  Accounting  Pronouncements

In  December  2003,  the United States 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.

n)     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.

o)     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,
                                    September 30, 2004          2003
                         ---------------------------------  ------------
                                   Accumulated    Net Book    Net Book
                           Cost    Amortization    Value       Value
                         --------  -------------  --------  ------------
<S>                      <C>       <C>            <C>       <C>
Air terminal             $700,799  $     202,139  $498,660  $   506,489
Computer equipment          1,680            620     1,060          747
Furniture and equipment     6,657          4,908     1,749          922

                         $709,136  $     207,667  $501,469  $   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.


                                        8
<PAGE>

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

5.     Related  Party  Transactions

a)     Included  in due to related parties is an amount of $19,300, representing
cash advances made during the nine months ended September 30, 2004 (December 31,
2003 - $12,846) to the Company by a shareholders and/or a corporation controlled
by that shareholder.  This shareholder controls 100% of the related corporation.
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 $21,560 (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.

c)     During  the  three  months  ended  September 30, 2004, the Company issued
350,000  common shares to various directors/officers of the Company at $0.05 per
share  for  consulting  services  provided  to  the  Company.

6.     Common  Shares

a)     During  the  three  month  period  ended  September 30, 2004, the Company
issued  413,000  shares  of  common  stock  at  $0.05  per share for services of
$20,650,  and 60,000 shares of common stock at $0.10 per share for cash proceeds
of  $6,000,  of  which  $5,000  is  recorded  as stock subscriptions receivable.

b)     During  the  three  month  period  ended  September 30, 2004, the Company
issued  429,200 shares of common stock at $0.05 per share for debt settlement of
$36,460,  which  resulted  in  a  debt  settlement  gain  of  $15,000.

c)     During the three month period ended September 30, 2004 the Company issued
50,000  shares  of  common  stock at $0.05 per share for debt settlement $5,000,
which  resulted  in  a  debt  settlement  gain  of  $2,500.

d)     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.

e)     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.

f)     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.

g)     During  the  three  month period ended March 30, 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  and  Contingencies

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 ("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
October  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.  Pemberton  may  terminate the Agreement in the event of a
material  default or bankruptcy by the Company. The terminal facilities together
with  the  land  shall  revert  to Pemberton at the expiration of the Agreement.

8.     Subsequent  Event

In October 2004, the Agreement with Pemberton expired due to the Company failing
to  timely  file  written  notice  with  Pemberton in April 2004 to exercise the
ten-year  option  extension  to October 2014. However, the Company and Pemberton
have  recently  concluded  re-negotiating  the lease and have verbally agreed to
terms  of  extension  through  October  2014.  The parties are in the process of
formalizing  the  agreement.

As  in the original lease, the terms of the re-negotiated agreement specify that
rent  is  payable  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, subject to
minimum  annual  rent  of  CDN$2,500.


                                        9
<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 September 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.

Recent  Events
--------------

     The  Company's  primary  asset  consists of a Lease and Operating Agreement
with  the Village of Pemberton, British Columbia, Canada 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 enable Prime Air
(BC)  to  undertake  the  planning,  development,  construction, management, and
operation  of  a  terminal  facility.

     The term of the lease commenced as of the Effective Date (June 1, 1995) and
is subject to certain renewals.  Provided that the Company follows the procedure
for renewal and is not in default under the lease, it will have the right to use
the  terminal  facility  until  2025.

     Due  to  an administrative error, the Company inadvertently failed to renew
the  lease  within  the specified time frame. Therefore, the lease terminated on
October  31,  2004.  However,  the  Company  has had discussion with the City of
Pemberton,  and  has  effectively renewed the lease under substantially the same
terms  and  conditions.


                                       10
<PAGE>

Results  of  Operations

Nine  months  ended  September  30,  2004  compared  to  September  30,  2003.

     During  the  nine  months  ended  September  30,  2004,  the Company earned
revenues of $4,376 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 nine months ended September 30, 2004 were $228,423
compared  to  $98,442  for  the  nine  months  ended  for  September  30,  2003.

     During  the  nine  months  ended  September  30, 2004, the Company incurred
consulting  fees, consulting fees to related parties, general and administrative
expenses  and  professional  fees  of  $17,789,  $70,000,  $53,607, and $67,560,
respectively,  compared  to consulting fees, consulting fees to related parties,
general  and  administrative  expense and professional fees of $14,000, $45,000,
$20,475  and $3,174, respectively for the same period of the prior year.  During
the  nine  months  ended  September  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.

Liquidity  and  Capital  Resources

     As  of  September  30,  2004,  the  Company's  negative working capital was
($85,216)  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.


                                       11
<PAGE>

                                     PART II

ITEM  1.     LEGAL  PROCEEDINGS

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

ITEM  2.     UNREGISTERED  SALES  OF  EQITY  SECURITIES  AND  USE  OF  PROCEEDS

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

     1.   During  the  three  month period ended September 30, 2004, the Company
          issued  413,000 shares of common stock at $0.05 per share for services
          of  $20,650,  and 60,000 shares of common stock at $0.10 per share for
          cash  proceeds  of  $6,000,  of  which  $5,000  is  recorded  as stock
          subscriptions  receivable.

     2.   During  the  three  month period ended September 30, 2004, the Company
          issued  429,200  shares  of  common  stock at $0.05 per share for debt
          settlement  of  $36,460,  which  resulted in a debt settlement gain of
          $15,000.

     3.   During  the  three  month  period ended September 30, 2004 the Company
          issued  50,000  shares  of  common  stock  at $0.05 per share for debt
          settlement $5,000, which resulted in a debt settlement gain of $2,500.

     The  above  issuances of shares were not registered upon reliance of either
Regulation  S  or  Section  4(2)  of  the  Securities  Act  of  1933.

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

     At  meeting  held  on September 15, 2004, the Board of Directors approved a
certain  resolutions  including  the  appointment  of  Douglas  Lineberry  as  a
director, the granting to directors 25,000 shares of Prime Air stock per quarter
for services rendered, and the granting 6.5 million shares and five year options
to  purchase  8  million  at $0.05 per share to six executive officers.   At the
same  meeting,  the  Board  of  Directors  also approved the issuance of 800,000
shares  of  common stock on a quarterly basis to these six executives in lieu of
salary  since  the  Company did not have the cash to compensate such executives.
The resolution appointing Douglas Lineberry was passed by a majority vote of the
board.  All  of  the remaining resolutions were unanimously approved by the five
incumbent  directors  who attended the meeting and Mr. Lineberry and the minutes
of  the  meeting  were  ratified.  However,  one director who did not attend the
meeting  is challenging the validity of the meeting since he claimed that notice
of  the  meeting  was  not  properly transmitted in the matter called for by the
Company's  bylaws  even  though it had been the Board of Director's prior custom
and practice to transmit notice in this manner.  This director challenges proper


                                       12
<PAGE>

notice  of  the meeting on the grounds that he was not 'telegraphed' a notice of
the  meeting, but received a notice by fax, email and voicemail.  Therefore this
director  is  disputing  the  resolutions adopted at this meeting as well as the
issuance  of shares and options.  The shares and options have been issued by the
board,  but  no  stock  certificates have yet been issued by the transfer agent.

ITEM  6.     EXHIBITS

(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


                                       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  22nd  day  of  November,  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>