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


                                Form 10-QSB


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

     For the quarter ended June 30, 1998

     [   ]     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

8598 112 STREET, FT. SASKATCHEWAN, ALBERTA, CANADA           T8L 3V8
(Address of principal executive offices)                    (Zip Code)

Issuer's telephone number, including area code:  (403) 998-3400

Check whether the Issuer (1) has filed all reports required to be
filed by section 13 or 15(d) of the Exchange Act 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  [   ]

State the number of shares outstanding of each of the Issuer's
classes of common equity as of the latest practicable date: At
September 18, 1998, there were 18,013,110 shares of the Registrant's
Common Stock outstanding.


                                PART I

                    ITEM 1.  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 nave 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 for the year ended December 31, 1997.

           ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS

       The Company is a development stage company and conducts all
operations through its wholly owned subsidiary, Prime Air (BC).  The
Company has had no material revenues in the past.  During the year
ended December 31, 1997, the only income received was bank interest
of $4,020.

       During the last three years, the operations of the Company
have been funded from equity participation of the owners.  Total
cash raised from equity funding from March 1992 to December 31, 1994
was $349,808, $131,755 for 1995 and $756,763 for 1996.  No funds
were raised during 1997, but the Company did convert $130,751 of
debt into common stock of the Company.

       The Company has realized a cumulative loss of $925,231 since
March 1992, and anticipates similar losses until operations begin,
which is expected in early 1999.

       The Company has sufficient working capital to meet its
immediate obligations, but does not have any cash available to allow
operations to commence.  The Company requires $1,500,000 million to
commence flight operations.  The Company intends to raise a total of
$3,000,000 by way of an equity offering, the net proceeds of which
will facilitate the operational start-up and provide sufficient
working capital to sustain operations for some time.  The only
significant capital expenditures anticipated in the next year are
airport and runway lighting improvements which are expected to cost
approximately $350,000.

                      PART II  OTHER INFORMATION

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

       No matters were submitted to the shareholders during the
quarter ended June 30, 1998.

                      ITEM 5.  OTHER INFORMATION

       None.

              ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       (a)     Exhibits.  The following exhibits are included as
                          part of this report:


       EXHIBIT NO.     DESCRIPTION OF EXHIBIT                         PAGE

       2.1             Plan and Agreement of Merger dated
                       March 10, 1997                                   *
       2.2             Merger Agreement dated June 29, 1994             *
       3.1             Articles of Incorporation                        *
       3.2             Articles of Merger dated November 26, 1997       **
       3.4             Bylaws of the Company                            *
       4.1             Stock Option Plan                                ***
       10.1            Airport Lease and Operating Agreement, as 
                       amended                                          *
       10.2            Employment Agreement with Blaine Haug            *
       10.3            Employment Agreement with Royle Smith            *
       10.4            Consulting Agreement with Siverthorn
                       Investments, Ltd.                                *
       10.5            Memorandum of Agreement with Voyageur Airways    *
       10.6            Addendum to Haug Employment Agreement            *
       10.7            Addendum to Smith Employment Agreement           *

        * Incorporated by reference from the Company's registration
statement on Form S-4 filed with the Securities and Exchange
Commission, file no. 333-28249.

        ** Incorporated by reference from the Company's annual report
on Form 10-KSB filed with the Securities and Exchange Commission,
file no. 333-28249.

        *** Incorporated by reference from the Company's quarterly
report on Form 10-QSB filed with the Securities and Exchange
Commission, file no. 333-28249.

(b)  Reports on Form 8-K: No reports on Form 8-K were filed during
the quarter ended June 30, 1998.

<PAGE>														
					       PRIME AIR, INC.									
      (A Development Stage Company)									
														
					       CONSOLIDATED BALANCE SHEETS									
					        (all figures in US dollars)									
														
					(UNAUDITED - SEE NOTICE TO READER)									
														
														
		                            					June 30    		June 30	     	December 31			
                             							1998	        	1997		         1997			
                          							(Unaudited)	 	(Unaudited)	   	(Audited)			
														
    					  ASSETS									

 Current Assets													
	  Cash and short-term deposits 		  $	36,894 	  $	104,268 	     $	11,388 			
	  Prepaid expenses and deposit						    -	        	1,109 		         -			
	  GST recoverable			               			1,546 	    	35,235 	       	1,587 			
                               							38,440    		140,612       		12,975 			
														
	Capital Assets (Note 4)	       					559,428    		616,820        613,516 			
														
														
                             						$	597,868   	$	757,432     	$	626,491 			
														
														
					LIABILITIES									
														
	Current Liabilities													
	  Accounts payable and 
   accruals		                  		  $ 	71,527 	  $	104,750 	    $ 	83,655 			
	  Notes and advances 
   payable  (Note 5)				            		95,412      		3,697        		3,495 			
	  Notes and advances 
   from related parties  (Note 6)						5,400 		       -	          	5,400 			
                                  			172,339    		108,447       		92,550 			
														
														
				SHAREHOLDERS' EQUITY										
														
	Capital Stock  (Note 7)													
	  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:													
	    7,140,213 common shares 			
     (1996: 6,556,781)			                8,829 	     	7,140 	    	7,140 			
														
	  Share subscription receivable		     				(20)	       	(20)      		(20)			
														
	  Capital in excess of par value				1,341,951 	  1,355,680	  1,355,740
		                               				1,350,760  		1,362,800 		1,362,860		
	
 Accumulated Deficit During 													
	  Development Stage		            				(925,231)	  	(713,815)	 	(828,919)			
                                							425,529 	   	648,985   		533,941 			
														
                             						  $	597,868 	  $	757,432   $	626,491 			

	Approved on Behalf of the Board:													
														
					 Director									
														
					 Director									
														
														
					               See Accompanying Notes									
														
							0 		0 		0 			
														
						 PRIME AIR, INC.								
						 (A Development Stage Company)								
														
 				  CONSOLIDATED STATEMENTS OF OPERATIONS								
	      (all figures in US dollars)								
														
			 			(UNAUDITED - SEE NOTICE TO READER)			            		 		   Period from	
				                                  									              Date of Inception	
					     		Six Months Ended		Six Months Ended		Year Ended		 on March 10, 1989	
						         	June 30	          	June 30		    December 31		   to June 30	
          							1998	             	1997	         	1997	        	  1998	
       							(Unaudited)        	(Audited)	   	(Audited)     		(Unaudited)	
												                                                    	(Note 1)	
	Direct Costs													
	  Flight 
   operations 		$	      -	      $	       -	    $      -	         $	114,720 	
														
	Administrative 
  and General													
	  Audit and 
   accounting					 	1,511 		         6,699 	     	23,826          		50,199 	
	  Advertising						    -	             	74 		         -	            	9,094 	
	  Amortization		 		9,958         		11,065      		21,603          		49,366 	
	  Automotive				 		1,884 		             -		          -	           	19,164 	
	  Consulting 
   fees		       				6,492            		328 	     	24,583          		94,368 	
	  Insurance				  		1,858          		3,877 	      	9,240          		17,559 	
	  Interest and 
   service charges				307            		247       		1,769 	          	9,565 	
	  Legal 				     		5,801 	        	15,469      		34,192 	         	63,388 	
	  Management 
   remuneration         -		              -		          -           		77,287 	
	  Office and 
   general	    					9,343          		6,904      		10,176          		87,831 	
	  Promotion and 
   entertainment 			7,268            		752         		711          		22,004 	
	  Rent						           -	            	296 	        	279          		34,603 	
	  Telephone and 
   utilities	 					11,613          		7,299      		18,039          		61,586 	
	  Transfer agent 
   and filing 
   fees	     	 				13,547          		4,863      		13,636          		28,409 	
	  Travel	     					6,474 	        	15,515 	     	25,464          		59,045 	
            							76,055         		73,388     		183,518 	        	683,468 	
														
	Other Income 
   (Expense)													
	  Gain (loss) on 
   foreign 
   exchange 
   conversion	 			(20,443)	        	(4,289)	    	(10,199)	        	(54,898)	
	  Interest income				187          		3,084 	      	4,020           		6,379 	
             					(20,256)        		(1,205)	     	(6,179)	        	(48,519)	
														
	 Net Loss 
  Before 
  Non-recurring 
  Item		      				(96,311)	       	(74,593)   		(189,697)	       	(846,707)	
														
	Non-recurring 
 Expense													
	  Consulting 
   costs to set 
   up US 
   corporation		        -		              -		          -          		(78,524)	
														
	Net Loss For 
 Period	    				$	(96,311)	      $	(74,593)	  $	(189,697)    	  $	(925,231)	
														
														
	Net Loss Per 
 Common Share	 	$	(0.0037)      	$	(0.0112)  	$ 	(0.0275)			
														
	Weighted 
 Average Common 
 Shares 
 Outstanding					6,896,225      		6,687,092 		   6,896,225		
														
														
						See Accompanying Notes								
														
														
														
						   PRIME AIR, INC.								
 	       (A Development Stage Company)								
														
						 CONSOLIDATED STATEMENTS OF CASH FLOWS								
	 	      (all figures in US dollars)								
														
		       (UNAUDITED - SEE NOTICE TO READER)								
														
														
														
														
			                                               										   Period from	
                                                 								    Date of Inception	
			    				Six Months Ended		Six Months Ended		Year ended		  on March 10, 1989	
						        	June 30         		June 30	    	 December 31     to March 31	
          							1998	           	1997	         	1997	         	  1998	
      							(Unaudited)     		(Unaudited)   		(Audited)	     	(Unaudited)	
                                                   													(Note 1)	
														
														
	NET INFLOW 
 (OUTFLOW) OF 
 CASH RELATED													
	TO THE 
 FOLLOWING 
 ACTIVITIES:													
														
	OPERATING													
	  Net loss		 $	(96,311)	)     $	(74,593)	)  $	(189,697)     	 $	(828,919)	
	  Non-cash 
   charge - 
 amortization		 		9,958 		        11,065 	      	21,603 	         	43,721 	
         							(86,353)	       	(63,528)	    	(168,094)	       	(785,198)	
														
   Change in 
   non-cash 
   working 
   capital 													
	  balances 
   relating to 
   operations 		(12,088)       		(25,968)     		(12,306)	         	82,068 	
         							(98,441)	)      	(89,496)	    	(180,400)	       	(703,130)	


	FINANCING													
	  Notes and 
   advances 
   payable		 				91,917 	        	(5,370)      		(5,572)	          	3,495 	
	  Notes and 
   advances 
   from related 
   parties		 				(8,732)	       	(25,522)		     (20,122)          		5,400 	
	  Issue of 
   capital stock (3,368)		       131,019 	     	131,079 	      	1,362,860 	
														
          							79,817        		100,127      		105,385 	      	1,371,755 	
														
														
	INVESTING													
	  Exchange 
   variance of 
   capital 
   assets		  				44,130 	        	(7,677)	     	(14,911)	       	(657,237)	
														
	NET CASH 
 INFLOW 
 (OUTFLOW) 						25,506          		2,954      		(89,926)         		11,388 	
														
	CASH, 
 BEGINNING OF 
 PERIOD				    		11,388        		101,314      		(85,351)	      	       -	
														
	CASH, END OF 
 PERIOD	   				$	36,894       	$	104,268    	$	(175,277)        	$	11,388 	
														
														

					                         See Accompanying Notes									
														

  
                                  
                           PRIME AIR INC.
                   (A Development Stage Company)
                       (A Nevada Corporation)
                                  
                 CONSOLIDATED FINANCIAL STATEMENTS
                                  
            JUNE 30, 1998 AND 1997 AND DECEMBER 31, 1997
                                  
                                  
                       Notice to Reader
            
                    Consolidated Balance Sheets
            
                    Consolidated Statements of 
                    Operations 
            
                    Consolidated Statements of
                    Shareholders' Equity and Deficit
                    
                    Consolidated Statements of Cash Flows
            
                    Notes to Consolidated Financial 
                    Statements
                             
                             
                             
                             
                             
                             
            KOCH & ASSOCIATES
            __________________________________________
            STE 601 - 938 HOWE STREET, VANCOUVER, B.C.
            V6Z 1N9   TELEPHONE (604)684-5700  FAX 
            (604)684-7211
            
            
            
            
            
            
                     NOTICE TO READER
            
                       I have compiled the consolidated
            balance sheet of Prime Air Inc., a Nevada
            company, as at  June 30, 1998 and
            consolidated statements of operations and
            cash flows for the six month period then
            ended from information provided by
            management.  I have not audited, reviewed or
            otherwise attempted to verify the accuracy
            or completeness of such information. 
            Readers are cautioned  these statements may
            not be appropriate for their purposes.
            
            
            August 13, 1998                       
            Certified Management Accountant
            Vancouver, B.C.        
            
            
                             
                      PRIME AIR INC.
              (A Development Stage Company)
                             
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
       June 30, 1998 and 1997 and December 31, 1997
            (Unaudited   See Notice to Reader)
            
            
  1.  INCORPORATION AND PRINCIPLES OF CONSOLIDATION
              
     On November 10, 1997, Prime Air Inc (a Nevada corporation) was formed, the
     purpose of which was to change the domicile of the Company to the State of
     Nevada and to acquire all of the assets and liabilities of the predecessor
     Delaware company.
              
     The predecessor Deleware company was incorporated under the laws of the 
     State of Delaware, USA 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 was reincorporated on August 30, 1993 as 
     Astro Enterprises, Inc.  On June 28, 1994, pursuant to appropriate
     shareholder agreements, Astro Enterprises, Inc. 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.  Upon 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. 
              
   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 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 1997. The future successful operation of the Company is 
     dependent upon its ability to obtain the financing required to complete 
     the terminal construction and commence operation thereof 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 the required financing and discharge its liabilities and 
     commitments in the normal course of business.
              
              
                            
                     PRIME AIR INC.
             (A Development Stage Company)
                            
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          June 30, 1998 and 1997 and  December 31, 1997
          (Unaudited   See Notice to Reader)
              
   3.  SIGNIFICANT ACCOUNTING POLICIES
              
        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 thereof which is provided on a straight-line
          basis over the 30 year term of the property lease. 
       Furniture and Equipment: 
          Furniture and equipment are stated at cost, net of amortization 
          which is provided for at the rate of 20% per annum on the declining 
          balance basis.
                       
       Reporting Currency
          All amounts in these consolidated financial statements are reported 
          in U.S. funds being converted from Canadian funds where applicable
          at the average annual rate as posted by the Internal Revenue
          Service of the United States as follows:
                  1998:    $ 0.6810 U.S. /  $ 1.  CDN
                  1997:    $ 0.7334 U.S. /  $ 1.  CDN
                  1996:    $ 0.7284 U.S. /  $ 1.  CDN 
                       
4.    CAPITAL ASSETS
              
       Capital assets consist of the following at June 30, 1998, December 31, 
       1997 and December 31, 1996:
                                                      
                                                 June 30, 1998          
                                                     Accumulated   Net Book 
                                            Cost     Amortization  Value     
       Air terminal construction costs  $  606,076   $ 47,691     $ 558,385
       Furniture and equipment               4,891      3,847         1,044
                                                      
                                         $ 610,967   $ 51,538     $ 559,428
              
                       
                                                      
                                                 June 30, 1997  
                                                     Accumulated   Net Book 
                                            Cost     Amortization  Value     
       Air terminal construction costs   $ 644,922   $ 32,017       612,905
       Furniture and equipment               5,262      1,347         3,915
                                         $ 650,184   $ 33,364     $ 616,820
                        
                       
                                                      
                              December 31, 1997      
                                                      
                                                      Accumulated   Net Book 
                                             Cost     Amortization  Value     
       Air terminal construction costs   $ 652,083   $ 42,058     $ 610,625
       Furniture and equipment               5,154      1,663         3,941
                                         $ 657,237   $ 43,721     $ 613,516
                        
                       
                     PRIME AIR INC.
             (A Development Stage Company)
                            
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              June 30, 1998 and 1997 and  December 31, 1997
              (Unaudited  See Notice to Reader)
                       
 5.    NOTES AND ADVANCES PAYABLE
              
         The notes and advances payable are unsecured, non-interest bearing 
         and are without specific terms of repayment.
              
 6.    RELATED PARTY TRANSACTIONS
              
         The notes and advances payable are unsecured, non-interest bearing 
         and are without specific terms of repayment.
              
              
 7.    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:
              
                 $100 per annum for the initial six (6) years
                 (1993 through 1998); 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
                 1999 through 2001 cannot be quantified as the
                 amount of gross receipts for those years cannot be
                 determined. 

<PAGE>
                              SIGNATURES

       Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
              
                                        PRIME AIR, INC.


Date: September 16, 1998                By /s/ Royle Smith, President


Date: September 16, 1998                By /s/ Greg Duffy, Principal
                                        Financial and Accounting Officer

[ARTICLE] 5
<TABLE>
<S>                             <C>
[PERIOD-TYPE]                   6-MOS
[FISCAL-YEAR-END]                          DEC-31-1998
[PERIOD-END]                               JUN-30-1998
[CASH]                                          36,894
[SECURITIES]                                         0
[RECEIVABLES]                                        0
[ALLOWANCES]                                         0
[INVENTORY]                                          0
[CURRENT-ASSETS]                                38,440
[PP&E]                                               0
[DEPRECIATION]                                       0
[TOTAL-ASSETS]                                 597,868
[CURRENT-LIABILITIES]                          172,339
[BONDS]                                              0
[PREFERRED-MANDATORY]                                0
[PREFERRED]                                          0
[COMMON]                                         8,829
[OTHER-SE]                                           0
[TOTAL-LIABILITY-AND-EQUITY]                   597,868
[SALES]                                              0
[TOTAL-REVENUES]                                     0
[CGS]                                                0
[TOTAL-COSTS]                                   98,441
[OTHER-EXPENSES]                                20,256
[LOSS-PROVISION]                                     0
[INTEREST-EXPENSE]                                   0
[INCOME-PRETAX]                                      0
[INCOME-TAX]                                         0
[INCOME-CONTINUING]                                  0
[DISCONTINUED]                                       0
[EXTRAORDINARY]                                      0
[CHANGES]                                            0
[NET-INCOME]                                   (20,256)
[EPS-PRIMARY]                                   (.0037)
[EPS-DILUTED]                                        0
</TABLE>