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 March 31, 1999

     [   ]     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 April 30, 1999, there were 
19,647,560 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, 1998.

<PAGE>

PRIME AIR INC.
(A Development Stage Company)
(A Nevada Corporation)

Consolidated Financial Statements

March 31, 1999 and 1998 and December 31, 1998 

(Unaudited - See Notice to Reader)

Notice to Reader

Balance Sheets

Statements of  Operations and Deficit

Statements of Cash Flows

Notes to Financial Statements

<PAGE>
Koch & Associates
_________________________________________
Ste 601 - 938 Howe Street, Vancouver, B.C. V6Z 1N9   Tel (604)684-5700  Fax 
(604)684-7211



NOTICE TO READER

     We have compiled the consolidated balance sheet of Prime Air Inc., a 
Nevada company, as at  March 31, 1999 and statements of loss and deficit  for 
the three month period then ended from information provided by management.  We 
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.

                                     "Koch & Associates"
April 28, 1999                         Certified Management Accountants
Vancouver, B.C.          

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

CONSOLIDATED BALANCE SHEETS
(all figures in US dollars)
(UNAUDITED - SEE NOTICE TO READER)

                                 March 31          March 31          December 31
                                 1999              1998              1998
                                 (Unaudited)       (Unaudited)       (Audited)
                                                  
                      ASSETS                              
                                                  

Current Assets                                                  
  Cash and short-term deposits   $    6,595        $    11,328          7,433 
  Prepaid expenses and deposit        1,545                  -          3,091 
  GST recoverable                     5,116              1,587          5,116 
                                     13,256             12,915         15,640 

Capital Assets (Note 4)             587,675            607,868        592,843 


                                 $  600,931        $   620,783        608,483 
                                                  
                                                  
                    LIABILITIES                              
                                                  
Current Liabilities                                                  
  Accounts payable and accruals  $   75,809        $   104,471         79,405 
  Notes and advances payable  
   (Note 5)                           3,254              3,495        109,754 
  Notes and advances from 
   related parties  (Note 6)              -              5,400              -
                                     79,063            113,366        189,159 


            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:                                                  
    19,647,560 common shares         19,648              7,140         18,013 
     (March 31, 1998 14,280,426; 
      December 31, 1998 18,013,110)                                             
                                                  
  Share subscription receivable           -                (20)             -

  Capital in excess of par value  1,507,873          1,355,740      1,381,498 
                                  1,527,521          1,362,860      1,399,511 
Accumulated Deficit During                                                   
  Development Stage              (1,005,653)          (855,443)      (980,187)
                                    521,868            507,417        419,324 

                                 $  600,931        $   620,783        608,483 
                                                  

Approved on Behalf of the 
Board:                                                  

                     Director                              

                     Director                              


See Accompanying Notes
<PAGE>

PRIME AIR, INC.                         
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(all figures in US dollars)
(UNAUDITED - SEE NOTICE TO READER)
                                 Three Months       Three Months    Year Ended
                                 Ended March 31     Ended March 31  December 31
                                     1999               1998            1998
                                  (Unaudited)        (Unaudited)     (Audited)
                                                  
Direct Costs                                                  
  Flight operations              $          -     $            -           -
                                                  
Administrative and General                                                  
  Audit and accounting                  1,287                  -      27,685 
  Advertising                               -                  -       3,949 
  Amortization                          5,168              5,648      20,673 
  Automotive                                -                  -           -
  Bad debts                                 -                  -       1,933 
  Consulting  fees                      3,299                  -       9,862 
  Insurance                             1,601              1,977       5,043 
  Interest and service charges             65                  -       1,041 
  Legal                                     -              3,586       9,840 
  Management remuneration                   -                  -           -
  Office and general                   20,958              2,578       8,737 
  Rent - airport facility                   -                  -          67 
  Repair and maintenance                  138                  -       5,047 
  Telephone and utilities               2,721              6,025      15,280 
  Transfer agent and filing fees          100              3,544      13,825 
  Travel, promotion and entertainment       -              3,166      29,823 
                                       35,337             26,524     152,805 

Other Income (Expense)                                                  
  Gain (loss) on foreign exchange 
   conversion                           9,871                  -         286 
  Interest income                           -                  -       1,251 
                                        9,871                  -       1,537 

Net Loss                              (25,466)           (26,524)   (151,268)
                                                  

Net Loss Per Common Share          $  (0.0013)       $   (0.0019)    (0.0089)
                                                  
Weighted Average Common Shares 
 Outstanding                        19,102,743        13,792,450  16,943,937 
(Giving effect to 2:1 share split)

                         See Accompanying Notes                         
<PAGE>
PRIME AIR, INC.                         
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(all figures in US dollars)
(UNAUDITED - SEE NOTICE TO READER)
                                   Three Months      Three Months    Year ended
                                   Ended March 31    Ended March 31  December 31
                                       1999              1998           1998
                                    (Unaudited)       (Unaudited)    (Audited)
                                                  

NET INFLOW (OUTFLOW) OF CASH 
RELATED TO THE FOLLOWING 
ACTIVITIES:                                                  

OPERATING                                                  
  Net loss                          $   (25,466)     $   (26,524)    (151,268)
  Non-cash charge - amortization          5,168            5,648       20,673 
                                        (20,298)         (20,876)    (130,595)

  Change in non-cash working 
   capital balances relating to 
   operations                            (2,050)          20,816      (10,870)
                                        (22,348)             (60)    (141,465)


FINANCING                                                  
  Notes and advances payable           (106,500)               -      106,259 
  Notes and advances from related 
   parties                                    -                -       (5,400)
  Issue of capital stock                128,010                -       36,651 

                                         21,510                0      137,510 


INVESTING                                                  
  Acquisition of capital assets               -                -            -

NET CASH INFLOW (OUTFLOW)                  (838)             (60)      (3,955)

CASH, BEGINNING OF PERIOD                 7,433           11,388       11,388 

CASH, END OF PERIOD                 $     6,595      $    11,328        7,433 

See Accompanying Notes                              

<PAGE>
PRIME AIR, INC.                              
(A Development Stage Company)
Consolidated Statements of Shareholders' Equity and Deficit
(all figures in US dollars)
                                         Capital in               Accumulated
                                         Excess of     Share     Deficit During
                     Common Shares      (Less than) Subscriptions Development
                  Shares       Amount    Par Value   Receivable     Stage
                                                  
Balance at 
 Inception on    
 March 10, 1989      -     $       -    $      -     $      -     $        -
                                                  
Issue of common 
 shares for cash      
 at $ .001/share   630,237        630          -            -              -
                                                  
Net loss for the 
 year ended     
 March 31, 1990      -             -           -            -          (17,956)
                           
Balance, March 31,
 1990              630,237        630          -            -          (17,956)
                                                  
Issue of common 
 shares for cash  
 at $ .001/share   157,559        158          -            -              -
                                                  
Net loss for the 
 year ended          
 March 31, 1991      -             -           -            -          (49,419)
                                
Balance, March 31, 
 1991              787,796        788          -            -          (67,375)
                 
Net loss for the 
 year ended        
 March 31, 1992      -             -           -            -          (10,990)
                 
Balance, March 31, 
 1992             787,796         788          -            -          (78,365)
                       
Issue of common 
 shares for cash        
 at $ .277/share  132,088         132        36,499         -                -
 at $ .214/share   17,069          17         3,628         -                -
                               
Net loss for the 
 year ended          
 March 31, 1993      -             -           -            -          (38,426)
                          
Balance, March 31, 
 1993             936,953         937        40,127         -         (116,791)
                                                  
Issue of common 
 shares for 
 services       
 at nominal value  92,173          92           (92)        -                -
                                                  
Issue of common 
 shares for cash     
 at $ .001/share  300,000         300          -            -                -
 at $ .109/share    3,340           3           361         -                -
 at $ .154/share   23,634          24         3,619         -                -
 at $ .280/share   19,401          19         5,400         -                -
 at $ .330/share   23,161          23         7,624         -                -
 at $ .463/share   87,445          88        40,330         -                -
 at $ .694/share   15,756          16        10,907         -                -
 at $ .925/share    7,878           8         7,274         -                -
                                                  
Net loss for the 
 year ended         
 March 31, 1994       -            -           -            -          (36,272)
                      
Balance, March 31, 
 1994            1,509,741    $ 1,510     $ 115,550     $   -       $  (153,063)

See Accompanying Notes
<PAGE>

PRIME AIR INC.
(A Development Stage Company)
                                                  
Consolidated Statements of Shareholders' Equity and Deficit
(all figures in US dollars)

                                      Capital in                  Accumulated
                                      Excess of        Share     Deficit During
                 Common Shares       (Less than)   Subscriptions  Development
              Shares        Amount    Par Value      Receivable      Stage
                                                  
Balance 
 Forward      1,509,741    $   1,510   $   115,550   $    -     $     (153,063)
                                 
Issue of 
common shares 
for services                                                  
at nominal 
value           937,478          937          (937)       -                -
                                                  
Issue of 
common shares 
for cash       
at 
$ .374/share    248,692          249        92,697        -                -
at 
$ .463/share    304,089          304       140,286        -                -
                                                  
Net loss for 
the period 
ended       
June 28, 1994       -             -            -          -            (40,947)
               
Balance, 
June 28, 
1994          3,000,000        3,000       347,596        -           (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          3,000,000        3,000       340,283      (20)          (329,540)
                                                  
Issue of 
common shares 
for cash                                                  
and/or 
services at 
an average of 
$ .234/share    562,550          563       131,192        -               -
              
Net loss for 
the period 
ended                                                  
December 31, 
1995               -               -           -          -            (71,266)
           
Balance, 
December 31, 
1995          3,562,550        3,563       471,475      (20)           (400,806)
                       
Issue of 
common shares 
for cash                                                  
at 
$ .500/share  1,510,558        1,511       753,769        -                -
                         
Issue of 
common shares 
for services                                                  
at nominal 
value         1,483,673        1,483          -           -                -
                                                  
Net loss for 
the period 
ended                                                  
December 31, 
1996              -              -            -           -           (238,416)

Balance, 
December 31, 
1996          6,556,781      $ 6,557      $1,225,244   $ (20)     $   (639,222)
                                                  
See Accompanying Notes To Financial Statements
<PAGE>
PRIME AIR INC.                              
(A Development Stage Company)
                            
Consolidated Statements of Shareholders' Equity and Deficit
(all figures in US dollars)
                                                  
                                     Capital in                    Accumulated
                                     Excess of          Share     Deficit During
                 Common Shares      (Less than)     Subscriptions  Development
                Shares      Amount    Par Value       Receivable       Stage
      
Balance 
Forward       6,556,781    $   6,557  $  1,225,244   $     (20)   $  (639,222)
                                                  
Issue of 
common shares 
for services                                                  
at nominal 
value           328,000          328           -            -               -
                                                  
Issue of 
common shares 
for debt                                                  
settlements:                                                  
at 
$ .500/share    124,252          124        62,001          -               -
at 
$ .504/share     36,380           36        18,303          -               -
at 
$ .530/share     94,800           95        50,192          -               -
          
Net loss for 
the year ended                                                  
December 31, 
1997                -             -           -             -         (189,697)
                                                  
Balance, 
December 31, 
1997          7,140,213        7,140     1,355,740        (20)        (828,919)
                                                  
                                                  
Issue of 
common shares 
for debt                                                  
settlements:                                                  
at 
$ .3935/share    10,000           10         3,863          -               -
at 
$ .4006/share    18,215           18         7,279          -               -
                                                  
Issue of common 
shares for 
services                                                  
at nominal 
value         1,663,727        1,664          -             -               -
              8,832,155        8,832     1,366,882        (20)        (828,919)
                                                  
Two for one 
stock split, 
May 18, 1998  8,832,155        8,832        (8,832)         -               -
             17,664,310       17,664     1,358,050        (20)        (828,919)
       
Issue of 
common shares 
for debt                                                  
settlement:                                                  
at 
$ .25/share      64,800           65        16,135          -               -
                                                  
Issue of 
common 
shares for 
services                                                  
at nominal 
value           290,000          290          -             -               -
                           
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                -             -           -             -         (151,268)
                                                  
Balance, 
December 31, 
1998            18,013,110      18,013   1,381,498          -         (980,187)
                                                  
Issue of 
common 
shares for 
debt                                                  
settlement:                                                  
at 
$ .20/share        624,450         624     126,376          -               -
                                    
Issue of 
common shares 
for services                                                  
at nominal 
value            1,010,000       1,010        -             -               -
                                                  
Net loss for 
the three months  
ended               
March 31, 1999        -            -          -             -          (25,466)
         
Balance, 
March 31, 
1999            19,647,560     $19,648   $1,507,874      $  -      $ (1,005,653)

See Accompanying Notes To Financial Statements                              

<PAGE>
PRIME AIR INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999

(Unaudited - See Notice to Reader)


1.  Incorporation and Principles of Consolidation

The 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.

On November 10, 1996, Prime Air Inc (a Nevada corporation) was formed, the 
purpose of which will be to change the domicile of the Company to the State of 
Nevada.

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.

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.

<PAGE>

PRIME AIR INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(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:     $ 0.6743 U.S. /  $ 1.  CDN
  
4.    Capital Assets

                                                     1999       1998
                                      Accumulated    Net Book   Net Book
                              Cost    Amortization   Value      Value
          
Air terminal 
construction costs        $ 652,084    $ 67,080     $ 585,004    $ 590,007

Furniture and equipment       5,153       2,482         2,671        2,836

                          $ 657,237    $ 69,562     $ 587,675    $ 592,843

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

During the three months ended March 31, 1999, the Company issued 800,000 
restricted common shares to a director at nominal value pursuant to a 
management contract. Also during the year ended December 31, 1998, the 
company borrowed $106,500 from a shareholder.  During the first quarter 
of 1999 the Company converted $92,000 of such debt to 423,200 shares of 
Common Stock of the company.  The remaining balance of $ 14,500 is due 
and payable by the Company immediately upon receiving funding to commence 
operations or upon demand at any time after July 31, 1999.  During the 
first quarter of 1999 the company borrowed $45,400, $35,000 of which has 
been converted to 201,250 shares of Common Stock of the company.

<PAGE>

PRIME AIR INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(Unaudited - See Notice to Reader)

7.    Capital Stock
     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

     Common Shares Issued:
                                    Number of Shares          Consideration
     To August 31, 1993
          - for cash                         300,000          $      300
     Prime Air Inc. share exchange
          - June 28, 1994                  2,700,000             350,296
     During year ended December 31, 1995
          - for cash                         562,550             131,756     
     Balance at December 31, 1995          3,562,550             482,352
     During year ended December 31, 1996
          - for cash                       1,510,558             755,279
          - consulting and related 
            services                       1,483,673               1,483
                                           2,994,231             756,762     

     Balance, December 31, 1996            6,556,781          $1,239,114 

     During the year ended 
      December 31, 1997
          - shares-for-debt settlements      255,432             130,751
          - consulting and related 
            services                         328,000                 328
                                             583,432             131,079     

     Balance, December 31, 1997            7,140,213          $1,370,193 

     During the year ended 
      December 31, 1998    
          - shares-for-debt settlements       93,015              27,370
          - consulting and related 
            services                       1,953,727               1,954
          - Transfer Agent correction         (6,000)                 (6)
                                           2,040,742              29,318
                                           9,180,955           1,399,511
          - "Two for One" share split      8,832,155          __________

     Balance, December 31, 1998           18,013,110           1,399,511

     During the three months ended 
      March 31, 1999
          - shares-for-debt settlements      624,500             127,000
          - consulting and related 
            services                       1,009,950               1,010

     Balance, March 31, 1999              19,647,650        $  1,527,521


<PAGE>
	
PRIME AIR INC.
(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999

(Unaudited - See Notice to Reader)

7.    Capital Stock (continued)

In July, 1997, management of the Company voluntarily halted trading of 
its common shares based upon the conclusion that information concerning 
the history of the Company provided by former management may not have 
been complete.


8.  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. 
<PAGE>

ITEM 2.  MANAGEMENT'S PLAN OF OPERATION

     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.  Operations are expected to commence in late 
1999.

     During the last four 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.  No debt was 
converted during 1998.  In the three months ended March 31, 1999, the Company 
converted debt of $127,000 into common stock of the Company.

     The Company has realized a cumulative loss of $1,005,653 since March 
1992, and anticipates similar losses until operations begin.

     The Company presently has no cash on hand to allow operations to 
commence.  The Company expects to pay approximately $85,000 to cover legal, 
insurance, and other essential expenses during the next 12 months whether 
operations commence or not.

     Prime Air (BC)'s sole fixed obligation is the payment of $100 CAD per 
annum to the Village of Pemberton under the terms of its Airport Lease and 
Operating Agreement.

     The Company proposes to raise a minimum of $3,000,000 and a maximum of 
$6,000,000 during the next year.  However, there is no assurance that the 
Company will be able to raise such funds during the next year.  This funding 
will provide sufficient cash to start operations, make capital improvements to 
the Pemberton Airport and terminal building, and sustain flight operations for 
some time.

     An agreement dated October 30, 1998, was signed between the Company and 
Chanen Painter & Company Limited, Investment Bankers to attempt to raise 
capital on behalf of the Company.

     Should operations commence during 1999, the Company anticipates hiring 
approximately six full-time employees during the next 12 months.


PART II  OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

During the quarter ended March 31, 1999, the Company sold the following shares 
of common stock of the Company without registration under the Securities Act 
of 1933:

a. On February 18, 1999, the Company issued 423,200 shares of its common stock 
to TRD Investments Ltd., as repayment for monies advanced to the Company 
during 1998.

b. Also on February 18, 1999, the Company issued 100,625 shares of common stock 
to TRD Investments Ltd., for monies advanced to the Company during 1999.

c. Also on February 18, 1999, the Company issued 100,625 shares of common stock 
to Dolphin Trading Ltd., as repayment for monies advanced to the Company 
during 1999.

d. Also on February 18, 1999, the Company issued 400,000 shares of common stock 
to Blaine Haug pursuant to the terms of his employment agreement through the 
date of cancellation.  See "Item 5. Other Information."

e. Also on February 18, 1999, the Company issued 400,000 shares of common stock 
to Royle Smith pursuant to the terms of his employment agreement through the 
date of cancellation.  See "Item 5. Other Information."

All of the aforesaid securities set forth immediately above were issued 
without registration under the Act by reason of the exemption from 
registration afforded by the provisions of Section 4(2) thereof, as 
transactions by an issuer not involving any public offering, each recipient of 
securities having delivered appropriate investment representations to 
Registrant with respect thereto and having consented to the imposition of 
restrictive legends upon the certificates evidencing such securities.  No 
underwriting discounts or commissions were paid in connection with such 
issuances.

ITEM 5.  OTHER INFORMATION

Effective April 30, 1999, Blaine Haug, an officer and director of the Company 
at such time, and Royle Smith, an officer of the Company at such time, 
terminated their employment contracts with the Company.  Also, in connection 
with such terminations, Mr. Smith resigned as president of the Company.  Mr. 
Haug has been appointed as the interim president of the Company and remains a 
director and chairman of the Company.

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

     10.8            Cancellation of Employment Agreement      40
                     for Mr. Smith dated April 30, 1999

     10.9            Cancellation of Employment Agreement      43 
                     for Mr. Haug dated May 1, 1999

(b)  Reports on Form 8-K: No reports on Form 8-K were filed during the quarter 
ended March 31, 1999.

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: May 14, 1999                    By /s/ Blaine Haug, President


Date: May 14, 1999                    By /s/ Greg Duffy, Principal Financial 
      and Accounting Officer


EXHIBIT 10.8 
PRIME AIR INC.
- and -
ROYLE SMITH

CANCELLATION OF EMPLOYMENT AGREEMENT
April 30, 1999

CANCELLATION OF EMPLOYMENT AGREEMENT

          THIS Agreement made effective as of April 30,1999 between:

PRIME AIR INC., 1950-1177 West Hastings Street, Vancouver, British Columbia  
V6E 2K3

          ("Prime Air")
- and -

ROYLE SMITH, 8598 112 Street, Fort Saskatchewan, Alberta  T8L 3V8

          (the "Employee")

RECITALS:

A.By an employment agreement made between Prime Air and the Employee as of 
January 18, 1996 (the "Employment Agreement"), Prime Air employed the Employee 
as its Chief Operating Officer;

B.Prime Air and the Employee each now wish to cancel and terminate the 
Employment Agreement on the terms and conditions set out herein.

NOW THEREFORE for certain good and valuable consideration, the receipt and 
sufficiency of which each party hereby acknowledges, the parties hereto 
covenant and agree as follows:

ARTICLE 1
INTERPRETATION

Section 1.1 Definitions

In this Agreement, including the recitals hereto, unless the subject matter 
otherwise requires, all capitalized and defined terms shall have the same 
meaning as ascribed thereto in the Employment Agreement and shall be 
interpreted and applied mutatis mutandis as required by the subject matter and 
context of this Agreement.

Section 1.2 Interpretation Not Affected by Headings

The division of this Agreement into separate articles and sections and the 
insertion of headings are for convenience of reference only and shall not 
affect the construction or interpretation of this Agreement. 

Section 1.3 Severability

If any covenant, obligation or agreement of this Agreement, or the application 
thereof to any person or circumstance shall, to any extent, be invalid or 
unenforceable, the remainder of this Agreement or the application of such 
covenant, obligation or agreement to persons or circumstances other than those 
as to which it is held invalid or unenforceable, shall not be affected thereby 
and each covenant, obligation and agreement of this Agreement shall be 
separately valid and enforceable to the fullest extent permitted by law.


ARTICLE 2
EFFECTIVE DATE

Section 2.1 Effective Date

This Agreement shall be effective as and from 11:59 p.m. (Vancouver time) on 
April 30, 1999 (the "Effective Date").


ARTICLE 3
CANCELLATION OF EMPLOYMENT AGREEMENT

Section 3.1 Cancellation of Employment Agreement

Prime Air and the Employee each acknowledge and agree that the Employment 
Agreement shall, on the Effective Date, be cancelled and terminated on the 
terms and conditions set out herein, the intention being that as of the 
Effective Date the Employment Agreement shall be of no further force or effect 
and the rights and obligations of the parties in respect thereof shall be 
entirely as set out herein.


ARTICLE 4
COMPENSATION OF EMPLOYEE

Section 4.1 Compensation of Employee

The Employee hereby acknowledges and agrees that he has received all 
Compensation and other amounts to which it he is entitled pursuant to the 
provisions of Article 3 of the Employment Agreement and hereby waives any 
rights or claims he may now or in the future have in respect of additional 
Compensation or any other rights, interest, property or amounts he may claim 
as being payable to him pursuant to the terms of the Employment Agreement.


ARTICLE 5
WAIVER OF TERMINATION NOTICE
AND ADDITIONAL COMPENSATION

Section 5.1 Waiver of Termination Notice and Additional Compensation

In consideration of the mutual covenants set out herein and the payment of $10 
now made by each party to the other, the receipt and sufficiency of which is 
hereby acknowledged, each hereby waives its right to any notice of termination 
of the Employment Agreement from the other and the right to any compensation 
in connection therewith, including any claim the Employee may have for 
additional Compensation or other remuneration pursuant to the provisions of 
Articles 3 and 4 of the Employment Agreement.


ARTICLE 6
INDEMNITIES

Section 6.1 Indemnity by Prime Air

Prime Air hereby indemnifies and holds the Employee harmless from and against 
any actions, debts, liabilities or obligations properly incurred pursuant to 
the Employment Agreement or arising in the reasonable and ordinary course of 
business of Prime Air prior to the Effective Date, and from and against any 
claims arising against the Employee, including costs and expenses incidental 
thereto, relating to the Employee's employment prior to the Effective Date and 
by reason of any action taken by the Employee pursuant to the Employment 
Agreement.

Section 6.2 Indemnity by Employee

The Employee hereby indemnifies and holds Prime Air harmless from and against 
any claims, actions, debts, costs, liabilities or obligations whatsoever, at 
law or in equity, arising by way of any breach of the Employment Agreement 
prior to the Effective Date by Prime Air, its employees, servants, agents or 
persons for which it is responsible at law or by reason of any negligence or 
wrongful act of Prime Air, its employees, servants, agents or persons for whom 
it is responsible.

Section 6.3 Waiver of Additional Rights

The Employee hereby waives any rights, claims or privileges which may have 
been granted by Prime Air to the Employee, either in writing or otherwise, 
prior to the Effective Date, whether by resolution of the board of directors 
of Prime Air, representation of officers of Prime Air, or otherwise, with 
respect to serving as an officer or a director of Prime Air subsequent to the 
Effective Date.


ARTICLE 7
GENERAL

Section 7.1 Waivers

The failure of either party to insist upon the strict performance of any of 
the terms or provisions of this Agreement or to exercise any option, right or 
remedy herein contained, shall not be construed as a waiver or as a 
relinquishment for the future of such term, provision, option, right or 
remedy, the same shall continue and remain in full force and effect.

Section 7.2 Amendments

This Agreement may not be modified or amended except with the written consent 
of the parties hereto.

Section 7.3 Further Assurances

The parties hereto shall execute and deliver from time to time all other 
appropriate supplemental agreements and other instruments, and take any other 
actions necessary to make this Agreement effective, binding and enforceable as 
between them.

Section 7.4 Binding Agreement

This Agreement shall be binding upon and enure to the benefit of each of the 
parties including their respective successors and permitted assigns.


ARTICLE 8
EXECUTION

Section 8.1 Execution

In witness whereof the parties have executed this Agreement as of the day 
first above written.

PRIME AIR INC.

     /s Blaine Haug

     /s Richard T. Shrieves

SIGNED, SEALED AND DELIVERED by Royle Smith in the presence of:

_____/s______________________
        Greg Duffy
        Witness

8598 112 Street, Fort Saskatchewan Alberta, Canada
Address

_____/s______________________
        ROYLE SMITH


<PAGE>
EXHIBIT 10.9 
PRIME AIR INC.
- and -
BLAINE HAUG

CANCELLATION OF EMPLOYMENT AGREEMENT
April 30, 1999

CANCELLATION OF EMPLOYMENT AGREEMENT

          THIS Agreement made effective as of April 30, 1999 between:

PRIME AIR INC., a British Columbia company with its registered office at 
1950-1177 West Hastings Street, Vancouver, British Columbia  V6E 2K3

          ("Prime Air")
- and -

BLAINE HAUG, of P.O. Box 106 Arawak House, Grand Turk, Turks & Caicos Islands, 
BWI

          (the "Employee")

RECITALS:

A.By an employment agreement made between Prime Air and the Employee as of 
January 18, 1996 (the "Employment Agreement"), Prime Air employed the Employee 
as its Assistant General Manager;

B.Prime Air and the Employee each now wish to cancel and terminate the 
Employment Agreement on the terms and conditions set out herein.

NOW THEREFORE for certain good and valuable consideration, the receipt and 
sufficiency of which each party hereby acknowledges, the parties hereto 
covenant and agree as follows:

ARTICLE 1
INTERPRETATION

Section 1.1 Definitions

In this Agreement, including the recitals hereto, unless the subject matter 
otherwise requires, all capitalized and defined terms shall have the same 
meaning as ascribed thereto in the Employment Agreement and shall be 
interpreted and applied mutatis mutandis as required by the subject matter and 
context of this Agreement.

Section 1.2 Interpretation Not Affected by Headings

The division of this Agreement into separate articles and sections and the 
insertion of headings are for convenience of reference only and shall not 
affect the construction or interpretation of this Agreement. 

Section 1.3 Severability

If any covenants, obligation or agreement of this Agreement, or the 
application thereof to any person or circumstance shall, to any extent, be 
invalid or unenforceable, the remainder of this Agreement or the application 
of such covenant, obligation or agreement to persons or circumstances other 
than those as to which it is held invalid or unenforceable, shall not be 
affected thereby and each covenant, obligation and agreement of this Agreement 
shall be separately valid and enforceable to the fullest extent permitted by 
law.


ARTICLE 2
EFFECTIVE DATE

Section 2.1 Effective Date

This Agreement shall be effective as and from 11:59 p.m. (Vancouver time) on 
April 30, 1999 (the "Effective Date").


ARTICLE 3
CANCELLATION OF EMPLOYMENT AGREEMENT

Section 3.1 Cancellation of Employment Agreement

Prime Air and the Employee each acknowledge and agree that, subject to the 
terms and conditions set out herein, the Employment Agreement shall, on the 
Effective Date, be cancelled and terminated, the intention being that as of 
the Effective Date the Employment Agreement shall be of no further force or 
effect and the rights and obligations of the parties in respect thereof shall 
be entirely as set out herein.


ARTICLE 4
COMPENSATION OF EMPLOYEE

Section 4.1 Compensation of Employee

The Employee hereby acknowledges and agrees that he has received all 
Compensation and other amounts to which he is entitled pursuant to the 
provisions of Article 3 of the Employment Agreement and hereby waives any 
rights or claims he may now or in the future have in respect of additional 
Compensation or any other rights, interest, property or amounts he may claim 
as being payable to him pursuant to the terms of the Employment Agreement.


ARTICLE 5
WAIVER OF TERMINATION NOTICE
AND ADDITIONAL COMPENSATION

Section 5.1 Waiver of Termination Notice and Additional Compensation

In consideration of the mutual covenants set out herein and the payment of $10 
now made by each party to the other, the receipt and sufficiency of which is 
hereby acknowledged, each party hereby waives its right to any notice of 
termination of the Employment Agreement from the other and the right to any 
Compensation in connection therewith, including any claim the Employee may 
have for additional or other remuneration pursuant to the provisions of 
Articles 3 and 4 of the Employment Agreement.


ARTICLE 6
INDEMNITIES AND RELEASES

Section 6.1 Indemnity by Prime Air

Prime Air hereby indemnifies and holds the employee harmless from and against 
any actions, debts, liabilities or obligations properly incurred pursuant to 
the Employment Agreement or arising in the reasonable and ordinary course of 
business of Prime Air prior to the Effective Date, and from and against any 
claims arising against the Employee, including costs and expenses incidental 
thereto, relating to the Employee's employment prior to the Effective Date and 
by reason of any action taken by the Employee pursuant to the Employment 
Agreement.

Section 6.2 Indemnity by Employee

The Employee hereby indemnifies and holds Prime Air harmless from and against 
actions, debts, costs, liabilities or obligations whatsoever, at law or in 
equity, arising by way of any breach of the Employment Agreement prior to the 
Effective Date by Prime Air, its employees, servants, agents or persons for 
which it is responsible or at law, or by reason of any negligence or wrongful 
act of Prime Air, its employees, servants, agents or persons for whom it is 
responsible.


ARTICLE 7
GENERAL

Section 7.1 Waivers

The failure of either party to insist upon the strict performance of any of 
the terms or provisions of this Agreement or to exercise any option, right or 
remedy herein contained, shall not be construed as a waiver or as a 
relinquishment for the future of such term, provision, option, right or 
remedy, or the same shall continue and remain in full force and effect.

Section 7.2 Amendments

This Agreement may not be modified or amended except with the written consent 
of the parties hereto.

Section 7.3 Further Assurances

The parties hereto shall execute and deliver from time to time all other 
appropriate supplemental agreements and other instruments, and take any other 
actions necessary to make this Agreement effective, binding and enforceable as 
between them.

Section 7.4 Binding Agreement

This Agreement shall be binding upon and enure to the benefit of each of the 
parties including their respective successors and permitted assigns.


ARTICLE 8
EXECUTION

Section 8.1 Execution

In witness whereof the parties have executed this Agreement as of the day 
first above written.

PRIME AIR INC.

   /s Blaine Haug

   /s Richard T. Shrieves

SIGNED, SEALED AND DELIVERED by Blaine Haug in the presence of:

__/s_________________________
      Richard T. Shrieves
      Witness

__/s________________________
      BLAINE HAUG