EMPLOYMENT AGREEMENT

           THIS EMPLOYMENT AGREEMENT (the "Agreement") is
made and entered into effective as of the 15th day of
June, 1999 (the "Effective Date") by and between Vanguard Airlines, Inc.,
a Delaware corporation (the "Company") and Robert J. Spane, an individual
("Employee").

                        R E C I T A L S:

     A.   The Company is engaged in the business of owning and
operating an air carrier certificated by the U.S. government to
engage in the provision of air transportation services in
the common carriage of persons, property and mail (the "Company
Business"). The Company is based in Kansas City, Missouri and
provides scheduled passenger service in the United States.

     B.   The Company hereby agrees to employ Employee and
Employee hereby agrees to accept such employment engagement with
the Company in accordance with the terms and conditions set forth
in this Agreement.

        NOW, THEREFORE, in consideration of the mutual promises
and covenants as contained herein, the parties hereto, intending
to be legally bound, agree as follows:

     1.   EMPLOYMENT.

     Subject to the terms and conditions hereinafter set forth,
the Company hereby agrees to employ Employee, and Employee hereby
agrees to be employed by Company, during the two year period (the
"Employment Term") beginning on June 16, 1999 (the "Commencement
Date"), and ending on June 15, 2001.  The Employment Term may be
terminated pursuant to the provisions of Section 4 or Section 5
hereof.

     2.   DUTIES.

     Employee shall be employed in the capacity of Chairman of
the Board, President and Chief Executive Officer of the Company.
Employee shall have such duties as may reasonably be assigned to
him by the Board of Directors of the Company.  Employee shall
perform such duties diligently and to the best of his ability,
and shall comply with the Company's business conduct policies as
in effect from time to time.  Employee's responsibilities
include, but are not limited to, the following actions: (a)
supervise, operate, and manage the overall operations of the
Company Business, including by way of illustration but not
limitation, decisions regarding (i) airline schedules and routes;
(ii) regulation of the Company Business by governmental
authorities, (iii) aircraft and other equipment and real estate
acquisitions and/or leases, (iv) formulation, implementation, and
administration of strategies, policies, and practices, (v)
formulation, implementation, and administration of budgets,
business and financial plans, (vi) hiring, firing, and
supervising employees and consultants, and (vii) setting
compensation and benefit programs for employees.  Except as
otherwise set forth herein, during the Employment Term, Employee
shall devote his entire working time, attention and energy to the
business of the Company, and shall not be engaged in any other
business activity that, in any significant way, conflicts with or
interferes with Employee's performance of his duties hereunder,
except as authorized by the Board of Directors of the Company.

     3.   COMPENSATION AND BENEFITS.

     SALARY.   During the Employment Term, the Company shall  pay
     Employee  for  his services hereunder a base salary  at  the
     rate  of  $250,000.00  per  annum  for  the  first  year  of
     employment and $300,000.00 per annum, for the second year of
     employment   subject   further  to  upward   adjustment   in
     accordance  with the Company's salary review  practices  and
     procedures  in effect from time to time.  Such salary  shall
     be  payable  semi-monthly  in accordance  with  the  regular
     payroll policies of the Company in effect from time to time.
     In  addition,  Employee shall participate in  the  following
     bonus plan:

               A  Yearly  Bonus  of 100% of the  base  salary  is available.

               This  Bonus  will  be  paid at  the  end  of  each
               calendar year, starting at Dec.31, 1999, for  the
               performance achieved in 1999.

               The  Bonus  will  be paid based on  comparing  the
               yearly  actual  operating profit with  the  yearly
               planned operating profit.

               To  receive  100%  of the bonus the  Company  must
               achieve its planned operating profit

               For  every 2% of actual operating profit  achieved
               above  the planned operating profit, an additional
               10%  of  the bonus will be paid. This extra  bonus
               will be capped at an additional 100% of the yearly
               bonus.

               If  the actual operating profit does not at  least
               equal  the  planned  operating profit,  a  partial
               bonus  will  be  paid as follows. The  bonus  will
               begin to be applied if the actual operating profit
               is  at  least 80% of the planned operating profit.
               For  every  2%  increase in the  actual  operating
               profit  above  80%, 10% of the Basic Yearly  Bonus
               will  be  paid. For example, if 90% of the planned
               operating  profit is achieved, 50%  of  the  Basic
               Yearly Bonus will be paid.


     (A)  BENEFITS.  During the Employment Term, Employee shall be
       entitled to participate in, to the extent Employee is eligible
       under the terms thereof, all benefit plans and programs that are
       generally provided from time to time by the Company to its
       executive personnel, including an incentive compensation plan, a
       pension or profit sharing plan, a stock purchase plan, a bonus
       plan, a group benefit plan and a medical plan.  Subject to the
       rights of Employee set forth in Sections 4 and 5 hereof, nothing
       herein shall preclude the Company from terminating or amending
       any employee benefit plan or program.

     (B)  OPTIONS.  The Company hereby agrees to grant Employee
       options to purchase 440,557 shares of Common Stock (2% of the
       Company's fully diluted stock), par value $0.001 per share, of
       the Company to Employee (the "Employee Options").  The terms of
       the grant of the Employee Options to Employee shall be as
       follows:

          (i)  The exercise price for the Employee Options shall
               be the share price on Jun 16, 1999 (the "Exercise
               Price");
          (ii) Payment of the exercise price per share is due in
               full upon exercise of all or any part of each
               installment that has accrued
          (iii) In the event this Agreement is terminated
               before the end of the Employment Term for any of
               the reasons set forth in Section 4(e), all
               unvested options shall lapse and become void; and
          (iv) The Employee Options shall vest as follows:

               (A)  in equal quarterly increments during the Employment Term
                    commencing with the commencement of employment of Employee
                    with the Company, with such vesting to be effective
                    upon the last day of each calendar quarter;
               (B)  one-half of any "unvested" Employee Options shall vest
                    upon the death or permanent disability of Employee;
               (C)  all of the unvested options shall vest upon the merger of
                    the Company into or with another person, unless
                    (X) the Company is the surviving entity and
                    (Y) this Agreement remains in full
                    force and effect; or
               (D)  all of the unvested options shall vest upon the sale of all
                    or substantially all of the assets or stock of the Company
                    to another person.
               (E)  The Term of all options is to be 10 years, including
                    previously vested stock options received for
                    employment from June 15, 1997 through June 16, 1999.

     (d)EXPENSE REIMBURSEMENT.  The Company shall reimburse
         Employee or directly pay all of the reasonable expenses
         incurred by Employee in connection with the scope of his
         assignment as set forth in this Agreement, including by way
         of illustration but not limited, as follows:

          (i)      all ordinary and necessary travel, lodging,
          entertainment, and related expenses;
          (ii)     the cost of renting an apartment as a
          temporary living expense in Kansas City,
          Missouri and leasing or renting a car in Kansas City,
          Missouri; and
          (iii)    the cost to move Employee's family and
          household goods to the Kansas City area.
          (iv)    Regardless of how, when, or why Employee leaves
          the Company, the expenses associated with
          moving Employee and Employee's family including all
          household goods to San Diego, California
          shall be paid by the Company.

The foregoing terms regarding the Employee Options shall, if the
parties hereto mutually so agree, be set forth in a separate
agreement (the "Stock Option Agreement").  The Stock Option
Agreement shall contain all usual and customary provisions,
including the foregoing terms.

     4.   TERMINATION OF ENGAGEMENT.

     This Agreement shall be terminated and the employment
relationship between the Company and Employee shall cease upon
the occurrence of any of the following events:

     (a)     by Employee for any reason, upon 30 days prior
             written notice;
     (b)     by the Company for any reason, upon 30 days prior
             written notice;
     (c)     by any party upon the expiration of the Employment
             Term;
     (d)     by the Company upon the death or permanent
             disability of Employee
     (e)     by the Company for "Cause," which for purposes of
     this Section 4 shall mean any of the following: (i)
     Employee's breach of or failure to comply with or observe
     any of the material terms, conditions or agreements
     contained in this Agreement, which breach or failure to
     comply has not been cured within 30 days following written
     notice by the Company to Employee setting forth in detail
     the specific nature of such breach or failure to comply, or
     if such breach or failure to comply cannot be cured within
     such 30 day period, Employee has not, (A) within such 30 day
     period, commenced actions to cure such breach or failure to
     comply and diligently pursued such actions and (B) actually
     cured such breach or failure to comply within 90 days
     following such initial written notice by the Company to
     Employee, (ii) Employee shall be adjudged by a court of
     competent jurisdiction as guilty of (A) any willful or
     grossly negligent act which causes material harm to the
     Company, (B) any criminal act which causes material harm to
     the Company, (C) any act involving moral turpitude which
     causes material harm to the Company, or (D) any fraud upon
     the Company, or (iii) Employee shall be guilty of habitual
     absenteeism, chronic alcoholism or other form of chronic
     addiction.

     5.   TERMINATION OBLIGATIONS OF THE COMPANY.

               In the event of termination of this Agreement by
               the Employee under Section 4(a) because of
               Employee's desire for any reason, the Company
               shall have the following obligations to Employee:

                    (a)  One half of all unvested stock will immediately vest
                    (b)  Employee will receive six month's salary

               In the event of termination of this Agreement by
               the Company under Section 4(b) because of the
               Company's desire for any reason, the Company shall
               have the following obligations to Employee:

                    (a)  All unvested stock options immediately vest
                    (b)  Employee will receive two year's salary
                    (c)  Employee will be granted options on an additional 1%
                         of the Company's stock. Strike price to be the
                         price on the day of termination
                    (d)  Employee will be offered a 5 year consulting
                         contract at $20,000.00 per month
                    (e)  Employee will be offered a seat on the
                         Board of Directors
                    (f)  Any unpaid portion of the Employee salary earned
                         through the date of termination shall be
                         paid by the Company to Employee
                    (g)  Any unreimbursed expenses owed by the Company
                         to Employee for expenses incurred through the
                         date of termination shall be
                         paid by the Company to Employee

               In the event of termination of this Agreement by
               the Company under Sections 4(c), because of the
               expiration of the Employment Term, The Company
               shall have the following obligations to the
               Employee:

                    (1)  Any unpaid portion of the Employee's salary and
                         bonus earned
                         through the date of termination shall be paid by the
                         Company to
                         Employee;
                    (2)  Any unreimbursed expenses owed by the Company to
                         Employee for expenses incurred through the date
                         of termination shall be
                         paid by the Company to Employee;
                    (3)  Employee Options shall be fully vested
                    (4)  Employee shall be offered full-time employment with the
                         Company upon mutually satisfactory terms
                         usual and customary in
                         the airline industry for companies of comparable
                         operations as
                         the Company; provided, however, that the Company
                         and Employee
                         shall enter into a written employment agreement
                         (the "Spane
                         Employment Agreement") which shall, for
                         purposes of illustration
                         but not limitation, contain the following provisions:

                         (1)  Employee shall have the officer
                              title of Chairman, Chief
                              Executive Officer, President, and member of
                              the Board of
                              Directors of the Company;
                         (2)  He shall have duties at least as
                              expansive as the Services
                              set forth in Section 2 of this Agreement;
                         (3)  He shall have an annual base salary
                              and annual bonus as
                              mutually agreed upon and usual and customary
                              in the airline
                              industry for companies of comparable operations
                              as the Company;
                         (4)  A term and severance arrangement as
                              mutually agreed upon and
                              usual and customary in the airline
                              industry companies of
                              comparable operations as the Company.
                         (5)  If the Employee declines full time
                              employment, Employee will
                              be offered a 5 year consulting contract
                              at $20,000.00 per month
                              and a seat on the Board of Directors.


               In the event of termination of this Agreement by
               the Company under Section 4(d), death or permanent
               disability of the Employee, the Company shall have
               the following obligations to Employee:

                         (i)  Any unpaid portion of the Employee's salary
                              earned through
                              the date of death or permanent disability shall
                              be paid by the
                              Company to Employee or his survivors;
                         (ii) Any unreimbursed expenses owed by the
                              Company to Employee
                              for expenses incurred through the date
                              of death or permanent
                              disability shall be paid by the Company
                              to Employee or his
                              survivors.
                         (iii)     One-half of those shares of the
                              Employee Options that
                              have not vested as of the date of termination
                              shall lapse and
                              become void and the remaining one-half of
                              the Employee Options
                              shall fully vest

               In the event of termination of this Agreement by
               the Company under Section 4(e), by the Company for
               "Cause," the Company shall have the following
               obligations to Employee:

              (1)  Any unpaid portion of the Employee's salary earned through
                   the date of termination shall be paid by the Company
                   to Employee
              (2)  Any unreimbursed expenses owed by the Company to Employee
                  for expenses incurred through the date of termination shall be
                   paid by the Company to Employee
              (3)  Employee options that have not vested at the date of
                   termination shall lapse and become void

Regardless of how, when, or why Employee leaves the Company,
Employee and his immediate family will receive unlimited life
time confirmed travel on Vanguard Airlines or the Successor
Company



     6.   REGISTRATION RIGHTS.

     Employee shall, with respect to the shares received upon
exercise of the Employee Options be granted unlimited piggy-back
registrations, with any cut-backs of shares to be registered
pursuant to the applicable registration statement to be done on a
pro-rata basis among all of the Sellers of Common Stock of the
Company pursuant to the applicable registration statement.  A
specific Registration Rights Agreement containing all usual and
customary provisions shall be entered into among Employee and the
Company.


     7.   INDEMNIFICATION.

     Neither the Company or Employee shall be liable for any of
the debts, liabilities or obligations of the other.  Accordingly,
the Company will indemnify Employee and Employee will indemnify
the Company, and each will hold the other harmless from and
against any and all loss, cost, damage injury or expense
(including court costs and reasonable attorneys' fees) whatsoever
and howsoever arising which Employee or the Company (as the case
may be) or any of their respective agents, successors or assigns
incurs as a proximate result of (a) Employee or the Company (as
the case may be) being held liable for any debt, liability or
obligation of the Company or Employee (as the case may be) or (b)
any breach of this Agreement by the Company or Employee (as the
case may be).

     In Employee's rendering of the Services hereunder and in his
capacity as officer, director, employee of the Company, the
Company shall, as and to the extent permitted by the General
Corporation Law of Delaware, indemnify Employee and hold Employee
harmless from and against any and all loss, cost, damage, injury
or expense (including court costs and reasonable attorneys' fees)
whatsoever and howsoever arising which Employee incurs relating
to his action under this Agreement and the status of Employee as
officer, director, employee of the Company.  In addition, the
Company shall include Employee as beneficiary and covered person
in the Company's insurance policy to protect Employee relating to
his status as officer, director, employee, independent
contractor, and/or agent of the Company.

     8.   NOTICE.

     All notices, requests, demands and other communications
hereunder shall be deemed duly given if delivered by hand or if
mailed by certified or registered mail with postage prepaid as
follows:
     If to the Company:

     Vanguard Airlines, Inc.
     7000 Squibb Road, 3rd Floor
     Mission, KS 66202
     Attention:  Corporate Secretary

     If to the Employee:

     Robert J. Spane
     333 W. 46th Terrace
     Apt. # 201
     Kansas City, MO 64112

or to any other address as either party may provide to the other
in writing.

     10.  ASSIGNMENT.

     This Agreement is personal and not assignable by the
Employee but it may be assigned by the Company without notice to
or consent of the Employee to, and shall thereafter be binding
upon enforceable by any other person which shall acquire or
succeed to substantially all of the business or assets of the
Company (and such person shall be deemed included in the
definition of the "Company" for all purposes of this Agreement)
but it is not otherwise assignable by the Company.
     IN WITNESS WHEREOF, the Company and Employee have each
caused this Agreement to be duly executed in duplicate by its
respective duly authorized officer and each of the parties hereto
has executed this Agreement on the date and year first above
written.


WITNESS/ATTEST:
                     COMPANY:

                     VANGUARD AIRLINES,INC.

                     On Behalf of the Board of Directors,


                     By:
                         -------------------------------
                     Name:




                     EMPLOYEE:

                     ROBERT J. SPANE



                     ----------------------------------
                     Robert J. Spane