UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM
10-K  [X] ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the fiscal year ended:  October 31,
2008  or  [ ] TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from
                 to  Commission file number 000-27011 ALPINE AIR EXPRESS, INC. (Exact Name of registrant as specified
 in its Charter)  Delaware
33-0619518(State or
other Jurisdiction of Incorporation or organization)
(I.R.S. Employer Identification
No.)  1177 Alpine Air Way Provo, UT 84601 (Address of Principal Executive
Offices)  (801) 373-1508 (Registrants Telephone Number, including
area code)  Securities registered pursuant to Section
12(b) of the Act: None  Securities registered pursuant to Section
12(g) of the Act: Common Stock, par value $0.001  Indicate by check mark if the Registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes
[  ] No [X]  Indicate by check mark if  the Registrant is not
required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
Yes [  ]   No [X]  Indicate by check mark whether the
Registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Exchange Act during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. (1) Yes [X] No [  ]
    (2) Yes [X] No [  ]  Indicate by check mark if disclosure of
delinquent filers pursuant to item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of Registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ X ]  Indicate by check mark whether the
Registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer or a smaller reporting company:    Large accelerated
filer       [   ]
Accelerated filer
                    [ 
 ]Non-accelerated
filer         [ 
 ]
Smaller reporting
company   [X]  Indicate by check mark whether the
Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 Yes [  ] No [X]  State the aggregate market value of the
voting and non-voting common stock held by non-affiliates computed by reference
to the price at which the common stock was last sold, or the average bid and
asked price of such common stock, as of the last business day of the
Registrant's most recently completed second fiscal quarter.  April 30, 2008 - $2,107,393  There are approximately
6,021,122 shares of common voting stock of the Registrant beneficially owned by
non-affiliates.  There is a limited public market for the common stock of
the Registrant, so this computation is based upon the bid price of $0.35 per
share of the Registrant's common stock on the OTC Bulletin Board as of April 30,
2008.  APPLICABLE ONLY TO REGISTRANTS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:  Not applicable.  Indicate the number of shares outstanding
of each of the registrants classes of common equity, as of the latest
practicable date:  January 28, 2009:  Common  36,200,801 January 28, 2009:  Preferred  840,000                                  PART I  ITEM 1. DESCRIPTION OF BUSINESS  Background.  Alpine Air
Express, Inc., a Delaware corporation ("Alpine Air"), is engaged in the air
cargo business through its wholly owned subsidiary, Alpine Aviation, Inc., a
Utah corporation ("Alpine Aviation").  Alpine Aviation was organized on
October 7, 1975, in the state of Utah.  Alpine Aviation has been operated
by the same management since 1986.  Alpine Aviation is an air cargo
operator, transporting mail packages and other time-sensitive cargo to more than
20 cities in the western portion of the mainland United States and in the
Hawaiian Islands. Alpine Aviation began its operations in the 1970's with the
intent of being a regional charter and cargo carrier.  After present
management acquired control in 1986, Alpine Aviation began to focus less on the
charter or passenger services and more on the cargo aspects of the airline
industry.  Since the 1990's, Alpine Aviation has focused on hauling mail
for the United States Postal Service and carrying packages for United Parcel
Service because of their favorable contracts, routes and payment practices.
 As a result of this focus, approximately 87% of Alpine Aviation's revenues
now come directly from these two customers.  Alpine Air
Express was formed in April, 1994, under the name "Riverside Ventures, Inc."
 Prior to its acquisition of Alpine Aviation in June, 2000, Alpine Air
Express had no business operations and was actively looking for a business with
which to merge or acquire in an effort to create an operation that would provide
value to our shareholders.  On June 12,
2000, Alpine Air Express, under its former name, entered into an agreement and
plan of reorganization with Alpine Aviation, pursuant to which Alpine Air
acquired all of the outstanding shares of Alpine Aviation.  Pursuant to the
terms of the reorganization, Alpine Air Express issued 9,895,000 shares of its
common stock to the stockholders of Alpine Aviation in exchange for all of the
issued and outstanding shares of Alpine Aviation.  As a result of the
reorganization, Alpine Aviation became a wholly owned subsidiary of Alpine Air
Express.  As a further result of the reorganization, the management of
Alpine Aviation assumed control over Riverside Ventures and changed the
company's name from "Riverside Ventures, Inc." to the current name of "Alpine
Air Express, Inc."  The reorganization has been treated as a "reverse
merger," with Alpine Aviation as the surviving entity for accounting purposes
and Alpine Air the surviving entity for corporate purposes. At the time of the
reorganization, Alpine Air Express had 1,000,000 shares of common stock
outstanding.  Following the reorganization, Alpine Air had 10,895,000
shares outstanding, which was composed of the 1,000,000 shares outstanding prior
to the issuance of shares for Alpine Aviation and the 9,895,000 newly issued
shares to the Alpine Aviation stockholders.  Alpine Air subsequently issued
an additional 105,000 shares, bringing the total outstanding shares to
11,000,000 as of 2003. During 2004 and 2005 the Company issued 122,000 shares,
bringing the total outstanding shares to 11,122,000 at 2005.  In 2006, we
effected a 3 for 1 stock split and issued additional shares for compensation
during 2006 resulting in a total of 36,271,461 outstanding shares at both
October 31, 2006 and 2007. During 2008 the Company purchased 70,660 shares to
hold as Treasury Stock bringing the total shares outstanding to 36,200,801.  Routes and Delivery.  Alpine
Aviation currently has 16 air cargo routes covering 29 cities in six western
states in the mainland U.S. and 2 routes covering several of the Hawaiian
Islands. Alpine also provides contract cargo charter flights for other carriers
and for the public.  Most routes are flown every day and some multiple
times per day.  In fiscal 2008, Alpine Aviation transported 11,162 tons of
cargo.  The largest component of Alpine Aviation's cargo mix is U.S. mail,
which accounted for approximately 80% of our fiscal 2008 revenue. The USPS
delivers and picks up all cargo we carry at the aircraft, unless other
arrangements are called for separately by the contract.  When the USPS
delivers and picks up the mail at the side of our aircraft, we are able to
reduce our costs significantly.  Alpine
currently operates 28 aircraft on two national certificates (one is inactive).
 The largest aircraft in our fleet is a Beechcraft 1900, which holds
approximately 6,000 pounds of cargo.  Our other aircraft type is the
Beechcraft 99, which holds approximately 3,400 pounds of cargo. The Company also
owns 2 Beechcraft 1900-D aircraft (passenger configuration) and currently leases
them on an annual lease basis.    Industry
overview.  The package
delivery and air cargo business has evolved rapidly over the last two decades,
driven by the integration of world markets, the rationalization of corporate
supply chains and the implementation of enterprise software and internet-based
information technology solutions. The ability to provide time-definite delivery
options and transfer information increasingly determines success.  Customer
demands for real-time information processing and worldwide distribution and
logistics capabilities favor companies with integrated services.  Customers
increasingly focus on the timing and predictability of deliveries rather than
the mode of transportation. As customers re-engineer the total distribution
process, which includes order processing, administration, warehousing,
transportation and inventory management, they attempt to reduce the most
expensive and fastest growing component, inventory carrying costs. Time-definite
transportation, which is no longer limited to air express, has become a critical
part of just-in-time inventory management and improving overall distribution
efficiency.  Technology
advances have made it easier for companies to analyze and compare distribution
options.  As a result of these changes, individual shipments are generally
smaller but more frequent and a greater proportion of products are being
delivered directly to end-users, particularly as e-commerce takes hold.
 Customers expect high performance levels and broad product offerings as
they seek to optimize supply chain solutions.  There has been
dramatic growth in the utilization of e-commerce by both consumers and
businesses for the transfer of goods.  Consumers who use the internet for
home shopping and other services shop across borders and require global delivery
capabilities.  Delivery of
packages to a specific destination at a guaranteed time has been the growth
engine for the package delivery industry over the past decade. The industry has
become increasingly dominated by large integrated carriers such as UPS and FedEx
that provide seamless services, including pick-up and delivery, shipment via air
and/or road transport and customs clearance. The pace of consolidation in the
package delivery industry has increased on a global scale.  Industry
participants are acquiring, merging with or forming alliances with partners that
can expand global reach, breadth of services or technological capabilities in
order to better enable those participants to compete in a rapidly changing
global environment.  In particular, government-run post offices have made
several recent alliances with and acquisitions of private-sector companies.
 Post offices, which still maintain numerous advantages over private-sector
companies, create significant challenges for competitors worldwide.  With the
growth in cargo and e-commerce taking a greater hold, we feel the need for
companies like Alpine Air will only continue to expand.  We offer the
ability to deliver mail and cargo to smaller markets without many of the
associated capital costs.  Employees.  The Company
has 122 employees, 67 of which are full time, including 10 in administration and
46 in flight operations, which includes 32 pilots.  No employees belong to
any labor union or have employment contracts.  Risk Factors  There is always a risk that our contracts
with the USPS will not be renewed or extended when they expire, however, we have
been contracting with them for nearly 20 years and we have always been able to
renew or win bids on the routes which we wanted to keep. Management is hopeful
that the current routes will continue to be flown by Alpine aircraft.  Unresolved Staff Comments  Not Applicable     ITEM 2.
DESCRIPTION OF PROPERTIES  Alpine Air is
headquartered in its owned facility located in Provo, Utah.  This facility
is on leased property at the Provo Municipal Airport. Our hangar consists of
approximately 25,000 square feet with attached corporate offices.  The
hangar and offices have been valued at a cost of approximately $1,200,000.  The company
also leases a 10,403 square foot hangar in Billings, Montana at the Logan
International Airport and has permits to lease and use hangar and office space
with the State of Hawaii, Department of Transportation for our air cargo
operations serving the Hawaiian Islands.  We carry
extensive insurance coverage on all facilities as well as aircraft.
 Management believes our insurance coverage is adequate to cover any damage
to our facilities or aircraft and any resulting liabilities.  ITEM 3. LEGAL PROCEEDINGS  Alpine Air
has been named in a lawsuit by a former employee for claims of approximately
$50,000 related to wrongful termination. The plaintiff is not actively pursuing
prosecution and we believe the case may be dismissed for lack of prosecution.  ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITIES HOLDERS  Not Applicable     PART
II  ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS  Alpine Air's
common stock is currently quoted on the National Association of Securities
Dealers Electronic Bulletin Board under the symbol "APNX" (a change in the
previous "ALPE" symbol took place during the current fiscal year). Set forth
below are the high and low closing bid prices for our common stock for each
quarter.  These bid prices were obtained from Yahoo Finance (available on
the internet ). All prices listed herein reflect inter- dealer prices, without
retail mark-up, mark-down or commissions and may not represent actual
transactions.  Quarter
Ended
High
Bid
Low
BidOctober 31, 2006
$0.44
$0.44January 31, 2007
$0.35
$0.35April 30, 2007
$0.35
$0.35July 31, 2007
$0.35
$0.35October 31, 2007
$0.42
$0.42January 31, 2008
$0.40
$0.35April 30, 2008
$0.55
$0.50July 31, 2008
$0.30
$0.30October 31, 2008
$0.07
$0.05   We cannot
guarantee that the present market for our common stock will continue or be
maintained, and the resale of "unregistered" and "restricted" shares pursuant to
Rule 144 of the Securities and Exchange Commission may substantially reduce the
market price of our common stock.  Holders.  As of January
28, 2009, there were 36,200,801 post split shares of common stock outstanding
held by approximately 682 active holders of record, including broker-dealers and
clearing corporations holding shares on behalf of their customers, as reported
by the Company's transfer agent.  This figure does not include an
indeterminate number of stockholders who may hold their shares in street name.  Dividends.  Since its
inception, Alpine Air has paid no dividends on its common stock, and we do not
anticipate that we will pay any dividends in the foreseeable future.  Recent Sales of Unregistered
Securities.  Except as
indicated below, Alpine Air has not sold any equity securities during the period
covered by this Annual Report that were not registered under the Securities Act
of 1933, as amended.    ITEM 6.
 SELECTED FINANCIAL DATA  Not Applicable   ITEM 7. MANAGEMENT DISCUSSION AND
ANALYSIS  General.  Alpine
Aviation Inc. provides air cargo transportation services in the United States in
Hawaii, Montana, North Dakota, South Dakota, Wyoming, Nebraska, and Colorado.
 While the USPS is our primary customer, we also provide contract cargo and
charter services for other package delivery and cargo carriers. We continue to
offer package delivery services for local businesses between the islands in
Hawaii. In addition to air cargo transportation, the Company provides
maintenance service on aircraft owned or operated by third parties, leasing of
 passenger aircraft, and operates a First Officer Training Program.  Revenues were
nearly $20 million in 2008, a nearly 8% increase from the $18.4 million in 2007.
 The primary increase in revenues came from several places; contract
changes in the Hawaii USPS contract, wherein the USPS extended the contract and
added fuel escalators to the contract, acquiring additional contracts with UPS,
and the acquisition and subsequent leasing of 2 1900-D passenger aircraft.  The new agreement with the Hawaii USPS
commenced in January 2006 and expired in June 2008. The USPS has elected to
extend the contract and has notified the Company that it has elected to bid the
contract out in February/March 2009 . If the Company were unable to be the
successful bidder on this contract, it would have a significant impact on
earnings and revenues. However, management has had substantial success in
renewing contracts with the USPS over the past 20 years.  The Montana/South Dakota USPS contract
currently runs through June 2009 with two 1-year extensions available to the
USPS. Based on USPS contract renewal history, the Company expects the USPS to
take advantage of the extensions. Again, if the Company were unable to renew
this contract, it would have a significant impact on earnings and revenues.
However, management has had substantial success in renewing contracts with the
USPS over the past 20 years.  In 2008, the
Company carried over 11,162 tons of cargo as compared to 10,877 tons in 2007.
This increase is directly attributable to the addition of more UPS contracts in
March 2008. The Company has experienced lighter cargo loads in their Charter
flights in Hawaii, which have been offset by the addition of the UPS routes in
Montana.  The Company
continued to experience rising costs in fuel, insurance, contract labor costs
and professional services fees. Public fuel prices increased over 120% during
the current fiscal year. These costs along with the need to continue maintenance
and repair of our aircraft place a strong demand on our cash resources.  Liquidity
and Capital Resources.  October 31, 2008 and 2007.  The Company
has a working capital position on October 31, 2008 of $1,869,086, as compared to
working capital on October 31, 2007, of $2,350,821. The decrease in working
capital has been the direct result of significant reductions in operating
expenses, negotiated increases in contract revenues, and re-allocation of
aircraft resources, offset by capital expenditures and higher fuel prices.  The Company's
decrease in working capital was a result of multiple factors, including
decreases in cash balances of $388,035 and increases in Accounts Receivable of
$245,533 and in Inventory of $410,779. There was also an increase in Accounts
Payable of $174,389. A increase of $677,268 was also noted in the current
portion of the notes payable accounts, as the Company has entered into
additional debt for the purchase of additional aircraft.  The Company
presently has no material off-balance sheet financing arrangements.    Total assets increased to
$25,758,349 on October 31, 2008 from $23,623,577 on October 31, 2007. Total
liabilities also increased to $11,916,143 from $9,109,622 during the same
period. Our stockholders' equity has also decreased from $14,513,955 to
13,842,206 for October 31, 2007 and October 31, 2008, respectively.  For the year
ended October 31, 2008 there was a net profit from operations before income
taxes and preferred stock dividends of $1,811,113. This is a significant
decrease from the previous years net income of $3,918,184. The difference is
mostly derived from the significant increase in fuel prices to the Company and
start-up costs related to our new contracts with UPS, which commenced on March
1, 2008. Depreciation was $2,218,710 for an increase of $332,217 over last year.
This increase is mostly due to the acquisition of aircraft to the fleet and
additional ground equipment purchases.  During the year
ended October 31, 2008, the company has continued to reduce the tax NOL
carryforward created in prior years and accordingly, there was a decrease in the
deferred tax benefits of $491,768.  Investing
activities for the year ended October 31, 2008, included receiving $1,889,870 in
net cash receipts primarily from the proceeds of the sale of property and
equipment. Additional equipment purchases during the current year totaled
$5,695,764.  For the year
ended October 31, 2008, net cash received from financing activities was
$445,448, which includes new funds made available of $4,000,000 and subsequent
use primarily from payments of $1,459,580 towards notes payable and the
redemption of $1,456,640 of Preferred Stock in the Company. All Alpine aircraft
are currently pledged as collateral on the line of credit, Notes Payable and
Preferred Stock of the Company.  For the year
ended October 31, 2007, net cash used in financing activities was $1,666,001,
which includes new funds made available of $6,000,000 and subsequent use
primarily from payments of $4,119,168 towards notes payable and $2,194,443 from
payments to related party notes payable. For the year ended October 31, 2006,
financing activities used net cash of $1,689,506, with $1,417,879 paid on notes
payable and $369,627 towards notes payable related parties.  For the years
ended October 31, 2008 and 2007, net increases (uses) in cash and cash
equivalents were $(388,035) and $602,793, and ending cash and cash equivalents
was $720,794 and $1,108,829, respectively.  Results of Operation.  During the
year ended October 31, 2008 total operating revenues were $19,840,376,
representing a nearly 8% increase from the 2007 revenues of $18,380,301.
 This increase is a attributable to the addition of the UPS flights and
continuation of the modifications made to the Hawaii USPS contract which reduced
overall aircraft flights. Total direct costs continued to increase to
$16,378,631 from $12,468,243 for the years 2008 and 2007, respectively. This 32%
increase in total direct costs was driven by a combination of actions including
the significant increases in fuel prices to the Company combined with the
additional start-up costs for the UPS contracts in Billings. These increases are
combined with a more effective deployment of Company assets and successful cost
management initiatives implemented by management.  Alpine's
revenue from Public Services which include its First Officer Training Program,
aircraft leasing and aircraft maintenance provided to outside entities decreased
slightly in 2008 to $204,494 from $249,240 in 2007, while expenses for Public
Services also increased to $216,254 from $162,101 in 2007.  Operating
expenses decreased to $1,025,618 from $1,415,100 for the years ended October 31,
2008 and 2007 respectively.  During the year ended October 31, 2008 and
2007, gain on disposal of assets was $499,623 and $397,918, respectively.  During the
year ended October 31, 2008, Other Income (expense) was $625,014 compared to the
previous year total of $578,774. The increase was the direct result of
additional interest paid by the Company due to additional financing and the
required amortization of the Companys recent granting of Stock Options.  Total income
tax expense for the year ended October 31, 2008 and 2007 was $491,768 and
$761,636, respectively.    For the year
ended October 31, 2008 and 2007, income before preferred dividends was
$1,319,345 and $3,156,548, or $0.04 per share and $0.09 per share and,
respectively. For the same periods net income available to shareholders was
$63,237 and $1,846,548, and $0.00 per share and $0.05 per share, respectively.
The difference for both years presented is approximately $1,783,311 and $0.04
per share, which is related to dividends declared on preferred stock and the
amortization of a preferred stock discount analogous to a preferred stock
dividend. The amortization portion of the preferred stock discount will end in
December 2008.  Critical Accounting Policies and
Estimates.  The
preparation of the Company's financial statements in conformity with accounting
principles generally accepted in the U.S. requires the use of estimates and
assumptions to determine certain assets, liabilities, revenues and expenses.
Management bases these estimates and assumptions upon the best information
available at the time of the estimates or assumptions. The Company's estimates
and assumptions could change materially as conditions within and beyond our
control change. Accordingly, actual results could differ materially from
estimates. The most significant estimates made by management include allowance
for doubtful accounts receivable, reserves for excess and obsolete inventories,
deferred tax asset valuation, revenue recognition and valuation of long-lived
assets.  Following is
a discussion of critical accounting policies and related management estimates
and assumptions.  Allowance for
Doubtful Accounts. An allowance for doubtful accounts receivable in the amount
of $22,540 and $19,390, respectively, as of October 31, 2008 and 2007, and was
established based on management's estimates of the collectability of accounts
receivable. The required allowance is determined using information such as
customer credit history, industry information, credit reports, customer
financial condition and the collectability of outstanding accounts receivables
associated with a discontinued business segment. The estimates can be affected
by changes in the financial strength of the aviation industry, customer credit
issues or general economic conditions.  Inventories.
The Company's parts inventories are valued at the lower of cost or market.
Reserves for excess and obsolete inventories in the amount of $52,525 and
$47,489, respectively, as of October 31, 2008 and 2007, are based on assessment
of the marketability of slow-moving and obsolete inventories. Estimates are
subject to volatility and can be affected by reduced equipment utilization,
existing supplies of used inventory available for sale, the retirement of
aircraft or ground equipment and changes in the financial strength of the
aviation industry.  Deferred
Taxes. Net deferred tax assets of $475,093 and $966,861 are shown net of
valuation allowance in the amount of $408,371 and $584,385, as of October 31,
2008 and 2007, respectively, to reflect the likelihood of the recoverability of
these assets. Company judgment of the recoverability of these assets is based
primarily on estimates of current and expected future earnings and tax planning.
The balance of net deferred tax assets will continue to decrease as the Company
continues to perform well.  Revenue
Recognition. Cargo revenue is recognized upon completion of contract terms and
maintenance revenue is recognized when the service has been performed. These
contracts vary in length but average three years, with some having options for
an additional year(s).  Valuation of
Long-Lived Assets. The Company assesses long-lived assets used in operations for
impairment when events and circumstances indicate the assets may be impaired and
the undiscounted cash flows estimated to be generated by those assets are less
than their carrying amount. In the event it is determined that the carrying
values of long-lived assets are in excess of the fair value of those assets, the
Company then will write-down the value of the assets to fair value.  Safe Harbor Statement.  Statements
made in this Form 10-K which are not purely historical are forward-looking
statements with respect to the goals, plan objectives, intentions, expectations,
financial condition, results of operations, future performance and business of
the Company, including, without limitation, (i) our ability to retain existing
commercial relationships and to obtain additional profitable sources of revenue,
and (ii) statements preceded by,   followed by or
that include the words "may", "would", "could", "should", "expects", "projects",
"anticipates", "believes", "estimates", "plans", "intends", "targets" or similar
expressions.  Forward-looking statements involve
inherent risks and uncertainties, and important factors (many of which are
beyond the Company's control) that could cause actual results to differ
materially from those set forth in the forward- looking statements, including
the following, in addition to those contained in the Company's reports on file
with the SEC: general economic or industry conditions, nationally and/or in the
communities in which the Company conducts business, legislation or regulatory
requirements, the economic condition of the U.S. Postal Service or United Parcel
Service, changes in the air cargo, charter and leasing industries, demand for
air cargo, charter and leasing services, competition, changes in the quality or
composition of the Company's services, our ability to develop profitable new
sources of revenue, changes in accounting principals, policies or guidelines,
financial or political instability, acts of war or terrorism, other economic,
competitive, governmental, regulatory and technical factors affecting the
Company's operations, services and prices.  Accordingly,
results actually achieved may differ materially from expected results in these
statements.  Forward-looking statements speak only as of the date they are
made.  The Company does not undertake, and specifically disclaims, any
obligation to update any forward-looking statements to reflect events or
circumstances occurring after the date of such statements.  ITEM 7A.  QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK Not Applicable   ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA                            ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED FINANCIAL STATEMENTS  October 31, 2008                                            ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED FINANCIAL STATEMENTS    CONTENTS   PAGEReport of Independent Registered Public Accounting
Firm
2Consolidated Balance Sheets at October 31, 2008 and
2007
3 - 4Consolidated Statements of Operations for the years
ended October 31, 2008 and 2007
5 - 6Consolidated Statement of Stockholders' Equity for
the years ended
October 31, 2008 and 2007
7  9Consolidated Statements of Cash Flows, for the
years ended October 31, 2008 and 2007
10 - 11Notes to Consolidated Financial Statements
12 - 24


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    Board of
Directors ALPINE AIR
EXPRESS, INC. AND SUBSIDIARY Provo, Utah  We have
audited the accompanying balance sheets of Alpine Air Express, Inc. and
Subsidiary as of October 31, 2008 and 2007 and the related statements of
operations, stockholders' equity and cash flows for each of the years in the
two-year period ended October 31, 2008.  Alpine Air Express, Inc. and
Subsidiarys management is responsible for these financial statements. Our
responsibility is to express an opinion on these financial statements based on
our audits.  We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States).  Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting.
 Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control over financial reporting.
 Accordingly, we express no such opinion.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Alpine Air Express, Inc. and
Subsidiary as of October 31, 2008 and 2007 and the results of its operations and
its cash flows for each of the years in the two-year period ended October 31,
2008 in conformity with accounting principles generally accepted in the United
States of America.    /s/Pritchett, Siler
& Hardy, P.C.  PRITCHETT, SILER
& HARDY, P.C.  Salt Lake City,
Utah January 28, 2009  2     ALPINE AIR EXPRESS, INC. AND
SUBSIDIARY  CONSOLIDATED BALANCE SHEETS  ASSETS  October 31,
                      2008
2007CURRENT ASSETS:Cash and cash equivalents
$
720,794
$1,108,829Trade accounts receivable,
net

2,254,241
2,008,708Inventories

1,795,119
1,384,340Prepaid expenses

658,874
587,434Deposits
Cash Value Life Insurance
Income Taxes Receivable
Other Current Assets

86,667
70,005
53,392
80,082
10,130
-
-
-Deferred tax asset,
current

133,126
116,497Total Current
Assets

5,852,300
5,215,938PROPERTY AND EQUIPMENT,net

19,389,082
17,302,275OTHER ASSETS

175,000
255,000DEFERRED TAX ASSETS,long-term

341,967
850,364TOTAL ASSETS
$
25,758,349
$23,623,577                          [Continued]  3    ALPINE AIR
EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED BALANCE SHEETS  [Continued]  LIABILITIES AND STOCKHOLDERS' EQUITY October 31, 2008
October
31,
2007CURRENT
LIABILITIES:Trade
accounts payable
$
1,074,971
$900,582Accrued
liabilities

925,458
584,508Deferred
Revenue

11,148
16,992Dividends
Payable

29,961
98,627Current
portion of notes payable

1,941,676
1,264,408Total
Current Liabilities

3,983,214
2,865,117DEFERRED GAIN ON
SALE OF ASSETS

95,997
270,725NOTES PAYABLE,net of current portion

7,836,932
5,973,780Total
Liabilities

11,916,143
9,109,622STOCKHOLDERS'
EQUITY:Preferred
stock, $.001 par value, $9.104 stated value, 1,000,000 shares
authorized
840,000 and 1,000,000 shares issued and outstanding, net of discount
          of $89,780 and
$808,019 for the years ending 2008 and 2007, respectively

7,557,580
8,295,981Common stock,
$.001 par value, 100,000,000 shares authorized,
36,271,461
issued and 36,200,801 and 36,271,461 shares  outstanding for the
years ended 2008 and 2007, respectively
Treasury
Stock

36,271

(31,797)
36,271

-Additional
paid-in capital

2,385,315
2,350,103Retained
earnings

3,894,837
3,831,600Total
Stockholders Equity

13,842,206
14,513,955Total Liabilities and
Stockholders Equity
$
25,758,349
$23,623,577                The
accompanying notes are an integral part of these consolidated financial
statement.  4    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED STATEMENTS OF OPERATIONS For the years ended
October 31,2008

2007OPERATING
REVENUE:Operations

$
19,635,882

$
18,131,061Public
services


204,494


249,240Total
Operating Revenues


19,840,376


18,380,301DIRECT
COSTS:Operations


16,162,377


12,306,142Public
services


216,254


162,101Total
Direct Costs


16,378,631


12,468,243Gross
Profit


3,461,745


5,912,058OPERATING
EXPENSES:General
and administrative
(Gain)
loss on disposal of assets


1,525,241
(499,623)


1,813,018
(397,918)Total
Operating Expenses


1,025,618


1,415,100Operating
income (loss)


2,436,127


4,496,958OTHER
INCOME (EXPENSE):Interest
income


48,381


44,082Interest
expense


(673,395)


(622,856)Total
Other Income (Expense)


(625,014)


(578,774)INCOME
(LOSS) BEFORE TAXES AND PREFERRED STOCK DIVIDEND


1,811,113


3,918,184Current
income tax expense (benefit)


-


-Deferred
income tax expense (benefit)


491,768


761,636INCOME
(LOSS) BEFORE PREFERRED STOCK DIVIDEND

$
1,319,345

$
3,156,548                       (continued)  5    ALPINE
AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED STATEMENTS OF OPERATIONS  [Continued]  For the Years Ended
October 31,2008

2007Preferred
Stock dividend declared andAmortization
of preferred stock discount analogous to a preferred stock dividend of a
Subsidiary

-


(655,000)NET
INCOME (LOSS)
$
1,319,345

$
2,501,548Preferred
Stock dividend declared and
Amortization
of preferred stock discount analogous to a preferred stock dividend

(1,256,108)


(655,000)NET
INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$
63,237

$
1,846,548NET
INCOME (LOSS) PER COMMON SHAREBasic
$
.00

$
0.05Diluted
$
.02

$
0.03                             The accompanying notes are an integral part of these consolidated
financial statements.    6     ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY  FOR THE YEARS
ENDED OCTOBER 31, 2008 AND 2007  Preferred Stock
In
Parent

Preferred
Stock

Common
StockShares

Amount

Discount

Shares

AmountBALANCE, October 31,
2006
-


-


-


36,271,461


36,271Issuance of Preferred
Stock in Parent
1,000,000


9,104,000


(1,167,139)


-


-Net income for the
year ended October 31, 2007
-


-


-


-


-Dividends declared
and amortization of preferred stock discount analogous to a preferred
stock dividend
-


-


359,120


-


-Stock subscription
Receivable
-


-


-


-


-Debt forgiveness on
early N/P redemption
-


-


-


-


-BALANCE, October 31,
2007
1,000,000

$
9,104,000

$
(808,019)


36,271,461

$
36,271   Net income for the
year ended October 31, 2008
-


-


-


-


-  Redemption of
Preferred Stock
(160,000)


(1,456,640)


-


-


-  Dividends declared
and amortization of preferred stock discount analogous to a preferred
stock dividend
-


-


718,239


-


-Amortization of Stock
Options
-


-


-


-



-  Treasury Stock
-


-


-


-


-  BALANCE, October 31,
2008
840,000

$
7,647,360

$
(89,780)


36,271,461

$
36,271  (continued)   7     ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY  FOR THE YEARS
ENDED OCTOBER 31, 2008 AND 2007 Additional Paid-in Capital

Stock
Subscription Receivable

Treasury Stock

Retained
Earnings

Accumulated
TotalBALANCE, October 31,
2006
$2,198,452


($260,834)


-


$1,985,052


$3,958,941Issuance of Preferred
Stock in Parent
-


-


-


-


7,936,861Net income for the
year ended October 31, 2007
-


-


-


2,501,548


2,501,548Dividends declared
and amortization of preferred stock discount analogous to a preferred
stock dividend
-


-


-


(655,000)


(295,880)Stock subscription
Receivable
-


260,834


-


-


260,834Debt forgiveness on
early N/P redemption
151,651


-


-


-


151,651BALANCE, October 31,
2007
$2,350,103

$
-

$
-


$3,831,600

$
14,513,955   Net income for the
year ended October 31, 2008
-


-


-


1,319,345


1,319,345  Redemption of
Preferred Stock
-





-


-


(1,456,640)  Dividends declared
and amortization of preferred stock discount analogous to a preferred
stock dividend
-





-


(1,256,108)


(537,869)  8     Amortization of Stock
Options
35,212


-


-


-



35,212  Treasury Stock
-


-


(31,797)


-


(31,797)  BALANCE, October 31,
2008
$2,385,315

$
-

$
(31,797)


$3,894,837

$
13,842,206                                             The
accompanying notes are an integral part of these consolidated financial
statements  9     ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED STATEMENTS OF CASH FLOWS  For the Year Ended October 31,2008

2007Cash
flows from operating activities:Net
income (loss)
$
1,319,345

$
2,501,548Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating
activities:Realized
gain on sale of fixed assets

(499,623)


(397,918)Deferred
tax expense (benefit)

491,768


761,636Depreciation
and amortization

2,218,710


1,886,493Change
in allowance for bad debt

3,150


5,720Change
in Inventory Valuation
Non-Cash
Items

5,036
35,212


-
260,834Preferred
Stock Dividends and related amortization

-


655,000Changes
in operating assets and liabilities:Trade
accounts receivable

(248,683)


(199,250)Inventories

(415,815)


32,731Income
taxes receivable

(23,292)


-Deposit

-


5,760Cash
Surrender Value of Officer Life Insurance Policy
Other
Current Assets
Prepaid
expenses

(70,005)
(82)
(101,540)


-
-
31,987Trade
accounts payable

174,389


(861,391)Accrued
expenses

340,950


54,333Deferred
gain amortization
Refundable
Deposits

(174,728)
(76,537)


(174,729)
-Deferred
Revenue

(5,844)


16,992Total
adjustments

1,653,066


2,078,198Net
cash provided by (used in) operating activities

2,972,411


4,579,746Cash
flows from investing activities:
Purchase
of Marketable Securities

(80,000)


-Proceeds
from sale of property and equipment

1,889,870


556,900Purchase
of property and equipment

(5,695,764)


(2,867,852)Proceeds
from reduction in Security Deposits

80,000


-Net
cash provided by (used in) investing activities

(3,805,894)


(2,310,952)Cash
flows from financing activities:Payment
on notes payable
Payment
on dividends payable

(1,459,580)
(606,535)


(4,119,168)
(2,194,443)Payment
on notes payable - related party
Purchase
of Treasury Stock
Payment
for Redemption of Preferred Stock

-
(31,797)
(1,456,640)


(1,254,390)
-Line
of Credit Increase

-


(98,000)Proceeds
from Notes payable

4,000,000


6,000,000Net
cash provided by (used in) financing activities

445,448


(1,666,001)Net
change in cash and cash equivalents

(388,035)


602,793Beginning
cash and cash equivalents

1,108,829


506,036Ending
cash and cash equivalents
$
720,794

$
1,108,829 [Continued]   10     ALPINE
AIR EXPRESS, INC. AND SUBSIDIARY  CONSOLIDATED STATEMENTS OF CASH FLOWS  [Continued] For the Year Ended October 31,2008

2007Supplemental
disclosures of cash flow information:Cash
paid during the period for:Interest
$
625,014

$
703,317Income
taxes
$
-

$
-  Non-cash investing and
financing activities:   For the year ended October
31, 2008:  The Company redeemed 160,000 shares of Preferred Stock with a
value of $9.104 per share, for a total of $1,456,640 in cash.  The Company had preferred dividend expense of $1,256,108 which is
comprised of $537,868 in dividends and $718,240 of amortized discount on
preferred stock analogous to a preferred stock dividend.  The Company purchased 70,660 shares of its own stock to hold as
Treasury Stock. Total value of $31,797.  As required by SFAS123R, the Company has established the
amortization of the value of Stock Options issued during the year. Total cost
recorded this year is $35,212 which is a non-cash item.  For the year ended October
31, 2007:  In April 2007, the Company issued 1,000,000 shares of new
Preferred Stock with a value of $9.104 per share (see Note 11). This new
issuance was exchanged share for share for the outstanding Preferred Shares
issued from the companys subsidiary, Alpine Aviation, Inc. This transaction had
no effect on the Companys cash.  In July 2007 the Company restructured most of its outstanding debt
and paid all outstanding Related Party Notes Payable. As part of the
restructuring, the related party involved agreed to discount the balances due by
$151,651. This amount was properly recorded as forgiveness of debt and booked as
increase to Paid In Capital.  The Company had preferred dividend expense from a subsidiary of
$655,000 which is comprised of $295,880 in dividends and $359,120 of amortized
discount on preferred stock analogous to a preferred stock dividend. The Company
also had preferred dividend expense of $655,000 which is comprised of $295,880
in dividends payable and $359,120 of amortized discount on preferred stock
analogous to a preferred stock dividend.  Stock subscription balance was reduced to $0 from $260,834. These
were related to a services contract which was in its second and final year and
has been amortized over the past two years.   The
accompanying notes are an integral part of these consolidated financial
statements.   11     ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS    NOTE 1 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES  This summary
of significant accounting policies of Alpine Air Express, Inc. and subsidiary
(the "Company") is presented to assist in understanding the Company's financial
statements. These accounting policies conform to accounting principles generally
accepted in the United States of America (USGAAP) and have been consistently
applied in the preparation of the consolidated financial statements.  Organization and business description - Alpine Aviation,
Inc. (Alpine) was incorporated in the state of Utah on October 7, 1975.  On
June 12, 2000 Alpine entered into a transaction that was accounted for as a
reverse merger with Riverside Ventures, Inc., a Delaware corporation
incorporated on April 20, 1994. At the time of the transaction, Riverside
Ventures, Inc. was inactive. All of the outstanding common stock of Alpine was
exchanged for 29,685,000 shares of common stock of Riverside Ventures, Inc.
 The transaction, accounted for as a reverse acquisition, resulted in a
recapitalization of Alpine, inasmuch as it was deemed to be the acquiring entity
for accounting purposes. Riverside Ventures, Inc. changed its name to Alpine Air
Express, Inc.  The Company is an air cargo operator, transporting mail,
packages and other time-sensitive cargo between cities in the western portion of
the United States.  Principles
of consolidation  The consolidated financial statements include the
accounts and operations of Alpine Air Express, Inc., and its wholly-owned
subsidiary Alpine Aviation, Inc. as of October 31, 2008 and 2007 (together
referred to as the Company). All material inter-company transactions and
accounts have been eliminated in the consolidation.  Cash and
cash equivalents - The Company considers demand deposits at banks and money
market funds at other financial institutions with an original maturity of three
months or less to be cash equivalents.  At October 31, 2008, the Company
had cash balances in excess of federally insured limits in the amount of
$642,049. . Other
assets -At October 31, 2008, the Company had three restricted cash time
deposits totaling $175,000 held as collateral for debt of a third party and is
included in other assets. (See Note 5)  Trade accounts receivable - The Company grants credit to
its customers, substantially all of whom are businesses located in the United
States. The Company does not require collateral on any of its trade accounts
receivable.  Inventories - Inventories consist of aircraft parts and
fuel stated at the lower of cost or market, determined using the first-in,
first-out method (FIFO).  Property and equipment - Provision for depreciation for
financial reporting purposes of property and equipment is computed on the
straight-line method over their estimated useful lives ranging from three to
forty years. (See Note 5) Maintenance, repairs, and renewals, which neither
materially add to the value of the property and equipment nor appreciably
prolong the useful lives are charged to expense as incurred.  Gains and
losses on dispositions are included in operations.  Engine
overhauls - The Company had previously used the direct expense method to
account for engine overhauls and has elected to make a change in accounting
method during the year ended October 31, 2006. The Company has elected to make a
"Change in Accounting Method" in order to use the deferral method of accounting
for our major engine and airframe component overhauls and which provides for
major engine and airframe component overhaul costs to be capitalized and
depreciated over the estimated useful life of the engine and airframe
components. This method will provide a more consistent approach to accounting
for major engine and airframe component overhauls.   12    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 1 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]  Impairment of long-term assets - The Company reviews all
long-term assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of such assets may not be recoverable through
undiscounted future cash flows. If an impairment loss has occurred, such loss is
recognized in the determination of net income.  Income taxes - The Company utilizes the liability method of
accounting for income taxes.  Under the liability method, deferred tax
assets and liabilities are determined based on the difference between financial
accounting and tax bases of assets and liabilities using enacted tax rates in
effect during the years in which the differences are expected to reverse.
 An allowance against deferred tax assets is recorded in whole or in part
when it is more likely than not that such tax benefits will not be realized.
(See note 13)  Use of estimates - In preparing financial statements in
conformity with accounting principles generally accepted in the United States of
America, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenue and
expenses during the reporting period.  Actual results could differ from
those estimates.  Fair value of financial instruments - Cash and cash
equivalents, marketable securities, accounts receivable, and accrued liabilities
are reflected in the financial statements at fair value because of the
short-term maturity of these instruments.  Management is not able to
practicably estimate the fair value of the notes receivable from related parties
due to the related party nature of the underlying transactions.  Income (Loss) per common share - The Company follows the
provisions of Statement of Financial Accounting Standards No. 128 "Earnings Per
Share" (SFAS No. 128).  SFAS No. 128 requires the presentation of basic and
diluted earning per share.  Basic earnings per share are calculated by
dividing income (loss) available to common shareholders by the weighted-average
number of common shares outstanding during each period. Diluted earnings per
share are similarly calculated, except that the weighted-average number of
common shares outstanding includes common shares that may be issued subject to
existing rights with dilutive potential.  Potential common shares having an
anti-dilutive effect on periods presented are not included in the computation of
dilutive earning per share. (See note 12)  Revenue and cost recognition - The Company utilizes the
accrual method of accounting whereby revenue is recognized when earned. Air
freight revenue is recognized upon delivery of cargo to its destination.
 Public services revenue consists of charter income, pilot training fees,
and customer maintenance services.  Charter income and customer maintenance
services income is recognized when the service is performed.  Pilot
training revenue is recognized over the course of the program, based on the pro
rata share of the course completed to date. The tuition revenue received, but
not yet earned, is deferred and recorded as "refundable deposits" on the balance
sheet.  Recently
Enacted Accounting Standards -Statement of Financial Accounting Standards
(SFAS) No. 157, Fair Value Measurements, SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities  Including an amendment
of FASB Statement No. 115, SFAS No. 160, Noncontrolling Interest in
Consolidated Financial Statements (as amended), SFAS No. 161, Disclosures
about Derivative Instruments and Hedging Activities  an amendment of FASB
Statement No. 133, SFAS No. 162, The Hierarchy of GAAP Sources for
Non-governmental entities, and SFAS No. 163,  Accounting for Financial
Guarantee Insurance Contracts were recently issued.  SFAS No. 157, 159,
160, 161, 162 and 163 have no current applicability to the Company or their
effect on the financial statements would not have been significant.        13    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 1 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]   Stock
Based Compensation - The Company currently accounts for its stock based
compensation in accordance with Statement of Financial Accounting Standards
("SFAS") No. 123 (as revised in 2004) "Accounting for Stock-Based Compensation."
This statement establishes an accounting method based on the fair value of
equity instruments awarded to employees as compensation. Equity instruments
issued to non-employees are valued based on the fair value of the services
received or the fair value of the equity instruments given up which ever is more
reliably measurable.  Beginning in February 2006, the Company adopted the
Provisions of SFAS No. 123 as revised in 2004 which will require that options
issued to employees as compensation be valued at fair value.  During 2007,
the Company issued options to purchase 425,278 shares of common stock to
employees and directors. During 2008 the Company has issued options to purchase
575,000 shares of common stock to employees and directors. All of these options
were issued under the Companys established equity incentive plan.  14    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS     NOTE 2 - TRADE ACCOUNTS
RECEIVABLE  Trade accounts
receivable consist of the following at: October 31,2008

2007Trade
accounts receivable
$
2,276,781

$
2,028,098Less
allowance for doubtful accounts

(22,540)


(19,390)$
2,254,241

$
2,008,708  Bad debt
(recovery) expense for the year ended October 31, 2008 and 2007 was $3,150 and
$(6,912), respectively.     NOTE 3 - PREPAID
EXPENSES  Prepaid
expenses consist of the following at: October 31,2008

2007Prepaid
expenses and credits
$
490,975

$
274,719Prepaid
other taxes

167,899


312,715$
658,874

$
587,434      NOTE 4 -
INVENTORIES  The composition
of inventories is as follows at: October 31,2008

2007Aircraft
Parts
$
1,363,116

$
1,000,025Work
in Process
Fuel

438,884
45,644


405,844
25,960Allowance

(52,525)


(47,489)$
1,795,119

$
1,384,340       15    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS     NOTE 5  PROPERTY PLANT
& EQUIPMENT  Property and equipment
consists of the following at:  Estimated life in years

2008
2007Building and
improvements
10
- 40

$
1,286,989
$1,280,391Aircraft
15


17,090,688
15,764,364Engines
7 -
10


9,160,569
7,235,864Equipment
3 -
10


290,292
201,875Furniture and
fixtures
3 -
10


356,082
338,145Vehicles
5 -
7


136,340
135,81128,320,960
24,956,450Less:
Accumulated depreciation and amortization



(8,931,878)
(7,654,175)$
19,389,082
$17,302,275  Depreciation expense amounted to $2,218,710 and $1,886,493 for the
years ended October 31, 2008 and 2007, respectively.  All of the
Company's aircraft are held as collateral on various notes payable and related
party notes payable at October 31, 2008 and 2007.  Sales/Leasebacks - In April 2004, the Company entered into
a sale/leaseback agreement with a third party, wherein, the Company sold an
aircraft for $650,000 and entered into an operating lease (See Note 6).
 The Company has recorded a deferred gain of $355,716 which will be
amortized over the life of the lease as an offset to lease expense.  In June 2004,
the Company entered into a sale/leaseback agreement with a third party, wherein,
the Company sold an aircraft for $650,000 and entered into an operating lease
(See Note 6).  The Company has recorded a deferred gain of $517,929 which
will be amortized over the life of the lease as an offset to lease expense.
 In addition, $80,000 of the proceeds from this sale are invested in a time
deposit as collateral on the lease.  These funds are recorded as a
restricted time deposit on the Company's records.  In April
2006, the Company entered into a sale/leaseback agreement with a third party,
wherein, the Company sold an aircraft for $675,000 and entered into a six month
operating lease. The Company has recorded a gain on the sale of the aircraft
during the second quarter of 2006 in the amount of $594,586. There is no
continuing commitment on the part of the Company to continue the operating lease
beyond six months. In addition, $95,000 of the proceeds from this sale are
invested in a time deposit as collateral on the lease. These funds are recorded
as a restricted time deposit on the Company records.  Aircraft
Dispositions - In January 2008 and again in May 2008 there were two separate
incidents involving the Companys aircraft. In both cases, the aircraft were
damaged beyond repair or unrecoverable. However, both of the aircraft were fully
insured and the Company does not expect either incident to have a significant
effect on operations or its financial position.   16    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE
6 - OPERATING LEASES  On March 20,
2001, the Company entered into a 30-year lease agreement with two five-year
extension options for real property at the Provo, Utah Airport. The Company also
leases a hangar in Billings, Montana at the Logan International Airport. The
lease is for a term of five years ending October 31, 2012. These operating lease
agreements contain scheduled rent escalation clauses based on changes in the
consumer price index that are being amortized over the term of the lease using
the straight-line method. In addition to the operating leases reported above,
the Company has two revocable permits (month-to-month leases) with the State of
Hawaii, Department of Transportation to use hangar and office space for its air
cargo operations and the permits are renewed on an annual basis.  Future minimum lease payments for the years ending October 31, are
as follows:  2009
$
31,3112010

27,3022011

27,3022012

27,3022013

7,356Thereafter

125,054$
245,627  Total Rental expense for
the period ending October 31, 2008 and 2007 was $199,254 and $163,302
respectively.  Aircraft - In April and June of 2004 and again in April of
2006, the Company entered into certain sale/leaseback agreements (See Note 5).
 The Company has agreed to lease two aircraft for sixty months.  It
has also agreed to lease a third aircraft on a month to month basis. The Company
is also required to pay an additional amount to the Lessor based on the
aircrafts actual flight time. The Lessor is responsible for engine and
propeller overhauls and certain qualifying improvements to all leased
aircraft.  Future minimum lease
payments are as follows for the periods ending October 31: 2009
$
66,000$
66,000   Total
Lease expense for the years ending October 31, 2008 and 2007 was $475,582 and
$348,378, respectively.    NOTE 7 - RELATED PARTY
TRANSACTIONS  The Company performed
maintenance and certain qualified repairs on an aircraft owned by a related
party.  The Company charges the related party cost plus ten percent markup
on all parts and a fixed rate of $55 per hour for labor.  Total related
party sales and cost of sales related to aircraft maintenance are as follows for
the year ended October 31:  2008

2007Total related party
sales
$
-

$
5,849Total related party
cost of sales

-


5,264Gross margin on
related party transactions
$
-

$
585       17    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS    NOTE 7 - RELATED PARTY
TRANSACTIONS (CONTINUED)   At October 31, 2008 and
2007, the Company had a receivable of $0 and $0, respectively, related to these
repairs, reported under accounts receivable - related parties on the balance
sheet.  Personal Guarantee -
The Company's major shareholder/officer has personally guaranteed several notes
which are also collateralized by certain aircraft of the Company.  (See
Notes 5 and 9)  Aircraft Purchase- In December 2003, the Company acquired
16 aircraft from an entity related to an officer and majority shareholder of the
Company for $9,900,000.  The consideration paid included $9,104,000 in
preferred stock of the Company's subsidiary Alpine Aviation, Inc. and the
assumption of the underlying debt on the aircraft totaling $709,981.  The
remaining $86,019 was recorded as a payable to the entity related to an officer
and majority shareholder of the Company.  As the aircraft were purchased
from a related party they have been recorded at their carryover basis of
$4,111,485.  A discount on preferred stock in the amount of $3,591,195, net
of tax effect of $2,197,320, has been recorded and is being amortized as
dividends over a five year period.  The preferred stock provides for
monthly dividends at an annual rate of 6.5%, and is not convertible. The Company
can redeem the subsidiary's preferred stock any time and the entity related to
an officer and majority shareholder of the Company can call for redemption of
the subsidiary's preferred stock any time after December 31, 2011.  Notes
Payable - Related Party - In connection with the purchase of the aircraft in
July 2003 the Company issued a note to an entity related to an officer and
majority shareholder of the Company in the amount of $1,476,381.  The note
payable dated July 31, 2003, bears an interest rate of 6.5% and called for
payments of $33,624 due for 14 monthly installments with the balance due
November 1, 2004. The entity related to an officer and majority shareholder of
the Company previously agreed to forestay future payment until required by the
note's balloon payment which was due November 1, 2004 but later agreed to defer
all payments of principal, interest and balloon payments until November 1, 2006.
Subsequently, all unpaid and accrued interest and the remaining principal
balance was rolled into a new note at 6.5% interest and a 5-year term. On
October 31, 2008 the balance of this note was $0.  In connection
with the purchase of aircraft in December 2003 from an entity related to an
officer and majority shareholder of the Company, the Company has entered into a
Note Payable in the amount of $86,019.  This note bears interest at 6.5%.
 The note holder had agreed to defer all payments of principal and interest
until November 1, 2006. Subsequently, all unpaid and accrued interest and the
remaining principal balance were rolled into a new note at 6.5% interest and a
5-year term. On October 31, 2008 the balance of this note was $0.  During May
2004, lease payments due to an entity related to an officer and majority
shareholder of the Company in the amount of $667,115 were converted into a
demand note payable with interest to accrue at six and one-half (6.50%) percent
on the principal balance. No principal or interest payments were required to be
paid until November 1, 2006. Subsequently, all unpaid and accrued interest and
the remaining principal balance was rolled into a new note at 6.5% interest and
a 5-year term. On October 31, 2008 the balance of this note was $0.  During
February 2007, preferred stock dividends due to an entity related to an officer
and majority shareholder in the amount of $1,849,250 was converted into a demand
note payable with interest to accrue at six and one-half (6.50%) percent on the
principal balance. On October 31, 2008 the balance of this note was $0.  The following is a summary of notes payable to related parties at
October 31,: 2008          2007 Notes
payable  related party
                                                                    $
             -                    
-       __________     _________      18     ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS      NOTE
8  LINE OF CREDIT  During the
year ended October 31, 2006, the Company initiated an overdraft line of credit
with a Lender. The balance is currently reported as a separate line item in
current liabilities on these financial statements. It is a $100,000 10-year
revolving line maturing August 25, 2016. Interest rate at Lender's Prime plus 1%
with a $0 balance on October 31, 2008 and 2007. Secured by same three aircraft
as Note payable #1 in Note 9 below.     NOTE
9  LONG TERM DEBT  Notes
payable arose from the purchase of aircraft during July 2003 [See Note 7], which
were subsequently refinanced and consisted of the following at:  October 31, 2008                                2007  __________
            
       ____________  Note payable issued August
28, 2006 for $1,936,193 due August 28, 2009. Interest rate of
 9.5% at October 31, 2008.  Secured by three Aircraft. Reg #N-17ZV, N-955AA, and
N-99GH. Personally
guaranteed by an officer/shareholder.
                                                     $1,209,653 $1,563,407  Lease Obligation issued
July 31, 2007 for $6,000,000 due Sept 30, 2012. Implied interest rate of
9.33%. Secured by seven Aircraft Reg#N95WA, N24BH,
N950AA, N99CA, N197GA, N127BA, and N192GA.
            
                       4,641,387 5,674,781  Lease Obligation issued in
August 2008 for $4,000,000 due September 2013 Stated Interest Rate of
7.33%. Secured by three aircraft Reg#N219VP, N155CJ, And
N60MJ.                                                                                                                       3,927,568 - _________ _________ $9,778,608 $7,238,188 Less
current portion          (1,941,676) (1,264,408) __________ ________ Long-term
portion         
   $7,836,932 $5,973,780    The estimated aggregate
maturities required on long-term debt for each of the individual years at
October 31, 2008 are as follows: 2009
  $ 1,941,676 2010
     2,112,795 2011
     2,209,440 2012
     1,627,811 2013
        613,253 Threafter       1,273,633 ___________ $
9,778,608 ____________  19    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  NOTE 10 - PREFERRED
STOCK - SUBSIDIARY  The Company's
subsidiary Alpine Aviation, Inc. is authorized to issue 1,000,000 shares of
preferred stock with a stated value of $9.104. At October 31, 2007, 1,000,000
shares are issued and outstanding.  The preferred stock provides for
monthly dividends at an annual rate of 6.5%, and is not convertible. The Company
can redeem the subsidiarys preferred stock any time and the Holder can call for
redemption of the subsidiary's preferred stock any time after December 31, 2008.
 Effective May 1, 2007 the Company became the Holder of 100% of the
Preferred Stock of its subsidiary, Alpine Aviation, Inc. when it exchanged its
own Preferred Stock in return for the Alpine Aviation, Inc. outstanding
Preferred Stock. Due to the intercompany relationship, the Alpine Aviation, Inc.
Preferred Stock is now eliminated in the consolidation process.    NOTE 11  STOCKHOLDERS
EQUITY  Common Stock
- The Company is authorized to issue 100,000,000 shares of $.001 par value
common stock. As of October 31, 2008, 36,271,461 shares are issued and
36,200,801 are outstanding.  Preferred
Stock - The Company is authorized to issue 1,000,000 shares of $.001 par value
preferred stock. In April 2007 the Board of Directors authorized the issuance of
1,000,000 shares of Preferred Stock with a stated value of $9.104. At October
31, 2007, 1,000,000 shares are issued and outstanding. The preferred stock
provides for monthly dividends at an annual rate of 6.5%, and is convertible at
any time by the holder based on the current market price of the Companys stock.
The Company can redeem the preferred stock any time and the Holder can call for
redemption of the preferred stock any time after December 31, 2011. During the
year ended October 31, 2008, the Company has redeemed 160,000 shares of the
outstanding Preferred Stock. As a subsequent event, the Company redeemed an
addition 20,000 shares on November 12, 2008.  Stock Option
Plan - In August 2001, the stockholders approved the adoption of an equity
incentive plan. The plan allows the Company to issue incentive stock options
(ISO's), non-statutory stock options and restricted shares to employees,
directors, and consultants of the Company. Annually, commencing January 2002,
the aggregate number of shares of the Company's common stock available for award
under the plan shall increase by the lesser of 250,000 or seven percent of the
outstanding stock less the number of shares previously authorized for the plan,
respectively. As of October 31, 2007 and  2008, a total of 1,278,540 shares
and 1,637,009 shares, respectively, of the Company's common stock have been
reserved for issuance under the plan. After August 18, 2011, the plan terminates
and no further options may be granted. The exercise price of options granted
under the terms of the plan must not be less than 100% of the fair market value
of the shares as of the date of grant. Additionally, no individual may be
granted more than 100,000 options in any given year. All options issued under
the plan are exercisable for ten years and vest after two years. The Company has
not received and does not intend to request a determination from the Internal
Revenue Service that the options issued under the plan will qualify under the
Code for treatment as qualified incentive stock options.  The Company
previously adopted the disclosure only provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS
123). During 2007, the Company issued options to purchase 425,278 shares of
common stock to employees and directors. During 2008 the Company has issued
options to purchase 575,000 shares of common stock to employees and
directors.  The fair value of these new options was estimated at the date of
grant using the Black-scholes option-pricing model with the following
weighted-average assumptions, an interest rate of four and 00/100 percent
 for the period ended October 31, 2008; expected life is ten years for the
outstanding options. It is assumed that no dividends will be paid during the
periods of calculation.  At the date of grant, volatility is calculated to
be one hundred twenty eight, resulting in a respective weighted-average fair
value per option of $0.29. Option pricing models require the best-input
assumptions available were used to value the options and management believes the
resulting option values are reasonable.  The current value for the amortization of the options on the
financial statement were calculated using the value at the date of issue, and
discounting for the fact that the options issued in 2006 had a 38% forfeiture
rate and using a  20    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 11  STOCKHOLDERS
EQUITY (CONTINUED)  25% discount derived from the fact that in the past 7 years there
have never been any options exercised. These discounts were applied and the
financial statements will reflect a $35,212 expense to amortize the values for
options issued in 2007 and 2008. The total tax benefit is calculated to be
$13,366.  A summary of
the status of the options outstanding under the Company's stock option plans at
October 31, 2008, is presented below: October 31, 2008

October 31, 2007Shares

Weighted Average Exercise Price

Shares

Weighted Average Exercise PriceOutstanding at beginning of period
1,211,106

$
1.75

881,620

$
1.75Granted
575,000


0.30

425,278


0.40Exercised
-


-

-


-Forfeited
149,097


0.38

95,792


0.48Expired
-


-

-


-Outstanding at end of period
1,637,009

$
1.11

1,211,106

$
1.40Weighted average fair
value of options granted during the year
575,000


0.30

425,278

$
0.40  A summary of the status of
the options outstanding under the Company's stock option plans and employment
agreements at October 31, 2008 is presented below:  Options Outstanding

Options ExercisableRange of Exercise
Prices

Number
of Outstanding

Weighted Average
Remaining Contractual Life

Weighted
Average Exercise Price

Number
Exercisable

Weighted
Average Exercise Price$2.50 - $2.75

556,620

2.8 years

$
2.53

556,620

$
2.53$0.50
$0.40
$0.30

220,000
337,889
522,500

7.7 years
8.6 years
9.7 years

$
$
$
0.50
0.40
0.30

220,000
-
-

$
$
$
0.50
0.40
0.301,637,009

6.9 years

$
   1.11

776,620

$
    1.96    NOTE 12 - INCOME (LOSS)
PER COMMON SHARE The following data show the
amounts used in computing net income (loss) per common share, for the years
ended October 31: For the Year Ended
October 31,2008

2007Net income (loss)
available to common shareholders

$
63,237

$
1,846,548Weighted average
number of common shares used in basic EPS


36,245,398


36,271,461Dilutive
effect of preferred stock


21,676,190


26,776,471    21    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS   NOTE 12 - INCOME (LOSS)
PER COMMON SHARE (continued)  Dilutive effect of
stock options

Weighted average
number of common shares and dilutive potential common stock used in
diluted EPS


-
---------------
57,921,588
__________


586,620
-------------
63,634,552  
_________  For the year
ended October 31, 2008 and 2007, 1,637,009 and 1,226,898 outstanding options,
respectively, were excluded from the calculation of diluted earnings per share
because their effect was anti-dilutive.  During December 2003 the Company
issued 1,000,000 series A, 6.5% preferred shares of the Company's subsidiary
Alpine Aviation, Inc. with a stated value of $9.104 per share, for the purchase
of aircraft.  These preferred shares have no voting rights and are not
convertible into common stock and thus are not included in the calculations of
earnings per share. During April 2007 the Company issued 1,000,000 series A,
6.5% preferred shares with a stated value of $9.104 per share.  These
preferred shares have no voting rights and are convertible into common stock at
the current market value. They do have a dilutive effect and are included in the
computation of EPS.      NOTE 13  INCOME
TAXES  The Company
accounts for income taxes in accordance with Statement of Financial Accounting
Standards No. 109 Accounting for Income Taxes [SFAS No. 109].  SFAS No. 109
requires the Company to provide a net deferred tax asset or liability equal to
the expected future tax benefit or expense of temporary reporting differences
between book and tax accounting and any available operating loss or tax credit
carryforwards.  At October 31, 2008 and October 31, 2007, respectively, the
total of all deferred tax assets was approximately $3,490,000 and $3,803,000 and
the total of the deferred tax liabilities was approximately $2,606,000 and
$2,252,000.  The amount of and ultimate realization of the benefits from
the deferred tax assets for income tax purposes is dependent, in part, upon the
tax laws in effect, the Company's future earnings, and other future events, the
effects of which cannot be determined.  The components of income
tax expense (benefit) from continuing operations for the year ended October
31,  2008

2007Current income tax
expense (benefit):Federal
$
-

$
-State

-


-Current
tax expense (benefit)
$
-

$
-Deferred tax expense
(benefit) arising from:Excess
of tax over financial accounting depreciation
$
198,036

$
613,629Deferred
gain

72,776


55,646Allowance
for bad debt

(1,196)


4,151Inventory
Shrinkage

(1,911)


(1,003)Reserve
for accrued vacation

(13,436)


(8,944)Accrued
interest

(87)


12,800Deferred
Compensation due to Stock Options Amortized

(13,366)


-Foreign
net operating loss carryforward

-


-Net
operating loss carryover

250,952


85,357Valuation
allowance

(176,014)


(160,145)Capital
loss carryover

176,014


160,145Net
deferred tax expense (benefit)
$
491,768

$
761,636  22       ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  NOTE 13 - INCOME TAXES
[CONTINUED]  Deferred
income tax expense results primarily from the reversal of temporary timing
differences between tax and financial statement income.  A
reconciliation of income tax expense from continuing operations at the federal
statutory rate to income tax expense at the company's effective rate is as
follows as of October 31: 2008                     
  2007 ___________
           _________ Computed
tax at the expected statutory rate
                                                           34.00% 34.00% State
and local income taxes, net of federal benefit
                                                  3.96% 3.96% Capital
loss carryover
                                                                                                     - - Valuation
allowance
                                                                                                (9.72)% (6.62)% Other
Items
                                                                                                              (1.09)% 0.13% ___________
               
 _________ Income
tax expense
                                                                                             27.15% 31.47% ___________
               
 _________    The temporary
differences, tax credits and carryforwards gave rise to the following deferred
tax asset (liability) for the year ended October 31, 2008 and at October 31,
2007:  October
31,

October
31,2008

2007Allowance for bad debt
$
8,556

$
7,360Reserve
for accrued vacation

103,619


90,183Accrued
interest

1,013


927Inventory Shrinkage

19,938


18,027Net
current tax assets
$
133,126

$
116,497Capital
Loss carryforward
$
210,245

$
386,258Net operation loss
carryforward

2,859,048


2,953,401Valuation allowance

(408,371)


(584,385)Alternative minimum tax credits

35,462


35,462Excess
of tax over book accounting depreciation

(2,606,583)


(2,251,947)Deferred Compensation due to Stock Options
Deferred sales

13,366
40,672


-
113,448Foreign
net operating loss carryforward

198,127


198,127Net
deferred tax (liability)
$
341,966

$
850,364  As of October
31, 2008 the Company has capital  loss carryforwards of approximately
$554,000 that expire in 2010 and a net operation loss carryforward of
approximately $7,532,000 that expires in 2025. A valuation allowance in the
amount of approximately $408,000 was recorded at October 31, 2008, due to
uncertainty of whether the company is more than likely not to generate
sufficient capital gains and foreign income to utilize the benefit of these loss
carryforwards before their expiration.  The change in the valuation
allowance for the year ended October 31, 2008 and 2007 was approximately
($176,000) and ($160,000) , respectively.     23    ALPINE AIR EXPRESS, INC. AND SUBSIDIARY  NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS          NOTE 14 
CONCENTRATIONS  U.S.
Postal Service Contracts- The Company receives the majority of its revenues
from contracts with the U.S. Postal Service (USPS).  For the year ended
October 31, 2008 and 2007, the revenues from contracts with the USPS represented
71% and 78% of total revenues, respectively.  At October 31, 2008 and 2007,
accounts receivable from the USPS totaled $1,236,412 and $1,257,995 or 55% and
63%, respectively. The contracts currently in effect for USPS routes will expire
between July and November 2009 for mainland US operations and in January 2009
for Hawaii. The loss of this customer would have a material negative effect on
the operations of the Company.   NOTE 15  COMMITMENTS
AND CONTINGENCIES  Lawsuit - The
Company has been named in a lawsuit by a former employee for claims of
approximately $50,000 related to wrongful termination. The plaintiff is not
actively pursuing prosecution and the Company believes the case may be dismissed
for lack of prosecution.  FAA Matters -
Several allegations and proposals have been put forth by the FAA and are
currently being reviewed by the Company. None of these assertions have resulted
in any enforcement action against the Company, nor does the Company expect any
actions as a result of their allegations. Management believes that the ultimate
resolution of these matters will not have a material impact on the financial
condition of the Company.  The Company
operates its aircraft under a certificate which allows it to accumulate time
between overhauls (TBO) in excess of manufacturer's recommendations.  The
Company regularly inspects its engines.  A majority of the engines used by
the Company have accumulated TBO in excess of manufacturer's
recommendations.   NOTE 16  SUBSEQUENT
EVENTS  Preferred Stock Redemption
-  On November 12, 2008 the Alpine Air Express Board of Directors voted to
redeem 20,000 shares of the Preferred Stock issued on May 1, 2007.   NOTE 17 OTHER CURRENT
ASSETS  In October, 2008, the
Company purchased two contracts for heating oil due in June 2009. The Company
recognized an $84 gain on the market value of the contracts through October 31,
2008.   24


ITEM
9:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE  There are have been no
changes in our independent accountants during the past two fiscal years or any
disagreements with independent accountants on accounting and financial
disclosure.  ITEM
9A(T):  CONTROLS AND PROCEDURES  The Companys
management, with the participation of our principal executive officer and our
principal financial officer, evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this Annual
Report.  Based on that evaluation, our principal executive officer and our
principal financial officer concluded that our disclosure controls and
procedures as of the end of the period covered by the Annual Report were
effective such that the information required to be disclosed by the Company in
reports filed under the Exchange Act is (i) recorded, processed, summarized and
reported within the time periods specified in the SECs rules and forms and (ii)
accumulated and communicated to our management, including our principal
executive officer and our principal financial officer, as appropriate to allow
timely decisions regarding disclosure.  A controls system cannot provide
absolute assurance, however, that the objectives of the controls system are met,
and no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been detected.  The Companys
management, with the participation of the principal executive officer and the
principal financial officer, evaluated the effectiveness of the Companys
internal control over financial reporting as of October 31, 2008.  In
making this assessment, the Companys management used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control  Integrated Framework.  Based on this evaluation, our
management, with the participation of the President and Vice President,
concluded that, as of October 31, 2008, our internal control over financial
reporting was effective.  This Annual
Report does not include an attestation report of the Companys registered public
accounting firm regarding internal control over financial reporting.
 Managements report was not subject to attestation by the Companys
registered public accounting firm pursuant to temporary rules of the Security
and Exchange Commission that permit the Company to provide only managements
report in this Annual Report.   Changes in
Internal Control Over Financial Reporting  There have
been no changes in internal control over financial reporting during the fourth
fiscal quarter of the fiscal year covered by this Annual Report.  ITEM 9B:  OTHER
INFORMATION  None, not
applicable.       PART III   ITEM
10.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT  Directors
and Executive Officers.  The members of the Board of
Directors of Alpine Air serve until the next annual meeting of stockholders, or
until their successors have been elected. The officers serve at the pleasure of
the Board of Directors.  The following are our directors and executive
officers.  Name
Age
Position
Held
Position SinceEugene R.
Mallette
59
CEO
1986Don T. Squire,
Jr.
49
Chief Financial
Officer
2005Max A. Hansen
59
Secretary/Treasurer
and Director
1986Joseph O.
Etchart
60
Chairman
2005Kenneth D.
Holliday
63
Director
2002Michael Brown
67
Director
2006Ronald L.
Pattison
51
Director
2006  Mr. Mallette began his career with
Alpine Aviation in 1979 as its Sales Manager, then became General Manager later
in 1979.  He became Chief Executive Officer and Director upon acquiring
Alpine Aviation in 1986.  Prior to his employment by Alpine Aviation, he
was employed by the State of Montana as a staff auditor.  He received a
B.A. in Business Administration from Carroll College in 1971.  Mr. Mallette
holds a private pilot's license and maintains his proficiency.  He devotes
time to civic and charitable causes and was previously Chairman of the Better
Business Bureau of Utah County and Vice-President of the Provo Chamber of
Commerce.  Don T. Squire Jr., was named Chief
Financial Officer in September 2005 after serving as Director of Accounting
since June 2005.  Mr. Squire is a licensed CPA and has served as a
consultant and in finance and accounting leadership capacities in private
industry for the past 17 years. His most recent consulting assignment prior to
coming to Alpine involved the restructuring of Sheaffer Pen Manufacturing (a
BIC, Inc. subsidiary). He has served as a Controller and Finance Manager for
Rehab Designs of America (GE Finance Subsidiary), Oriflame USA, Priority
Dispatch Corp. (formerly Medical Priority Consultants), Infinity Nutritionals,
and other organizations. He has served as an adult leader in the Boy Scouts of
America for over 10 years, including time as a District Chairman.  Max Hansen has been a director since
1986.  He has been practicing law since 1976 and has owned his own firm,
Max A. Hansen & Associates, P.C. since 1980.  Mr. Hansen provides legal
services to Alpine Air.  From 1988 to 1989, he was President of the Montana
Bar Association and is currently a member of the American Bar Association House
of Delegates. Mr. Hansen has received distinguished service awards from the
Montana State Bar Association and the Montana Supreme Court.  He received a
JD degree from the University of San Diego in 1976, where he was a member of the
law review.  He received a BA in Political Science from Carroll College in
1971.  Joseph O. Etchart has been a member
of our Board of Directors since April, 2002.  He formerly served as Alpine
Air's Director of Public and Investor Relations.  He is also the President
and CEO of Hinsdale Land Company, a real estate and agricultural enterprise in
Montana.  Since 1985, Mr. Etchart has served on the Board of Directors, and
is a former Chairman of the Board, of Montana Livestock Ag Credit, one of the
premier agricultural lending institutions in the Pacific Northwest.  He
served two terms as President of the Washington, D.C. based National Public
Lands Council, where he was involved in the legislative and regulatory process
associated with federal land commodity production.  In addition, Mr.
Etchart has held numerous civic, political and appointed posts, including
Campaign Finance Chairman during the first successful election of Montana
Governor Marc Racicot.  Mr. Etchart received a Bachelor of Arts degree in
Sociology from Carroll College in 1970 and is an active member of numerous
organizations, including the Knights of Columbus.       Kenneth D. Holliday joined our Board
of Directors in September, 2002.  He has extensive experience in the
aviation industry and currently serves as President and CEO of Avcon, Inc., a
consulting company assisting airlines, aviation and travel related companies.
 He was formerly the President and CEO of TransMeridian Airlines, an air
carrier contracted to fly A-320 aircraft for one of the nation's largest tour
operators.  Mr. Holliday also has served as President and CEO of Private
Jet Expeditions, Inc., where he directed airline growth from one B-727 aircraft
to 16 MD-80 aircraft over a two-year period.  Mr. Holliday received a
Bachelor of Science degree in Industrial Management from Clemson University and
USAF undergraduate pilot training at Williams Air Force Base in Arizona.  Michael Brown was most recently the
Managing Director and Head of Mergers and Acquisitions in the Investment Banking
Group of Wells Fargo Securities where he completed numerous mergers and
acquisitions, private placements and initial public offerings for companies in
various segments of the consumer and technology industries. Mr. Brown was a
member of the Investment Banking Commitment Committee of Wells Fargo Securities
and coordinated the firm's investment banking activities in Southern California.
Prior to joining the predecessor of Wells Fargo Securities, in September 2000,
Mr. Brown was a Managing Director in Sutro & Co.'s Investment Banking
Department and Head of Mergers and Acquisitions. Before joining Sutro, Mr. Brown
was the founding Managing Director of Drexel Burnham Lambert's West Coast
Mergers and Acquisitions Department. During his seven-year tenure at Drexel, Mr.
Brown's transactions included arranging the $1.6 billion sale of Jack Kent
Cooke's cable properties to a consortium of cable operators, Turner
Broadcasting's $1.2 billion purchase of MGM, the sale of the Beverly Wilshire
Hotel to Regent International, the sale of the Desert Inn and Sands Casinos to
MGM Grand, and T. Boone Pickens' attempted takeovers of Gulf Oil and UNOCAL. Mr.
Brown was a member of Turner Broadcasting's Board of Directors. Prior to joining
Drexel, Mr. Brown was a Partner specializing in mergers and acquisitions at
Kidder Peabody & Co. in Los Angeles and Vice President of Mergers and
Acquisitions in the New York office of Goldman Sachs. Mr. Brown was a member of
the faculty of Harvard Business School. Mr. Brown is a graduate of Harvard
University (M.B.A.) and the Wharton School of the University of Pennsylvania
(B.S.&E.). He has served with the U.S. Army Special Forces.  Ronald L. Pattison received his CPA
Certificate in August of 1984 after graduating with a B.A. in Business
Administration, specializing in Accounting. Ron has specialized in the design
and administration of defined contribution plans, but also has a working
knowledge of the requirements for defined benefit plans. He was the manager of
the Defined Contribution practice group in the Albuquerque, New Mexico office of
a national consulting firm. Ron left that practice in December of 1990 to start
Pattison Pension Specialists, Inc., where he is currently a principal.  Alpine Air established a standing
audit committee in the first quarter of its 2002 fiscal year.  The
committee has adopted a charter and currently consists of three members, Ron
Pattison (Chair), Joe O. Etchart and Michael Brown.  Alpine Air does not
have standing nominating or compensation committee.  Except as indicated below, to the
knowledge of management, during the past five years, no director, person
nominated to become a director, executive officer, promoter or control person of
Alpine Air:  (1) was a general partner or
executive officer of any business entity that filed any bankruptcy petition,
either at the time of the bankruptcy or two years prior to that time;  (2) was convicted in a criminal
proceeding or named subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses);  (3) was the subject of any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his or her involvement in any type of business,
securities or banking activities;  (4) was found by a court of
competent jurisdiction in a civil action, the Securities and Exchange Commission
or the Commodity Futures Trading Commission to have violated any federal or
state securities or commodities law, and the judgment has not been reversed,
suspended or vacated.       Code
of Ethics.  We filed our Code of Conduct for our
executive officers with our Amended 10KSB dated October 31, 2003, and filed with
the Securities and Exchange Commission on March 19, 2004.  Compliance
with Section 16(a) of the Exchange Act.  Alpine Air believes all forms
required to be filed under Section 16 of the Exchange Act have been timely
filed.  On January 9, 2004, our Board of
Directors adopted an Insider Trading Policy.  The purpose of this Policy is
to ensure that our directors, executive stockholders and 10% stockholders comply
with Section 16(a) of the Exchange Act and to establish procedures by which our
insiders may buy and/or sell our common stock without violating the securities
laws' prohibition against insider trading.  ITEM 11.
 EXECUTIVE COMPENSATION  The following tables set forth
certain summary information concerning the compensation paid or accrued for each
of Alpine Air's last three completed fiscal years to Alpine Air or its principal
subsidiary Chief Executive Officer and each of its other executive officers that
received compensation in excess of $100,000 during such period (as determined at
October 31, 2008, the end of Alpine Air's last completed fiscal year). Unless
indicated otherwise, all share figures in this Item reflect the three-for-one
split of our issued and outstanding common stock in January, 2006.  Summary
Compensation Table.  SUMMARY COMPENSATION TABLE  Name and Principal
Position
(a)
Year
(b)
Salary
($)
(c)
Bonus
($)
(d)
Stock Awards
($)
(e)
Option Awards
($)
(f)
Non-Equity Incentive
Plan Compensation
($)
(g)
Nonqualified
 Deferred Compensation
($)
(h)
All Other
Compensation
($)
(i)
Total
Earnings
($)
(j)Eugene R. Mallette
CEO
10/31/08
10/31/07
10/31/06
97,529
93,997
82,715
541
542
0
0
0
0
534
460
423
0
0
0
0
0
0
25,107
3,992
4,556
123,711
98,991
87,694Bill Distefano,
General Manager
10/31/08
10/31/07
10/31/06
138,986
122,394
126,418
66,368
511
0
0
0
0
534
460
423
0
0
0
0
0
0
6,942
3,884
3,753
212,830
127,249
130,594Don T. Squire Jr,
CFO
10/31/08
10/31/07
10/31/06
82,695
79,125
64,971
10,541
541
0
0
0
10,000
5,339
3,221
423
0
0
0
0
0
0
6,249
4,941
4,871
104,824
87,828
80,265   Options/SAR
Grants.   During the year ended October 31,
2007 we issued options to purchase 5,000 shares each to the CEO, Eugene
Mallette, General Manager Bill Distefano and to the CFO, Don T. Squire Jr..
These were issued as part of the same option grant offered to all full-time
employees in June of 2007. In addition to these, the CFO was also awarded 30,000
options to purchase shares as part of an annual bonus.  During the
year ended October 31, 2008 we issued options to purchase 5,000 shares each to
the CEO, Eugene Mallette and the General Manager Bill Distefano. These were
issued as part of the same option grant offered to all full-time employees in
July of 2008. In addition to these, the CFO was also awarded 50,000 options to
purchase shares as part of an annual bonus       Aggregated
Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table.  No
stock options or SARs were exercised during the fiscal year ended October 31,
2008 and 2007.  Pension
Table.  None.  Compensation
of Directors.  During the fiscal year ended October
31, 2008, each Director was issued stock options to acquire 10,000 shares of
common stock. These options have a two year restriction and an exercise price of
$0.30 per share.  During the fiscal year ended October
31, 2007, each Director was issued stock options to acquire 10,000 shares of
common stock. These options have a two year restriction and an exercise price of
$0.40 per share.  During the fiscal year ended October
31, 2006, each Director was issued stock options to acquire 10,000 shares of
common stock. These options have a two year restriction and an exercise price of
$0.50 per share.  During the fourth quarter of the
current year, the Board of Directors fees were increased to $4,000 per quarter
from the previous rate of $2,500 per quarter for services rendered.  Termination
of Employment and Change of Control Arrangement.  There are no compensatory plans or
arrangements, including payments to be received from Alpine Air, with respect to
any person named in Cash Compensation set out above which would in any way
result in payments to any such person because of his resignation, retirement, or
other termination of such person's employment with Alpine Air or its
subsidiaries, or any change in control of Alpine Air, or a change in the
person's responsibilities following a change in control of Alpine Air.  Stock Option Plan.  In August 2001, Alpine Air adopted
an equity incentive plan.  The plan allows Alpine to issue incentive stock
options ("ISOs") within the meaning of section 422A of the Internal Revenue Code
of 1986, as amended ("Code"), non- statutory stock options and restricted shares
to employees, directors and consultants of Alpine Air.  A total of 770,000
shares of Alpine Air's common stock have been reserved for issuance under the
plan.  As of January of each year commencing in the year 2002, the
aggregate number of shares of Alpine Air's common stock that may be awarded
under the plan shall automatically increase by a number equal to the lesser of
(i) 7% of the total number of shares of Alpine's common stock outstanding, minus
the number of shares of stock previously authorized for award under the plan at
the close of the preceding calendar year or (ii) 250,000 shares of common
stock.  The exercise price of options
granted under the terms of the plan must not be less than 100% of the fair
market value of the shares as of the date of grant, or 110% of the fair market
value for ISOs granted to optionees possessing more than 10% of the total
combined voting power of all classes of stock of Alpine Air for ISOs and 85% of
the fair market value of the stock for nonqualified options.  In addition,
the aggregate fair market value (as determined on the date of each option grant)
of shares with respect to which ISOs are exercisable for the first time by an
employee during any calendar year shall not exceed $100,000.  Additionally,
no individual may be granted more than 100,000 options in any given year.  Alpine Air has not received and does
not intend to request a determination from the Internal Revenue Service that the
ISOs issued under the plan will qualify under the Code for treatment as
ISOs.  The plan provides that an option may
be exercised by payment in cash or, with the consent of the board of directors,
by delivery of common stock of Alpine Air valued at its fair market value on the
date of payment.  An option holder shall not have any of the rights of a
shareholder with respect to the shares subject to the option until the shares
have been fully paid and issued.       The board of directors or a
committee of the directors will initially administer the plan, prescribe the
form and content of options to be granted, receive elections for the exercise of
stock conversion rights, determine the terms and restrictions on all restricted
stock awards granted under the plan, and other items.  No stock option can
be granted for a period longer than ten years or for a period longer than five
years for ISOs granted to optionees possessing more than 10% of the total
combined voting power of all classes of stock of Alpine Air.  The right to
exercise an option terminates three months after the termination of an
employees employment, unless the employee dies or is disabled, in which event
the option will remain exercisable for a period of one year after the
termination of employment.  The plan terminates, and no further options may
be granted after August 18, 2011.  In August 2001, Alpine Air issued
options to acquire 547,185 shares of its common stock at an exercise price of
$2.50 per share and an option to purchase 79,998 shares at an exercise price of
$2.75 per share.  In 2002, Alpine Air issued options to acquire 2,562
shares of its common stock at an exercise price of $2.50 per share.  All
options were issued under the plan.  In addition, a total of 82,251 options
have been forfeited through October 31, 2005.  During 2006, the Company issued
options to acquire 325,000 shares of its common stock at an exercise price of
$0.50 per share, to employees and directors of the company. To date 105,000 of
the 2006 options have been forfeited. During 2007, the Company issued options to
acquire 425,278 shares of its common stock at an exercise price of $0.40 per
share, to employees and directors of the company. To date 87,389 of the 2007
options have been forfeited. During 2008, the Company issued options to acquire
575,000 shares at an exercise price of $0.30 per share. To date, 52,500 of those
options have been forfeited.  ITEM 12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  The following table sets forth
information relating to the beneficial ownership of Alpine Air's common stock as
of  October 31, 2008 by each person known by Alpine Air to be the
beneficial owner of more than 5% of the outstanding shares of common stock and
each of Alpine Air's directors and executive officers.  Name and Address of
Principal Stockholders
Common Stock
PercentageEugene R.
Mallette
1177 Alpine Air
Way
Provo, Utah
84601
27,729,465(1)(3)
76.4%SCS, Inc.
455 East 500 South,
#201
Salt Lake City, Utah
84111
2,450,214(2)
6.7%Officers and
DirectorsEugene R. Mallette,
CEO and Director
27,729,465(1)(3)
76.4%Don T. Squire, Jr.
CFO
60,000(4)
Less
than 1%Max Hansen,
Secretary/Treasurer, Director
11,874
Less
than 1%Joseph O. Etchart,
Director
18,945
Less
than 1%Ronald L. Pattison,
Director
42,600
Less
than 1%All officers and
directors as a group (5 persons)
27,862,884
76.8%  (1) IFW St. Croix Group, LLLP
dissolved its partnership in February of 2007 and distributed the shares to Mr.
Mallette.  (2) 2,245,464 of these shares were
issued as restricted stock as compensation on a consulting contract entered into
by the Company. The contract covers a two year period and lifting of the
restricted status is dependant on contract performance.  (3) 15,000 of these shares are in
the name of Mary Lou Mallette, Mr. Mallette's wife.  (4) These shares were issued
11/22/2005 and are restricted.       Unless otherwise noted above, Alpine
Air believes that all persons named in the table have sole voting and investment
power with respect to all shares of common stock beneficially owned by them.
 For purposes hereof, a person is deemed to be the beneficial owner of
securities that can be acquired by such person within 60 days from the date
hereof upon the exercise of warrants or options or the conversion of convertible
securities.  Each beneficial owner's percentage ownership is determined by
assuming that any warrants, options or convertible securities that are held by
such person (but not those held by any other person) and which are exercisable
within 60 days from the date hereof, have been exercised.  Securities Authorized
for Issuance under Equity Compensation Plans.  Equity
Compensation Plan Information  Plan Category
Number of Securities
to be issued upon exercise of outstanding options, warrants and
rights
Weighted-average
exercise price of outstanding options, warrants and rights
Number of securities
remaining available for future issuance under equity compensation plans
excluding securities reflected in column (a)(a)
(b)
(c)Equity compensation
plans approved by security holders
556,620
220,000
337,889
$2.53
$0.50
$0.40
-
-
-Equity compensation
plans not approved by security holders
522,500
-0-
$0.30
-0-
-
-Total
1,637,009
$1.11
-   ITEM 13.  CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS  Aircraft Purchase - In December
2003, the Company acquired 16 aircraft from an entity related to an officer and
majority shareholder of the Company for $9,900,000.  The consideration paid
included $9,104,000 in preferred stock of the Company's subsidiary Alpine
Aviation, Inc. and the assumption of the underlying debt on the aircraft
totaling $709,981.  The remaining $86,019 is recorded as a payable to the
entity related to an officer and majority shareholder of the Company.  As
the aircraft were purchased from a related party they have been recorded at
their carryover basis of $4,111,485.  A discount on preferred stock in the
amount of $3,591,195, net of tax effect of $2,197,320, has been recorded and is
being amortized as dividends over a five year period.  The preferred stock
provides for monthly dividends at an annual rate of 6.5%, and is not
convertible. However, in April 2007 the Board of Directors authorized the
issuance of 1,000,000 shares of Preferred Stock in the Parent Company, Alpine
Air Express, with a stated value of $9.104, which were exchanged with the holder
for the outstanding preferred stock in the subsidiary. The newly issued
preferred stock in the Parent Company provides for monthly dividends at an
annual rate of 6.5%, and is convertible at any time by the holder based on the
current market price of the Companys stock. The Company can redeem the
preferred stock any time and the Holder can call for redemption of the preferred
stock any time after December 31, 2011.  Notes Payable - Related Party - In
connection with the purchase of the aircraft the Company issued a note to an
entity related to an officer and majority shareholder of the Company in the
amount of $1,476,381.  The note payable dated July 31, 2003, bears an
interest rate of 6.5% and called for payments of $33,624 due for 14 monthly
installments with the balance due November 1, 2004. The entity related to an
officer and majority shareholder of the Company previously agreed to forestay
future payment until required by the note's balloon payment which was due
November 1, 2004 but later agreed to defer all payments of principal, interest
and balloon payments until November 1, 2006. Subsequently, all unpaid and
accrued interest and the remaining principal balance was rolled into a new note
at 6.5% interest and a 5-year term. On October 31, 2008 the balance of this note
was $0.  In connection with the purchase of aircraft during 2004 from an
entity related to an officer and majority shareholder of the Company, the
Company has entered into a Note Payable in the amount of $86,019.  This
note bears interest at 6.5%.  The note holder had agreed to defer all
payments of principal and interest until November 1, 2006.      Subsequently, all unpaid and accrued interest and the remaining
principal balance was rolled into a new note at 6.5% interest and a 5-year term.
On October 31, 2008 the balance of this note was $0. During May 2004, lease
payments due to an entity related to an officer and majority shareholder of the
Company in the amount of $667,115 were converted into a demand note payable with
interest to accrue at six and one- half (6.50%) percent on the principal
balance. No principal or interest payments were required to be paid until
November 1, 2006. Subsequently, all unpaid and accrued interest and the
remaining principal balance was rolled into a new note at 6.5% interest and a
5-year term. On October 31, 2008 the balance of this note was $0.  Personal Guarantee - The Company's
major shareholder/officer has personally guaranteed loans which are also
collateralized by certain aircraft of the Company.  ITEM 14.  PRINCIPAL
ACCOUNTANT FEES AND SERVICES.  The
following is a summary of the fees billed to Alpine Air by its principal
accountants during the fiscal years ended October 31, 2008, 2007, and 2006:  Fee
category
2008

2007

2006Audit fees
$
100,182

$
89,936

$
74,411Audit-related
fees

0


0


0Tax fees

0


0


0All other fees

0


0


0Total
fees
$
100,182

$
89,936

$
74,411  Audit fees - Consists of fees for
professional services rendered by our principal accountants for the audit of
Alpine Air's annual financial statements and the review of financial statements
included in Alpine Air's Forms 10-QSB or services that are normally provided by
our principal accountants in connection with statutory and regulatory filings or
engagements.  Audit-related fees -  Consists
of fees for assurance and related services by our principal accountants that are
reasonably related to the performance of the audit or review of Alpine Air's
financial statements and are not reported under "Audit fees."  Tax fees - Consists of fees for
professional services rendered by our principal accountants for tax compliance,
tax advice and tax planning.  All other fees -  Consists of
fees for products and services provided by our principal accountants, other than
the services reported under "Audit fees," "Audit-related fees" and "Tax fees"
above.  The fees disclosed in this category include due diligence,
preparation of pro forma financial statements as a discussion piece for a Board
 member, and preparation of letters in connection with the filing of
Current Reports on Form 8-K.  Policy on
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditors.  The Company's Audit Committee
Charter does not provide for the approval in advance of the performance of
professional services to be provided to the Company by its principal accountant.
 All services rendered by our principal accountant are performed pursuant
to a written engagement letter between us and the principal accountant.       PART IV  ITEM 15.
EXHIBITS  (a)
Exhibits.  31.1  302
Certification of Eugene Mallette  31.2  302
Certification of Don T. Squire Jr.  32
    906 Certification   SIGNATURES  In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.  Alpine
Air Express, Inc.   Date: 1/28/2009
                 By:
/s/Eugene Mallette Eugene
Mallette, Chief Executive Officer and Director   In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.  Date: 1/28/2009
                   /s/Eugene
Mallette Eugene
Mallette, Chief Executive Officer and Director   Date: 1/28/2009
                    /s/Don
T. Squire Jr. Don
T. Squire Jr., Chief Financial Officer   Date: 1/28/2009
                    /s/Max
A. Hansen Max
A. Hansen, Secretary/Treasurer and Director   Date: 1/28/2009
                     /s/Joseph
O. Etchart Joseph
O. Etchart, Chairman   Date: 1/28/2009
                     /s/Kenneth
D. Holliday Kenneth
D. Holliday, Director   Date: 1/28/2009
                     /s/Michael
Brown Michael
Brown, Director   Date: 1/28/2009
                     /s/Ronald
L. Pattison Ronald
L. Pattison, Director