UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

^{______________}

FORM 10-Q

^{______________}

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

For the quarterly period ended ~~April~~July 3031, 2010

[ ] TRANSITION REPORT ~~PERSUANT~~PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to____________

Commission File No. 000-27011

ALPINE AIR EXPRESS, INC.

(Exact name of registrant as specified in its charter)


Delaware	33-0619518
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

1177 Alpine Air Way

Provo, Utah 84601

(Address of Principal Executive Offices)

(801) 373-1508

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year,

if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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. ~~Yes [X] No [ ]~~

Yes [X] No [ ]

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]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Not applicable.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No.

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~June~~September 87, 2010 - 36,271,461 shares of common stock.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

The condensed consolidated financial statements of Alpine Air Express, Inc., a Delaware corporation, and its subsidiary Alpine Aviation, Inc., a Utah corporation, as required to be filed with this 10-Q Quarterly Report were prepared by management, and commence on the following page, together with related notes. In the opinion of management, the financial statements present fairly the consolidated financial condition, results of operations and cash flows of Alpine Air for the periods presented.

ALPINE AIR EXPRESS, INC.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~April~~July 3031, 2010

ALPINE AIR EXPRESS, INC.

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

	PAGE
Condensed Consolidated Balance Sheets at April 30, 2010 (Unaudited) and October 31, 2009 (Audited)	5
Condensed Consolidated Balance Sheets at July 31, 2010 (Unaudited) and October 31, 2009 (Audited)	5
Unaudited Condensed Consolidated Statements of Operations for the three and six Months ended April 30, 2010 and 2009	6
Unaudited Condensed Consolidated Statements of Operations for the three and nine Months ended July 31, 2010 and 2009	6
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended April 30, 2010 and 2009	7-8
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended July 31, 2010 and 2009	7-8
Condensed Notes to Unaudited Consolidated Financial Statements	9-1213

ALPINE AIR EXPRESS, INC.

CONSOLIDATED BALANCE SHEETS

ASSETS


	July 31, 2010 Unaudited		October 31, 2009 Audited
ASSETS CURRENT ASSETS:
Cash and cash equivalents	$	506,523	$ 992,241
Trade accounts receivable, net Note receivable		1,435,019 48,822	1,468,854 -
Inventories		2,334,205	1,850,486
Prepaid expenses		697,626	253,399
Deposits Cash value life insurance Income taxes receivable		38,575 85,572 -	64,549 80,550 324
Deferred tax asset, current		322,000	271,000
Total current assets		5,468,342	4,981,403
PROPERTY AND EQUIPMENT, NET RESTRICTED CASH		21,614,234 204,946	21,235,497 200,695
OTHER ASSETS, NET		133,642	142,629
Total assets	$	27,421,164	$ 26,560,224

	April 30, 2010 Unaudited		October 31, 2009 Audited
CURRENT ASSETS:
Cash and cash equivalents	$	347,831	$ 992,241
Trade accounts receivable, net Note receivable		1,420,676 48,822	1,468,854 -
Inventories		2,049,996	1,850,486
Prepaid expenses		160,744	253,399
Deposits Cash value life insurance Income taxes receivable		13,637 80,550 -	64,549 80,550 324
Deferred tax asset, current		276,000	271,000
Total current assets		4,398,256	4,981,403
PROPERTY AND EQUIPMENT, NET RESTRICTED CASH		22,274,390 203,517	21,235,497 200,695
OTHER ASSETS, NET		122,462	142,629
Total assets	$	26,998,625	$ 26,560,224

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade accounts payable	$	~~754~~642,~~426~~106	$ 991,513
Accrued liabilities Dividends payable		837,687 39,883	837,229 244,616
Accrued liabilities Dividends payable Income taxes payable		1,042,293 41,212 37,900	837,229 244,616 -
Deferred revenue		299,~~624~~395	120,037
Line of credit		~~566,021~~-	276,021
Current portion of long-term debt		1,~~144~~400,000	1,842,000
Total current liabilities		3,~~344~~262,~~641~~906	4,311,416
DEFERRED TAX LIABILITY LINE OF CREDIT		1,~~237~~580,000 -	620,000 472,854
LONG-TERM DEBT, net of current portion		7,~~616~~571,~~102~~819	7,147,937
Total liabilities		12,~~197~~414,~~743~~725	12,552,207
PREFERRED STOCK, $.001 par value, $9.104 stated value, 1,000,000 shares authorized, 820,000 shares issued and outstanding.		7,465,280	7,465,280
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value, $9.104 stated value, 1,000,000 shares authorized, 820,000 shares issued and outstanding.		7,465,280	7,465,280
Common stock, $.001 par value, 100,000,000 shares authorized, 36,271,461 shares issued and outstanding.		36,271	36,271
Additional paid-in capital		2,~~483~~491,~~109~~868	2,457,550
Retained earnings		45,~~867~~064,~~884~~682	4,094,845
		14,852,544	14,053,946
		7,592,821	6,588,666
Less treasury stock, 211,980 and 141,320 shares at cost, respectively		(51,662)	(45,929)
Total stockholders’ equity		147,~~800~~541,~~882~~159	146,~~008~~542,~~017~~737
Total liabilities and stockholders’ equity	$	2627,~~998~~421,~~625~~164	$ 26,560,224

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALPINE AIR EXPRESS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the Three Months Ended For the Six Months Ended


	For the Three Months Ended July 31,				For the Nine Months Ended July 31,
		2010		2009		2010		2009
OPERATING REVENUE:
Operations	$	4,802,568	$	4,817,312	$	14,904,885	$	15,377,033
Public services		20,519		6,090		41,563		134,292
Total operating revenues		4,823,087		4,823,402		14,946,448		15,511,325
DIRECT COSTS:
Operations		3,356,789		3,742,150		10,554,802		11,924,615
Public services		48,945		44,075		122,312		175,252
Total direct costs		3,405,734		3,786,225		10,677,114		12,099,867
Gross profit		1,417,353		1,037,177		4,269,334		3,411,458
OPERATING EXPENSES:
General and administrative		724,774		441,040		1,570,842		1,602,110
Total operating expenses		724,774		441,040		1,570,842		1,602,110
Operating income		692,579		596,137		2,698,492		1,809,348
OTHER INCOME (EXPENSE):
Interest income		2,816		2,395		9,259		10,660
Interest expense		(381,483)		(215,939)		(766,807)		(660,690)
Gain on disposal of assets		425,044		-		423,828		-
Gain (Loss) on investments		-		57,158		-		(76,343)
Total other income (expense)		46,377		(156,386)		(333,720)		(726,373)
INCOME BEFORE TAXES AND PREFERRED STOCK DIVIDEND Current income tax expense		738,956 122,850		439,751 -		2,364,772 123,000		1,082,975 -
Deferred income tax expense		297,000		180,000		909,000		441,000
NET INCOME		319,106		259,751		1,332,772		641,975
Preferred stock dividend declared and amortization of preferred stock discount analogous to a preferred stock dividend.		(122,308)		(122,307)		(362,935)		(453,104)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	196,798	$	137,444	$	969,837	$	188,871


NET INCOME PER COMMON SHARE
Basic	$	.00	$	.00	$	.03	$	.01
Diluted	$	.00	$	.00	$	.01	$	.00

April 30, April 30,

		2010		2009		2010		2009
OPERATING REVENUE:
Operations	$	5,038,910	$	5,145,525	$	10,102,317	$	10,559,721
Public services		14,125		85,434		21,044		128,202
Total operating revenues		5,053,035		5,230,959		10,123,361		10,687,923
DIRECT COSTS:
Operations		3,585,602		4,116,027		7,198,013		8,182,465
Public services		32,553		86,545		73,367		131,177
Total direct costs		3,618,155		4,202,572		7,271,380		8,313,642
Gross profit		1,434,880		1,028,387		2,851,981		2,374,281
OPERATING EXPENSES:
General and administrative		404,359		442,340		846,068		1,161,070
Total operating expenses		404,359		442,340		846,068		1,161,070
Operating income		1,030,521		586,047		2,005,913		1,213,211
OTHER INCOME (EXPENSE):
Interest income		2,632		2,643		6,443		8,265
Interest expense		(182,579)		(213,603)		(385,324)		(444,751)
Loss on disposal of assets		(258)		-		(1,216)		-
Loss on investments		-		(28,383)		-		(133,501)
Total other income (expense)		(180,205)		(239,343)		(380,097)		(569,987)
INCOME BEFORE TAXES AND PREFERRED STOCK DIVIDEND		850,316		346,704		1,625,816		643,224
Deferred income tax expense		323,150		159,907		612,150		261,000
NET INCOME		527,166		186,797		1,013,666		382,224
Preferred stock dividend declared and amortization of preferred stock discount analogous to a preferred stock dividend.		(118,319)		(118,320)		(240,627)		(330,797)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	408,847	$	68,477	$	773,039	$	51,427
NET INCOME PER COMMON SHARE
Basic	$	.01	$	.00	$	.02	$	.00
Diluted	$	.00	$	.00	$	.01	$	.00

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALPINE AIR EXPRESS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

~~Six~~Nine Months Ending ~~April~~July 3031, 2010 and 2009

	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,~~013~~332,~~666~~772	$		~~382~~641,~~224~~975
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on disposal of assets Loss on investment Deferred gain amortization		1,216 - -			- 127,974 (87,365)
Gain on disposal of assets Loss on investment Deferred gain amortization		(423,828) - -			- 1,059 (95,997)
Deferred tax expense		~~612~~909,000			~~236~~405,111
Depreciation and amortization		12,~~702~~508,~~550~~296			12,~~604~~355,~~548~~433
Stock based compensation		2534,~~559~~318			4159,~~856~~244
Provision for losses on accounts receivable Provision for inventory obsolescence		~~(13~~76,~~402)~~640 58,402			-23,247 -
Changes in operating assets and liabilities:
Trade accounts receivable		12(91,~~758~~627)			~~(30~~363,~~810)~~405
Other assets		1522,~~000~~500			(2224,~~729~~192)
Inventories		(~~204~~492,~~912~~121)			(~~746~~954,~~020~~815)
Income taxes receivable Prepaid expenses Deposits		324 9227,~~655~~273 50,~~912~~262			35,890 421,~~177~~928 73,~~091~~435
Trade accounts payable Accrued liabilities		(237,087) 458			(5,187) 9,736
Trade accounts payable Accrued liabilities Income taxes payable		(349,407) 205,064 37,900			101,902 (266,911) -
Deferred revenue		(~~117~~20,~~413~~642)			~~513~~(2,295)
Net cash provided by operating activities		23,~~959~~835,~~686~~126			12,~~622~~718,~~009~~419
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments Sale of investments		- -			(168,449) 5225,~~552~~434
Purchases of property and equipment		(2,684,218)			(2,480,568)
Purchases of property and equipment Proceeds from sale of equipment Cash surrender value of life insurance		(3,512,478) 1,128,800 (5,022)			(3,362,857) - (10,545)
Net cash used in investing activities		(2,~~684~~388,~~218~~700)			(23,~~643~~316,~~465~~417)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on long-term debt Payment on dividends payable		(2,~~128~~519,~~356~~715) (~~445~~566,~~360~~339)			(1,~~084~~622,~~129~~114) (~~189~~270,~~883~~977)
Payment for redemption of preferred stock		-			(182,080)
Change in line of credit Proceeds from related party line of credit Purchase of treasury stock		(~~192~~758,~~854~~875) - (5,733)			~~448~~748,875 ~~200~~50,000 -
Proceeds from long-term debt		1,~~855~~922,~~247~~769			1,200,000
Net cash provided by (used in) financing activities		(917,056)			392,783
Net cash used in financing activities		(1,927,893)			(76,296)
Net change in cash and cash equivalents		(~~641~~481,~~588~~467)			(~~588~~674,~~673~~294)
BEGINNING CASH AND CASH EQUIVALENTS		1,192,936			720,794
ENDING CASH AND CASH EQUIVALENTS	$	~~551~~711,~~348~~469	$		~~132~~46,~~121~~500

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALPINE AIR EXPRESS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

~~Six~~Nine Months Ending ~~April~~July 3031, 2010 and 2009

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

		2010		2009
Cash paid during the period for:
Interest	$	~~385~~766,~~324~~807	$	~~444~~660,~~751~~690
Income taxes	$	-85,000	$	-

Non-cash investing and financing activities:

For the ~~six~~nine months ended ~~April~~July 3031, 2010, the Company:

Capitalized debt issuance costs of $5393,~~247~~040.

Refinanced $14,~~204~~267,~~803~~962 of long-term debt.

Increased prepaid aircraft insurance by issuing $471,500 of debt.

Increased lease deposit by $24,288 through the issuance of debt.

Exchanged accounts receivable for a note receivable of $48,822.

For the ~~six~~nine months ended ~~April~~July 3031, 2009, the Company:

Recorded the amortization of a preferred stock dividend and reduced retained earnings by $89,780.

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALPINE AIR EXPRESS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Condensed Financial Statements – The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at ~~April~~July 3031, 2010 and 2009 and for the periods then ended have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s October 31, 2009 audited financial statements. The results of operations for the periods ended ~~April~~July 3031, 2010 and 2009 are not necessarily indicative of the operating results for the full year.

Recently Enacted Accounting Standards – In April 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-13, “Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades” (“ASU 2010-13”). ASU 2010-13 addresses the classification of a share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity security trades. FASB Accounting Standards Codification (“ASC”) Topic 718 was amended to clarify that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trade shall not be considered to contain a market, performance or service condition. Therefore, such an award is not to be classified as a liability if it otherwise qualifies for equity classification. The amendments in ASU 2010-13 are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, with early application permitted. We do not anticipate that the adoption of this guidance will have a material impact on our financial position and results of operations.

In February 2010, the FASB issued ASU No. 2010-09, “Amendments to Certain Recognition and Disclosure Requirements” (“ASU 2010-09”), which amends ASC Topic 855, “Subsequent Events.” The amendments to ASC Topic 855 do not change existing requirements to evaluate subsequent events, but: (i) defines a “SEC Filer,” which we are; (ii) removes the definition of a “Public Entity”; and (iii) for SEC Filers, reverses the requirement to disclose the date through which subsequent events have been evaluated. ASU 2010-09 was effective for us upon issuance. This guidance did not have a material impact on our financial position and results of operations.

In January 2010, the FASB issued ASU No. 2010-06, “Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”). ASU 2010-06 requires new disclosures for (i) transfers of assets and liabilities in and out of levels one and two fair value measurements, including a description of the reasons for such transfers and (ii) additional information in the reconciliation for fair value measurements using significant unobservable inputs (level three). This guidance also clarifies existing disclosure requirements including (i) the level of disaggregation used when providing fair value measurement disclosures for each class of assets and liabilities and (ii) the requirement to provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for level two and three assets and liabilities. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about activity in the roll forward for level three fair value measurements, which is effective for fiscal years beginning after December 15, 2010. The adoption of this guidance has not had a material impact on our financial position and results of operations.

Management believes the impact of other recently issued standards and updates, which are not yet effective, will not have a material impact on the Company’s consolidated financial position, results of operations or cash flows upon adoption.

NOTE 2 - TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable consist of the following:

	April 30, 2010			October 31, 2009
Trade accounts receivable	$	1,473,804	$		1,535,384
Less allowance for doubtful accounts		(53,128)			(66,530)
	$	1,420,676	$		1,468,854

ALPINE AIR EXPRESS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable consist of the following:


	July 31, 2010			October 31, 2009

Trade accounts receivable Employee advances	$	1,577,674 515	$		1,535,384 -
Less allowance for doubtful accounts		(143,170)			(66,530)
	$	1,435,019	$		1,468,854

NOTE 3 - NOTE RECEIVABLE

The Company has ana ~~unsecured~~secured note receivable from a former equipment lessor, bearing interest at 3%. The terms require that the principal and accrued interest be paid upon maturity of the note, April 30, 2011. As of ~~April~~July 3031, 2010 the outstanding balance is $48,822 and is secured by a second lien on a Beech 99 aircraft.

NOTE 4 - PREPAID EXPENSES

Prepaid expenses consist of the following:

	April 30, 2010			October 31, 2009
	July 31, 2010			October 31, 2009
Prepaid expenses and credits	$	69245,~~519~~744	$		84,954
Prepaid other taxes Prepaid insurance Prepaid training		4443,~~271~~566 35401,~~821~~289 117,~~133~~027			81,332 80,907 6,206
	$	~~160~~697,~~744~~626	$		253,399

NOTE 5 - INVENTORIES

Inventories consist of the following:

	April 30, 2010			October 31, 2009
	July 31, 2010			October 31, 2009
Aircraft parts	$	1,~~669~~883,~~248~~294	$		1,620,614
Work in process Fuel		~~425~~476,~~769~~489 1235,~~904~~347			247,089 35,306
Allowance for obsolescence		(5760,925)			(52,523)
	$	2,~~049~~334,~~996~~205	$		1,850,486

NOTE 6 – PROPERTY AND EQUIPMENT

^{Property and equipment consists of the following:}

	Estimated life in years	~~April~~July 3031, 2010			October 31, 2009
Building and improvements	10 - 40	$	1,~~286~~369,~~989~~559	$	1,286,989
Aircraft	15		2019,~~224~~867,~~204~~470		18,746,456
Engines	7 - 10		12,~~749~~567,~~153~~781		12,185,742
Equipment	3 - 10		309,002		306,655
Furniture and fixtures	3 - 10		~~326~~324,~~096~~606		329,029
Vehicles	5 - 7		~~130~~128,~~281~~413		140,540
			35,025,725		32,995,411
			34,566,831		32,995,411
Less: accumulated depreciation and amortization			(12,~~751~~952,~~335~~597)		(11,759,914)
		$	2221,~~274~~614,~~390~~234	$	21,235,497

NOTE 7 – LINE OF CREDIT

The Company has a $1,000,000 line of credit with a lending institution to help manage cash flow and day to day operations. The line of credit has a variable interest rate, currently 6.5% and matures on February 23, 2011. The interest is payable each month on any outstanding balance. As of April 30, 2010 the outstanding balance was $566,021. The line of credit is secured by two aircraft. Reg #N194GA and N955AA.

ALPINE AIR EXPRESS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The~~NOTE ~~Company~~7 ~~also~~– ~~has~~LINE aOF $100,000 line of credit with the same lending institution to help manage cash flow and day to day operations. The line of credit has a variable interest rate, currently at 6.5% and matures on August 25, 2016. The interest is payable each month on any outstanding balance. As of April 30, 2010 the outstanding balance was $0. The line of credit is secured by three aircraft. Reg #N194GA, N955AA, and N99GH.CREDIT

The Company has a $1,000,000 line of credit with a lending institution to help manage cash flow and day to day operations. The line of credit has a variable interest rate, currently 6.5% and matures on February 23, 2011. The interest is payable each month on any outstanding balance. As of July 31, 2010 the outstanding balance was $0. The line of credit is secured by two aircraft, Reg #N194GA and N955AA.

The Company also has a $100,000 line of credit with the same lending institution to help manage cash flow and day to day operations. The line of credit has a variable interest rate, currently at 6.5% and matures on August 25, 2016. The interest is payable each month on any outstanding balance. As of July 31, 2010 the outstanding balance was $0. The line of credit is secured by three aircraft, Reg #N194GA, N955AA, and N99GH.

NOTE 8 – LONG TERM DEBT

Long term debt consists of the following:

		April 30, 2010		October 31, 2009
		July 31, 2010		October 31, 2009
Note payable with an interest rate of 8.75% at October 31, 2009. Secured by three aircraft. Reg #N17ZV, N955AA, and N194GA and personally guaranteed by an officer/shareholder. This note was refinanced.	$	-	$	815,083
Note payable with an interest rate of 8.75% at October 31, 2009. Secured by three aircraft, Reg #N17ZV, N955AA, and N194GA and personally guaranteed by an officer/shareholder. This note was refinanced.	$	-	$	815,083
Note payable issued on August 19, 2009 for $2,524,200 due August 19, 2012.Current interest rate of 6.5%. Secured by four aircraft. Reg #N154GA, N99GH, N326CA, and N239AL and personally guaranteed by an officer/shareholder.		2,275,670		2,453,216
Note payable issued on August 19, 2009 for $2,524,200 due August 19, 2012. Current interest rate of 6.5%. Secured by four aircraft, Reg #N154GA, N99GH, N326CA, and N239AL and personally guaranteed by an officer/shareholder.		2,183,240		2,453,216

Note payable with interest only due at an interest rate of 4.75%. Personally guaranteed by an officer/shareholder. This note was refinanced.		-		1,200,500
Note payable issued on January 7, 2010 for $2,700,000 due January 7, 2016. Interest rate of 7.147%. Secured by four aircraft Reg #N172GA, N125BA, N219VP, and N198GA.		2,649,205		-
Note payable issued on January 7, 2010 for $2,700,000 due January 7, 2016. Interest rate of 7.147%. Secured by four aircraft, Reg #N172GA, N125BA, N219VP, and N198GA. Note payable issued on May 4, 2010 for $400,775 due February 1, 2011. Interest rate of 7.78%. Unsecured note used to finance aircraft insurance premium. Note payable issued on June 11, 2010 for $3,087,407 due June 11, 2015. Interest rate of 5.865%. Secured by four aircraft, Reg #N114AX, N127BA, N24BH, and N950AA.		2,613,011 269,765 3,054,452		- - -
Capital Lease Obligations		3851,~~835,227~~351		4,521,138
		8,760,102		8,989,937
		8,971,819		8,989,937
Less current portion		(1,~~144~~400,000)		(1,842,000)
Long-term portion	$	7,~~616~~571,~~102~~819	$	7,147,937

NOTE 9 - INCOME PER COMMON SHARE

The following data show the amounts used in computing net income per common share:

For Three Months Ended For Six Months Ended

April 30, April 30,

		2010		2009		2010		2009
Net income available to common shareholders	$	408,847	$	68,477	$		$	51,427
Weighted average number of common shares used in basic EPS		36,271,461		36,271,461		36,271,461		36,271,461

ALPINE AIR EXPRESS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Dilutive effect of preferred stock Dilutive effect of stock options	78,307,133 -	39,290,947 -	68,072,462 -	37,326,400 -
Weighted average number of common shares and dilutive potential common stock used in diluted EPS	114,578,594	75,562,408	104,343,923	73,597,861

ALPINE AIR EXPRESS, INC.

~~NOTE~~NOTES 10TO –UNAUDITED ~~CONCENTRATIONS~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~U.S.~~NOTE ~~Postal~~9 ~~Service~~– ~~Contracts~~PREFERRED - The Company receives the majority of its revenues from contracts with the U.S. Postal Service (USPS). For the six months ended April 30, 2010 and 2009, the revenues from contracts with the USPS represented 69% and 65% of total revenues, respectively. At April 30, 2010 and October 31, 2009, accounts receivable from the USPS totaled $798,860 and $759,109, or 54% and 49%, respectively. The contracts currently in effect for USPS routes will expire in September 2015. The loss of contracts with this customer would have a material negative effect on the operations of the Company. STOCK

~~NOTE~~The 11Company –is ~~COMMITMENTS~~authorized ~~AND~~to ~~CONTINGENCIES~~issue 1,000,000 shares of Series A $.001 par value preferred stock. The preferred stock provides for monthly dividends at an annual rate of 6.5%. As of July 31, 2010 and October 31, 2009 there were 820,000 shares issued and outstanding. This preferred stock is convertible at any time by the holder until December 1, 2011 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 1, 2011at a liquidation value of $9.104 per share.

Previous Company financial statements issued after July 31, 2007 classified this preferred stock as an equity instrument. Following recent consultations with the Securities and Exchange Commission, the Company is reclassifying this preferred stock as a mezzanine item outside of the Equity section of the consolidated balance sheets.

NOTE 10 - INCOME PER COMMON SHARE

The following data show the amounts used in computing net income per common share:


	For Three Months Ended July 31,				For Nine Months Ended July 31,
		2010		2009		2010		2009
Net income available to common shareholders	$	196,798	$	137,445	$	,837	$	188,871
Weighted average number of common shares used in basic EPS		36,271,461		36,271,461		36,271,461		36,271,461
Dilutive effect of preferred stock Dilutive effect of stock options		79,985,143 -		74,652,800 -		71,628,486 -		46,658,000 -
Weighted average number of common shares and dilutive potential common stock used in diluted EPS		116,256,604		110,924,261		107,899,947		82,929,461

NOTE 11 – 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 nine months ended July 31, 2010 and 2009, the revenues from contracts with the USPS represented 69% and 64% of total revenues, respectively. At July 31, 2010 and October 31, 2009, accounts receivable from the USPS totaled $876,576 and $759,109, or 57% and 49%, respectively. The contracts currently in effect for USPS routes will expire in September 2015. The loss of contracts with this customer would have a material negative effect on the operations of the Company.

ALPINE AIR EXPRESS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – COMMITMENTS AND CONTINGENCIES

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~~Federal 12Aviation –Administration ~~SUBSEQUENT~~(FAA) ~~EVENTS~~Matters- Several allegations and proposed penalties have been put forth by

~~Alpine~~the ~~Air~~FAA ~~Express~~and ~~has~~are ~~evaluated~~currently ~~subsequent~~being ~~events~~reviewed ~~through~~by the ~~date~~Company. Management has assessed the ~~financial~~probability ~~statements~~and ~~were~~has ~~issued,~~estimated and ~~concluded~~accrued ~~there~~a ~~were~~reasonable noamount ~~events~~to orcover ~~transactions~~any ~~during~~penalties ~~this~~the ~~period~~Company ~~that~~may ~~required~~incur. ~~recognition~~None orof ~~disclosure~~these assertions have resulted in ~~its~~any ~~financial~~enforcement ~~statements~~action against the Company, ~~other~~nor ~~than~~does the ~~events~~Company ~~noted~~expect ~~below~~any actions as a result of the allegations.

InNOTE ~~May~~13 ~~2010,~~– ~~the~~SUBSEQUENT ~~Company sold a Beechcraft 1900D aircraft, Reg # N17ZV, for $1,125,000. The proceeds of this sale were used to reduce the balance on a line of credit.~~ EVENTS

InAlpine ~~June~~Air ~~2010,~~Express ~~the~~has ~~Company~~evaluated ~~signed~~subsequent aevents ~~note~~through ~~payable~~the ~~with~~date athe ~~lending~~financial ~~institution~~statements ~~for~~were $3issued,~~087,407.~~ ~~The note matures on June 11, 2015. It is secured by four aircraft, Reg #N950AA, N24BH, N114AX,~~ and ~~N127BA.~~concluded ~~The~~there ~~stated~~were ~~interest~~no ~~rate~~events isor ~~5.865%~~transactions ~~and~~during ~~the proceeds of~~ this ~~loan~~period ~~were~~that ~~used~~required torecognition ~~pay~~or ~~off~~disclosure ~~the~~in ~~balance~~its offinancial ~~one capital lease obligation~~statements.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

General.

Alpine Aviation Inc. operates two business segments. The operations segment provides air cargo transportation services in the United States in Montana, North Dakota, and South Dakota (69% of revenue). In addition to air cargo transportation, the Company flies charters for other cargo carriers (23% of revenue), and leases passenger aircraft to other air carriers (8% of revenue). The public services segment provides maintenance service on aircraft owned and operated by third parties (less than 1% of revenue), ~~leases passenger aircraft to other air carriers (8% of revenue),~~ and operates a First Officer ~~Training~~training ~~Program~~program (less than 1% of revenue).

During the three months ended ~~April~~July 3031, 2010, cargo volumes were slightly lower (81%) when compared to the same period last year. The Company carried 2,~~066~~100 tons of cargo this quarter in 2010 compared to 2,~~240~~130 tons in the same quarter in 2009.

This decrease in weight is directly attributable to a decline in the overall weight we carry on each

route for each of our customers combined with the reduction of flights due to the loss of the US Postal Service contracts in Hawaii on August 7, 2009.

In 2009 the Company was successful in its attempts to renew the Montana/South Dakota/North Dakota contract with the US Postal Service. The contract began in 2009 and runs for six years through 2015. In the future, 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. The Company is also under contract with a major US cargo carrier until 2013.

The current US Postal Service contract includes a significant per pound rate increase over previous contracts. The Company continues to experience moderate rising costs. Fuel, insurance, aircraft maintenance, and repairs place a demand on the Companies cash resources, however, management has been exceptionally proactive in containing and reducing operating costs in order to better maximize the use of cash resources.

Liquidity and Capital Resources

~~April~~July 3031, 2010 and October 31, 2009.

~~The~~Historical ~~Company~~Source ~~has a working capital position on April 30, 2010~~ of ~~$1,053,615,~~Cash as compared to $669,987 on October 31, 2009. The increase of $383,628 is attributed primarily to the decrease in current liabilities of $966,775 resulting from the Company’s efforts to pay down debt and ~~refinance~~Capital ~~existing debt to more favorable terms.~~ Expenditures:

~~During~~ The ~~the~~Company ~~six~~has ~~months~~a ~~ending~~working ~~April~~capital ~~30,~~position ~~2010~~on ~~the~~July ~~Company~~31, ~~purchased~~2010 ~~property and equipment~~ of $2,~~684~~205,~~218 compared with $2~~436,~~480,568~~ ~~during~~as ~~the~~compared ~~six months ending April 30, 2009. In addition~~ to ~~the~~working ~~purchase~~capital ofon ~~one~~October ~~additional aircraft in each of the six months ended April 30~~31, ~~2010 and April 30~~2009, ~~2009 other equipment purchased is mainly the result~~ of ~~the necessity to overhaul and repair engines~~$669,987. ~~landing~~The ~~gear,~~increase ~~and~~in ~~propellers~~working ascapital ~~they~~has ~~reach~~been the ~~end~~direct ~~of their useful life per FAA and manufacturer requirements. Other equipment purchased is the~~ result of ~~management’s~~a ~~efforts~~$486,939 toincrease ~~improve the safety of the aircraft. The Company is~~ in ~~the~~current ~~process~~assets ofcoupled ~~equipping all aircraft~~ with a ~~Garmin~~decrease ~~GPS~~of ~~system and with Terrain Awareness Warning Systems (TAWS). These systems provide pilots with up-to-date situational awareness~~$1, ~~satellite weather updates~~048,510 ~~terrain~~in ~~avoidance,~~current ~~and better approach and landing capabilities~~liabilities. The Company ispresently ~~also~~has ~~installing~~no ~~Engine~~material ~~Trend~~off-balance ~~Monitoring~~sheet ~~(ETM)~~financing ~~systems which allow the Company to monitor that all engines operate within specified parameters~~arrangements. ~~This provides the maintenance department with valuable information used to assess needed repairs and the existence of potentially unsafe engine conditions.~~

The Company received proceeds from a long-term note in the amount of $2,700,000 in January 2010 and proceeds from a long-term note in the amount of $3,087,407 in June 2010. The proceeds from these notes were used to refinance existing long and short-term debt and a capital lease to more favorable terms.

Results of Operation.

Three and six months ended April 30, 2010 and 2009.

During the three and six months ended April 30, 2010, Alpine Air had a net profit of $527,166 and $1,013,666, respectively, with a net profit available to common shareholders of $408,847 and $773,039, respectively, or $0.01 and $0.02 per share, respectively. During the three and six months ended April 30, 2009 the Company had a net profit of $186,797 and $382,224, respectively, and a net profit available to shareholders of $68,477 and $51,427, respectively, or $0.00 and $0.00 per share, respectively.

Revenue for the three and six months ended April 30, 2010, was $5,053,035 and $10,123,361, respectively, of which $5,038,910 and $10,102,317, respectively, consisted of revenue from operations and $14,125 and $21,044, respectively, was derived from public services. This represents a decrease in total revenue of approximately 3% and 5%, respectively, over revenues of $5,230,959 and $10,687,923, respectively, for the same period in 2009. This decrease in revenue is primarily due to the loss of Alpine Air’s Hawaii USPS contracts; however, an increase in USPS rates for Montana/South Dakota/North Dakota contracts and a new lease contract of the Company’s new Beechcraft 1900-D passenger aircraft offset most of the lost revenue.

Total direct costs were $3,618,155 and $7,271,380 in the three and six months ended April 30, 2010, as compared to $4,202,572 and $8,313,642, respectively, in the same periods for the prior year. This decrease of 14% and 13%, respectively, in total direct costs is directly related to the termination of our Hawaii operations due to the ending of the contract.

~~General~~ Total ~~and~~assets ~~Administrative~~increased ~~expenses decreased~~ to $~~404~~27,~~359~~421,164 ~~and~~on ~~$846~~July 31,~~068~~ ~~during~~2009 ~~the~~from ~~three~~$26,560,224 ~~and~~on ~~six~~October ~~months~~31, ~~ended~~2009. ~~April~~Total ~~30,~~liabilities ~~2010,~~decreased ~~from~~to $~~442~~12,~~340~~414,725 ~~and~~from $112,~~161~~552,~~070~~207 during the ~~three~~same ~~and~~period. Stockholders' ~~six~~equity ~~months~~has ~~ended~~also ~~April~~increased ~~30,~~a ~~2009.~~total ~~This decrease~~ of 9%$998,422, ~~and~~from ~~27%~~$6, ~~respectively~~542,737 isto ~~primarily~~7,541,159 ~~due~~for toOctober ~~managements~~31, ~~efforts~~2009 toand ~~reduce~~July ~~and~~31, ~~control~~2010, ~~costs~~respectively.

~~During~~ For the ~~three~~nine ~~and six~~ months ended ~~April~~July 3031, 2010, ~~there~~the ~~has~~Company ~~been~~had a ~~decrease~~net ofprofit ~~25%~~from ~~and~~operations ~~33%,~~before ~~respectively,~~income intaxes ~~other~~and ~~expense~~preferred ~~from~~stock ~~$239,343~~dividends ~~and~~of $~~569~~2,~~987~~364,772. ~~respectively,~~This inis ~~2009~~an toincrease ~~$180,205~~of ~~and~~ $~~380~~1,~~097~~281,797 ~~respectively,~~from inthe ~~2010. This~~previous ~~decrease~~year’s isnet ~~primarily~~income ~~attributed~~of ~~to a~~ $311,~~024~~082,975. Depreciation and ~~$59,427,~~amortization ~~respectively,~~expense ~~decrease~~for inthe ~~interest~~nine ~~expense~~months ~~and~~ending aJuly ~~decrease~~31, in2010 ~~realized~~was ~~losses~~$2,508,296 ~~from~~for ~~investments~~an increase of $28152,~~383~~863 ~~and~~over ~~$133,501,~~last ~~respectively~~year.

During the nine months ended July 31, 2010, the Company decreased the tax net operating loss carryforward by $2,234,661. There was an increase in the deferred tax accounts of $909,000.

Investing activities for the nine months ended July 31, 2010, consisted mainly of the purchase of one additional aircraft, engine overhauls, and capital improvements to aircraft totaling $3,512,478. The Company also received proceeds of $1,128,800 from the sale of one Beechcraft 1900 aircraft and other equipment.

For the nine months ended July 31, 2010, net cash used in financing activities was $1,927,893, which included new funds made available from notes payable of $1,922,769. The subsequent use of these funds was primarily towards reducing notes payable by $2,519,715, payoff of a line of credit of $758,875 and the payment of preferred stock dividends of $566,339.

For the nine months ended July 31, 2009, net cash used from financing activities was $76,296, which included a new capital lease of $1,200,000, a new line of credit of $748,875 and $50,000 loan from a related party. The subsequent use of these funds was primarily used towards reducing notes payable by $1,622,114, the payment of preferred stock dividends of $270,977 and the redemption of $182,080 of Preferred Stock in the Company.

For the nine months ended July 31, 2010 and July 31, 2009, net uses in cash and cash equivalents were $481,467 and $674,294, and ending cash and cash equivalents were $711,469 and $46,500, respectively.

Cash Requirements:

The following table summarizes the Company’s contractual obligations as of July 31, 2010:


		Total		One Year		2-5 Years		After 5 Years

Long-term debt principal	$	8,120,468	$	1,168,000	$	5,229,863	$	1,722,605
Capital leases principal		851,351		232,000		619,351		-
Interest payments		1,832,201		555,987		1,224,970		51,244
Operating leases		350,054		39,342		92,950		217,762
Dividend payment of preferred shares		687,428		485,243		202,185		-
Total	$	11,841,502	$	2,480,572	$	7,369,319	$	1,991,611

Future Capital Expenditures:

The Company, as of July 31, 2010, had no open commitments to purchase additional aircraft.

Results of Operations.

Three months ended July 31, 2010 and 2009.

Operating Revenue

During the three months ended July 31, 2010 total operating revenues were $4,823,087, representing a less than 1% decrease over 2009 revenues for the same period of $4,823,402. The following tables summarize Alpine Air’s operating revenue and associated percentage-of-change for the periods indicated.


		Three months ended July 31, 2010		Three months ended July 31, 2009	2010 over 2009 Change
Operating Revenue:
Operations
Mail revenue	$	3,285,367	$	3,134,589	5%
Contract cargo revenue and ad-hoc charters		1,171,101		1,384,708	(15)%
Aircraft leasing		346,100		298,015	16%
Total operations		4,802,568		4,817,312	Less than 1%
Public services
First officer		14,779		2,808	426%
Maintenance		5,740		3,282	75%
Total public services		20,519		6,090	237%
Total operating revenue	$	4,823,087	$	4,823,402	Less than 1%


	Three months ended July 31, 2010	Three months ended July 31, 2009	2010 over 2009 Change
Operating Revenue:
Operations
Mail revenue	68%	65%	3%
Contract cargo revenue and ad-hoc charters	24%	28%	(4)%
Aircraft leasing	7%	6%	1%
Total operations	99%	99%	-
Public services
First officer	Less than 1%	Less than 1%	-
Maintenance	Less than 1%	Less than 1%	-
Total public services	1%	1%	-
Total operating revenue	100%	100%	-

Direct Costs

Total direct costs decreased to $3,405,734 from $3,786,225 for the three months ending July 31, 2010 and 2009, respectively. This decrease is mainly due to a decrease of $276,397 in labor and benefits expenses, a decrease of $118,743 in aircraft lease expense, and a decrease of $112,372 in aircraft insurance expense. Labor and benefits expenses decreased due to the ceasing of operations in Hawaii, aircraft lease expenses decreased due to the ending of several sale/leaseback agreements, and aircraft insurance expense decreased due to a premium decrease with a new insurance company. Depreciation and amortization expense for the three months ended July 31, 2010 increased to $784,661 from $750,885 during the same period in 2009. This increase was due to additional depreciation on one new aircraft acquired during 2010 and from major engine and airframe component overhauls capitalized in 2010. The following table summarizes Alpine Air’s direct costs and the associated percentages-of-change for the periods indicated.


		Three months ended July 31, 2010		Three months ended July 31, 2009	2010 over 2009 Change
Direct Costs:
Operations
Depreciation and amortization	$	784,661	$	750,885	4%
Other direct costs		2,572,128		2,991,265	(14)%
Total operations		3,356,789		3,742,150	(10)%
Public services
Total public services		48,945		44,075	11%
Total direct costs	$	3,405,734	$	3,786,225	(10)%

Operating Expenses

Operating expenses increased to $724,774 from $441,040 for the three months ended July 31, 2010 and 2009, respectively. This was due mainly to an increase in bad debt expense and the accrual of fines and penalties. The following table summarizes Alpine Air’s operating expenses and the associated percentages-of-change for the periods indicated.


		Three months ended July 31, 2010		Three months ended July 31, 2009	2010 over 2009 Change
Operating Expenses:
General and administrative	$	724,774	$	441,040	64%
Total operating expenses		724,774		441,040	64%

Interest Income

Interest income for the three months ended July 31, 2010 increased to $2,816 from the amount at July 31, 2009 of $2,395. This increase in interest income is due to an increase of cash in interest bearing accounts.

Interest Expense

Total interest expense for the three months ended July 31, 2010 and 2009 was $381,483 and $215,939, respectively. This increase in interest expense is due to a refinance of a capital lease to a note payable and subsequent pre-payment penalties associated with this early termination of the lease.

Gain on Disposal of Assets

Gain on disposal of assets for the three months ended July 31, 2010 increased to $425,044 from $0 as of July 31, 2009. The gain on disposal of assets is due to the difference in the cost basis versus the net book value on a sale of a Beechcraft 1900 aircraft.

Income Tax Expense

The provision for income tax expense for the three months ended July 31, 2010 and 2009 was $419,850 and $180,000, respectively. The increase in income taxes as a percentage of income before taxes of 56.8% in 2010 and 40.9% in 2009 was due to a non-deductible fines and penalties.

Net Income

For the three months ended July 31, 2010 and 2009, income before preferred dividends was $319,106 and $259,751, or $0.01 per share and $0.01 per share, respectively. For the same periods net income available to shareholders was $196,798 and $137,444, or $0.00 per share and $0.00 per share, respectively. The difference for both years presented is approximately $122,308 and $122,307, respectively ($0.00 and $0.00 per share, respectively), which is related to dividends declared on preferred stock.

Nine months ended July 31, 2010 and 2009.

Operating Revenue

During the nine months ended July 31, 2010 total operating revenues were $14,946,448, representing a 4% decrease over 2009 revenues for the same period of $15,511,325. This decrease in revenue is attributed to decrease in contract cargo revenue and ad-hoc charters. The following tables summarize Alpine Air’s operating revenue and associated percentage-of-change for the periods indicated.


		Nine months ended July 31, 2010		Nine months ended July 31, 2009	2010 over 2009 Change
Operating Revenue:
Operations
Mail revenue	$	10,253,693	$	9,882,936	4%
Contract cargo revenue and ad-hoc charters		3,491,817		4,589,586	(24)%
Aircraft leasing		1,159,375		904,511	28%
Total operations		14,904,885		15,377,033	(3)%
Public services
First officer		28,080		15,369	83%
Maintenance		13,483		118,923	(89)%
Total public services		41,563		134,292	(69)%
Total operating revenue	$	14,946,448	$	15,511,325	(4)%


	Nine months ended July 31, 2010	Nine months ended July 31, 2009	2010 over 2009 Change
Operating Revenue:
Operations
Mail revenue	68%	64%	4%
Contract cargo revenue and ad-hoc charters	23%	29%	(6)%
Aircraft leasing	8%	6%	2%
Total operations	99%	99%	-
Public services
First officer	Less than 1%	Less than 1%	-
Maintenance	Less than 1%	Less than 1%	-
Total public services	1%	1%	-
Total operating revenue	100%	100%	-

Direct Costs

Total direct costs decreased to $10,677,114 from $12,099,867 for the nine months ending July 31, 2010 and 2009, respectively. This decrease is mainly due to a decrease of $862,367 in labor and benefits expense, a decrease of $665,653 in aircraft lease expense, and a decrease of $100,073 in aircraft insurance expense. Labor and benefits expenses decreased due to the ceasing of operations in Hawaii, aircraft lease expenses decreased due to the ending of several sale/leaseback agreements, and aircraft insurance expense decreased due to a premium decrease with a new insurance company. Depreciation and amortization expense for the nine months ended July 31, 2010 increased to $2,428,769 from $2,355,433 during 2009. This increase was due to additional depreciation on one new aircraft acquired during 2010 and from major engine and airframe component overhauls capitalized in 2010. The following table summarizes Alpine Air’s direct costs and the associated percentages-of-change for the periods indicated.


		Nine months ended July 31, 2010		Nine months ended July 31, 2009	2010 over 2009 Change
Direct Costs:
Operations
Depreciation and amortization	$	2,428,769	$	2,355,433	3%
Other direct costs		8,126,033		9,569,182	(15)%
Total operations		10,554,802		11,924,615	(11)%
Public services
Total public services		122,312		175,252	(30)%
Total direct costs	$	10,677,114	$	12,099,867	(12)%

Operating Expenses

Operating expenses decreased to $1,570,842 from $1,602,110 for the nine months ended July 31, 2010 and 2009, respectively. This decrease was due mainly to an overall reduction in labor and benefits expense and a decrease in bad debt expense, coupled with an increase in fines and penalties. The following table summarizes Alpine Air’s operating expenses and the associated percentages-of-change for the periods indicated.


		Nine months ended July 31, 2010		Nine months ended July 31, 2009	2010 over 2009 Change
Operating Expenses:
General and administrative	$	1,570,842	$	1,602,110	(2)%
Total operating expenses		1,570,842		1,602,110	(2)%

Interest Income

Interest income for the nine months ended July 31, 2010 decreased to $9,259 from the amount at July 31, 2009 of $10,660. This decrease in interest income is due to a reduction of cash in interest bearing accounts.

Interest Expense

Total interest expense for the nine months ended July 31, 2010 and 2009 was $766,807 and $660,690, respectively. This increase in interest expense is due to a refinance of a capital lease to a note payable and subsequent pre-payment penalties associated with this early termination of the lease.

Gain on Disposal of Assets

Gain on disposal of assets for the nine months ended July 31, 2010 increased to $423,828 from $0 as of July 31, 2009. The gain on disposal of assets is due to the sale of one Beechcraft 1900 aircraft

Income Tax Expense

The provision for income tax expense for the nine months ended July 31, 2010 and 2009 was $1,032,000 and $441,000, respectively. The increase in income taxes as a percentage of income before taxes of 43.6% in 2010 and 40.7% in 2009 was due to non-deductible fines and penalties.

Net Income

For the nine months ended July 31, 2010 and 2009, income before preferred dividends was $1,332,772 and $641,975, or $0.04 per share and $0.02 per share, respectively. For the same periods net income available to shareholders was $969,837 and $188,871, or $0.03 per share and $0.01 per share, respectively. The difference in net income available to common shareholders for both years presented is $362,935 and $453,104, respectively ($0.01 and $0.01 per share, respectively), which is related to dividends declared on preferred stock and $89,780 amortization of preferred stock discount for the nine months ended July 31, 2009.

Off-balance sheet arrangements

We have no off balance sheet arrangements during the quarter ended ~~April~~July 3031, 2010.

Forward Looking Statements.

Statements made in this Form 10-Q 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, 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.

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, 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 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable to smaller reporting companies.

Item 4T4. Controls and Procedures.

Management’s report on disclosure controls and procedures.

As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our CEO and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our CEO and Principal Financial Officer concluded that information required to be disclosed is recorded, processed, summarized and reported within the specified periods and is accumulated and communicated to management, including our CEO and Principal Financial Officer, to allow for timely decisions regarding required disclosure of material information required to be included in our periodic Securities and Exchange Commission reports. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our CEO and Principal Financial Officer have concluded that our disclosure controls and procedures are effective to a reasonable assurance level of achieving such objectives. However, it should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. In addition, we reviewed our internal controls over financial reporting, and there have been no changes in our internal controls or in other factors in the last fiscal quarter that has materially affected our internal controls over financial reporting.

14Changes in internal control over financial reporting

~~reviewed~~We ~~our~~had ~~internal controls over financial reporting, and there have been~~ no changes in our internal ~~controls~~control orover infinancial ~~other~~reporting ~~factors~~during in the ~~last fiscal~~ quarter ~~that~~ended ~~has~~July ~~materially~~31, ~~affected our internal controls over financial reporting~~2010.

~~Changes~~PART inII ~~internal~~- ~~control~~OTHER ~~over financial reporting~~INFORMATION

We had no changes in our internal control over financial reporting during the quarter ended April 30, 2010.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Not applicable.

Item 1A. Risk Factors

Not applicable to smaller reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Sales of Unregistered Securities

During the quarter ended ~~April~~July 3031, 2010, we did not issue any unregistered securities.

Use of Proceeds of Registered Securities

We had no proceeds from the sale of registered securities during the quarter ended ~~April~~July 3031, 2010.

Purchases of Equity Securities by Us and Affiliated Purchasers

SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)	(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased Under the Plans or Programs
Month #1 February 1, 2010 through February 28, 2010	None	None	None	None
Month #1 May 1, 2010 through May 31, 2010	None	None	None	None
Month #2 March 1, 2010 through March 31, 2010	None	None	None	None
Month #2 June 1, 2010 through June 30, 2010	None	None	None	None
Month #3 April 1, 2010 through April 30, 2010	Treasury Stock 70,660 shares from General Manager, Bill Distefano	$.0811 per share, $5,732.80 total purchase value	None	None
Month #3 July 1, 2010 through July 31, 2010	None	None	None	None
Total	None	None	None	None

Item 3. Defaults Upon Senior Securities.

None; not applicable.

Item 4. (Removed and Reserved).

Item 5. Other Information.

(a)

None; not applicable.

(b)

Nominating Committee

During the quarterly period ending ~~April~~July 3031, 2010, there were no changes in the procedures by which security holders may recommend nominees to the Company’s Board of Directors.

Also during the quarterly period ending April 30, 2010, the management of Alpine Air asked two directors to voluntarily resign in an effort to reduce expenses and improve cash flow. There were no disagreements with the directors and they complied with the request to resign.

Item 6. Exhibits

(a) Exhibits and index of exhibits.

31.1 302 Certification of Eugene R. Mallette

31.2 302 Certification of Rick C. Wood

32 906 Certification

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

ALPINE AIR EXPRESS, INC.

Date:	0609/1410/10	By:	/s/Eugene R. Mallette
			Eugene R. Mallette
			Chief Executive Officer and Director
Date:	0609/1410/10	By:	/s/Rick C. Wood
			Rick C. Wood
			Principal Financial Officer
Date:	0609/1410/10	By:	/s/Max A. Hansen
			Max A. Hansen
			Secretary/Treasurer and Director
Date:	0609/1410/10	By:	/s/Joseph O. Etchart
			Joseph O. Etchart
			Chairman
Date:	0609/1410/10	By:	/s/Ronald L. Pattison
			Ronald L. Pattison
			Director

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