AIRNET SYSTEMS INC, 424B1, 1996-06-03

AIRNET SYSTEMS INC
424B1, 1996-06-03
AIR TRANSPORTATION, SCHEDULED

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<PAGE>
5,600,000 SHARES

AIRNET SYSTEMS

COMMON SHARES

The 5,600,000 common shares, par value $.01 per share (the "Common Shares"),
offered hereby are being offered by AirNet Systems, Inc. (the "Company"). Prior
to the Offering, there has been no public market for the Common Shares. See
"Underwriting" for the factors considered in determining the initial public
offering price.

The Common Shares have been approved for quotation on The Nasdaq National
Market under the symbol "ANSY."

Any investment in the Common Shares offered hereby involves a high degree of
risk. For a discussion of certain risks of an investment in the Common Shares
offered hereby, see "Risk Factors" on pages 8 to 11.

-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

-------------------

<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions* Company+
<S> <C> <C> <C>
Per Share........................ $14.00 $0.98 $13.02
Total++.......................... $78,400,000 $5,488,000 $72,912,000
</TABLE>

- ------------
* The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."

+ Before deducting expenses of the Offering payable by the Company estimated
to be $900,000.

++ The Company has granted the Underwriters a 30-day option to purchase up to
840,000 additional Common Shares on the same terms per share solely to cover
over-allotments, if any. If such option is exercised in full, the total
price to public will be $90,160,000, the total underwriting discounts and
commissions will be $6,311,200 and the total proceeds to Company will be
$83,848,800. See "Underwriting."

-------------------

The Common Shares are being offered by the Underwriters as set forth under
"Underwriting" herein. It is expected that the delivery of certificates therefor
will be made at the offices of Dillon, Read & Co. Inc., on or about June 5,
1996. The Underwriters include:

<TABLE>
<S> <C>
DILLON, READ & CO. INC. THE ROBINSON-HUMPHREY
COMPANY, INC.
</TABLE>

The date of this Prospectus is May 30, 1996
<PAGE>

The following legend (in red ink) will run sideways down the front cover of the
Prospectus: Information contained herein is subject to completion or amendment.
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of any offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

The inside front cover of the Prospectus will contain gate-fold pictures as
follows:

1. A top-view picture of a Learjet in flight under the logo "AirNet Systems."

2. Under the heading "THE AIRNET SYSTEMS NETWORK" is the following caption:
"The Company operates a fully integrated national air transportation network
that operates between 85 cities in more than 40 states and delivers 13,000
time-critical shipments in three distinct route systems each working day."

Below such heading are three maps entitled "BASIC PROGRAM," PREMIUM PROGRAM" and
"CITY PROGRAM," respectively, which show the United States and have points
connected by lines reflecting the Company's flights.

Under the "BASIC PROGRAM" map is the following caption: "The `Basic' program
has a 9:30 PM-10:00 PM hub time in Columbus, Ohio and serves 3,900 zip codes
for delivery between 12:01 AM and 2:00 AM."

Under the "PREMIUM PROGRAM" map is the following caption: "The `Premium' program
has an 11:00 PM-11:30 PM hub time in Columbus, Ohio and Charlotte, North
Carolina and serves 5,400 zip codes for delivery by 3:00 AM."

Under the "CITY PROGRAM" map is the following caption: "The `City' program has a
4:00 AM-5:30 AM hub time in Columbus, Ohio and serves 8,500 zip codes for
delivery by approximately 8:00 AM."

3. Under the heading "THE AIRNET SYSTEMS DELIVERY PROCESS" are six photographs
as follows: (i) a photograph of a U.S. Check-Registered Trademark- delivery
truck and driver with the following caption: "U.S. CHECK-Registered
Trademark-: A typical shipment of canceled bank checks is presorted as to
final destination by bank personnel and then picked up from the bank customer
by a Company courier."; (ii) a photograph of a bar-code scanner and a bundle
of checks with the following caption: "The shipment is transported to the
local airport where it is scanned via bar-code technology into the Company's
proprietary ComCheck-SM- tracking system. The shipment is then loaded into
the Company's aircraft."; (iii) a photograph of a Learjet on the tarmac with
the following caption: "The Company's fast and reliable fleet of 23 Learjet
and 58 light twin engine aircraft transport shipments over 85,000 miles per
night, primarily Monday through Thursday."; (iv) a photograph of the Company's
sorting operations with the following caption: "Upon arrival at the Company's
Columbus, Ohio hub or one of its mini-hubs, the shipment is off-loaded,
sorted by destination and re-loaded onto the Company's aircraft."; (v) a
photograph of a U.S. Check-Registered Trademark- delivery truck being
off-loaded with the following caption: "At the destination city, the
shipment is off-loaded for the final time and delivered to the receiving
bank or Federal Reserve branch. There the shipment is once again
bar-code scanned and promptly downloaded into the Company's ComCheck-SM-
computer system and made available on-line to customers -- allowing banks to
manage their cash position and maximize float revenue."; and (vi) a
photograph of a TIMEEXPRESS-Registered Trademark- delivery truck and driver
with the following caption: "TIMEEXPRESS-Registered Trademark-: The Company's
TIMEEXPRESS-Registered Trademark- delivery services utilize the same
transportation network as the U.S. Check-Registered Trademark- bank delivery
system. The Company's proprietary OnTime-SM- corporate tracking software
supplies scheduling, pricing and delivery information to customers."

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON SHARES
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ
IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND THE FINANCIAL
STATEMENTS OF THE COMPANY, INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE IN
THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL INFORMATION PRESENTED IN THIS
PROSPECTUS ASSUMES NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION AND
HAS BEEN ADJUSTED TO REFLECT (I) THE REINCORPORATION OF THE COMPANY IN OHIO
AND THE CORRESPONDING 422.57:1 SPLIT OF THE COMMON SHARES PRIOR TO THE
OFFERING MADE HEREBY (THE "OFFERING"); (II) AN INCREASE IN THE AUTHORIZED
NUMBER OF COMMON SHARES TO 40,000,000; AND (III) THE CANCELLATION OF AN
OUTSTANDING WARRANT TO PURCHASE 2,483,537 COMMON SHARES AND THE EXERCISE OF AN
OUTSTANDING WARRANT TO PURCHASE 167,227 COMMON SHARES. REFERENCES IN THIS
PROSPECTUS TO THE "COMPANY" REFER COLLECTIVELY TO AIRNET SYSTEMS, INC. AND ITS
PREDECESSOR ENTITIES.

THE COMPANY

AirNet Systems, Inc. operates a fully integrated national air
transportation network that operates between 85 cities in more than 40 states
and delivers over 13,000 time-critical shipments each working day. The
Company's U.S. Check-Registered Trademark- division, which generates
approximately 86% of the Company's revenues, is the leading transporter of
canceled checks and related information for the U.S. banking industry, meeting
more than 1,100 daily deadlines. The Company's TIMEXPRESS-Registered
Trademark- division, which generates approximately 12% of the Company's
revenues, provides specialized, high-priority delivery service for customers
requiring a reliable late pick-up and early delivery service combined with
prompt, on-line delivery information. The Company's People Dedicated to
Quality ("PDQ") division offers retail aviation fuel sales and related ground
services for customers in Columbus, Ohio.

The Company currently operates a fleet of 81 aircraft (23 Learjet and 58
light twin engine aircraft), which fly approximately 85,000 miles per night,
primarily Monday through Thursday. The Company also provides ground pick-up
and delivery services throughout the nation, utilizing a fleet of 93
Company-owned ground vehicles as well as a ground transportation network of
over 350 independent contractors. The Company uses its own air transportation
network as well as commercial airlines, when appropriate, to provide same-day
and same-night delivery services for itself, as well as for certain major
overnight document and parcel delivery companies.

Later pick-ups and earlier deliveries than those offered by other national
carriers are the differentiating characteristics of the Company's
time-critical delivery network. In addition, the Company offers other value-
added services to its customers, such as on-line delivery information. The
Company consistently has achieved on-time performance levels exceeding 95%. In
order to maintain this performance, the Company utilizes a number of
proprietary customer service and management information systems to track,
sort, dispatch and control the flow of checks and small packages throughout
the Company's delivery system. Delivery times and certain shipment information
are available on-line and on the Internet. For example, ComCheck-SM-, a unique
proprietary software system, provides bank customers access to delivery time,
shipment information and retrieval of historical proof-of-delivery
information, critical data that enable banks to manage their cash position and
maximize float revenue. OnTime-SM- and Ship-Link-SM-, Company-developed
software programs, provide scheduling and pricing information, as well as
on-line delivery and shipper acknowledgment data for small package customers.
The Company also has developed several internal software programs to enhance
dispatch monitoring, cost control and customer service functions.

The Company believes that the market for reliable, time-critical
deliveries is growing as a result of a number of global trends, including: (i)
corporations requiring just-in-time inventory parts; (ii) medical laboratories
requiring same-day deliveries; (iii) consolidating ground-based small package
couriers requiring a national air delivery network; and (iv) global air
freight forwarders requiring a domestic connection for their international
networks that can deliver on a same-day/same-night or pre-8:00 a.m. basis. As
the Company's banking customers typically require services four nights per
week, there exists substantial available flight time and aircraft for the
Company to pursue these business opportunities. The Company believes its
flexible and reliable air transportation network and its demonstrated
expertise in providing time-critical deliveries position the Company to
provide such additional services at premium prices.

3
<PAGE>
BUSINESS STRATEGY

The principal components of the Company's operating and growth strategy
are as follows:

FOCUS ON UNIQUE AIRCRAFT TYPE AND ROUTE STRUCTURE. The Company's fast and
reliable fleet of 23 Learjets and 58 light twin engine aircraft is positioned
around a highly efficient and flexible national route structure designed to
facilitate late pick-up and early delivery times, minimize delays and simplify
flight scheduling. The Company's hub-and-spoke system, with a primary hub in
Columbus and several mini-hubs across the nation, enables the Company to match
the varying load capacities of its aircraft with the shipment weight and
volume of each destination city and to consolidate shipments at its mini-hubs
and primary hub.

ATTRACT, RETAIN AND MOTIVATE THE HIGHEST QUALITY PERSONNEL
AVAILABLE. Central to the Company's high service-oriented culture is a
commitment to hiring, retaining and motivating exceptionally talented
associates who are focused on a set of core values designed by the Company to
provide a working environment where integrity, accountability, open
communication, team management and responsibility and quality performance are
explicitly stated goals. The Company believes that its current compensation
and benefits packages, proposed stock ownership incentives and corporate
culture will continue to provide a competitive advantage in attracting and
motivating its associates.

EXPAND U.S. CHECK-REGISTERED TRADEMARK- POSITION IN THE BANKING
INDUSTRY. The Company intends to strengthen its leadership position in the
transportation of canceled bank checks by adding routes and aircraft to its
air transportation network to facilitate even more late pick-up and early
delivery times covering a greater number of cities. These capabilities,
combined with the Company's value-added services (such as ComCheck-SM-) not
currently offered by competing canceled bank check delivery companies, should
enable the Company to expand its position in this market.

GROW TIMEXPRESS-Registered Trademark- PACKAGE DELIVERY SERVICE. The
Company believes that its TIMEXPRESS-Registered Trademark- service offers a
more flexible pick-up and delivery schedule for small packages than those
offered by other national carriers, and appeals to customers with
time-sensitive delivery requirements. To date, growth in the Company's
TIMEXPRESS-Registered Trademark-business has been constrained by limited load
capacity on existing U.S. Check-Registered Trademark- routes. The Company
intends to purchase aircraft to provide additional capacity for the delivery
of canceled bank checks and small packages. The Company believes significant
opportunities exist for expanding its small package delivery business by more
aggressively marketing the TIMEXPRESS-Registered Trademark- brand-name and by
contracting to deliver for some of the national overnight package delivery
companies whose infrastructures cannot be easily modified to meet
same-day/same-night or pre-8:00 a.m. delivery deadlines.

HISTORY AND OFFERING RELATED TRANSACTIONS

The Company was founded in 1974 and began transporting canceled checks on
a point-to-point basis out of Pontiac, Michigan. In 1980, the Company
established its primary hub in Columbus, Ohio to serve as the central point
for its nationwide air distribution system. In 1984, the Company formed
TIMEXPRESS-Registered Trademark- and began to deliver small package freight on
a national scale. In 1988, the Company entered into a non-competition
agreement (the "Wright Agreement") with Wright International Express, Inc.
("WIE") and its sole shareholder Donald W. Wright, Sr., and acquired certain
key assets of WIE. WIE was the Company's primary private sector competitor in
the canceled check transportation business. In 1989, the Company completed the
acquisition of Air Continental, Inc., the other principal private sector
competitor engaged in the interstate transportation of canceled checks. Today,
the Company's only significant competitor in the transportation of canceled
checks is the Interdistrict Transportation System (the "ITS") operated by the
Federal Reserve System (the "Federal Reserve").

4
<PAGE>
As part of the Wright Agreement, as amended, the Company agreed to pay a
percentage of the Company's cash flow on an on-going basis to Donald Wright
and granted him a warrant to purchase 2,483,537 Common Shares (the "Donald
Wright Warrant") and a warrant to Jeffrey Wright, Donald Wright's son, to
purchase 167,227 Common Shares (the "Jeffrey Wright Warrant" and, collectively
with the Donald Wright Warrant, the "Wright Warrants"), which warrants are
exercisable upon the closing of the Offering. The Company has agreed to
repurchase the Donald Wright Warrant upon the closing of the Offering for
$29.9 million, or the equivalent of $12.04 per Common Share underlying such
warrant, and will cancel the Donald Wright Warrant upon its repurchase. Gerald
G. Mercer, the Company's Chairman and Chief Executive Officer, has agreed to
purchase the Jeffrey Wright Warrant upon the closing of the Offering for $2.0
million, or the equivalent of $12.04 per Common Share underlying such warrant,
and will exercise the Jeffrey Wright Warrant immediately following such
purchase. Upon the repurchase by the Company of the Donald Wright Warrant, the
Wright Agreement will be terminated in its entirety, and no further payments
will be made. In connection with the repurchase and cancellation of the Donald
Wright Warrant, the Company expects to receive a tax benefit asset of
approximately $7.0 million. The benefit from this asset will be realized as
cash savings by offsetting income taxes otherwise payable on future taxable
income. The tax benefit will have no effect on the Company's income statement
currently or for any future period; however, the tax benefit will be reflected
as additional paid-in capital on the Company's balance sheet.

In connection with offering related transactions, the Company will incur
non-recurring, non-cash expenses in the quarter in which the Company completes
the Offering totaling approximately $19.8 million. Approximately $15.0 million
of such $19.8 million results from the termination of certain Stock Purchase
Agreements between the Company and seven executive officers, pursuant to which
the executive officers purchased an aggregate of 1,484,908 Common Shares.

The Company's principal executive offices are located at 3939
International Gateway, Columbus, Ohio 43219 and its telephone number is (614)
237-9777.

THE OFFERING

<TABLE>
<S> <C>
Common Shares offered....................... 5,600,000
Common Shares to be outstanding after the
Offering................................... 11,477,835(1)
Use of proceeds............................. To repay certain indebtedness incurred in
connection with the payment of undistributed S
Corporation earnings to the Company's existing
shareholders, to repurchase and cancel the
Donald Wright Warrant and to repay certain
bank indebtedness. See "Use of Proceeds,"
"Certain Relationships and Related Party
Transactions" and "Prior S Corporation
Status."
Nasdaq National Market symbol............... ANSY
</TABLE>

--------------------------
(1) Does not include 1,150,000 Common Shares reserved for issuance under the
Company's Incentive Stock Plan. See "Management -- Incentive Stock Plan."

RISK FACTORS

Any investment in the Common Shares offered hereby involves a high degree
of risk. For a discussion of certain risks of an investment in the Common
Shares offered hereby, see "Risk Factors" on pages 8 through 11.

5
<PAGE>
SUMMARY FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, SIX MONTHS ENDED MARCH 31,
-------------------------------------------- ---------------------------------
PRO FORMA PRO FORMA
1993 1994 1995 1995(1) 1995 1996 1996(1)
--------- --------- --------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues........................... $ 58,590 $ 63,446 $ 67,462 $ 67,462 $ 32,452 $ 35,509 $ 35,509
Air transportation expenses........ 43,437 44,570 46,111 46,111 22,652 24,604 24,604
Fixed based operations............. 1,150 1,081 956 956 446 390 390
Selling, general, administrative
(2)............................... 3,927 3,788 3,405 3,405 1,656 2,238 2,238
Executive compensation (3)......... 2,985 4,883 6,587 3,000 2,997 3,120 1,500
Wright Agreement expenses (4)...... 1,339 1,813 2,328 -- 1,207 728 --
--------- --------- --------- ----------- --------- --------- -----------
Income from operations............. 5,752 7,311 8,075 13,990 3,494 4,429 6,777
Interest expense................... 1,123 1,093 1,452 -- 611 736 --
--------- --------- --------- ----------- --------- --------- -----------
Net income......................... $ 4,629 $ 6,218 $ 6,623 $ 2,883 $ 3,693
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
PRO FORMA DATA:
Income before taxes................ 13,990 6,777
Taxes on income.................... 5,596 2,711
----------- -----------
Net income......................... $ 8,394 $ 4,066
----------- -----------
----------- -----------
Net income per common share........ $ 0.74 $ 0.36
----------- -----------
----------- -----------
Pro forma weighted average common
shares outstanding (in thousands)
(5)............................... 11,332 11,200
OTHER OPERATING DATA:
Number of aircraft (end of
period)........................... 70 73 78 78 74 81 81
On-time performance (6)............ 97.6% 96.4% 97.7% 97.7 % 97.0% 94.9% 94.9 %
EBITDA (7)......................... $ 11,614 $ 13,644 $ 15,429 $ 21,344 $ 6,971 $ 8,585 $ 10,933
Cash flows provided by (used in):
Operating activities............. 10,810 14,722 15,310 14,316 6,524 8,025 6,943
Investing activities............. (8,248) (12,814) (14,223) (14,223 ) (6,230) (5,437) (5,437 )
Financing activities............. (2,551) (2,000) (1,107) (783 ) (549) (2,824) (2,540 )
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, 1996
-------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(8) AS ADJUSTED(9)
--------- --------------- ---------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital..................................................... $ 656 $ 940 $ 10,739
Net property and equipment.......................................... 34,082 34,082 34,082
Total assets........................................................ 52,651 57,339 60,909
Total debt.......................................................... 17,531 38,531 --
Shareholders' equity................................................ 23,036 8,264 50,365
</TABLE>

--------------------------------
(1) Adjusted to reflect the following pro forma adjustments as if the
transactions had been completed as of the beginning of the periods
indicated: (i) the reduction of compensation expense payable to the
Company's executive officers; (ii) the reduction of costs in connection
with the termination of the Stock Purchase Agreements and the Deferred
Compensation Agreements; (iii) the elimination of non-competition payments
and the elimination of amortization expense associated with the Wright
covenant not to compete asset, both of which are related to the
termination of the Wright Agreement; (iv) the reduction in interest
expense related to the repayment of existing debt from the proceeds of the
Offering; and (v) the recording of federal and state income taxes as if
the Company had been a C Corporation during each such period. See
"Selected Unaudited Condensed Pro Forma Financial Data," "Certain
Relationships and Related Party Transactions," "Prior S Corporation
Status," "Offering Related Transactions" and Note 12 of the Notes to the
Company's Financial Statements.

The Income Statement Data do not reflect significant non-recurring charges
totaling approximately $19.8 million that will be incurred at the time of
the Offering. These charges include non-cash expenses of approximately
$15.0 million in connection with the termination of the Stock Purchase
Agreements and $2.6 million relating to the write-off of the covenant not
to compete asset in connection with the termination of the Wright
Agreement. The $15.0 million expense will result in a corresponding
increase in

6
<PAGE>
additional paid-in capital but no change in total shareholders' equity. In
addition, the Company will record a deferred tax expense of $2.1 million
as a result of the termination of the Company's S Corporation status. See
"Offering Related Transactions" and "Prior S Corporation Status."

(2) Excludes executive compensation and expenses related to the Wright
Agreement, which expenses appear separately in this presentation.

(3) Except for the pro forma periods, includes executive compensation and
expenses associated with the Stock Purchase Agreements and the Deferred
Compensation Agreements. See "Certain Relationships and Related Party
Transactions -- Stock Purchase Agreements" and "-- Deferred Compensation
Agreements." Data for pro forma periods ended September 30, 1995 and March
31, 1996 assume the Company's revised compensation arrangements and the
payment of 100% of the potential bonuses under such arrangements. See
"Management -- Compensation of Executive Officers."

(4) Includes annual non-competition payments and amortization expenses in
connection with the Wright Agreement and the associated Wright covenant
not to compete asset.

(5) The pro forma weighted average common shares outstanding is based on the
weighted average common shares outstanding, using the treasury stock
method, for the applicable period, as adjusted for the number of Common
Shares required to be issued by the Company in the Offering to generate
sufficient net proceeds to repay debt, to repurchase and cancel the Donald
Wright Warrant and to fund planned distributions to existing shareholders.

(6) On-time performance is defined as the annualized percentage of times that
the Company's U.S. Check-Registered Trademark- division meets its
customers' delivery requirements.

(7) "EBITDA" is defined as net income before interest expense, taxes on
income, depreciation and amortization. EBITDA should not be construed as
an alternative to income from operations or cash flows from operating
activities (each as determined in accordance with generally accepted
accounting principles).

(8) Adjusted to reflect the following pro forma transactions as if they had
occurred on March 31, 1996: (i) distributions of the AAA Notes to existing
shareholders from the AAA account in the amount of approximately $21.0
million; (ii) the recognition of a net deferred tax liability of $2.1
million resulting from the termination of the Company's S Corporation
status; (iii) the termination of the Stock Purchase Agreements and the
Deferred Compensation Agreements and the elimination of a $3.7 million
liability associated therewith; (iv) the repayment of notes receivable
from existing shareholders of $0.3 million; and (v) the termination of the
Wright Agreement, the write-off of the covenant not to compete asset of
$2.6 million and the recording of a related tax benefit asset of $7.0
million. See "Selected Unaudited Condensed Pro Forma Financial Data,"
"Certain Relationships and Related Party Transactions," "Prior S
Corporation Status," "Offering Related Transactions" and Note 12 of the
Notes to the Company's Financial Statements.

(9) Adjusted to reflect the Offering and the use of the net proceeds therefrom
after deducting underwriting discounts and estimated expenses payable by
the Company in connection with the Offering. See "Use of Proceeds."

7
<PAGE>
RISK FACTORS

ANY INVESTMENT IN THE COMMON SHARES BEING OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING
FACTORS IN EVALUATING ANY INVESTMENT IN THE COMMON SHARES.

COMPETITION

The market for scheduled air and ground delivery service is highly
competitive. The Company's U.S. Check-Registered Trademark-division competes
primarily against the Federal Reserve's ITS, which has significantly greater
financial and other resources than the Company. The Federal Reserve is regulated
by the Monetary Control Act of 1980 (the "Monetary Control Act"), which in
general requires that the Federal Reserve price its services on a cost basis
plus a set percentage private market adjustment. Failure by the Federal Reserve
to comply with the Monetary Control Act could have an adverse competitive impact
on the Company. In addition, there can be no assurance that the Monetary Control
Act will not be amended, modified or repealed, or that new legislation affecting
the Company's business will not be enacted. Although the entrance of such major
participants in the next-day and second-day air delivery market as United Parcel
Service ("UPS") and Federal Express Corporation ("FedEx") into the business of
same-day and early morning delivery has not had a material adverse effect on the
Company's business to date, there can be no assurance that these competitors
will not have such an effect in the future. See "Business -- Competition."

INTEREST RATE FLUCTUATIONS

The value of the Company's canceled check transportation services to its
banking customers is directly related to the federal funds rate, which is
determined by the Federal Reserve and represents the rate of interest that banks
can earn on timely delivered shipments of canceled checks. If the federal funds
rate were to drop to historically low levels, the resulting diminution in the
value of the Company's services to its banking customers could adversely affect
the Company's business. See "Industry Overview -- How Banks Clear and Settle
Canceled Bank Checks."

BANKING INDUSTRY CONSOLIDATION

The banking industry, including commercial banks, savings banks and Federal
Reserve banks, represents the Company's largest category of customers,
accounting for approximately 86% of the Company's revenues in fiscal 1995. The
prevalent trend in the banking industry over the past several years has been
consolidation. The number of banks in the U.S. has decreased by approximately
25% since 1987, as banks have acquired and merged with each other. As the number
of banks decreases, the Company may become increasingly dependent on certain of
its customers. Although such consolidation has not had a material adverse impact
on the Company's business to date, there can be no assurance that the
consolidation trend will not have an adverse effect on the Company's business in
the future.

TECHNOLOGY

Some analysts have predicted that the increased use of electronic funds
transfers will lead to a "checkless society," which could adversely affect
demand for the Company's delivery services to the financial services industry.
In addition, some banking industry analysts have predicted the development of
various forms of imaging technology that could reduce or eliminate the need for
prompt delivery of canceled checks. Similarly, technological advances in the
nature of "electronic mail" and "telefax" have affected the demand for on-call
delivery services by small package delivery customers. While none of these
technological advances has had any significant adverse impact on the Company's
business to date, there can be no assurance that these or similar technologies,
or other regulatory or technological changes in the check clearance and national
payments systems, will not have an adverse effect on the Company's business in
the future.

RISKS RELATED TO GROWTH THROUGH ACQUISITIONS

One of the Company's business strategies is to increase its revenues,
earnings and market share through the acquisition of companies that will
complement its existing operations or provide it with an entry into markets it
does not currently serve. Growth through acquisition involves substantial risks,
including the risk of improper valuation of the acquired business and the risk
of inadequate integration. There can be no assurance that suitable acquisition
candidates will be available, that the Company will be able to acquire or
profitably manage such additional

8
<PAGE>
companies or that future acquisitions will produce returns that justify the
investment. In addition, the Company may compete for acquisition and expansion
opportunities with companies that have significantly greater resources than the
Company. See "Business -- Business Strategy."

The Company currently intends to finance future acquisitions by using Common
Shares for all or a portion of the consideration to be paid, which may result in
substantial dilution to the purchasers of the Common Shares offered hereby. In
the event that the Common Shares do not maintain a sufficient valuation, or
potential acquisition candidates are unwilling to accept the Common Shares as
part of the consideration for the sale of their businesses, the Company may be
required to utilize more of its cash resources, if available, in order to pursue
its acquisition strategy. If the Company does not have sufficient cash
resources, its growth could be limited and its existing operations could be
impaired unless it is able to obtain additional capital through subsequent debt
or equity financings. There can be no assurance that the Company will be able to
obtain such financing or that, if available, such financing will be on terms
acceptable to the Company. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

INDEPENDENT OWNER/OPERATORS

From time to time, federal and state authorities, including the Internal
Revenue Service, have sought to assert, and at times have successfully asserted,
that independent owner/operators in the transportation industry are employees
rather than independent contractors, thus requiring the payment of payroll and
related taxes. The Company believes that the independent contractors utilized by
the Company are not employees under existing interpretations of federal and
state laws. However, there can be no assurance that federal and/or state
authorities will not challenge this position, or that laws or regulations,
including tax laws, or interpretations thereof, will not change. If these
independent contractors should be deemed to be employees of the Company, the
Company would be required to pay for and administer added benefits to them. As a
result, the Company's operating costs would increase. Additionally, the Company
could be liable for additional taxes, penalties and interest for prior periods
and additional taxes for future periods, which could have a material adverse
effect on the Company's business. See "Business -- Operations."

DEPENDENCE ON KEY PERSONNEL

The Company's operations are dependent on the continued efforts of its
executive officers and on its senior management, particularly Gerald G. Mercer,
the Company's President and Chief Executive Officer, and Eric P. Roy, the
Company's Executive Vice President, Chief Financial Officer and Chief Operating
Officer. If the executive officers of the Company become unable or decide not to
continue in their present positions, or if a material number of such senior
management fail to continue with the Company and the Company is unable to
attract and retain other skilled associates, the Company's business could be
adversely affected. The Company does not have an employment agreement with any
of its executive officers. See "Management."

DEPENDENCE ON KEY SUPPLIER

The Company currently utilizes the services of Garrett Aviation exclusively
for major period inspections and core overhauls of its 30-series Learjets. This
reliance upon a sole supplier involves several risks, including a risk of the
unavailability of these services and a reduced control of pricing and completion
times for such services. Failure to receive such services from Garrett Aviation
or an alternate supplier on a timely basis or a substantial increase in the
price of such services could have an adverse effect on the Company's business.
See "Business -- Operations -- Flight Operations -- Aircraft Maintenance."

PERMITS AND LICENSING; REGULATION

The Company's delivery operations are subject to various federal, state and
local regulations that in many instances require permits and licenses. Failure
by the Company to maintain required permits or licenses, or to comply with
applicable regulations, could result in substantial fines or possible revocation
of the Company's authority to conduct certain of its operations. Furthermore,
acquisitions by the Company could be impeded by delays in obtaining approvals
for the transfer of permits or licenses, or failure to obtain such approvals.
See "Business -- Regulation."

The Company's flight operations are regulated by the Federal Aviation
Administration (the "FAA") under Part 135 of the Federal Aviation Regulations.
Among other things, these regulations govern permissible flight and

9
<PAGE>
duty time for aviation flight crews. The FAA is currently contemplating certain
changes in flight and duty time guidelines, which, if adopted, could increase
the Company's operating costs. These changes, if adopted, could also require the
Company and other operators regulated by the FAA to hire additional flight crew
personnel. No changes of this nature have been adopted at this time. In
addition, Congress, from time to time, has considered various means, including
excise taxes, to raise revenues directly from the airline industry to pay for
air traffic control facilities and personnel. If such an excise tax or other
charge were implemented, the Company's operating costs could increase.

BENEFITS OF THE OFFERING TO CURRENT SHAREHOLDERS

The Company intends to use a portion of the net proceeds of the Offering to
repay the AAA Notes (as defined below) in the aggregate principal amount of
approximately $21.0 million to the Company's existing shareholders. The
principal amount of the AAA Notes will be approximately equal to the accumulated
earnings of the Company on which taxes either have been paid or are payable by
the existing shareholders. See "Prior S Corporation Status." In addition, the
Offering will provide the existing shareholders with liquidity through the
creation of a public market. See "Shares Eligible for Future Sale."

The Company is obligated to repurchase the Donald Wright Warrant upon the
closing of the Offering for $29.9 million, or the equivalent of $12.04 per
Common Share underlying such warrant, and will use a portion of the net proceeds
of the Offering for such repurchase. Upon such repurchase, Donald W. Wright, Sr.
will no longer own any equity interest in the Company, and the Wright Agreement
will be terminated. See "Certain Relationships and Related Party Transactions --
Wright Agreement" and "-- Wright Warrants."

SIGNIFICANT VOTING CONTROL OF DIRECTORS AND EXECUTIVE OFFICERS

Gerald G. Mercer, the Company's Chairman, President and Chief Executive
Officer, will beneficially own approximately 38.3% of the outstanding Common
Shares upon the closing of the Offering (or 35.7% if the Underwriters'
over-allotment option is exercised in full). The other directors and executive
officers as a group will beneficially own an additional 12.9% of the outstanding
Common Shares upon the closing of the Offering (or 12.1% if the Underwriters'
over-allotment option is exercised in full). Accordingly, Mr. Mercer will have
significant voting power with respect to, and in conjunction with the other
directors and executive officers may be able to control, the election of the
Board of Directors of the Company and, in general, the determination of the
outcome of the various matters submitted to the shareholders for approval.
Although there are no formal shareholder arrangements with respect to voting for
the election of directors or other matters, there can be no assurance that Mr.
Mercer and the other directors and executive officers will not vote their Common
Shares in the same manner with respect to such elections or matters submitted to
shareholders for approval. See "Principal Shareholders" and "Description of
Capital Stock."

DILUTION

Purchasers of the Common Shares offered hereby will experience an immediate
and substantial dilution of $9.66 in the net tangible book value per share of
their investment. In the event the Company issues additional Common Shares in
the future, including Common Shares that may be issued in connection with future
acquisitions, purchasers of Common Shares in this Offering may experience
further dilution in the net tangible book value per share of the Common Shares.
See "Dilution."

SHARES ELIGIBLE FOR FUTURE SALE; POTENTIAL ADVERSE IMPACT ON MARKET PRICE

Sales of a substantial number of Common Shares in the public market
following the Offering, or the perception that such sales could occur, could
have an adverse effect on the price of the Common Shares and may make it more
difficult for the Company to sell Common Shares in the future at times and for
prices that it deems appropriate. The Company and all of the directors and
executive officers of the Company have agreed, subject to certain exceptions,
not to offer, sell, contract to sell, transfer or otherwise encumber or dispose
of, directly or indirectly, any Common Shares, or securities convertible into or
exchangeable for Common Shares, for a period of 180 days from the date of this
Prospectus without the prior written consent of Dillon, Read & Co. Inc. Dillon,
Read & Co. Inc., in its sole discretion, and at any time without prior notice,
may release all or any portion of the Common Shares subject to the

10
<PAGE>
lock-up agreements described herein. When such lock-up restrictions lapse, the
Common Shares may be sold in the public market or otherwise disposed of in
compliance with the Securities Act of 1933, as amended (the "Securities Act").
See "Shares Eligible for Future Sale" and "Underwriting."

NO PRIOR PUBLIC MARKET; DETERMINATION OF INITIAL OFFERING PRICE; VOLATILITY OF
COMMON SHARES PRICE

Prior to the Offering, there has been no public market for the Common
Shares. Although the Common Shares have been approved for quotation on The
Nasdaq National Market, there can be no assurance that an active trading market
will develop or be sustained. The initial public offering price of the Common
Shares has been determined by negotiations among the Company and the Managing
Underwriters (as defined herein) and may not be indicative of the market price
of the Common Shares after completion of the Offering. The price of the Common
Shares in the future may be volatile. A variety of events, including
quarter-to-quarter variations in operating results, news announcements, trading
volume, general market trends and other factors, could result in wide
fluctuations in the price of the Common Shares. For a discussion of the factors
considered in determining the initial public offering price, see "Underwriting."

POTENTIAL ANTI-TAKEOVER EFFECT AND POTENTIAL ADVERSE IMPACT ON MARKET PRICE OF
CERTAIN CHARTER AND CODE OF REGULATIONS PROVISIONS AND THE OHIO GENERAL
CORPORATION LAW

Certain provisions of the Company's Articles of Incorporation and Code of
Regulations and of the Ohio Revised Code (the "Ohio GCL"), together or
separately, could discourage potential acquisition proposals, delay or prevent a
change in control of the Company and limit the price that certain investors
might be willing to pay in the future for the Common Shares. Among other things,
these provisions (i) require certain supermajority votes; and (ii) establish
certain advance notice procedures for nomination of candidates for election as
directors and for shareholder proposals to be considered at shareholders'
meetings.

Pursuant to the Company's Articles of Incorporation, upon the closing of the
Offering, the Board of Directors of the Company will have authority to issue up
to 10,000,000 preferred shares without further shareholder approval. Such
preferred shares could have dividend, liquidation, conversion, voting and other
rights and privileges that are superior or senior to the Common Shares. Issuance
of preferred shares could result in the dilution of the voting power of the
Common Shares, adversely affect holders of the Common Shares in the event of
liquidation of the Company or delay, defer or prevent a change in control of the
Company.

In addition, Section 1701.831 of the Ohio GCL contains provisions that
require shareholder approval of any proposed "control share acquisition" of any
Ohio corporation at any of three ownership thresholds: 20%, 33 1/3% and 50%; and
Chapter 1704 of the Ohio GCL contains provisions that restrict certain business
combinations and other transactions between an Ohio corporation and interested
shareholders. See "Description of Capital Stock -- Potential Anti-Takeover
Effects of Articles of Incorporation, Code of Regulations and the Ohio General
Corporation Law."

PRIOR S CORPORATION STATUS

In July 1988, the Company elected to be treated as an S Corporation under
subchapter S of the Internal Revenue Code of 1986, as amended (the "Code") for
federal income tax purposes and comparable state tax laws. As a result of the S
Corporation election, the Company's shareholders have been taxed directly on the
Company's income, whether or not such income was distributed, and the Company
has not been subject to federal income tax at the corporate level.

Since July 1988, the Company has made periodic distributions to its
shareholders. The balance of taxed or taxable accumulated earnings which have
not been distributed is reflected in an "accumulated adjustments account" (the
"AAA account"). In connection with the Offering, the Company's S Corporation
status will terminate and the Company is making a distribution on the date
hereof of promissory notes (the "AAA Notes") in the aggregate principal amount
of approximately $21.0 million to its existing shareholders from the AAA
account. The aggregate principal amount of the AAA Notes is approximately equal
to the undistributed earnings in the AAA account on which the shareholders
either have paid or will be required to pay income taxes. A portion of the
proceeds of the Offering will be used to repay the AAA Notes. See "Use of
Proceeds."

11
<PAGE>
OFFERING RELATED TRANSACTIONS

In addition to the termination of the Company's S Corporation status and the
distribution of the AAA Notes described above, the following transactions will
occur in connection with the Offering:

TERMINATION OF STOCK PURCHASE AGREEMENTS WITH EXISTING SHAREHOLDERS

On April 1, 1994, the Company entered into Stock Purchase Agreements with
seven executive officers, pursuant to which these executive officers purchased
an aggregate of 1,484,908 Common Shares for an aggregate purchase price of
approximately $364,000, which was paid by the delivery of promissory notes. Upon
the closing of the Offering, the Stock Purchase Agreements will be terminated,
and the promissory notes will be paid. See "Certain Relationships and Related
Party Transactions -- Stock Purchase Agreements."

The Stock Purchase Agreements have resulted in expenses of $2.3 million and
$1.3 million for the year ended September 30, 1995, and the six months ended
March 31, 1996, respectively, which expenses will cease upon the termination of
the Stock Purchase Agreements in connection with the Offering. The Company's pro
forma income statements have been adjusted accordingly. The anticipated
repayment by the seven executive officers of the Stock Purchase Agreement notes
in the remaining aggregate principal amount of $284,000 will result in a
decrease in notes receivable and a corresponding increase in cash, as reflected
in the Company's pro forma balance sheet at March 31, 1996. In addition, the
distribution of the AAA Notes will eliminate the $1.7 million liability relating
to the Stock Purchase Agreements. The elimination of this liability has been
reflected in the Company's pro forma balance sheet at March 31, 1996. See
"Selected Unaudited Condensed Pro Forma Financial Data" and Note 12 of the Notes
to the Company's Financial Statements.

In addition, as a result of the termination of the Stock Purchase
Agreements, the Company will incur a non-recurring, non-cash expense of
approximately $15.0 million in the fiscal quarter in which the Offering is
closed. This expense will result in a corresponding increase in additional
paid-in capital, but no change in total shareholders' equity. This expense is
not tax deductible and represents the portion of the distribution of the AAA
Notes to the seven executive officers not previously recorded as compensation
expense plus the difference between the net offering price and the net book
value of the 1,484,908 shares on the date the Stock Purchase Agreements are
terminated. This accounting treatment is required since the stock purchase plan
is being accounted for in a manner similar to a variable stock option plan. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

TERMINATION OF DEFERRED COMPENSATION AGREEMENTS WITH EXISTING SHAREHOLDERS

Between 1986 and 1991, the Company entered into Deferred Compensation
Agreements with seven executive officers, pursuant to which the Company is
obligated to pay these executive officers deferred compensation equal in each
case to a percentage of the increase in the Company's net book value. In
connection with the Offering and the distribution of the AAA Notes, the seven
executive officers have agreed to forego their remaining deferred compensation
payments in the aggregate amount of $2.0 million and to terminate the Deferred
Compensation Agreements upon the closing of the Offering. See "Certain
Relationships and Related Party Transactions -- Deferred Compensation
Agreements."

The Deferred Compensation Agreements have resulted in expenses of $0.3
million and $0.1 million for the year ended September 30, 1995, and the six
months ended March 31, 1996, respectively, which expenses will cease upon
termination of the Deferred Compensation Agreements in connection with the
Offering. The Company's pro forma income statements have been adjusted
accordingly. The elimination of the liability associated with the Deferred
Compensation Agreements will result in an increase of $2.0 million in
shareholders' equity on the Company's pro forma balance sheet at March 31, 1996.
See "Selected Unaudited Condensed Pro Forma Financial Data" and Note 12 of the
Notes to the Company's Financial Statements.

REDUCTION IN EXECUTIVE OFFICER COMPENSATION

Following the closing of the Offering, the Company expects to restructure
the compensation arrangements with its executive officers. See "Management --
Compensation of Executive Officers." The reduction of compensation expense for
executive officers will result in an adjustment to the Company's pro forma
income statement of

12
<PAGE>
$1.0 million and $0.2 million for the year ended September 30, 1995, and the six
months ended March 31, 1996, respectively. See "Selected Unaudited Condensed Pro
Forma Financial Data" and Note 12 of the Notes to the Company's Financial
Statements.

TERMINATION OF THE WRIGHT AGREEMENT

In 1988, in consideration for the agreement of WIE and Donald W. Wright, Sr.
not to compete with the Company, the Company entered into the Wright Agreement,
which, as amended, provides for annual payments, tied to the cash flows and debt
to equity ratio of the Company, to Donald Wright and certain designees. Upon the
repurchase by the Company of the Donald Wright Warrant, the Wright Agreement
will be terminated in its entirety, and no further payments will be made. See
"Certain Relationships and Related Party Transactions -- Wright Agreement."

The termination of the Wright Agreement will result in an adjustment to the
Company's pro forma income statement of $2.1 million and $0.6 million for the
year ended September 30, 1995, and the six months ended March 31, 1996,
respectively. Elimination of amortization expense in connection with the
write-off of the covenant not to compete asset related to the Wright Agreement
will result in an additional adjustment to the Company's pro forma income
statement of $0.3 million and $0.1 million for the year ended September 30,
1995, and the six months ended March 31, 1996, respectively. In addition, the
write-off of the covenant not to compete asset will result in a decrease of $2.6
million in shareholders' equity on the Company's pro forma balance sheet at
March 31, 1996, and a corresponding non-cash expense in the fiscal quarter in
which the Offering is closed. See "Selected Unaudited Condensed Pro Forma
Financial Data" and Note 12 of the Notes to the Company's Financial Statements.

PURCHASE OF WRIGHT WARRANTS

In further consideration for the agreement by WIE and Donald Wright not to
compete with the Company, the Company issued the Wright Warrants to Donald
Wright and Jeffrey Wright. The Wright Warrants entitle the Wright Trust (as
defined below), as assignee of Donald Wright, and Jeffrey Wright to purchase an
aggregate of 2,650,764 Common Shares for an aggregate exercise price of $3,200
at any time on or after the closing of the Offering. The Company has agreed to
repurchase the Donald Wright Warrant upon the closing of the Offering for $29.9
million, or the equivalent of $12.04 per Common Share underlying such warrant,
and will cancel the Donald Wright Warrant upon its repurchase. Gerald G. Mercer
has agreed to purchase the Jeffrey Wright Warrant upon the closing of the
Offering for $2.0 million, or the equivalent of $12.04 per Common Share
underlying such warrant, and will exercise the Jeffrey Wright Warrant
immediately following such purchase. See "Certain Relationships and Related
Party Transactions -- Wright Warrants."

In connection with the repurchase and cancellation of the Donald Wright
Warrant and the corresponding tax treatment, the Company will realize a related
tax benefit asset estimated to be $7.0 million. The benefit from this asset will
be realized as cash savings by offsetting income taxes otherwise payable on
future taxable income. The tax benefit will have no effect on the Company's
income statement currently or for any future period; however, the tax benefit
will be reflected as additional paid-in capital on the Company's balance sheet.
See "Selected Unaudited Condensed Pro Forma Financial Data" and Note 12 of the
Notes to the Company's Financial Statements.

NON-RECURRING EXPENSES

In connection with the termination of the Stock Purchase Agreements, the
Company will incur a non-recurring, non-cash expense of approximately $15.0
million in the fiscal quarter in which the Offering is closed. In connection
with the termination of the Wright Agreement, the Company will expense $2.6
million as a result of the write-off of the covenant not to compete asset. In
connection with the termination of the Company's S Corporation status, the
Company will incur a deferred income tax expense of $2.1 million.

NEW CREDIT AGREEMENT

Simultaneously with the closing of the Offering, the Company will enter into
a $50.0 million, five-year, unsecured revolving credit agreement (the "New
Credit Agreement"). The Company has received a commitment from NBD Bank, the
agent and sole lender under the Existing Credit Agreement (as defined below), to
act as agent and underwriter under the New Credit Agreement. The closing of the
Offering will be conditioned upon the concurrent closing of the New Credit
Agreement. See "Description of Certain Indebtedness -- New Credit Agreement."

13
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the 5,600,000 Common Shares
offered hereby after deducting underwriting discounts and estimated expenses
payable by the Company in connection with the Offering are estimated to be $72.0
million (approximately $82.9 million if the Underwriters' over-allotment option
is exercised in full). Of the net proceeds to be received by the Company, (i)
approximately $21.0 million will be used to repay the outstanding principal
amount of the AAA Notes, (ii) $29.9 million will be used to repurchase and
cancel the Donald Wright Warrant and (iii) approximately $17.5 million will be
used to repay outstanding indebtedness under the Existing Credit Agreement which
bore interest at the weighted average rate of 7.4% on March 31, 1996, and
matures at various dates between December 31, 1996 and May 1, 2000. See "Prior S
Corporation Status," "Certain Relationships and Related Party Transactions --
Wright Warrants" and "Description of Certain Indebtedness -- Existing Credit
Agreement."

The repayment of the AAA Notes described above is being made in connection
with the Company's distribution from its AAA account to its existing
shareholders of an amount approximately equal to the undistributed earnings in
the AAA account on which the shareholders either have paid or will be required
to pay income taxes up to the time of the termination of the Company's S
Corporation status. See "Prior S Corporation Status."

Following the closing of the Offering and of the $50.0 million New Credit
Agreement, the Company will have no funds drawn down, and will have
approximately $31.8 million in additional funds available, under such New Credit
Agreement, which funds may be used for general corporate purposes, including to
finance acquisitions of additional aircraft, as well as acquisitions of
companies that will complement the Company's existing operations or provide it
with an entry into new markets. Although, from time to time, the Company has had
discussions with various companies regarding possible acquisition, the Company
currently does not have any definitive plans, arrangements or understandings,
whether written or oral, with any company regarding an acquisition. See
"Description of Certain Indebtedness -- New Credit Agreement" and "Business --
Business Strategy."

DIVIDEND POLICY

The Company anticipates that, after payment of the S Corporation
distributions to existing shareholders and the termination of the Company's S
Corporation status in connection with the Offering, any future earnings will be
retained to finance the Company's operations and for the growth and development
of its business. See "Prior S Corporation Status." Accordingly, the Company does
not currently anticipate paying cash dividends on its Common Shares in the
foreseeable future. The payment of any future dividends will be subject to the
discretion of the Board of Directors of the Company and will depend on the
Company's results of operations, financial position and capital requirements,
general business conditions, restrictions imposed by financing arrangements, if
any, legal restrictions on the payment of dividends, and other factors the Board
of Directors deems relevant. The Company's New Credit Agreement effectively will
prohibit the Company from paying cash dividends on its Common Shares in excess
of 50% of Net Income (as defined therein). See "Description of Certain
Indebtedness -- New Credit Agreement."

14
<PAGE>
CAPITALIZATION

The following table sets forth the current portion of long-term debt and
capitalization of the Company as of March 31, 1996 on an actual basis, pro forma
as of such date to reflect the transactions set forth in note (1) hereto and pro
forma as adjusted as of such date to reflect the transactions set forth in note
(1) hereto and the sale of the 5,600,000 Common Shares offered hereby and the
application of the net proceeds therefrom, after deducting underwriting
discounts and estimated expenses payable by the Company in connection with the
Offering. See "Use of Proceeds." This table should be read in conjunction with
the Financial Statements of the Company, including the Notes thereto, appearing
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1996
--------------------------------------
PRO FORMA
ACTUAL PRO FORMA(1) AS ADJUSTED
--------- ------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Current portion of long-term debt............................... $ 6,229 $ 6,229 $ --
--------- ------------- ------------
--------- ------------- ------------
Long-term debt, less current portion (2)........................ $ 11,302 $ 32,302 $ --
Shareholders' equity:
Preferred Shares, $.01 par value; 10,000,000 shares
authorized; no shares issued and outstanding................. -- -- --
Common Shares, $.01 par value; 40,000,000 shares authorized;
5,710,608 shares issued and outstanding (actual); 5,877,835
shares issued and outstanding (pro forma); 11,477,835 shares
issued and outstanding (as adjusted) (3)..................... 57 59 115
Additional paid-in capital.................................... 350 23,205 65,250
Retained earnings (deficit)................................... 22,913 (15,000) (15,000)
Notes receivable from shareholders............................ (284) -- --
--------- ------------- ------------
Total shareholders' equity.................................. 23,036 8,264 50,365
--------- ------------- ------------
Total capitalization........................................ $ 34,338 $ 40,566 $ 50,365
--------- ------------- ------------
--------- ------------- ------------
</TABLE>

- ------------------------
(1) Assumes the following transactions occurred as of March 31, 1996: (i)
distributions to existing shareholders from the AAA account in the amount of
approximately $21.0 million in AAA Notes; (ii) the recognition of a net
deferred tax liability of $2.1 million resulting from the termination of the
Company's S Corporation status; (iii) the termination of the Stock Purchase
Agreements and the Deferred Compensation Agreements and the elimination of
$3.7 million of liability associated therewith; (iv) the repayment of notes
receivable from existing shareholders of $0.3 million; (v) the termination
of the Wright Agreement, the write-off of the covenant not to compete asset
of $2.6 million and the recording of a related tax benefit asset of $7.0
million; (vi) the reclassification of the remaining undistributed earnings
of the Company prior to becoming a C Corporation from retained earnings to
additional paid-in capital; and (vii) the recording of the $15.0 million
non-cash expense, with the corresponding increase to additional paid-in
capital, resulting from the termination of the Stock Purchase Agreements.
See "Selected Unaudited Condensed Pro Forma Financial Data," "Certain
Relationships and Related Party Transactions," "Prior S Corporation Status,"
"Offering Related Transactions" and Note 12 of the Notes to the Company's
Financial Statements.

(2) See Note 4 of Notes to Financial Statements for a description of the
Company's long-term debt.

(3) Excludes 1,150,000 Common Shares reserved for issuance under the Company's
Incentive Stock Plan. See "Management -- Incentive Stock Plan."

15
<PAGE>
DILUTION

The net tangible book value of the Company as of March 31, 1996, was $19.8
million, or $3.47 per Common Share outstanding. Net tangible book value per
Common Share represents total tangible assets of the Company less total
liabilities, divided by the number of Common Shares outstanding. After giving
effect to the adjustments described under "Offering Related Transactions," the
pro forma net tangible book value as of March 31, 1996 would have been
approximately $7.7 million, or $1.30 per share. After giving further effect to
the Offering and the application of the net proceeds to the Company therefrom
after deducting underwriting discounts and estimated expenses payable by the
Company in connection with the Offering; the pro forma net tangible book value
of the Company at March 31, 1996, would have been $49.8 million or $4.34 per
share, representing an immediate increase in net tangible book value of $3.04
per share to existing shareholders and an immediate dilution of $9.66 per share
to new investors in the Common Shares offered hereby. See "Prior S Corporation
Status" and "Use of Proceeds." The following table illustrates the resulting
dilution with respect to the Common Shares offered hereby:

<TABLE>
<CAPTION>
Public offering price per share............................. $ 14.00
<S> <C> <C>
Net tangible book value per share as of March 31, 1996...... $ 3.47
Adjustment in net tangible book value per share attributable
to Offering Related Transactions (1)....................... (2.17)
---------
Pro forma net tangible book value per share................. 1.30
---------
Increase in net tangible book value per share attributable
to the Offering............................................ 3.04
Pro forma net tangible book value per share after the
Offering................................................... 4.34
---------
Dilution per share to new investors......................... $ 9.66
---------
---------
</TABLE>

- ------------------------
(1) See "Offering Related Transactions."

The following table summarizes, on a pro forma basis as of March 31, 1996,
the number of Common Shares purchased from the Company, the aggregate net
consideration paid and the average price per share paid by the existing
shareholders and by new investors purchasing Common Shares in the Offering
without giving effect to underwriting discounts and estimated expenses of the
Offering:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------------- -------------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------ ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Existing shareholders............ 5,877,835 51.2% $ 364,583 0.5% $ 0.06
New investors.................... 5,600,000 48.8 78,400,000 99.5 14.00
------------ ----- ------------- -----
Total........................ 11,477,835 100.0% $ 78,764,583 100.0%
------------ ----- ------------- -----
------------ ----- ------------- -----
</TABLE>

16
<PAGE>
SELECTED FINANCIAL DATA

The selected financial data presented below as of and for each of the years
in the five-year period ended September 30, 1995, have been derived from the
Financial Statements of the Company, which have been audited by Ernst & Young
LLP, independent auditors. The selected financial data set forth below for the
Company as of and for the six months ended March 31, 1995 and 1996 have been
derived from unaudited financial statements of the Company that have been
prepared on the same basis as the audited Financial Statements and include all
adjustments, consisting of normal recurring accruals, that the Company considers
necessary for a fair presentation of the financial position and results of
operations for the periods presented. Operating results for the six-month period
ended March 31, 1996 are not necessarily indicative of the results that may be
expected for the fiscal year ending September 30, 1996. The selected financial
data presented below should be read in conjunction with the more detailed
information contained in the Financial Statements and Notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED SEPTEMBER 30, ENDED MARCH 31,
----------------------------------------------------- --------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Air transportation:
Check delivery...................... $ 46,924 $ 49,000 $ 49,358 $ 54,047 $ 58,264 $ 27,960 $ 30,570
Small package delivery.............. 6,975 7,719 7,967 8,241 8,192 3,973 4,460
Fixed base operations................. 1,274 1,335 1,265 1,158 1,006 519 479
--------- --------- --------- --------- --------- --------- ---------
55,173 58,054 58,590 63,446 67,462 32,452 35,509
Costs and expenses:
Air transportation:
Wages and benefits.................. 6,160 6,890 7,594 8,186 9,195 4,557 4,876
Aircraft fuel....................... 7,699 7,331 7,151 6,958 7,445 3,599 3,875
Aircraft maintenance................ 5,361 5,134 5,427 5,721 6,034 3,075 3,291
Aircraft leases..................... 4,058 4,766 4,405 3,260 1,043 634 379
Ground couriers and outside
services........................... 8,396 8,031 7,950 8,347 8,611 4,138 4,551
Depreciation and amortization....... 4,496 5,120 5,862 6,333 7,354 3,477 4,156
Other............................... 4,014 4,534 5,048 5,765 6,429 3,172 3,476
Fixed base operations................. 1,270 1,217 1,150 1,081 956 446 390
Selling, general, administrative:
Executive compensation.............. 2,257 2,530 2,738 3,285 3,952 1,835 1,719
Other executive compensation (1).... 463 814 247 1,598 2,635 1,162 1,401
Wright Agreement expenses (1)(2).... 963 1,240 1,339 1,813 2,328 1,207 728
Other............................... 2,247 3,446 3,927 3,788 3,405 1,656 2,238
--------- --------- --------- --------- --------- --------- ---------
Total costs and expenses................ 47,384 51,053 52,838 56,135 59,387 28,958 31,080
--------- --------- --------- --------- --------- --------- ---------
Income from operations.................. 7,789 7,001 5,752 7,311 8,075 3,494 4,429
Interest expense........................ 1,857 1,240 1,123 1,093 1,452 611 736
--------- --------- --------- --------- --------- --------- ---------
Net income (3).......................... $ 5,932 $ 5,761 $ 4,629 $ 6,218 $ 6,623 $ 2,883 $ 3,693
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
OTHER OPERATING DATA:
Number of aircraft (end of period)...... 66 68 70 73 78 74 81
On-time performance (4)................. 98.2% 97.5% 97.6% 96.4% 97.7% 97.0% 94.9%
EBITDA (5).............................. $ 12,285 $ 12,121 $ 11,614 $ 13,644 $ 15,429 $ 6,971 $ 8,585
Cash flows provided by (used in):
Operating activities................ 11,865 9,709 10,810 14,722 15,310 6,524 8,025
Investing activities................ (6,375) (5,456) (8,248) (12,814) (14,223) (6,230) (5,437)
Financing activities................ (5,276) (4,128) (2,551) (2,000) (1,107) (549) (2,824)
</TABLE>

17
<PAGE>

<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------------------------------- MARCH 31,
1991 1992 1993 1994 1995 1996
--------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital.................................. $ 2,055 $ 5,348 $ 6,216 $ 3,390 $ 1,062 $ 656
Net property and equipment....................... 17,159 17,395 19,438 25,570 32,834 34,082
Total assets..................................... 33,038 33,637 35,829 42,141 49,037 52,651
Total debt....................................... 15,017 13,850 13,169 16,250 19,228 17,531
Shareholders' equity............................. 11,235 14,036 16,794 17,931 20,469 23,036
</TABLE>

- --------------------------
(1) Certain expenses of the Company, such as executive compensation, expenses
associated with the Stock Purchase Agreements and the Deferred Compensation
Agreements and payments made in connection with the Wright Agreement vary
based on the Company's income and/or cash flows for the relevant periods.
See "Certain Relationships and Related Party Transactions."

(2) Includes annual non-competition payments and amortization expenses in
connection with the Wright Agreement and the associated Wright covenant not
to compete asset. See "Certain Relationships and Related Party Transactions
-- Wright Agreement."

(3) Reflects the Company as an S Corporation during the periods presented.
Accordingly, the Selected Financial Data do not contain a provision for
income taxes. See "Prior S Corporation Status."

(4) On-time performance is defined as the annualized percentage of times that
the Company's U.S. Check-Registered Trademark- division met its customers'
delivery requirements.

(5) "EBITDA" is defined as net income before interest expense, taxes on income,
depreciation and amortization. EBITDA should not be construed as an
alternative to income from operations or cash flows from operating
activities (each as determined in accordance with generally accepted
accounting principles).

18
<PAGE>
SELECTED UNAUDITED CONDENSED PRO FORMA FINANCIAL DATA

The selected unaudited condensed pro forma financial data have been derived
from the historical financial statements of the Company. The unaudited pro forma
income statement data for the fiscal year ended September 30, 1995 and the six
months ended March 31, 1996, give effect to (i) the Company's C Corporation
election and (ii) the transactions described under "Offering Related
Transactions" as if such transactions had occurred at the beginning of each such
period. The unaudited condensed pro forma balance sheet data give effect to such
transactions and to the Offering and the use of the net proceeds therefrom after
deducting underwriting discounts and estimated expenses payable by the Company
as if such transactions had occurred on March 31, 1996. See "Prior S Corporation
Status," "Offering Related Transactions" and "Use of Proceeds."

THE SELECTED UNAUDITED CONDENSED PRO FORMA FINANCIAL DATA AND ACCOMPANYING
NOTES SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS OF THE COMPANY
AND THE NOTES THERETO APPEARING ELSEWHERE HEREIN. THE UNAUDITED PRO FORMA
FINANCIAL DATA ARE PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DO NOT PURPORT
TO REPRESENT WHAT THE COMPANY'S FINANCIAL POSITION OR RESULTS OF OPERATIONS
ACTUALLY WOULD HAVE BEEN HAD THE TRANSACTIONS DESCRIBED THEREIN BEEN COMPLETED
AS OF THE DATE OR AT THE BEGINNING OF THE PERIODS INDICATED, OR TO PROJECT THE
COMPANY'S FINANCIAL POSITION OR RESULTS OF OPERATIONS AT ANY FUTURE DATE OR FOR
ANY FUTURE PERIOD.

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1995 SIX MONTHS ENDED MARCH 31, 1996
--------------------------------------- ---------------------------------------
HISTORICAL ADJUSTMENTS PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA
----------- ------------- ----------- ----------- ------------- -----------
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA (1):
Revenues:
Air transportation:
Check delivery.................. $ 58,264 $ 58,264 $ 30,570 $ 30,570
Small package delivery.......... 8,192 8,192 4,460 4,460
Fixed base operations............. 1,006 1,006 479 479
----------- ----------- ----------- -----------
67,462 67,462 35,509 35,509
Costs and expenses:
Air transportation:
Wages and benefits.............. 9,195 9,195 4,876 4,876
Aircraft fuel................... 7,445 7,445 3,875 3,875
Aircraft maintenance............ 6,034 6,034 3,291 3,291
Aircraft leases................. 1,043 1,043 379 379
Ground couriers and outside
services....................... 8,611 8,611 4,551 4,551
Depreciation and amortization... 7,354 7,354 4,156 4,156
Other........................... 6,429 6,429 3,476 3,476
Fixed base operations............. 956 956 390 390
Selling, general, administrative:
Executive compensation.......... 3,952 $ (952)(2) 3,000 1,719 $ (219)(2) 1,500
Other executive compensation.... 2,635 (2,635)(3) -- 1,401 (1,401)(3) --
Wright Agreement expenses....... 2,328 (2,328)(4) -- 728 (728)(4) --
Other........................... 3,405 3,405 2,238 2,238
----------- ------------- ----------- ----------- ------------- -----------
Total costs and expenses............ 59,387 (5,915) 53,472 31,080 (2,348) 28,732
----------- ------------- ----------- ----------- ------------- -----------
Income from operations.............. 8,075 5,915 13,990 4,429 2,348 6,777
Interest expense.................... 1,452 (1,452)(5) -- 736 (736)(5) --
----------- ------------- ----------- ----------- ------------- -----------
Income before income taxes.......... $ 6,623 $ 7,367 13,990 $ 3,693 $ 3,084 6,777
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
Pro forma income taxes (6).......... 5,596 2,711
----------- -----------
Pro forma net income................ $ 8,394 $ 4,066
----------- -----------
----------- -----------
Pro forma net income per common
share.............................. $ 0.74 $ 0.36
----------- -----------
----------- -----------
Pro forma weighted average common
shares outstanding (in thousands)
(7)................................ 11,332 11,200
</TABLE>

19
<PAGE>

<TABLE>
<CAPTION>
MARCH 31, 1996
----------------------------------------------------------------------
PRO FORMA OFFERING PRO FORMA AS
HISTORICAL ADJUSTMENTS PRO FORMA ADJUSTMENTS ADJUSTED
----------- --------------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Assets:
Current assets............................ $ 15,317 $ 284(8) $ 15,601 $ 72,002(9) $ 19,171
(68,432)(9)
Property, plant and equipment, net........ 34,082 -- 34,082 -- 34,082
Intangibles, net.......................... 3,200 (2,596)(10) 604 -- 604
Other assets.............................. 52 7,000 (10 7,052 -- 7,052
----------- --------------- ----------- ------------- ------------
Total assets.............................. $ 52,651 $ 4,688 $ 57,339 $ 3,570 $ 60,909
----------- --------------- ----------- ------------- ------------
----------- --------------- ----------- ------------- ------------
Liabilities and equity:
Other current liabilities................. $ 8,432 $ -- $ 8,432 $ -- $ 8,432
Current portion of long-term debt......... 6,229 -- 6,229 (6,229)(9) --
----------- --------------- ----------- ------------- ------------
Total current liabilities................. 14,661 -- 14,661 (6,229) 8,432
----------- --------------- ----------- ------------- ------------
Notes payable............................. 11,302 21,000 (11 32,302 (32,302)(9) --
Deferred compensation..................... 3,652 (3,652)(12) -- -- --
Deferred taxes............................ -- 2,112 (13 2,112 -- 2,112
Shareholders' equity...................... 23,036 (14,772)(14) 8,264 42,101(9) 50,365
----------- --------------- ----------- ------------- ------------
Total liabilities and equity.............. $ 52,651 $ 4,688 $ 57,339 $ 3,570 $ 60,909
----------- --------------- ----------- ------------- ------------
----------- --------------- ----------- ------------- ------------
</TABLE>

- ------------------------
(1) The unaudited pro forma income statement data do not reflect significant
non-recurring expenses which will be incurred at the time of the Offering.
These expenses include non-cash expenses, with a corresponding increase in
additional paid-in capital, of approximately $15.0 million in connection
with the termination of the Stock Purchase Agreements and $2.6 million
relating to the write-off of the covenant not to compete asset in connection
with the termination of the Wright Agreement. In addition, the Company will
record a net deferred tax expense of $2.1 million as a result of the
termination of the Company's S Corporation status. See "Offering Related
Transactions" and "Prior S Corporation Status."

(2) Adjustments reflect the reduction in compensation to the Company's
executive officers under revised compensation arrangements and the payment
of 100% of potential bonuses under such arrangements.

(3) Adjustments reflect the reduction in costs in connection with the
termination of the Stock Purchase Agreements and the Deferred Compensation
Agreements. See "Certain Relationships and Related Party Transactions."

(4) Adjustments reflect the reduction in costs in connection with the
elimination of non-competition payments and the elimination of amortization
expense associated with the Wright covenant not to compete asset in
connection with the termination of the Wright Agreement. See "Offering
Related Transactions -- Termination of the Wright Agreement."

(5) Adjustments reflect the reduction in interest expense related to the
repayment of existing debt from the proceeds of the Offering. See "Use of
Proceeds."

(6) Adjustments reflect the recording of federal and state income taxes at an
effective rate of 40% as if the Company had been a C Corporation during each
such period. See "Prior S Corporation Status."

(7) The pro forma weighted average common shares outstanding is based on the
weighted average common shares outstanding, using the treasury stock method,
for the applicable period, as adjusted for the number of Common Shares
required to be issued by the Company in the Offering to generate sufficient
net proceeds to repay debt, to repurchase and cancel the Donald Wright
Warrant and to fund planned distributions to existing shareholders.

20
<PAGE>
(8) Adjustments reflect the repayment of notes receivable from existing
shareholders. See "Offering Related Transactions -- Termination of Stock
Purchase Agreements with Existing Shareholders."

(9) Adjustments reflect the Offering and the use of the net proceeds therefrom
after deducting underwriting discounts and estimated expenses payable by the
Company in connection with the Offering. See "Use of Proceeds."

(10) Adjustments reflect the termination of the Wright Agreement, the write-off
of the covenant not to compete asset of $2.6 million and the recording of a
related tax benefit asset of $7.0 million. See "Offering Related
Transactions -- Termination of the Wright Agreement."

(11) Adjustments reflect the distribution of the AAA Notes to the existing
shareholders. See "Prior S Corporation Status."

(12) Adjustments reflect the termination of the Deferred Compensation Agreements
and Stock Purchase Agreements and the elimination of the associated
liabilities. See "Offering Related Transactions -- Termination of Stock
Purchase Agreements with Existing Shareholders" and "-- Termination of
Deferred Compensation Agreements with Existing Shareholders."

(13) Adjustments reflect the recognition of a net deferred tax liability
resulting from the termination of the Company's S Corporation status. See
"Prior S Corporation Status."

(14) Reflects adjustments to shareholders' equity as follows (dollars in
thousands):

<TABLE>
<S> <C>
Repayment of notes receivable..................................... $ 284
Write-off of covenant not to compete asset........................ (2,596)
Recording of tax benefit asset related to exercise of Wright
Warrants......................................................... 7,000
AAA account distributions......................................... (21,000)
Elimination of liabilities related to Deferred Compensation
Agreements and Stock Purchase Agreements......................... 3,652
Recognition of net deferred tax liability......................... (2,112)
---------
$ (14,772)
---------
---------
</TABLE>

21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION IS
BASED UPON AND SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S FINANCIAL
STATEMENTS AND NOTES THERETO, THE SELECTED FINANCIAL DATA AND OTHER FINANCIAL
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS.

GENERAL

The Company derives its revenues primarily from fees charged for air and
ground delivery services. Check and small package delivery services account for
approximately 98% of the Company's revenues. Costs of the delivery services
consist primarily of the fuel, maintenance, wages and benefits related to the
operation of the Company's fleet of aircraft, salaries and related benefits paid
to the Company's drivers, fees paid to independent contractors and operating and
maintenance expenses related to the Company's delivery vehicles. See "Business
- -- Services -- Aircraft Fleet" and "Business -- Services -- Vehicles." The
remaining revenues are generated by the Company's fixed base operation and are
related to the sale of aviation fuels, maintenance and other services provided
at the Company's Columbus, Ohio facility.

IMPACT ON OPERATIONS

The Financial Statements have been or will be affected by several factors,
including: (i) the corporate strategic decision to acquire, rather than to
lease, aircraft; (ii) S Corporation distributions; (iii) a change in Federal
Reserve bank regulations affecting the ability of commercial banks to compete
with Federal Reserve banks; (iv) the incurrence of non-recurring, non-cash
expenses in the quarter in which the Offering occurs; (v) development of a fuel
rebate/surcharge program for the Company's customers; (vi) taxes on income in
connection with the termination of the Company's S Corporation status; (vii) the
tax benefit associated with the exercise of the Donald Wright Warrant; and
(viii) the growth of the National Clearinghouse Association (the "NCHA").

CORPORATE STRATEGIC DECISION TO ACQUIRE AIRCRAFT. In fiscal 1993, the
Company made a strategic decision to replace leased aircraft, particularly jet
aircraft, with purchased aircraft. The Company was able to pursue this strategy
as a result of the Company's strong financial condition and its ability to take
on additional debt to fund such acquisitions. As aircraft leases expired, the
Company began purchasing replacement aircraft. Since October 1, 1992, the
Company has acquired 11 Learjets, nine of which replaced leased aircraft. The
resulting savings in lease expense have been in excess of $4.0 million, offset
somewhat by increased interest expense due to increased debt and increased
depreciation expense. In fiscal 1994, the Company decided also to begin
replacing some of its leased light twin engine aircraft with larger twin engine
aircraft with increased payload capacities, and the Company has since acquired
nine Piper Chieftains.

S CORPORATION DISTRIBUTIONS. Since the Company elected S Corporation status
in July 1988, it has made distributions to its shareholders for the purpose of
funding their income tax payments on the income generated by the Company, which
income is taxable to the shareholders whether or not distributed. In fiscal
1994, the Company began making S Corporation distributions in an amount in
excess of the amount necessary to pay applicable income taxes. These additional
distributions were made from cash generated from operations and totaled $3.1
million through the end of fiscal 1995. The Company distributed an additional
$0.5 million during the six months ended March 31, 1996. In addition, in
connection with the Offering and the conversion to a C Corporation, the Company
is making a distribution of the AAA Notes in the aggregate principal amount of
approximately $21.0 million, which approximates the value of the Company's AAA
account at the time of the Offering. See "Prior S Corporation Status."

MODIFICATION OF FEDERAL RESERVE BANK REGULATIONS. In January 1994, the
banking industry determined that the Federal Reserve banks had an unfair
advantage in the marketplace for check clearing services. Prior to such
determination, Federal Reserve banks were allowed to present checks to the
Federal Reserve for payment in immediately available funds without having to pay
a presentment fee. Commercial banks are often required to pay a presentment fee
to other commercial banks in exchange for the right to draw immediately against
deposits of such banks. The Federal Reserve responded by initiating a regulatory
policy called "Same-Day Settlement," which mandates that if a bank is presented
with a check drawn on its deposits, such bank must pay the presenting bank in
immediately available funds, without charging any additional fees, provided that
the check is presented by 8:00 a.m.

22
<PAGE>
Same-Day Settlement has allowed commercial banks to compete more favorably with
the Federal Reserve banks and, correspondingly, has increased demand for the
Company's delivery services, as the Company can deliver to most locations in the
U.S. prior to the 8:00 a.m. deadline.

NON-RECURRING EXPENSES. The Company will incur significant non-recurring
expenses immediately following the Offering. These expenses will include
non-cash expenses of approximately $15.0 million in connection with the
termination of the Stock Purchase Agreements and $2.6 million relating to the
write-off of the covenant not to compete asset in connection with the
termination of the Wright Agreement. In addition, the Company will record a
deferred tax expense of $2.1 million as a result of the termination of the
Company's S Corporation status. The $15.0 million expense will result in a
corresponding increase in additional paid-in capital, but no change in total
shareholders' equity.

The Company does not expect these non-recurring expenses to have a
significant impact on the Company's operations and cash flows, although they
will have a material, negative impact on the Company's reported earnings for the
fiscal quarter in which they are incurred and for the 1996 fiscal year. See
"Offering Related Transactions -- Non-Recurring Expenses," "Certain
Relationships and Related Party Transactions -- Stock Purchase Agreements" and
"-- Wright Warrants."

DEVELOPMENT OF A FUEL REBATE/SURCHARGE PROGRAM. In January 1990, as jet
fuel prices rose dramatically, the Company developed a fuel rebate/surcharge
program. Pursuant to this program, as the OPIS-CMH (Oil Price Information
Service -- Columbus, Ohio Station) price of jet fuel exceeds $.75 per gallon,
the Company's customers are surcharged. In turn, as the OPIS-CMH price falls
below $.68 per gallon, the Company's customers receive a rebate.

TAXES ON INCOME. In July 1988, the Company elected to be treated as an S
Corporation under Subchapter S of the Code and comparable provisions of certain
state tax laws, and since then has paid no federal income tax. For reporting
purposes, the Company records a charge for state taxes for those states which do
not recognize Subchapter S status. Prior to the closing of the Offering, the
Company will terminate its S Corporation status and thereafter will be
responsible for federal and state income taxes. See "Selected Unaudited
Condensed Pro Forma Financial Data."

TAX BENEFIT FROM THE EXERCISE OF THE DONALD WRIGHT WARRANT. The Company
expects to receive a tax benefit asset from the repurchase and cancellation of
the Donald Wright Warrant of approximately $7.0 million. See "Offering Related
Transactions -- Purchase of Wright Warrants" and "Certain Relationships and
Related Party Transactions -- Wright Warrants." This tax benefit will be
recorded on the Company's balance sheet and may be used to offset taxes payable
on future income of the Company. The tax benefit will have no effect on the
Company's income statement currently or for any future period, but will
positively affect cash flows. See "Selected Unaudited Condensed Pro Forma
Financial Data" and Note 12 of the Notes to the Company's Financial Statements.

NATIONAL CLEARINGHOUSE ASSOCIATION. Established by a joint venture owned in
part by the Company's existing shareholders and approved by the Federal Reserve
in 1991, the NCHA is a consortium of over 60 bank holding companies that have
joined together to reduce check-clearing costs by means of a multi-bank, private
net settlement arrangement. See "Industry Overview -- How Banks Clear and Settle
Canceled Bank Checks -- The National Clearinghouse Association" and "Certain
Relationships and Related Party Transactions -- Float Control, Inc./CHEXS
Partnership." The volume of checks cleared through the NCHA has grown steadily
each month since 1991, and this continued growth has resulted in increased
volume and revenues for the Company, which is the principal transporter of
canceled checks for the NCHA and its member bank holding companies.

23
<PAGE>
RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, items in the
Company's income statements as a percentage of revenues for the periods
indicated.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED SEPTEMBER 30, MARCH 31,
---------------------------------- ----------------------
1993 1994 1995 1995 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Air transportation:
Check delivery............................................ 84.2% 85.2% 86.4% 86.2% 86.1%
Small package delivery.................................... 13.6 13.0 12.1 12.2 12.6
Fixed base operations....................................... 2.2 1.8 1.5 1.6 1.3
----- ----- ----- ----- -----
Total revenues................................................ 100.0% 100.0% 100.0% 100.0% 100.0%

Costs and Expenses:
Air transportation:
Wages and benefits........................................ 13.0% 12.9% 13.6% 14.0% 13.7%
Aircraft fuel............................................. 12.2 11.0 11.0 11.1 10.9
Aircraft maintenance...................................... 9.3 9.0 8.9 9.5 9.3
Aircraft leases........................................... 7.5 5.1 1.5 2.0 1.1
Ground couriers and outside services...................... 13.6 13.2 12.8 12.8 12.8
Depreciation and amortization............................. 10.0 10.1 10.9 10.7 11.7
Other..................................................... 8.6 9.1 9.5 9.8 9.8
Fixed base operations....................................... 1.9 1.7 1.4 1.4 1.1
Selling, general, administrative:
Executive compensation.................................... 4.7 5.2 5.9 5.6 4.8
Other executive compensation.............................. 0.4 2.5 3.9 3.6 3.9
Wright Agreement expenses................................. 2.3 2.9 3.5 3.7 2.1
Other..................................................... 6.7 5.8 5.1 5.1 6.3
----- ----- ----- ----- -----
Total costs and expenses...................................... 90.2 88.5 88.0 89.3 87.5
----- ----- ----- ----- -----
Income from operations........................................ 9.8 11.5 12.0 10.7 12.5
Interest expense.............................................. 1.9 1.7 2.2 1.9 2.1
----- ----- ----- ----- -----
Net income.................................................... 7.9% 9.8% 9.8% 8.8% 10.4%
----- ----- ----- ----- -----
----- ----- ----- ----- -----
</TABLE>

SIX MONTHS ENDED MARCH 31, 1996 COMPARED TO SIX MONTHS ENDED MARCH 31, 1995

REVENUES. Revenues for the six months ended March 31, 1996 were $35.5
million, an increase of $3.0 million, or 9.4% compared to $32.5 million for the
six months ended March 31, 1995. Of this increase, $0.7 million was due to two
additional days of operations during the six months ended March 31, 1996, $1.1
million was due to price increases and $1.2 million was due to a higher level of
business activity. Revenues from check delivery for the six months ended March
31, 1996, were $30.6 million, an increase of $2.6 million or 9.3%, compared to
$28.0 million for the six months ended March 31, 1995. Revenues from small
package delivery for the six months ended March 31, 1996 were $4.5 million, an
increase of $0.5 million or 12.3%, compared to $4.0 million for the six months
ended March 31, 1995. Revenues from fixed base operations for the six months
ended March 31, 1996 were comparable to revenues of $0.5 million for the six
months ended March 31, 1995.

WAGES AND BENEFITS. Wages and benefits expense for the six months ended
March 31, 1996 was $4.9 million, an increase of $0.3 million or 7.0%, compared
to $4.6 million for the six months ended March 31, 1995. The increase was due
primarily to normal pay rate increases, as well as increased health insurance
costs. The increase was also due to the Company increasing its 401(k) matching
contribution from 25% to 50% of contributions on a maximum of 6% of an
associate's pay.

AIRCRAFT FUEL. Aircraft fuel expense for the six months ended March 31,
1996 was $3.9 million, an increase of $0.3 million or 7.7%, compared to $3.6
million for the six months ended March 31, 1995. The increase was due

24
<PAGE>
primarily to increased fuel prices and to two additional days of operations
during the six months ended March 31, 1996 compared to the six months ended
March 31, 1995. The increase also reflects increased flight hours of Piper
Chieftains which have greater fuel consumption but larger payloads than
previously used aircraft, as well as increased Learjet flight hours.

AIRCRAFT MAINTENANCE. Aircraft maintenance expense for the six months ended
March 31, 1996 was $3.3 million, an increase of $0.2 million or 7.0%, compared
to $3.1 million for the six months ended March 31, 1995. The increase was
primarily due to higher parts prices and more aircraft being maintained.

AIRCRAFT LEASES. Aircraft leases expense for the six months ended March 31,
1996 was $0.4 million, a decrease of $0.2 million or 40.3%, compared to $0.6
million for the six months ended March 31, 1995. The decrease was primarily due
to the Company's leasing fewer Learjets and fewer light twin engine aircraft
during the six months ended March 31, 1996 compared to the six months ended
March 31, 1995, reflecting the Company's decision to acquire rather than lease
aircraft.

GROUND COURIERS AND OUTSIDE SERVICES. Ground couriers and outside services
expense includes the cost of independent contractors as well as Company
associates. Ground couriers and outside services expense for the six months
ended March 31, 1996 was $4.6 million, an increase of $0.5 million or 10.0%,
compared to $4.1 million for the six months ended March 31, 1995. Of such
increase, $0.1 million was due to two additional days of operations during the
six months ended March 31, 1996 compared to the six months ended March 31, 1995.
The remainder of the increase was due to the addition of new Company couriers,
price increases from independent contractors and the need for additional
services because of increased business activity.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense for
the six months ended March 31, 1996 was $4.2 million, an increase of $0.7
million or 19.5% compared to $3.5 million for the six months ended March 31,
1995. $0.6 million of the increase was due to the increase in depreciation
expense of flight equipment for the six months ended March 31, 1996 compared to
the six months ended March 31, 1995 attributable to the Company's decision to
acquire rather than lease aircraft.

OTHER. Other expenses for the six months ended March 31, 1996 were $3.5
million, an increase of $0.3 million or 9.6%, compared to $3.2 million for the
six months ended March 31, 1995. This increase was primarily due to an increase
in insurance expense as a result of an adjustment to the Company's insurance
premium due to the increased value of the Company's fleet. The increase in other
expenses was also due to an increase in commercial freight expense, an increase
in landing fees, and an increase in office and hanger rental expense due to a
June 1995 expansion of the Company's facilities and a July 1995 rent increase.

EXECUTIVE COMPENSATION. Executive compensation expense for the six months
ended March 31, 1996 was $1.7 million, a decrease of $0.1 million or 6.3%,
compared to $1.8 million for the six months ended March 31, 1995. The decrease
was due to a decrease in performance-based bonuses in the 1996 period.

OTHER EXECUTIVE COMPENSATION. Other executive compensation expense includes
the appreciation in the book value of the Common Shares acquired by certain
executive officers pursuant to the Stock Purchase Agreements. Other executive
compensation expense for the six months ended March 31, 1996 was $1.4 million,
an increase of $0.2 million or 20.6%, compared to $1.2 million for the six
months ended March 31, 1995. See "Certain Relationships and Related Party
Transactions -- Stock Purchase Agreements."

OTHER SELLING, GENERAL AND ADMINISTRATIVE. Other selling, general and
administrative expenses for the six months ended March 31, 1996 were $2.2
million, an increase of $0.5 million or 35.1% compared to $1.7 million for the
six months ended March 31, 1995. This increase was due to an increase in general
insurance, property and real estate taxes and state taxes. Also included in
other selling, general and administrative expenses for the six months ended
March 31, 1996 was $0.1 million for the settlement of a wrongful termination
lawsuit.

INTEREST EXPENSE. Interest expense for the six months ended March 31, 1996
was $0.7 million, an increase of $0.1 million or 20.4%, compared to $0.6 million
for the six months ended March 31, 1995. The increase was due to increased
borrowings which were used primarily for capital expenditures.

25
<PAGE>
FISCAL 1995 COMPARED TO FISCAL 1994

REVENUES. Revenues were $67.5 million for fiscal 1995, an increase of $4.1
million or 6.3%, compared to $63.4 million for fiscal 1994. Revenues from check
delivery were $58.3 million for fiscal 1995, an increase of $4.3 million or
7.8%, compared to $54.0 million for fiscal 1994. This increase was due to the
increased level of business activity, at least part of which can be attributed
to the implementation of Same-Day Settlement in January 1994. The increase in
revenues from check delivery was also due in part to the increase in the
Company's shipping volume as a result of increased participation in the NCHA
throughout 1994 and 1995. Of the overall increase in revenues for fiscal 1995
compared to fiscal 1994, approximately $2.0 million was due to rate increases
implemented by the Company on January 1, 1995 and 1994.

Revenues from small package delivery were $8.2 million for fiscal 1995
compared to $8.2 million for fiscal 1994. A 4.7% increase in revenues from new
business and increased business from existing customers was offset by a $0.4
million loss of business from the U.S. Postal Service.

Revenues from fixed based operations were $1.0 million for fiscal 1995, a
decrease of $0.2 million or 13.1%, compared to $1.2 million for fiscal 1994.
This decrease was due to a $0.3 million decrease in revenues generated from
retail maintenance as a result of the Company's decision to reduce retail work
due to the maintenance demands of its own growing fleet of aircraft. This
decrease was partially offset by a $0.1 million increase in revenues from retail
fuel sales.

WAGES AND BENEFITS. Wages and benefits expense was $9.2 million for fiscal
1995, an increase of $1.0 million or 12.3%, compared to $8.2 million for fiscal
1994. Of the increase, $0.6 million was due to increased costs of benefits. The
Company increased its discretionary contribution to the Company's 401(k) plan by
$0.2 million, and group health insurance costs increased by $0.4 million. The
Company is self-insured for health care benefits and such claims were greater in
fiscal 1995 than in fiscal 1994.

AIRCRAFT FUEL. Aircraft fuel expense was $7.4 million for fiscal 1995, an
increase of $0.4 million or 7.0%, compared to $7.0 million for fiscal 1994. This
increase was due, in part, to an increase in hours flown. The increase in
aircraft fuel expense was also due, in part, to minor increases in aviation fuel
prices during fiscal 1995. Fuel rebates were $0.4 million for fiscal 1995, an
increase of $0.1 million or 61.6%, compared to $0.3 million for fiscal 1994.

AIRCRAFT MAINTENANCE. Aircraft maintenance expense was $6.0 million for
fiscal 1995, an increase of $0.3 million or 5.5%, compared to $5.7 million for
fiscal 1994. The increase was due, in part, to higher parts costs and use of
outsourced maintenance facilities for more routine maintenance in fiscal 1995
compared to fiscal 1994. Outsourcing maintenance work was necessary because
rotating the Company's fleet to one of the Company's maintenance facilities
became increasingly difficult as flight hours increased in fiscal 1995.

AIRCRAFT LEASES. Aircraft leases expense was $1.0 million for fiscal 1995,
a decrease of $2.3 million or 68.0%, compared to $3.3 million for fiscal 1994.
This decrease was due to the Company's continued strategy of acquiring rather
than leasing aircraft. During the last month of fiscal 1994 and the first month
of fiscal 1995, the Company acquired three Learjets that it had previously
leased. By the end of fiscal 1995, the Company leased only one Learjet and 12
light twin engine aircraft.

GROUND COURIERS AND OUTSIDE SERVICES. Ground couriers and outside services
expense was $8.6 million for fiscal 1995, an increase of $0.3 million or 3.2%,
compared to $8.3 million for fiscal 1994. This increase was due to a $0.4
million increase in the cost of ground agents due to the additional agents
needed to handle increased volume in shipments, partially offset by a $0.1
million decrease in the cost of independent contractors due to the loss of the
U.S. Postal Service business.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense was
$7.4 million for fiscal 1995, an increase of $1.1 million or 16.1%, compared to
$6.3 million for fiscal 1994. Almost all of this increase was due to an increase
in depreciation of flight equipment as a result of the Company's strategy to
acquire rather lease aircraft.

OTHER. Other expenses were $6.4 million for fiscal 1995, an increase of
$0.6 million or 11.5%, compared to $5.8 million for fiscal 1994. This increase
was due to an increase in insurance expense in fiscal 1995 compared to

26
<PAGE>
fiscal 1994, partially due to an increase in aircraft insurance of $0.4 million
due to a rate increase and a year-end adjustment for increased fleet value, and
partially due to an increase in workers' compensation insurance of $0.2 million
due to a rate increase and an increase in payroll.

FIXED BASE OPERATIONS. Fixed based operations expense was $1.0 million for
fiscal 1995, a decrease of $0.1 million or 11.6%, compared to $1.1 million for
fiscal 1994. This decrease was due to a decrease in the cost of retail
maintenance and a non-cash charge taken in fiscal 1995 to write down the value
of the Company's Norwalk, Ohio facility.

EXECUTIVE COMPENSATION. Executive compensation expense was $4.0 million for
fiscal 1995, an increase of $0.7 million or 20.3%, compared to $3.3 million for
fiscal 1994. The increase was primarily due to a $0.6 million increase in
performance-based bonuses in fiscal 1995 compared to fiscal 1994.

OTHER EXECUTIVE COMPENSATION. Other executive compensation expense was $2.6
million for fiscal 1995, an increase of $1.0 million or 64.9%, compared to $1.6
million for fiscal 1994. Other executive compensation includes the appreciation
in the book value of the Common Shares acquired by certain executive officers
pursuant to the Stock Purchase Agreements, which were executed in April 1994.
The increase in fiscal 1995 expense resulted from such appreciation for a full
fiscal year compared to the fiscal 1994 expense which relates only to a six
month period. See "Certain Relationships and Related Party Transactions -- Stock
Purchase Agreements."

WRIGHT AGREEMENT. Wright Agreement expense was $2.3 million for fiscal
1995, an increase of $0.5 million or 28.4%, compared to $1.8 million for fiscal
1994. The increase was due to additional payments made pursuant to the Wright
Agreement in fiscal 1995 based on the financial performance of the Company. See
"Certain Relationships and Related Party Transactions -- Wright Agreement."

OTHER SELLING, GENERAL AND ADMINISTRATIVE. Other selling, general and
administrative expenses were $3.4 million for fiscal 1995, a decrease of $0.4
million or 10.1%, compared to $3.8 million for fiscal 1994. The decrease was
primarily due to a $0.3 million decrease in the loss on disposal of assets and a
$0.1 million decrease in professional fees in fiscal 1995 compared to fiscal
1994, partially offset by computer-related expenses associated with the
development and implementation of handheld bar code scanners.

INTEREST EXPENSE. Interest expense was $1.5 million for fiscal 1995, an
increase of $0.4 million or 32.9%, compared to $1.1 million for fiscal 1994.
This increase was primarily due to the Company's increased capital expenditures,
including the acquisition of additional aircraft during the 13 months beginning
September 1994 which increased debt by $5.3 million. The increase in interest
expense was partially offset by a decrease in aircraft lease expense. During
fiscal 1995, the Company also amended the Existing Credit Agreement to allow the
Company to borrow funds at variable Eurodollar rates tied to the Company's debt
to equity ratio.

FISCAL 1994 COMPARED TO FISCAL 1993

REVENUES. Total revenues were $63.4 million for fiscal 1994, an increase of
$4.8 million or 8.3%, compared to $58.6 million for fiscal 1993. Revenues from
check delivery were $54.0 million for fiscal 1994, an increase of $4.6 million
or 9.5%, compared to $49.4 million for fiscal 1993. Of the increase, $2.3
million was due to rate increases implemented by the Company on January 1, 1994
and 1993, and $0.5 million was due to the return of several customers in the
Southeast who had used a competitor for part of fiscal 1993. Increased
participation in the NCHA also led to increased volume and revenues in fiscal
1994.

Revenues from small package delivery were $8.2 million for fiscal 1994, an
increase of $0.2 million or 3.4%, compared to $8.0 million for fiscal 1993. This
increase was due to an increase in business activity and a rate increase,
partially offset by a $0.6 million decrease in revenues from the U.S. Postal
Service during fiscal 1994. Although the loss of the Postal Service had a
significant impact on revenues, the impact on net income was small because it
was low margin business.

Revenues from fixed based operations were $1.2 million for fiscal 1994, a
decrease of $0.1 million or 8.5%, compared to $1.3 million for fiscal 1993. This
decrease was due to diminished retail maintenance revenues as a result of the
Company's decision to reduce retail activities due to the maintenance demands of
its growing fleet of aircraft.

27
<PAGE>
WAGES AND BENEFITS. Wages and benefits expense was $8.2 million for fiscal
1994, an increase of $0.6 million or 7.8%, compared to $7.6 million for fiscal
1993. This increase was due to increased wages in fiscal 1994 due to the
addition of 18 associates as package handlers, partially offset by a reduction
in the administrative staff by six associates.

AIRCRAFT FUEL. Aircraft fuel expense was $7.0 million for fiscal 1994, a
decrease of $0.2 million or 2.7%, compared to $7.2 million for fiscal 1993. The
decrease was due to lower fuel prices in fiscal 1994. Fuel rebates were $0.3
million for fiscal 1994, an increase of $0.1 million or 26.4%, compared to $0.2
million for fiscal 1993.

AIRCRAFT MAINTENANCE. Aircraft maintenance expense was $5.7 million for
fiscal 1994, an increase of $0.3 million or 5.4%, compared to $5.4 million in
fiscal 1993. This increase was due to the addition of aircraft to the Company's
fleet.

AIRCRAFT LEASES. Aircraft leases expense was $3.3 million for fiscal 1994,
a decrease of $1.1 million or 26.0%, compared to $4.4 million for fiscal 1993.
This decrease was due to the Company's strategic decision to purchase rather
than lease aircraft. In fiscal 1994, the Company acquired four Learjets and four
Piper Chieftains, all of which replaced leased aircraft.

GROUND COURIERS AND OUTSIDE SERVICES. Ground couriers and outside services
expense was $8.3 million for fiscal 1994, an increase of $0.4 million or 5.0%,
compared to $7.9 million for fiscal 1993. This increase was due to a $0.7
million increase in ground agent expenses for fiscal 1994 compared to fiscal
1993 due to the additional agents needed to handle increased volume in
shipments, partially offset by a decrease of $0.3 million due to a decrease in
other outside services as a result of the loss of the U.S. Postal Service
business.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense was
$6.3 million for fiscal 1994, an increase of $0.4 million or 8.0%, compared to
$5.9 million for fiscal 1993. The increase was due to the acquisition of new
aircraft during fiscal 1994 at a total cost of $6.9 million.

OTHER. Other expenses were $5.8 million for fiscal 1994, an increase of
$0.8 million or 14.2%, compared to $5.0 million for fiscal 1993. Of this
increase, $0.2 million was due to an increase in insurance expense, partially
due to an increase in automobile insurance expense.

FIXED BASE OPERATIONS. Fixed base operations expense was $1.1 million for
fiscal 1994, a decrease of $0.1 million or 6.0%, compared to $1.2 million for
fiscal 1993. The decrease was due to a reduction in retail maintenance activity
for fiscal 1994.

EXECUTIVE COMPENSATION. Executive compensation expense was $3.3 million for
fiscal 1994, an increase of $0.6 million or 20.0%, compared to $2.7 million for
fiscal 1993. This increase was due in part to increases in executive salaries
and performance-based bonuses in fiscal 1994.

OTHER EXECUTIVE COMPENSATION. Other executive compensation expense was $1.6
million for fiscal 1994, an increase of $1.4 million or 547.0%, compared to $0.2
million for fiscal 1993. Of this increase, $0.5 million was attributable to the
Deferred Compensation Agreements, with the remainder due to the appreciation in
the value of the Common Shares acquired by certain executive officers pursuant
to the Stock Purchase Agreements, which were executed in April 1994. Other
executive compensation expense for fiscal 1993 was related solely to the
Deferred Compensation Agreements. See "Certain Relationships and Related Party
Transactions -- Deferred Compensation Agreements" and "-- Stock Purchase
Agreements."

WRIGHT AGREEMENT. Wright Agreement expense was $1.8 million for fiscal
1994, an increase of $0.5 million or 35.4%, compared to $1.3 million for fiscal
1993. The increase was due to additional payments made pursuant to the Wright
Agreement in fiscal 1994 based on the financial performance of the Company. See
"Certain Relationships and Related Party Transactions -- Wright Agreement."

OTHER SELLING, GENERAL AND ADMINISTRATIVE. Other selling, general and
administrative expenses were $3.8 million for fiscal 1994, a decrease of $0.1
million or 3.5%, compared to $3.9 million for fiscal 1993. There were no
significant changes in any one expense account for fiscal 1994 compared to
fiscal 1993.

28
<PAGE>
INTEREST EXPENSE. Interest expense was $1.1 million for fiscal 1994 and
$1.1 million for fiscal 1993. Although the Company's debt was higher in fiscal
1994 compared to fiscal 1993 due to additional financing for capital
acquisitions, interest rates were more favorable, and the Company, because of
its improving financial condition, was able to borrow funds at lower Eurodollar
rates as compared to its previous prime based borrowings.

LIQUIDITY AND CAPITAL RESOURCES

GENERAL. The Company's principal sources of liquidity are internally
generated funds and credit arrangements. The Company plans to repay a
significant portion of its existing bank debt with proceeds from the Offering
and has received a commitment from NBD Bank to provide a new credit facility
upon the closing of the Offering. See "Use of Proceeds" and "Description of
Certain Indebtedness -- New Credit Agreement." The Company believes that the new
credit facility will allow it to expand through the acquisition of additional
aircraft and other capital equipment and through the possible acquisition of
other companies. See "Business -- Business Strategy."

EXISTING CREDIT AGREEMENT. The Company is party to various credit
arrangements with NBD Bank, its primary lender. The Company currently has an
$8.0 million revolving credit loan which matures June 30, 1997. Outstanding
borrowings under the revolving credit loan were $6.7 million as of March 31,
1996. In addition, the Company had term notes totaling $10.8 million as of March
31, 1996, with maturities ranging between December 31, 1996 and May 1, 2000. The
Company's weighted average interest rate at March 31, 1996 was 7.4%.

NEW CREDIT AGREEMENT. Simultaneously with the closing of the Offering, the
Company will enter into the New Credit Agreement to replace the Existing Credit
Agreement. The New Credit Agreement will provide the Company with a $50.0
million, five year, unsecured revolving credit facility and will provide the
Company with significantly more favorable terms and conditions than the Existing
Credit Agreement. The New Credit Agreement will contain financial covenants
which contain different baselines or measure financial ratios different from
those in the Existing Credit Agreement, including minimum Tangible Net Worth
(85% of post-Offering Tangible Net Worth plus 50% of annual Net Income), a
Funded Debt to EBITDA ratio (not to exceed 2.5:1.0), a Funded Debt to Total
Capitalization ratio (not to exceed 0.5:1.0) and a Cash Flow Coverage ratio (not
to be less than 1.05:1.0 through June 29, 1997 or less than 1.1:1.0 through
September 29, 1997 or less than 1.2:1.0 thereafter) (capitalized terms, in each
case, as defined therein). The Company believes that the New Credit Agreement
will provide it with additional financial and operating flexibility.
Specifically, the New Credit Agreement will increase the Company's availability,
permit the Company to borrow more easily at Eurodollar-based rates and will
facilitate acquisitions. Availability under the New Credit Agreement will be
limited to certain specified percentages of accounts receivable, parts inventory
and the wholesale value of the Company's aircraft and equipment. Under the New
Credit Agreement, the Company would have had an additional $14.3 million of
availability at March 31, 1996, and the Company estimates that total
availability under the New Credit Agreement will be approximately $31.8 million
upon the closing of the Offering, of which no funds will have been drawn down.

The Company expects that the net proceeds from the Offering, together with
existing financing arrangements, will be sufficient to fund the Company's
operations for at least the next 18 months.

CAPITAL EXPENDITURES. Capital expenditures totaled $5.4 million in the six
months ended March 31, 1996, $14.5 million in fiscal 1995, $12.9 million in
fiscal 1994 and $8.4 million in fiscal 1993. The Company anticipates capital
expenditures will total approximately $12.1 million in fiscal 1996. Expenditures
were for flight equipment, delivery vehicles, facility improvements and data
processing equipment. The Company anticipates that it will continue to acquire
flight equipment as necessary to maintain growth and continue offering quality
service to its customers. The Company also expects to continue developing
management information systems as they relate to its package delivery business
as well as electronic initiatives within the nation's payment mechanism.

S CORPORATION DISTRIBUTIONS. The Company elected S Corporation status in
July 1988 and has made distributions to its shareholders for the purpose of
paying taxes on income generated by the Company which is taxable to the
shareholders. In addition, the Company began in 1994 to make distributions in
excess of those necessary to pay taxes. These additional distributions totaled
$3.1 million through the end of fiscal 1995. At or prior to the closing of the
Offering, the Company will terminate its S Corporation status. On the date
hereof, the Company is distributing the AAA Notes in the aggregate principal
amount of approximately $21.0 million, which approximates the balance of the
Company's AAA account. See "Prior S Corporation Status."

29
<PAGE>
CASH FLOWS FROM OPERATING ACTIVITIES. Cash flows from operating activities
were $8.0 million, $15.3 million and $14.7 million for the six months ended
March 31, 1996 and fiscal years 1995 and 1994, respectively.

SEASONALITY AND VARIABILITY IN QUARTERLY RESULTS

The Company's operations historically have been somewhat seasonal and
somewhat dependent on the number of bank holidays falling during the week.
Because financial institutions are the Company's principal customers, the
Company's air system is scheduled around the needs of financial institution
customers. When financial institutions are closed, there is no need for the
Company to operate a full system. The Company's first quarter is often the most
impacted by bank holidays (including Thanksgiving and Christmas) recognized by
its primary customers. When these holidays fall on Monday through Thursday, the
Company's revenues and net income are adversely affected. The Company's annual
results fluctuate as well. There can be a difference of two or three days of
system operation from one year to the next. For example, the Company operated a
full system on 197 days in fiscal 1995, 199 days in fiscal 1994 and 198 days in
fiscal 1993.

Operating results are also affected by the weather. The Company generally
experiences higher maintenance costs during its second quarter. Winter weather
also requires additional costs for de-icing, hangar rental and other aircraft
services. The Company's cash flows are also influenced by the budget cycles of
its primary customers. Many financial institutions have calendar year budget
cycles and desire to pay for December services prior to year end. This results
in increased cash flows for the Company's first quarter but decreased cash flows
in January and February.

INFLATION

Historically, inflation has not been a significant factor to the Company.
Although the value of the Company's service to its primary customers is enhanced
by higher interest rates, the volume of business has not changed historically
with fluctuating interest rates. The Company has attempted to minimize the
effects of inflation on its operating results through rate increases and cost
controls, including development of a fuel rebate/surcharge program. Pursuant to
this program, as the OPIS-CMH price of jet fuel exceeds $.75 per gallon, the
Company's customers are surcharged.

ENVIRONMENTAL MATTERS

The Company feels that compliance with environmental matters has not had,
and is not expected to have, a material effect on operations. Although the
Company believes that it is in compliance with all applicable noise level
regulations and is working proactively with various local governments to
minimize noise issues, future noise pollution regulations could require the
replacement of several of the Company's aircraft.

30
<PAGE>
INDUSTRY OVERVIEW

The expedited delivery and distribution industry in the U.S. is a highly
fragmented business, composed of thousands of companies providing largely
two-day, next-day and same-day pick-up and delivery services. The Air Courier
Conference Association estimates that the annual revenues of the air delivery
industry total at least $35 billion. The Company believes that the industry can
be divided into the following market segments: (i) highly specialized,
time-critical deliveries, including delivery of canceled bank checks; (ii) air
courier document and parcel delivery; (iii) air freight forwarding; and (iv)
corporate transportation and logistics support. While the Company participates
primarily in one niche of the highly specialized, time-critical deliveries
market segment (transportation of canceled bank checks), it believes that its
highly flexible, nationwide air transportation network can be utilized for
expedited delivery and distribution of goods within any of the above-mentioned
industry segments.

HIGHLY SPECIALIZED, TIME-CRITICAL DELIVERIES. There are a number of special
transportation services required by individuals, hospitals, scientific
laboratories and industries, such as medical samples and canceled bank checks,
which require time-critical and reliable service to avoid the costly
consequences of late or missed deliveries. Data for most of this industry
segment, with the exception of the transportation of canceled bank checks, are
not available, due to the highly specialized nature of the products that are
delivered. The growth in the need for overnight deliveries of canceled bank
checks can be measured by the growth in the number of bank checks actually
written annually on a nationwide basis and the aggregate dollar value of these
checks. Federal Reserve statistics from 1985 through 1995, profiled below, show
a compound annual growth rate in the number of checks written of 2.3% over the
period to 61.6 billion checks in 1995. Similarly, the dollar value of checks
written grew at a compound annual rate of 3.2% over the same period, reaching
$42.2 trillion in 1995. Additionally, The Tower Group, an independent research
firm, has projected that the number of checks written should total 70 billion by
the year 2000.

The following tables set forth the number of checks written and the
aggregate dollar value of such checks from 1985 through 1995:

<TABLE>
<CAPTION>
EDGAR REPRESENTATION OF DATA POINTS USED IN
PRINTED GRAPHIC
VOLUME OF CHECKS WRITTEN (IN BILLIONS)
<C> <C>
1985 48.9
1986 50.1
1987 51.6
1988 53.2
1989 54.3
1990 56.8
1991 58.0
1992 58.9
1993 60.2
1994 61.0
1995 61.6
</TABLE>

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
DOLLAR VALUE OF CHECKS WRITTEN (IN
TRILLIONS)
<S> <C>
1985 $ 30.8
1986 $ 31.8
1987 $ 32.8
1988 $ 34.1
1989 $ 35.1
1990 $ 36.0
1991 $ 37.4
1992 $ 38.5
1993 $ 39.6
1994 $ 40.9
1995 $ 42.2
</TABLE>

Other than the Company, the only national provider of air transportation
services to the U.S. banking industry for canceled checks is the Federal
Reserve's ITS. Within Federal Reserve districts, the transportation of canceled
checks is handled mostly by ground vehicles operated by regional or local banks,
or the ITS. Between Federal Reserve districts, there are numerous regional
carriers who contract with banks and groups of banks to provide such services.
Some of these providers may include regional air courier and document delivery
companies, but none of them commands a significant share of the national market
or is capable of providing national service. In addition, many banks require a
wide variety of pick-ups, deliveries and available endpoints, as well as
superior on-time performance and management information systems to enable them
to manage float and make appropriate draw down decisions, which few of these
other delivery companies currently can provide. See "-- How Banks Clear and
Settle Canceled Bank Checks."

31
<PAGE>
AIR COURIER DOCUMENT AND PARCEL DELIVERY MARKET. Comprised mostly of
same-day and next-day pick-up and delivery services, this market is dominated by
several large companies with national hub-and-spoke delivery systems which
provide service based upon established pick-up and delivery schedules rather
than those requested by the customer. These carriers include FedEx, UPS, the
U.S. Postal Service, Airborne Express and DHL, among others. In addition to
these carriers, there are several multi-regional companies that focus on
same-day and early next-day deliveries custom-tailored to the customers'
requested pick-up and delivery times. Numerous other firms operate only on a
regional basis, and provide similar services. Finally, there are hundreds of
small, closely-held owner-operator businesses which operate in only one location
with little or no national market share.

AIR FREIGHT FORWARDING MARKET. Traditionally dominated by the large
domestic and international passenger airline companies, who utilize excess cargo
space in their fleet of passenger aircraft to shuttle freight internationally
and domestically, the air freight forwarding market has expanded significantly
to include participants focused solely on international delivery, who then
subcontract for local delivery. This market has grown with the globalization of
world markets, as corporations increasingly source raw materials from multiple
origins throughout the world, contract for or perform manufacturing and assembly
operations in many different countries and distribute their products worldwide.
International freight companies have increasingly been seeking flexible air
distribution networks operating domestically that can connect with their
cross-Pacific and cross-Atlantic delivery routes and meet the custom-tailored
needs of their customers on a same-day or next-day basis.

CORPORATE TRANSPORTATION AND LOGISTICS SUPPORT MARKET. Corporations that
have complex sourcing and distribution systems are seeking to minimize inventory
carrying costs and reduce expenses associated with the movements of raw
materials. The increasingly time-sensitive nature of product delivery schedules
due to shorter product life cycles and "just-in-time" inventory management has
led to growth in this market segment. Many companies are concluding that they
perform transportation logistics functions less effectively than third party
providers. As a result, companies have looked to outsource these functions to
reduce costs while enhancing cost-efficiency and reliability of the logistics
function.

HOW BANKS CLEAR AND SETTLE CANCELED BANK CHECKS

Banks attempt to clear checks expeditiously in order to convert their
non-earning assets into interest-bearing assets. A check deposit cannot begin to
earn interest until the physical item has been routed from the bank where it was
first deposited to the bank on which the funds were drawn. The elapsed time
between the deposit of the check and the delivery of the check to a Federal
Reserve bank or the bank on which it was drawn results in "float." Banks desire
to minimize float in order to maximize the availability of funds and the
corresponding ability to earn income on those funds.

In 1995, approximately 61.6 billion checks were written in the U.S. Of that
number, approximately 25% were "transit" checks, or checks presented in one
Federal Reserve district for payment, while drawn "out-of-district." Banks use
sophisticated, computerized check-sorting equipment to sort checks at a rate in
excess of 80,000 items per hour, per machine. The individual average dollar
value of all checks written is approximately $700, while the average transit
check is approximately $1,300 because of the higher level of corporate trade
payment involved. Many large commercial banks daily clear gross transit checks
valued at more than $500 million, which equates to daily interest income value
of up to $75,000 (assuming a federal funds rate of 5.5%). The expedited sorting
and delivery of canceled bank checks allows banks and their customers to share
in this value.

THE NATIONAL CLEARINGHOUSE ASSOCIATION

The NCHA is a consortium of over 60 bank holding companies that have joined
together to reduce check-clearing costs by means of a multi-bank, private net
settlement arrangement located at The Huntington National Bank. The NCHA was
developed by the CHEXS Partnership (as defined below). The CHEXS Partnership is
owned by affiliates of The Huntington National Bank and Littlewood Shain and
Company, and by Float Control, Inc. Float Control, Inc. is a corporation owned
by the executive officers of the Company, Donald W. Wright, Sr. and Jeffrey
Wright. See "Certain Relationships and Related Party Transactions -- Float
Control, Inc./CHEXS Partnership."

The bank members of the NCHA benefit from their affiliation with the NCHA by
receiving a quick, convenient and efficient settlement at a single location of
"out-of-district" checks deposited at their banks. Currently, the NCHA clears
approximately 3.5 to 4.0 million checks each working day.

32
<PAGE>
BUSINESS

OVERVIEW

The Company operates a fully integrated national air transportation network
that operates between 85 cities in more than 40 states and delivers over 13,000
time-critical shipments each working day. The Company's U.S. Check-Registered
Trademark- division, which generates approximately 86% of the Company's
revenues, is the leading transporter of canceled checks and related information
for the U.S. banking industry, meeting more than 1,100 daily deadlines. The
Company's TIMEXPRESS-Registered Trademark- division, which generates
approximately 12% of the Company's revenues, provides specialized, high-priority
delivery service for customers requiring a reliable late pick-up and early
delivery service combined with prompt, on-line delivery information. The
Company's PDQ division offers retail aviation fuel sales and related ground
services for customers in Columbus, Ohio.

The Company currently operates a fleet of 81 aircraft (23 Learjet and 58
light twin engine aircraft), which fly approximately 85,000 miles per night,
primarily Monday through Thursday. The Company also provides ground pick-up and
delivery services throughout the nation, utilizing a fleet of 93 Company-owned
ground vehicles as well as a ground transportation network of over 350
independent contractors. The Company uses its own air transportation network as
well as commercial airlines, when appropriate, to provide same-day and
same-night delivery services for itself, as well as for certain major overnight
document and parcel delivery companies.

Later pick-ups and earlier deliveries than those offered by other national
carries are the differentiating characteristics of the Company's time-critical
delivery network. In addition, the Company offers other value-added services to
its customers, such as on-line delivery information. The Company consistently
has achieved on-time performance levels exceeding 95%. In order to maintain this
performance, the Company utilizes a number of proprietary customer service and
management information systems to track, sort, dispatch and control the flow of
checks and small packages throughout the Company's delivery system. Delivery
times and certain shipment information are available on-line and on the
Internet. For example, ComCheck-SM-, a unique proprietary software system,
provides bank customers access to delivery time, shipment information and
retrieval of historical proof of delivery information, critical data that enable
banks to manage their cash position and maximize float revenue. OnTime-SM- and
Ship-Link-SM-, Company developed software programs, provide scheduling and
pricing information, as well as on-line delivery and shipper acknowledgment data
for small package customers. The Company also has developed several internal
software programs to enhance dispatch monitoring, cost control and customer
service functions.

The Company believes that the market for reliable, time-critical deliveries
is growing as a result of a number of global trends, including: (i) corporations
requiring just-in-time inventory parts, in order to lower production costs; (ii)
medical laboratories requiring same-day deliveries; (iii) consolidating
ground-based small package couriers requiring a national air delivery network;
and (iv) global air freight forwarders requiring a domestic connection for their
international networks that can deliver on a same-day/same-night or pre-8:00
a.m. basis. As the Company's banking customers typically require services four
nights per week, there exists substantial available flight time and aircraft for
the Company to pursue these business opportunities by flying during the day and
on weekends when the Company's aircraft are not otherwise servicing the
Company's banking customers. The Company believes that its flexible and reliable
air transportation network and its demonstrated expertise in providing
time-critical deliveries position the Company to provide such additional
services at premium prices.

BUSINESS STRATEGY

The principal components of the Company's operating and growth strategy are
to (i) focus on unique aircraft type and route structure; (ii) attract, retain
and motivate the highest quality personnel available; (iii) expand its U.S.
Check-Registered Trademark- position in the banking industry; (iv) grow its
TIMEXPRESS-Registered Trademark- package delivery service; and (v) pursue
strategic acquisition opportunities. These strategies are discussed in more
detail below:

33
<PAGE>
to consolidate shipments at its mini-hubs and primary hub. The Company's hubs
are located primarily in less congested regional airports. These locations, in
conjunction with the Company's off-peak departure and arrival times, provide
easy take-offs and landings, convenient loading and unloading, fast refueling
and maintenance, as well as lower cost distribution center space. The Company's
four strategically located maintenance bases help minimize aircraft down time.
The Company's focus on Learjets and light twin engine aircraft has also enabled
it to develop an in-house expertise in purchasing, flying, maintaining and
operating its fleet at high profitability levels.

ATTRACT, RETAIN AND MOTIVATE THE HIGHEST QUALITY PERSONNEL AVAILABLE. As a
service organization, the Company recognizes the importance of hiring, retaining
and motivating the highest quality personnel available who are focused on a set
of core values designed by the Company to provide a working environment where
integrity, accountability, open communication, team management and
responsibility and quality performance are explicitly stated goals. The Company
regularly holds team-building sessions, continuing education for its associates
and on-the-job training programs for associates. The Company provides its
associates with competitive compensation and benefits packages. In connection
with the Offering, the Company intends to offer stock options to a significant
number of the Company's associates and to encourage stock ownership by
associates thereafter. The Company believes that its current compensation and
benefits package, proposed stock ownership incentives and corporate culture will
give the Company a significant competitive advantage.

EXPAND U.S. CHECK-REGISTERED TRADEMARK- POSITION IN THE BANKING
INDUSTRY. The Company intends to strengthen its leadership position in the
transportation of canceled bank checks by adding routes and aircraft to its air
transportation network to facilitate even more late pick-up and early delivery
times covering a greater number of cities. These capabilities, combined with the
Company's value-added services (such as ComCheck-SM-) not currently offered by
competing canceled bank check delivery companies, should enable the Company to
expand its position in this market.

GROW TIMEXPRESS-Registered Trademark- PACKAGE DELIVERY SERVICE. The Company
delivers packages on a same-day/same-night and pre-8:00 a.m. basis for
TIMEXPRESS-Registered Trademark- and certain other national and regional
overnight document and package delivery companies via the U.S. Check-Registered
Trademark- air transportation system and the commercial airline system when
necessary. The Company believes that its TIMEXPRESS-Registered Trademark-
service offers a more flexible pick-up and delivery schedule for small packages
than those offered by other national carriers, and appeals to customers with
time-sensitive delivery requirements. To date, growth in the Company's
TIMEXPRESS-Registered Trademark- business has been constrained by limited load
capacity on existing U.S. Check-Registered Trademark- routes which typically
operate four nights a week. The Company intends to purchase aircraft to provide
additional capacity for the delivery of canceled bank checks and small packages.
The Company believes significant opportunities exist for expanding its small
package delivery business by more aggressively marketing the
TIMEXPRESS-Registered Trademark- brand-name and by contracting to deliver for
some of the national overnight package delivery companies whose infrastructures
cannot be easily modified to meet same-day/same-night or pre-8:00 a.m. delivery
deadlines.

PURSUE STRATEGIC ACQUISITION OPPORTUNITIES. The fragmented nature of the
air and ground package delivery industry, outside of the major national
carriers, provides the Company with opportunities for strategic acquisitions.
The Company believes that it is well-positioned to consolidate regional air
freight operators and ground couriers by acquiring high-quality candidates. The
Company would like to expand its delivery network through the acquisition of
other air delivery companies and additional aircraft serving new routes. In
addition, by acquiring companies in markets where the Company already has a
presence, management expects to recognize substantial operating advantages by
consolidating overlapping delivery routes. The Company believes it has a
demonstrated expertise in evaluating acquisition opportunities based on the
potential for revenue growth and profitability, as well as a proven track record
for efficiently integrating such acquisitions.

34
<PAGE>
AIRCRAFT FLEET

The Company operates a fleet of 81 aircraft, of which 70 are owned and the
remainder are leased from unrelated third party lessors. The Company's fleet was
comprised of the following aircraft at May 1, 1996:

<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
PAYLOAD(1) RANGE(2) SPEED(3)
AIRCRAFT TYPE NUMBER (LBS.) (N. MILES) (KNOTS)
- ---------------------------------------------- ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Learjets, Model 35............................ 8 4,200 2,000 440
Learjets, Model 35A........................... 9 4,200 2,000 440
Learjets, Model 25............................ 6 3,500 1,000 440
Piper Navajo Chieftain........................ 9 1,500 800 175
Piper Aerostar................................ 14 1,000 900 190
Beech Baron................................... 25 1,000 700 180
Cessna 310.................................... 10 900 600 170
</TABLE>

- ------------------------
(1) Maximum payload in pounds for a one-hour flight plus required fuel reserves.

(2) Maximum range in nautical miles, assuming zero wind, full fuel and full
payload.

(3) Maximum speed in knots, assuming full payload.

The Learjet is among the most reliable, fastest and most fuel-efficient
small jet aircraft available in the world. The 30-series Learjets allow the
Company to carry up to 4,200 pounds of cargo in certain lane segments. The
30-series also allows for non-stop lane segments of up to 2,000 miles within the
Company's network. These Learjets also meet all Stage 3 noise requirements
currently being implemented across the country. The Learjet 25 is a smaller
aircraft with slightly smaller payload and range capabilities. The Company
intends to phase-out these aircraft and replace them with the more efficient
Lear 35 or other Stage 3 aircraft.

The Company's Learjet fleet provides it with nationwide connectivity. Long
lane segments from all corners of the nation converge on the Company's hub in
Columbus, as well as "mini-hubs" located in Atlanta, Chicago, Charlotte, Dallas,
Denver, Des Moines and New York. Smaller, light twin engine aircraft typically
provide service to the various "spoke" cities in the Company's network, which
include virtually all of the nation's large metropolitan areas.

The Company acquires and operates pre-owned aircraft, typically between 15
and 20 years old. These aircraft are reasonably priced and are relatively
modern, as they have undergone no significant design changes in the last 20
years. Further, when appropriately maintained (the Company performs its own
major airframe inspections and overhauls on its aircraft fleet), these aircraft
show little or no evidence of erosion in either performance or safety.

OPERATIONS

The Company provides to its customers complete transportation and
informational services for national distribution of canceled bank checks and
small packages. Operations include over 13,000 nightly deliveries in over 40
states, flying over 85,000 miles per night. The Company's ground and air
infrastructure includes the following key elements:

GROUND OPERATIONS

The first major component of the Company's ground operations involves the
pick-up of shipments for delivery, as well as bar code scanning for data entry
into the Company's ComCheck-SM- and OnTime-SM- management information systems.
Upon delivery to the originating airport, the Company's ground crews load
shipments into U.S. Check-Registered Trademark- aircraft for delivery. The
Company's ground personnel are trained in proper freight handling techniques,
and wear safety belts when appropriate to minimize the risk of injury. At the
Company's hub in Columbus, aircraft fueling operations include trained fuelers
and ground support equipment including six fuel trucks and approximately 86,500
gallons of fuel storage capacity. The Company provides training for ground
support personnel on an ongoing basis, including emergency procedures. The
Company's main sort facility is also in Columbus, with approximately 80
associates loading and unloading aircraft and fine sorting shipments to their
final destination. These processes are all controlled by the Company's central
dispatch, which is also located in Columbus.

35
<PAGE>
VEHICLES. The Company operates a fleet of 93 ground transportation
vehicles, all of which are owned by the Company. The Company utilizes a
computerized system for monitoring vehicle maintenance and conducts in-house
training sessions throughout the year to maximize safety. Vehicles range in size
from passenger cars to full-size vans, depending on the market being serviced.
In some situations, Company drivers may utilize their own vehicles, in which
case they are reimbursed for direct vehicle expenses. In addition, where
appropriate, the Company utilizes over 350 independent contractors to further
augment its ground delivery network.

DRIVERS. The Company employs 206 full and part-time drivers, which
constitute approximately 33% of its workforce. The ground courier industry has
typically experienced a high turnover rate, which the Company has mitigated over
time by offering health insurance and other benefits to its drivers.

INDEPENDENT CONTRACTORS. In certain situations where management has deemed
cost-effective and appropriate, the Company has utilized the services of
independent contractors. From time to time, federal and state authorities have
sought to assert that independent owner/operators in the transportation industry
are employees, rather than independent contractors. The Company believes that
independent contractors utilized by the Company are not employees under existing
interpretations of federal and state laws. In order to avoid such issues, the
Company will continue to attempt to assure that its arrangements with
independent contractors are structured so that they will not be deemed to be
employees.

FUELING. The Company's PDQ division provides aircraft fueling and parking
for certain of its customers at its facility in Columbus. This division accounts
for approximately 1% of the Company's annual revenues.

FLIGHT OPERATIONS

The Company's flight operations are headquartered in Columbus. The Company
hires and trains its pilots, requiring each to attend a Company-run, two-week
training program. This flight school includes training on the Company's flight
simulator prior to any actual flight time. Additionally, new pilots typically
apprentice as co-pilots in order to gain familiarity with the U.S.
Check-Registered Trademark- route system and the unique demands of night flying.
Periodic simulator training and ongoing cockpit resource management training
provide the Company's pilots with updated techniques and safety methods. The
Company believes it has the highest level of training provided by any operator
of similar aircraft in the nation.

AIRCRAFT MAINTENANCE. Aircraft maintenance is also headquartered in
Columbus. This facility operates 24 hours a day, 365 days a year. The Company
employs 72 experienced aircraft and avionics technicians in four separate
locations across the country (Columbus, Denver, Hartford and Minneapolis),
performing all levels of maintenance from 100-hour inspections on its light twin
engine aircraft to 7,200-hour/12-year inspections on its fleet of Learjets.
These technicians also perform several types of periodic engine inspections and
overhauls. In conjunction with Learjet, Company personnel have developed revised
and enhanced inspection programs for its Learjet fleet, which the Company
believes has provided a superior inspection process at reduced cost. Avionics
trouble-shooting and repair, done internally by the Company since 1989, provide
for maximum efficiency and minimum aircraft downtime for its entire fleet. The
Company currently utilizes the services of Garrett Aviation exclusively for
major period inspections and core overhauls of its 30-series Learjets.

DISPATCH. The Company's central dispatch function ties together all
components of the air operation. Departure and arrival times are continuously
updated, and weather conditions throughout the nation are constantly monitored.
Company dispatchers remain in constant contact with pilots, outbased hub
managers, fuelers and maintenance and ground delivery personnel to ensure that
no gaps exist in the Company's delivery process.

ROUTE SCHEDULING. The scheduling of aircraft within the Company's route
system is determined by the concentration of the Company's bank customers in
particular metropolitan areas. Currently the Company operates between 85 cities
each working day. Revisions, additions and deletions of routes occur when the
Company adds new customers or determines that load factors necessitate
additional aircraft on a particular lane segment.

36
<PAGE>
DELIVERY SERVICES

The Company provides complete transportation and informational services for
its customers in the U.S. banking industry, serviced by its U.S.
Check-Registered Trademark- division, as well as its small package delivery
customers, serviced by its TIMEXPRESS-Registered Trademark- division. Although
the services are provided by one air transportation system, providing
significant economies of scale, each customer base receives customized service
to meet its particular delivery needs.

CANCELED BANK CHECK DELIVERY SERVICES. A typical shipment of canceled bank
checks is picked up from the sending bank by a Company courier. Shipments are
pre-sorted by bank personnel and bundled as to final destination using
Company-supplied, color-coded bags. The shipment is then transported to the
local airport where it enters the Company's air transportation system and is
scanned via bar code technology, which reads information pertaining to the
shipper, receiver, airbill number and applicable deadline. This data is then
promptly downloaded into the Company's ComCheck-SM- computer system, where it is
available to the Company's customer service representatives ("CSRs").

Upon arrival at the Company's Columbus hub or one of the Company's
mini-hubs, the shipment is off-loaded, sorted by destination and reloaded onto
the Company's aircraft. At the destination city, the shipment is off-loaded for
the final time and delivered by Company courier to the receiving bank or Federal
Reserve branch. When delivered, the shipment is once again scanned and promptly
downloaded into the Company's computer system. Delivery information for all
shipments is then available on-line to the Company's customer base as well as
the CSRs. The Company's customer service department is available to handle any
inquiries, discrepancies or supply requests, as well as provide proof of
delivery documentation, all of which are value-added features of the Company's
service.

The Company provides delivery service for three sets of banking industry
deadlines. The U.S. Check-Registered Trademark- "Basic" program, which has a
9:30 p.m. -- 10:00 p.m. hub time in Columbus, provides delivery service between
12:01 a.m. and 2:00 a.m. to approximately the northeastern third of the nation.
The "Premium" program, which has an 11:00 p.m. -- 11:30 p.m. hub time in
Columbus and Charlotte, provides delivery service at approximately 3:00 a.m. to
the eastern half of the nation. Finally, the U.S. Check-Registered Trademark-
"City" program, which has a 4:00 a.m. -- 5:30 a.m. hub time in Columbus,
provides delivery service at approximately 8:00 a.m. to all cities served by the
U.S. Check-Registered Trademark-network. The Company prices these services based
on the tier of service and by the pound on a customer by customer basis.

SMALL PACKAGE DELIVERY SERVICES. The Company's TIMEXPRESS-Registered
Trademark- delivery service utilizes the same transportation network as the U.S.
Check-Registered Trademark- bank delivery system, which enables
TIMEXPRESS-Registered Trademark- to offer to its customers late pick-up and
early delivery times. A typical TIMEXPRESS-Registered Trademark- shipment is
either picked up by a Company courier or delivered to the airport by the
customer, at which point shipment information, including shipper, receiver and
airbill number, is entered into the TIMEXPRESS-Registered Trademark- OnTime-SM-
computer system. The shipment then enters the Company's air transportation
network. Upon arrival at its destination city (having gone through sorting and
transportation procedures similar to the Company's bank shipments), the shipment
is off-loaded and delivered to its destination by Company personnel or
independent contractors. Upon delivery, the shipment information is again noted
with consignee information and promptly entered into the OnTime-SM- system,
which again provides on-line and Internet access for TIMEXPRESS-Registered
Trademark- customers.

The Company also provides airport-to-airport service for certain of its
customers, including UPS, FedEx and other consolidating freight forwarders. This
service does not typically require the same level of information reporting, but
fills a significant need for these TIMEXPRESS-Registered Trademark- customers
whose infrastructures cannot be easily modified to meet same-day, same-night or
pre-8:00 a.m. delivery deadlines.

CUSTOMERS

The highly specialized needs of the Company's customer base combined with
the Company's performance level over the years have resulted in a high level of
customer retention for both U.S. Check-Registered Trademark- and
TIMEXPRESS-Registered Trademark-. This customer retention level, in turn,
creates a level of stability in the Company's revenue base that allows for
product development and continued dedication of resources to providing the
highest possible level of service to customers in the U.S. banking industry and
other small package delivery customers.

U.S. BANKING INDUSTRY. The banking industry, including commercial banks,
savings banks and Federal Reserve banks, represents the Company's largest
category of customers and in 1995 accounted for approximately 86% of the

37
<PAGE>
Company's revenues. This customer list represents 92 of the nation's 100 largest
bank holding companies. The Company provides daily service (four nights per
week) for its entire customer base, and has contracts with many of its large
customers. The Company's time-critical canceled check delivery service enables
the Company's banking customers to offer competitive services, products and
pricing. No single customer accounted for more than 10% of the U.S.
Check-Registered Trademark- division's fiscal 1995 revenues.

SMALL PACKAGE DELIVERY CUSTOMERS. The Company's TIMEXPRESS-Registered
Trademark- small package delivery system accounted for approximately 12% of the
Company's revenues in 1995. Customers for this service include industrial and
service corporations, medical companies, UPS, FedEx and consolidating freight
forwarders. Similar to the Company's banking industry customers, its small
package delivery customers tend to be nightly shippers, with a high level of
retention. No single customer accounted for more than 10% of the
TIMEXPRESS-Registered Trademark- division's fiscal 1995 revenues.

OTHER CUSTOMERS. The remainder of the Company's billing base is provided
from fuel sales at the Company's facility at Columbus. No single customer
accounted for more than 10% of the Company's other fiscal 1995 revenues.

CUSTOMER SERVICE

The Company's customer service department helps to provide many of the
Company's value-added features. In addition to providing prompt, courteous
replies to all customer inquiries utilizing a common tone of service, the CSRs
help provide proof of delivery documentation when required, assist with ordering
supplies and provide prompt shipment tracking information when requested. The
Company's management information systems assist in the customer service function
in many ways, including: (i) shipment and delivery information is available
on-line, via the utilization of bar code technology, to both banking and small
package customers through ComCheck-SM- and OnTime-SM-, respectively; (ii)
current and historical (dating back as far as 45 days) proof-of-delivery
documentation can be requested and provided on-line through the ComCheck-SM- and
OnTime-SM- systems; (iii) supplies can be ordered on-line through ComCheck-SM-
and OnTime-SM-, providing a user-friendly environment for the Company's
customers; (iv) OnTime-SM- performance data is reviewed constantly by
management, graphed and reported quarterly for trend monitoring purposes, so
that any fluctuations in customer service can be addressed immediately; (v) the
Company's dispatch function includes the ability to relay all relevant shipper
information on-line throughout the organization, assuring a smooth dissemination
of information regarding special pick-ups and deliveries; and (vi) internal
management reports include load factor analysis and capacity reporting, so the
Company can modify the network as appropriate to provide additional lift where
demanded by customers. All relevant information referred to above is available
on-line to the Company's CSRs who are then empowered to keep the Company's
customer base fully informed on a prompt basis.

MARKETING

The Company has typically marketed directly to its bank customer base, with
little need for national advertising. Banking industry sales efforts have
included assisting in the design of customized clearing systems for bank
customers which match the appropriate aircraft with the bank's needs for more
processing time or specific deadlines sought by the sending bank. Marketing
efforts in this area have included promotion of the NCHA. The success of the
NCHA has had a complementary effect on the Company, as more checks are now
transported through the private sector.

The Company has been an exhibitor at numerous industry trade shows such as
the Bank Administration Institute ("BAI") Float Management Conference, the BAI
Check Processing Conference and the Air Courier Conference of America. This
process has enabled the Company to maintain close contact with its customer
base.

Small package delivery services have also typically been directly marketed
to companies requiring this unique, specialized service, as well as to
consolidating freight forwarders and national integrated carriers such as FedEx
and UPS. This approach has enabled the Company to direct volume to lane segments
with space available. The Company feels opportunities for expansion exist in
this area, and it will aggressively develop this level of service through an
expanded sales force and more aggressive promotion of the TIMEXPRESS-Registered
Trademark- brand name.

HUMAN RESOURCES

The Company believes it has achieved a significant competitive advantage
within its industry through its major commitment to human resources. All levels
of the Company's management strive to operate within the spirit

38
<PAGE>
of the Company's core values, which are: (i) Honesty, Integrity, Trust and
Respect -- the Company believes its customers expect these qualities and the
Company strives to deliver them; (ii) Accountability -- the Company believes its
associates are accountable to the customer in the marketplace, to peers in the
workplace and, ultimately, to God; (iii) Open and Free Communication -- the
Company strives to communicate from the bottom to the top, from the top down,
and with the marketplace, by providing a medium for involvement, creativity and
encouragement for all its people and the customer; (iv) Team Management Style
with Shared Responsibilities -- the Company strives to delegate the
decision-making process as far down as possible, encouraging involvement and
shared responsibilities; and (v) Quality Performance -- the Company's goal is
simple: to be the best, by focused teamwork with self-policing,
quality-controlled systems and hiring and educating the best personnel
available, and then motivating and compensating them appropriately.

Additionally, representatives of the Company's human resources team
periodically travel throughout the country to the Company's outbase facilities
to help ensure compliance with the Company's core values and other personnel
policies. All Company personnel are part of a Company-wide drug-testing program.
Management believes this program, which goes beyond the requirements of the
Company's regulators, helps to ensure the highest possible performance levels.
The Company also conducts random drug and alcohol testing in compliance with
Federal Aviation Administration regulations. Management training and
professional development seminars are periodically held for, and attended by,
all levels of Company personnel. The Company also aggressively compensates for
performance, with excellent performance recognized and rewarded through
incentive-based compensation.

ASSOCIATES

The chart below summarizes the three-year history of the Company's
workforce. The Company's associates are not represented by any unions or covered
by any collective bargaining agreements. The Company has experienced no work
stoppages and believes that its relationship with associates is good.

<TABLE>
<CAPTION>
AT MARCH 31,
-------------------------------------
DEPARTMENT 1994 1995 1996
- -------------------------------------------------------------- ----- ----- -----
<S> <C> <C> <C>
Management/Administration..................................... 103 117 111
Flight........................................................ 118 123 124
Maintenance................................................... 70 71 72
Driver/Courier/Ramp/Sort...................................... 233 292 314
-- -- --
Total..................................................... 524 603 621
-- -- --
-- -- --
</TABLE>

PROPERTIES AND FACILITIES

The Company operates ground courier facilities at 40 locations. The land and
building used for the Company's headquarters, located in Columbus, Ohio, are
leased from Gerald G. Mercer under a lease agreement which expires on February
29, 2000. Mr. Mercer owns the building and leases the land from The Port
Authority of Columbus under a 25-year lease which expires on December 31, 2009,
subject to a 20-year renewal option. The building currently has 80,000 square
feet, of which the Company leases approximately 73,000 square feet. The
Company's headquarters is currently used for operations, aircraft maintenance,
vehicle maintenance, general and administrative functions, and training. In
addition, several facilities also contain or are primarily used for storage and
warehouse space. See "Certain Relationships and Related Party Transactions --
Lease of Company Headquarters."

The Company operates at numerous locations throughout the country. The
mini-hub locations generally include an office and/or a section of the lessor's
hangar or ramp that is allocated to the Company.

The Company's facilities rental expense for the fiscal year ended September
30, 1995, and six months ended March 31, 1996, was approximately $1.5 million
and $0.8 million, respectively. For additional information concerning the
Company's leases, see the Company's Financial Statements included elsewhere
herein.

COMPETITION

The air and ground courier industry is highly competitive. The Company's
primary competitor is the Federal Reserve's ITS. The actions of the Federal
Reserve are regulated by the Monetary Control Act, which, in summary, requires
the Federal Reserve to price its services at actual cost plus a private sector
adjustment factor of 7%. The

39
<PAGE>
Company believes that the purpose of the Monetary Control Act is to curtail the
possibility of predatory pricing by the Federal Reserve when it competes with
the private sector. No assurance beyond the remedies of law can be given that
the Federal Reserve will comply with the Monetary Control Act.

In the private sector, there are a large number of smaller, regional
carriers that transport canceled checks, none with a significant interstate
market share. The two largest private sector air carriers, FedEx and UPS, both
carry canceled checks where the deadlines being pursued fit into their existing
system, but this has not represented a significant market share of this industry
segment to date. The Company provides customized service for its customer base,
often with later pick-ups and earlier deliveries than the large, national
carriers. Both FedEx and UPS utilize the Company's transportation network for
certain situations where they require customized service. No assurance can be
provided that FedEx, UPS or any other large national carrier will not attempt to
compete more directly with the Company in the future.

The Company competes with commercial airlines and numerous other carriers in
its small package transportation business. The Company's market share in this
industry is less than 1%. The Company believes that this market represents a
significant expansion opportunity. The Company also has a minor presence in the
same-day or next-flight-out industry. The Company believes that there are a
number of competitors in this industry, including FedEx and UPS. To the extent
the Company elects to increase its presence in the same-day industry, it will
compete against these companies. The Company will emphasize its information
technology, competitive pricing and historically high on-time performance levels
to compete in this market.

REGULATION

The Company is regulated under Part 135 of the Federal Aviation Regulations
by the Federal Aviation Administration. In connection with the operation of
Company vehicles and aircraft, the Company is subject to regulation by the U.S.
Department of Transportation with respect to the handling of hazardous
materials. The Company holds nationwide general commodities authority from the
Interstate Commerce Commission to operate as a common carrier on an interstate
basis within the contiguous 48 states. The Company's delivery operations are
subject to various state and local regulations, and, in many instances, require
permits and licenses from state authorities.

The Company believes that it has all permits, approvals and licenses
required to conduct its operations and that it is in compliance with applicable
regulatory requirements relating to its operations. Failure of the Company to
comply with the applicable regulations could result in substantial fines or
possible revocation of one or more of the Company's operating permits.

LEGAL PROCEEDINGS

There are no pending legal proceedings involving the Company other than
routine litigation incidental to the Company's business. In the opinion of the
Company's management, such proceedings should not, individually or in the
aggregate, have a material adverse effect on the Company's results of operations
or financial condition.

TRADEMARKS

The Company utilizes various service marks, trademarks and tradenames in
connection with its services. While the Company considers its service marks,
trademarks and tradenames to be important in the conduct of its business, the
business of the Company is not dependent on any individual service mark,
trademark or tradename.

40
<PAGE>
MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information as of May 30, 1996,
regarding each of the Company's directors and executive officers:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------ --- --------------------------------------------------------------
<S> <C> <C>
Gerald G. Mercer 48 Chairman of the Board, President and Chief Executive Officer
Eric P. Roy 41 Director, Executive Vice President, Treasurer, Chief Operating
Officer and Chief Financial Officer
Glenn M. Miller 49 Vice President, Operations
Charles A. Renusch 54 Vice President, Sales
Guy S. King 43 Vice President, Sales
Lincoln L. Rutter 39 Vice President, Sales
Kendall W. Wright 48 Vice President, Sales
William R. Sumser 40 Vice President, Finance, Controller and Secretary
Donald D. Strench 39 Vice President, Corporate Development
Adele Mercer 41 Director
Tony C. Canonie, Jr. 49 Director nominee
Russell M. Gertmenian 48 Director nominee
J.F. Keeler, Jr. 55 Director nominee
</TABLE>

Upon the closing of the Offering, the Company anticipates that Ms. Mercer
will resign as a director and the size of the Board of Directors will be
increased to seven. The Company has reached an agreement with Messrs. Canonie,
Gertmenian and Keeler to join the Board of Directors upon the closing of the
Offering. Mr. Gertmenian, a partner with Vorys, Sater, Seymour and Pease, has
served as the Company's principal outside counsel since 1988. Messrs. Canonie
and Keeler have no other affiliation with the Company. It is anticipated that
Messrs. Canonie, Gertmenian and Keeler will be appointed to serve, at least
initially, as members of the Compensation and Audit Committees of the Board of
Directors, which committees will be created upon the closing of the Offering.

Additionally, as soon as practicable following the closing of the Offering,
the Company intends to appoint two additional independent directors who have no
other affiliation with the Company.

GERALD G. MERCER has served as Chairman of the Board, President and Chief
Executive Officer of the Company since founding the Company in 1974. Mr. Mercer
led the negotiations for the successful acquisitions of WIE and Air Continental,
Inc. in 1988 and 1989, respectively. He served as President of the Michigan
Association of Aviation Businesses in 1986, and has been a member of the Young
Presidents' Organization since 1986. Mr. Mercer has been a guest speaker at
several major universities throughout the country.

ERIC P. ROY has been a Director of the Company since 1994 and has served as
Chief Financial Officer of the Company since 1986. Mr. Roy was named Executive
Vice President and Chief Operating Officer in 1991. Prior to 1986, Mr. Roy
served as Controller, Treasurer and President of Air Freight Services, Inc., a
controlled group of 12 aviation-related companies. Mr. Roy assisted in
negotiating and arranged financing for the acquisitions of WIE and Air
Continental, Inc.

GLENN M. MILLER has served as Vice President, Operations for the Company
since 1975. Mr. Miller successfully coordinated all operational details involved
in the acquisitions of WIE and Air Continental, Inc.

CHARLES A. RENUSCH has served as Vice President, Sales (Northeast Region)
for the Company since 1980. Prior to joining the Company, Mr. Renusch was
responsible for Bank Float and Transportation for the National Bank of

41
<PAGE>
Detroit, N.A. Mr. Renusch designed the net settlement process utilized by the
Check Express System, which currently settles over four million transactions per
business day. See "Certain Relationships and Related Party Transactions -- Float
Control, Inc./CHEXS Partnership."

GUY S. KING has served as Vice President, Sales (TIMEXPRESS-Registered
Trademark-) for the Company since 1989. Prior to 1989, Mr. King served the
Company in numerous functions dating back to 1976, including dispatch and pilot,
before eventually founding the Company's TIMEXPRESS-Registered Trademark- small
package transportation department in 1984. Mr. King has served on the Board of
Directors of the Air Courier Conference of America since 1993.

LINCOLN L. RUTTER has served as Vice President, Sales (West Region) for the
Company since 1988. Prior to joining the Company, he served as Vice President of
Sales of WIE, as well as Float Manager for Colorado National Bank of Denver.

KENDALL W. WRIGHT has served as Vice President, Sales (Southeast Region) for
the Company since 1988. Prior to joining the Company, he served as Vice
President of Sales for WIE.

WILLIAM R. SUMSER has served the Company as Vice President and Secretary
since March 1996, as Controller since 1988 and as Assistant Vice President from
1988 through March 1996. Mr. Sumser has a total of 18 years of financial
experience, and is responsible for the Company's daily cash management,
financial reporting and purchasing functions.

DONALD D. STRENCH has served as Vice President, Corporate Development for
the Company since April 1996. Prior to joining the Company, Mr. Strench served
in various financial positions for American Airlines, Inc. between September
1986 and March 1996, including Vice President, Corporate Development (American
Eagle).

ADELE MERCER has been a director of the Company since 1994. Ms. Mercer is
the wife of Mr. Mercer.

TONY C. CANONIE, JR. has been nominated and has agreed to serve as a
Director of the Company commencing upon the closing of the Offering. Since 1990,
Mr. Canonie has served as Chief Executive Officer of Canonie Ventures Inc., a
venture capital and advisory services firm specializing in the waste industry.
From 1989 to 1990, Mr. Canonie served as Chief Executive Officer of Grace
Environmental Inc., a subsidiary of W.R. Grace & Co.

RUSSELL M. GERTMENIAN has been nominated and has agreed to serve as a
Director of the Company commencing upon the closing of the Offering. Mr.
Gertmenian has been a partner of Vorys, Sater, Seymour and Pease since 1979 and
currently serves as a member of such firm's Executive Committee. Mr. Gertmenian
is a director of Liqui-Box Corporation, a manufacturer of flexible plastic
packaging systems.

J.F. KEELER, JR. has been nominated and has agreed to serve as a Director of
the Company commencing upon the closing of the Offering. Mr. Keeler is
President, Chief Executive Officer and Chairman of the Board of The Fishel
Company, a national utilities construction firm, which he first joined in 1967.
Mr. Keeler is a director of Bank One, N.A. and serves on the Board of Directors
of the Columbus Chamber of Commerce.

Directors of the Company are elected annually. Officers of the Company are
elected annually and serve at the discretion of the Board of Directors.

COMPENSATION OF THE BOARD OF DIRECTORS

Directors who are officers or associates of the Company will receive no
additional compensation for their services as members of the Board of Directors
or as members of Board committees. Directors who are not officers or associates
of the Company will be paid a quarterly fee of $1,500, as well as additional
fees of $1,000 for each meeting of the Board or of a Board committee attended by
such Director. The Company's Directors are reimbursed for their out-of-pocket
expenses incurred in connection with their service as directors, including
travel expenses. In addition, pursuant to the Incentive Stock Plan, each
Director will receive an annual option to purchase 2,000 Common Shares.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth certain information regarding cash and
non-cash compensation paid by the Company during the fiscal year ended September
30, 1995, to the Company's Chief Executive Officer, and to each of the Company's
four other most highly compensated executive officers whose salary and bonus
exceeded $100,000

42
<PAGE>
(collectively, the "Named Executive Officers"), during such year. The Company
did not grant any stock options or restricted stock awards to any of the Named
Executive Officers during the 1995 fiscal year, and the dollar value of
perquisite and other personal benefits, if any, received by each of the Named
Executive Officers in fiscal year 1995 was less than established reporting
thresholds.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------ ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION(1)
- --------------------------------------------------------------------- ---------- ------------ -----------------
<S> <C> <C> <C>
Gerald G. Mercer .................................................... $ 826,376 $ 1,161,333 $ 6,022
Chairman of the Board, President and Chief Executive Officer
Eric P. Roy ......................................................... 129,332 167,646 59,363
Executive Vice President, Chief Financial Officer and Chief
Operating Officer
Glenn M. Miller ..................................................... 129,332 235,681 146,787
Vice President, Operations
Charles A. Renusch .................................................. 129,332 201,232 147,173
Vice President, Sales
Guy S. King ......................................................... 129,332 144,857 31,380
Vice President, Sales
</TABLE>

- ------------------------
(1) "All Other Compensation" for the Named Executive Officers consists of
amounts contributed by the Company to the accounts of the Named Executive
Officers under the Savings Plan (as defined below) and, except with respect
to Mr. Mercer, amounts paid pursuant to the Deferred Compensation
Agreements. See "-- Section 401(k) Savings Plan" and "Certain Relationships
and Related Party Transactions -- Deferred Compensation Agreements."

Following the closing of the Offering, the Company expects to restructure
the compensation arrangements with its executive officers. The Company expects
that (i) the annual base salaries for Messrs. Mercer, Roy, Miller, Renusch and
King will be approximately $400,000, $275,000, $200,000, $200,000 and $200,000,
respectively, and (ii) such officers will receive bonus compensation based upon
the achievement of certain performance objectives. It is currently contemplated
that such bonus compensation will not exceed 60% of annual base salaries. The
Company expects that annual base salaries for the four other executive officers
will be approximately $200,000 plus similar performance-based bonuses. The
Company believes that any bonuses will be in line with comparable companies, and
any arrangements will be subject to final Compensation Committee approval. The
final terms of any such restructured arrangements could differ from those
described above.

Other than the Incentive Stock Plan (described below), which was adopted by
the Board of Directors and approved by the shareholders of the Company on May 1,
1996, and the Stock Purchase Agreements with seven executive officers, which
will be terminated upon the closing of the Offering, the Company has no stock
option or stock purchase plans. Except for the automatic grants to non-associate
Directors, no grants have been made or approved under the Incentive Stock Plan.
See "-- Incentive Stock Plans" and "Certain Relationships and Related Party
Transactions -- Stock Purchase Agreements."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company has never had a Compensation Committee or other committee of the
Board of Directors performing similar functions. Decisions concerning
compensation of executive officers of the Company were made by the Company's
Chief Executive Officer. The Board of Directors will establish a Compensation
Committee upon the closing of the Offering.

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<PAGE>
INCENTIVE STOCK PLAN

The purpose of the AirNet Systems, Inc. 1996 Incentive Stock Plan (the
"Incentive Stock Plan") is to attract and retain key personnel, including
consultants and advisors to and directors of the Company, and to enhance their
interest in the Company's continued success and to allow all associates an
opportunity to have an ownership interest in the Company.

The Incentive Stock Plan provides for the grant of incentive and
nonqualified stock options, restricted stock and performance shares
(individually, an "Award" or, collectively, "Awards"). In addition, the
Incentive Stock Plan provides for the purchase of Common Shares through payroll
deduction by all associates of the Company who have satisfied certain
eligibility requirements. No Award under the Incentive Stock Plan may be granted
after May 1, 2006. The maximum number of Common Shares available to be issued
under the Incentive Stock Plan is 1,150,000. The maximum number of Common Shares
for which certain individuals (the Chief Executive Officer and the four other
highest paid officers) may receive options (incentive and non-qualified) is
limited to 50,000 Common Shares over a one-year period. The Common Shares to be
delivered under the Incentive Stock Plan will be made available from the
authorized but unissued Common Shares or from Common Shares held in treasury.
The Incentive Stock Plan contains customary provisions with respect to
adjustments for stock splits and similar transactions and the rights of
participants upon mergers and other business combinations.

The Incentive Stock Plan will be administered by the Compensation Committee
of the Board of Directors (the "Committee"), on which only non-associate
directors who are "disinterested" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), may serve. The
Committee has the discretion to select from among eligible associates those to
whom Awards will be granted and determine the terms and conditions applicable to
each Award. With respect to all non-executive officers (I.E., associates who are
not subject to the provisions of Section 16 of the Exchange Act), the Company's
Chief Executive Officer may make recommendations to the Committee. The Committee
also has the sole and complete authority to interpret the provisions of the
Incentive Stock Plan. The Committee's decisions will be binding on the Company
and the participants in the Incentive Stock Plan. Key associates of, and
consultants and advisors to, the Company and any future subsidiaries who can
make substantial contributions to the successful performance of the Company are
eligible to be granted Awards under the Incentive Stock Plan. It is anticipated
that the Committee's determinations of which eligible individuals will be
granted Awards and the terms thereof will be based on each individual's present
and potential contribution to the success of the Company and its subsidiaries.
The approximate number of persons initially eligible to receive Awards under the
Incentive Stock Plan has not yet been determined. Further, the Incentive Stock
Plan provides that associates will be given the opportunity to purchase
additional Common Shares through a payroll deduction program. The Incentive
Stock Plan also provides that, on an annual basis and without any further action
by the Committee or the Board, the Company will grant director options, as
described below, to each non-associate director of the Board.

STOCK OPTIONS. The Committee may grant non-qualified stock options to
associates, advisors and consultants but may grant incentive options only to
associates. The Committee has discretion to fix the exercise price of such
options, which, in the case of an incentive stock option, may not be less than
the fair market value of the Common Shares at the date of grant. In the case of
an incentive stock option granted to a 10% shareholder of the Company, the
exercise price may not be less than 110% of the fair market value of the Common
Shares at the date of grant. The Committee also has broad discretion as to the
terms and conditions under which options will be exercisable. Incentive stock
options will expire not later than ten years after the date on which they are
granted (or five years in the case of an incentive stock option granted to a 10%
shareholder of the Company). The exercise price of the options may be satisfied
in cash or, in the discretion of the Committee, by exchanging Common Shares
owned by the optionee, or by a combination of the preceding.

DIRECTOR OPTIONS. Under the Incentive Stock Plan, each director who is not
an associate of the Company or of a subsidiary, and who was not a director of
the Company on May 1, 1996, will receive, on the first business day after each
annual meeting of shareholders, provided that the director continues to serve on
the Board on such date, a grant of a non-qualified stock option to purchase
2,000 Common Shares at an exercise price equal to the fair market value of the
Common Shares on the date of grant. A director option will be exercisable until
the earlier of (i) the tenth anniversary of the date of grant and (ii) three
months (one year in the case of a director who becomes disabled

44
<PAGE>
or dies) after the date the director ceases to be a director, provided, however,
that if a director ceases to be a director after having been convicted of, or
pled guilty to, a felony, the director option will be canceled on the date the
director ceases to be a director. The exercise price of the director options may
be satisfied in cash or, in the discretion of the Committee, by exchanging
Common Shares owned by the director, or by a combination of cash and Common
Shares.

RESTRICTED STOCK AWARDS. An award of restricted stock is an Award of Common
Shares that is subject to such restrictions as the Committee deems appropriate,
including forfeiture conditions and restrictions on transfer for a period
specified by the Committee. Awards of restricted stock may be granted under the
Incentive Stock Plan for or without consideration. Restrictions on restricted
stock may lapse in installments based on factors selected by the Committee. The
Committee, in its sole discretion, may waive or accelerate the lapsing of
restrictions in whole or in part. Prior to the expiration of the restricted
period, except as otherwise provided by the Committee, a participant who has
been granted restricted stock will, from the date of grant, have the rights of a
shareholder of the Company in respect of such Common Shares, including the right
to vote such Common Shares and to receive dividends and other distributions
thereon, subject to the restrictions set forth in the Incentive Stock Plan and
in the instrument evidencing such Award. The shares of restricted stock will be
held by the Company, or by an escrow agent designated by the Company, during the
restricted period and may not be sold, assigned, transferred, pledged or
otherwise encumbered until the restrictions have lapsed. The Committee has
authority to determine the duration of the restricted period and the conditions
under which restricted stock may be forfeited, as well as the other terms and
conditions of such awards.

PERFORMANCE SHARE AWARDS. A performance share award is an Award of a number
of units that represent the right to receive a specified number of Common Shares
or cash, or both, upon satisfaction of certain specified performance goals,
subject to such terms and conditions as the Committee determines. Performance
Awards will be earned to the extent such performance goals established by the
Committee are achieved over a period of time specified by the Committee. The
Committee has discretion to determine the value of each performance Award, to
adjust the performance goals as it deems equitable to reflect events affecting
the Company or changes in law or accounting principles or other factors, and to
determine the extent to which performance Awards that are earned may be paid in
the form of cash, Common Shares or a combination of both.

STOCK PURCHASE PLAN. Periodically, all associates of the Company who have
at least one year of service with the Company will be given the opportunity to
purchase Common Shares under the Incentive Stock Plan through a payroll
deduction program. Pursuant to this program, associates will be able to purchase
Common Shares at a price equal to between 85% and 100% of fair market value.
Certain restrictions contained in Section 423 of the Code apply to this payroll
deduction program, including a limitation on the maximum value of Common Shares
that may be purchased by an individual associate in any calendar year. Upon
purchase of Common Shares through payroll deduction, the Company will issue
share certificates to the participating associates.

The Committee has broad discretion as to the specific terms and conditions
of each Award and any rules applicable thereto, including the effect, if any, of
a change in control of the Company. The terms of each Award are to be evidenced
by a written instrument delivered to the participant. The Common Shares issued
under the Incentive Stock Plan are subject to applicable tax withholding by the
Company which, to the extent permitted by Rule 16b-3 under the Exchange Act, may
be satisfied by the withholding of Common Shares issuable under the Incentive
Stock Plan. Any Awards granted under the Incentive Stock Plan may not be
assigned or transferred except by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order.

The Incentive Stock Plan may be amended or terminated at any time by the
Board of Directors; provided, however, that no such amendment or termination may
adversely affect an optionee's or grantee's rights under any Award theretofore
granted under the Incentive Stock Plan, except with the consent of such optionee
or grantee, and except that no amendment may be made without shareholder
approval if the Committee determines that such approval is necessary to comply
with any tax or regulatory requirement, including any approval that is required
as a prerequisite for exemptive relief from Section 16 of the Exchange Act, for
which or with which the Committee determines that it is desirable to qualify or
comply.

45
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE INCENTIVE STOCK PLAN

STOCK OPTIONS. When an optionee exercises a non-qualified stock option, the
difference between the option price and any higher fair market value of the
Common Shares, generally on the date of exercise, will be ordinary income to the
optionee and generally will be allowed as a deduction for federal income tax
purposes to the Company. Any gain or loss realized by an optionee on disposition
of the Common Shares acquired upon exercise of a non-qualified stock option
generally will be capital gain or loss to such optionee, long-term or short-term
depending on the holding period, and will not result in any additional tax
consequences to the Company. The optionee's basis in the Common Shares for
determining gain or loss on the disposition will be the fair market value of
such Common Shares determined generally at the time of exercise.

When an optionee exercises an incentive stock option while employed by the
Company or a subsidiary or within three months (one year for death or
disability) after termination of employment, no ordinary income will be
recognized by the optionee at that time, but the excess (if any) of the fair
market value of the Common Shares acquired upon such exercise over the option
exercise price will be an adjustment to taxable income for purposes of the
federal alternative minimum tax applicable to individuals. If the Common Shares
acquired upon exercise of the incentive stock option are not disposed of prior
to the expiration of one year after the date of acquisition and two years after
the date of grant of the option, the excess (if any) of the sales proceeds over
the aggregate option exercise price of such Common Shares will be long-term
capital gain, but the employer will not be entitled to any tax deduction with
respect to such gain. Generally, if the Common Shares are disposed of prior to
the expiration of such periods (a "disqualifying disposition"), the excess of
the fair market value of such Common Shares at the time of exercise over the
aggregate option price (but not more than the gain on the disposition if the
disposition is a transaction on which a loss, if realized, would be recognized)
will be ordinary income at the time of such disqualifying disposition (and the
Company will generally be entitled to a federal income tax deduction in like
amount). Any gain realized by the optionee as a result of a disqualifying
disposition that exceeds the amount treated as ordinary income will be capital
in nature, long-term or short-term depending on the holding period. If an
incentive stock option is exercised more than three months (one year after death
or disability) after termination of employment, the tax consequences are the
same as described above for non-qualified options.

RESTRICTED STOCK. In the absence of an election by a participant pursuant
to Section 83(b) of the Code, the grant of restricted Common Shares will not
result in taxable income to the participant or a deduction for the Company in
the year of grant. The value of such restricted Common Shares will be taxable to
the participant in the year in which the restrictions lapse. Alternatively, a
participant may elect to treat as income in the year of grant the fair market
value of the restricted Common Shares on the date of grant pursuant to Section
83(b) of the Code, by making the election within 30 days after the date of such
grant. If such an election were made, such participant would not be allowed to
deduct at a later date the amount included as taxable income if he or she should
forfeit the restricted Common Shares to the Company. The Company will generally
be entitled to a federal income tax deduction equal to the amount of ordinary
income recognized by the participant in the year such income is recognized.
Prior to the lapse of restrictions, dividends paid on the Common Shares subject
to such restrictions will be taxable to the participant as additional
compensation in the year received free of restrictions, and the Company will be
allowed a corresponding federal income tax deduction.

STOCK PURCHASE PLAN. Common Shares purchased pursuant to the stock purchase
plan at 100% of fair market value will be taxed as if such Common Shares had
been acquired on the open market. Therefore, any gain or loss realized by an
associate on disposition of the Common Shares acquired pursuant to the stock
purchase plan generally will be capital gain or loss to such associate,
long-term or short-term depending on the holding period, and will not result in
any additional tax consequences to the Company. If an associate purchases Common
Shares pursuant to the stock purchase plan at less than 100% of fair market
value, then such associate shall treat as ordinary income in the year in which
such associate disposes of such Common Shares (or the year closing with such
associate's death) an amount equal to the lesser of (i) the excess of the fair
market value at the time of such disposition or death over the amount paid for
the Common Shares or (ii) the excess of the fair market value of the Common
Shares at the time the Common Shares were purchased over the amount paid for the
Common Shares.

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<PAGE>
SPECIAL RULES. Special rules apply to a participant who is subject to
Section 16 of the Exchange Act. Certain additional special rules apply if the
exercise price for a stock option is paid in Common Shares previously owned by
the optionee rather than in cash and if the Award is held, following the death
of a participant, by the executors of the participant's estate.

SECTION 401(k) SAVINGS PLAN

The Company maintains a defined contribution savings plan which is intended
to qualify under Section 401(k) of the Code (the "Savings Plan"). Under the
terms of the Savings Plan, all associates who have worked a minimum of six
months for the Company may contribute up to 15% of their annual earnings to the
Savings Plan. The Company may elect, in its discretion, to make a matching
contribution to the Savings Plan. Currently, the Company's annual matching
contributions under the Savings Plan do not exceed 3% of total compensation. In
addition, the Company makes profit-sharing contributions on behalf of eligible
associates.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

LEASE OF COMPANY HEADQUARTERS

The Company leases approximately 73,000 square feet of office, warehouse and
hangar space in Columbus, Ohio (including the Company's headquarters) pursuant
to a lease agreement dated June 29, 1988 with Mr. Mercer. Pursuant to the lease
agreement, the Company pays base rent of $10.28 per square foot plus operating
expenses which were approximately an additional $2.41 per square foot for fiscal
1995. The lease expires on February 29, 2000. The Company paid rent of
approximately $592,000, $622,650 and $707,305 in fiscal years 1993, 1994 and
1995, respectively, to Mr. Mercer. The Company believes that the terms of this
lease are no less favorable to the Company than those reasonably available from
unrelated third parties for comparable space.

WRIGHT AGREEMENT

In consideration for the agreement of WIE and Donald W. Wright, Sr. not to
compete with the Company, the Company entered into the Wright Agreement, which,
as amended, provides for annual payments to Donald Wright. Such annual payments
are tied to the cash flow and debt to equity ratio of the Company and are
subject to certain minimum payment amounts. Pursuant to the Wright Agreement, as
amended, such payments are guaranteed through 2018 to Donald Wright during his
lifetime in the form of an annuity and upon his death are to be made to Donald
Wright's designees. The Company's expenses for payments made to Donald Wright in
connection with the Wright Agreement totaled approximately $1.1 million, $1.6
million, $2.1 million and $0.6 million in fiscal years 1993, 1994 and 1995 and
the six months ended March 31, 1996, respectively.

Upon the repurchase of the Donald Wright Warrant by the Company, the Wright
Agreement will be terminated in its entirety, and no further payments will be
made.

WRIGHT WARRANTS

Pursuant to the Wright Agreement, and in further consideration for Donald
Wright's agreement not to compete with the Company, the Company issued four
warrants to purchase in the aggregate 35% of the Company's then outstanding
shares of common stock in the event of an initial public offering of the
Company's capital stock. Two of such warrants have since been canceled. The
remaining warrants, as amended, entitle Donald Wright to purchase 2,483,537
Common Shares (approximately 29.7% of the Common Shares on a fully diluted basis
at the time of exercise) for $3,000 and Jeffrey Wright, Donald Wright's son, to
purchase 167,227 Common Shares (2.0% of the Common Shares on a fully diluted
basis) for $200. On February 26, 1996, Donald Wright transferred the Donald
Wright Warrant to the Donald W. Wright, Sr. Family Irrevocable Trust dated
December 9, 1994 (the "Wright Trust").

As amended, the Wright Warrants permit the Wright Trust (as assignee of
Donald Wright) and Jeffrey Wright to exercise the Wright Warrants at any time on
or after the closing of an initial public offering of the Company's capital
stock, provided that such closing occurs prior to July 31, 2018. In addition,
the Wright Warrants entitle the Wright Trust and Jeffrey Wright to certain
piggyback registration rights in connection with an offering of capital stock by
the Company. The Wright Trust and Jeffrey Wright have waived such registration
rights in connection with the Offering. The Company has agreed to repurchase the
Donald Wright Warrant upon the closing of the Offering for $29.9 million, or the
equivalent of $12.04 per Common Share underlying such warrant, and will cancel
the

47
<PAGE>
Donald Wright Warrant upon its repurchase. Gerald G. Mercer has agreed to
purchase the Jeffrey Wright Warrant upon the closing of the Offering for $2.0
million, or the equivalent of $12.04 per Common Share underlying such warrant,
and will exercise the Jeffrey Wright Warrant immediately following such
purchase.

Upon cancellation or exercise, as the case may be, the Wright Warrants shall
be terminated in their entirety, including any ongoing registration rights which
might otherwise continue.

In connection with the repurchase and cancellation of the Donald Wright
Warrant and the corresponding tax treatment, the Company expects to realize a
related tax benefit estimated to be $7.0 million. This tax benefit will be
recorded on the Company's balance sheet and may be used against future income of
the Company for tax purposes. The tax benefit will have no effect on the
Company's income statement currently or for any future period. See "Selected
Unaudited Condensed Pro Forma Financial Data" and Note 12 of the Notes to the
Company's Financial Statements.

STOCK PURCHASE AGREEMENTS

On April 1, 1994, the Company entered into Stock Purchase Agreements with
seven executive officers, including each of the Named Executive Officers other
than Mr. Mercer, pursuant to which the executive officers purchased an aggregate
of 1,484,908 Common Shares for an aggregate purchase price of approximately
$364,000, which was paid by the delivery of promissory notes from the executive
officers. Pursuant to the terms of the Stock Purchase Agreements, the executive
officers cannot sell their respective Common Shares to any party other than the
Company. In the event of certain triggering events, such as termination, death
or disability, the Company is obligated to purchase the Common Shares held by a
particular executive officer at a price ranging from the net book value of the
Common Shares held, if less than the original amount paid, to the appreciation
in the book value of the Company from the date the Common Shares were issued to
the date of such triggering event. The Stock Purchase Agreements provide that in
the event the Company sells all or substantially all of its assets, or if a
majority of its voting stock is sold or otherwise disposed of by its
shareholders, prior to such a triggering event, the executive officer will
receive the fair market value of his Common Shares. As amended, the Stock
Purchase Agreements provide that upon the initial public offering of the Common
Shares, the redemption provisions will become inapplicable, and the executive
officers will be able to sell their Common Shares without limitation, subject to
the restrictions imposed by the Securities Act and by the Underwriters. See
"Shares Eligible for Future Sale."

Upon the closing of the Offering, the Stock Purchase Agreements will be
terminated, and the promissory notes will be fully paid.

In connection with the termination of the Stock Purchase Agreements, the
Company will incur a non-recurring, non-cash expense of approximately $15.0
million in the quarter in which the Offering is closed. This expense will result
in a corresponding increase in additional paid-in capital, but will have no
effect on total shareholders' equity. See "Offering Related Transactions --
Non-Recurring Expenses" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

DEFERRED COMPENSATION AGREEMENTS

Between 1986 and 1991, the Company entered into Deferred Compensation
Agreements with seven executive officers, including all of the Named Executive
Officers other than Mr. Mercer. Pursuant to the Deferred Compensation
Agreements, the Company is obligated to pay these executive officers a certain
percentage of the increase in the Company's net book value. The accrual of
benefits under the Deferred Compensation Agreements was frozen as of March 31,
1994, in connection with the execution of the Stock Purchase Agreements.
Distributions since such date have been based on the net book value of the
Company as of March 31, 1994. The Company paid deferred compensation to the
seven executive officers of approximately $247,000, $546,000 and $308,000 for
the 1993, 1994 and 1995 fiscal years, respectively.

In connection with the Offering and the distribution from the AAA account of
the AAA Notes, the seven executive officers have agreed to forego their
remaining deferred compensation payments in the aggregate amount of $3.7
million. The Deferred Compensation Agreements will be terminated upon the
closing of the Offering.

48
<PAGE>
FLOAT CONTROL, INC./CHEXS PARTNERSHIP

Float Control, Inc. is a company, owned by certain executive officers of the
Company, Donald W. Wright, Sr. and Jeffrey Wright, which owns a 19% interest in
Check Exchange System Co. (the "CHEXS Partnership"). The other participants in
the CHEXS Partnership are affiliates of The Huntington National Bank and
Littlewood, Shain and Company. The CHEXS Partnership operates a national net
settlement switch utilized by members of the NCHA, which the CHEXS Partnership
helped to found. The national net settlement switch operates as a clearinghouse
for NCHA member banks, pursuant to which such banks are able to settle
transactions with other NCHA members by utilizing the switch rather than having
to maintain a separate account with each such member. Canceled bank checks which
are settled through the NCHA typically are routed through the Company's air
transportation system. From time to time, the Company has made loans to Float
Control, Inc. Since October 1, 1992, the largest aggregate balance owed by Float
Control, Inc. to the Company was approximately $95,000. As of March 31, 1996,
less than $1,000 was outstanding, all of which will be repaid prior to the
closing of the Offering. In addition, in fiscal 1993, the Company paid Charles
A. Renusch, an executive officer and existing shareholder of the Company,
$200,000 for his efforts on behalf of Float Control, Inc. to establish the
national net settlement switch. See "Industry Overview -- How Banks Clear and
Settle Canceled Bank Checks -- National Clearinghouse Association."

COMPANY GUARANTY OF PERSONAL DEBT

The Company is currently guaranteeing a five-year bank loan from NBD Bank to
Mr. Mercer, the Company's Chairman, President and Chief Executive Officer, and
his wife Adele Mercer, a director, which loan is collateralized by the Company's
facilities in Columbus, which Mr. Mercer owns and leases to the Company. The
loan bears interest at the prime rate set by NBD Bank plus 0.5%, matures on
December 31, 1998 and had outstanding balances of $850,000 and $800,000 at
September 30, 1995 and March 31, 1996, respectively. Mr. Mercer intends to repay
the loan in full at the closing of the Offering. NBD Bank has agreed to
terminate the Company's guaranty at or prior to the closing of the Offering.

INDEMNIFICATION AGREEMENTS

The Company's existing shareholders have agreed to indemnify the Company for
any corporate level federal income taxes which might be imposed upon the Company
for any period prior to the termination of the Company's S Corporation status.
As an S Corporation, the Company has not been subject to federal income taxes at
the corporate level, and the Company has no reason to believe that any such
corporate level federal taxes will be imposed for any such period. See "Prior S
Corporation Status."

In addition, Mr. Mercer has agreed to indemnify the Company with respect to
certain environmental liabilities with respect to underground storage tanks on a
Michigan property formerly owned by Mr. Mercer and leased to the Company. The
Company ceased its operations at this property in 1988, at which time Mr. Mercer
sold the property to an unaffiliated third party. The aggregate amount of any
such liabilities is estimated by the Company to be less than $100,000.

DWARF LEASING

Since January 1992, the Company has leased four light twin engine aircraft
from Dwarf Leasing, Inc., a corporation owned by Glenn M. Miller, Eric P. Roy,
Guy S. King, Kendall W. Wright and William R. Sumser, who are executive officers
of the Company. Total lease expenses were $129,600, $129,600, $99,000 and
$21,000 for the fiscal years ended September 30, 1993, 1994 and 1995 and for the
six months ended March 31, 1996, respectively. In fiscal 1995, the Company
purchased two of such aircraft and, in February 1996, purchased the remaining
aircraft. The total purchase price of such aircraft was $455,000. The Company
believes that the terms of such leases and such purchases were no less favorable
than those reasonably available from unaffiliated third parties.

PEDIA PALS, INC.

Pedia Pals, Inc. is a company which is engaged in the development of
children-friendly medical devices for use in pediatrics and which is owned, in
part, by certain of the Company's executive officers. Since fiscal 1993, the
Company has loaned Pedia Pals, Inc. an aggregate of $300,000 for general working
capital purposes, which amount bore interest at the prime rate set by NBD Bank
and which amount has been repaid in full.

49
<PAGE>
LOANS TO CERTAIN EXECUTIVE OFFICERS

The Company has provided Mr. Mercer a revolving credit facility to cover
personal items paid on behalf of Mr. Mercer by the Company, including charges
for fuel, maintenance and insurance for personal aircraft. This facility is
represented by a note from Mr. Mercer to the Company which bears interest equal
to the Company's cost of funds. Since the beginning of fiscal 1993, the highest
balance outstanding with respect to this note was $1,038,000, and the balance as
of March 31, 1996 was $1,038,000. Mr. Mercer will repay this note in full upon
the closing of the Offering.

In addition, the Company is currently paying for certain renovations of the
Columbus, Ohio facility, which is owned by Mr. Mercer and leased to the Company.
The total amount of such renovations is estimated to be $1.1 million. Mr. Mercer
will reimburse the Company for such expenditures, plus interest at a floating
rate approximately equal to the Company's borrowing costs, upon the closing of
the Offering. Following such renovations, the Company's lease payments to Mr.
Mercer will be increased to reflect the expansion of and improvements to the
Company's facility. See "-- Lease of Company Headquarters."

The Company loaned Glenn M. Miller $150,000 on December 11, 1995 in
connection with Mr. Miller's purchase of a piece of property for private use.
The loan to Mr. Miller is unsecured, matures on December 31, 1997 and bears
interest at the prime rate, as determined by NBD Bank. Mr. Miller repaid $75,000
of such loan on December 29, 1995 and intends to repay the balance upon the
closing of the Offering.

NCI PARTNERS

NCI Partners is a partnership of all of the Company's executive officers
except Mr. Mercer and Mr. Strench. The partnership was formed pursuant to a
succession plan to assure that the Company would continue under current
management in the event of the deaths of Mr. Mercer and his wife, Adele Mercer.
Therefore, on December 7, 1992, the partnership acquired life insurance policies
on Mr. Mercer and his wife in the aggregate amount of $40.0 million, with the
partnership as the sole beneficiary. Proceeds from the life insurance policies
would be used to acquire the Common Shares owned by Mr. Mercer from the Mercers'
estate. Premiums for these life insurance policies in the aggregate amount of
approximately $65,000 per year have been paid by the Company and subsequently
reimbursed by NCI Partners. At or prior to the closing of the Offering, NCI
Partners will reimburse the Company for all such premiums, NCI Partners will be
dissolved and the policies will be canceled.

50
<PAGE>
PRINCIPAL SHAREHOLDERS

The table below sets forth the number and percentage of outstanding Common
Shares beneficially owned by (i) each director and executive officer of the
Company; (ii) all directors and executive officers of the Company as a group;
and (iii) each person known by the Company to own beneficially more than five
percent of any class of the Company's voting securities, in each case, as of May
30, 1996, and as adjusted to reflect the sale of Common Shares being offered
hereby (assuming that the Underwriters' over-allotment option is not exercised).
The Company believes that each individual or entity named has sole investment
and voting power with respect to Common Shares indicated as beneficially owned
by such individual or entity, except as otherwise noted. The address of each of
the executive officers and directors is c/o AirNet Systems, Inc., 3939
International Gateway, Columbus, Ohio 43219.

At May 30, 1996, there were nine holders of record of Common Shares.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED PRIOR TO SHARES BENEFICIALLY
OFFERING OWNED AFTER OFFERING
---------------------- ----------------------
EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL SHAREHOLDERS NUMBER PERCENT NUMBER PERCENT
- -------------------------------------------------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Gerald G. Mercer (1)................................................ 4,392,927 74.7% 4,392,927 38.3%
Glenn M. Miller..................................................... 543,425 9.3 543,425 4.7
Charles A. Renusch.................................................. 380,313 6.5 380,313 3.3
Eric P. Roy......................................................... 226,920 3.9 226,920 2.0
Guy S. King......................................................... 105,642 1.8 105,642 *
Lincoln L. Rutter................................................... 85,781 1.5 85,781 *
Kendall W. Wright................................................... 85,781 1.5 85,781 *
William R. Sumser................................................... 57,046 * 57,046 *
Donald D. Strench................................................... -- -- -- --
Adele Mercer........................................................ -- -- -- --
All executive officers and directors as a group (10 persons)........ 5,877,835 100.0 5,877,835 51.2
</TABLE>

- ------------------------
* Less than one percent.

(1) Includes 167,227 Common Shares subject to the Jeffrey Wright Warrant which
Mr. Mercer has agreed to purchase upon the closing of the Offering. See
"Certain Relationships and Related Party Transactions -- Wright Warrants."
Also includes 1,000,000 Common Shares held by the Gerald G. Mercer 5/30/96
Grantor Retained Annuity Trust, of which Mr. Mercer is the grantor and
trustee and possesses sole voting and dispositive power. Mr. Mercer intends
to give 76,000 Common Shares on May 31, 1996 to the Gerald G. Mercer 5/30/96
Irrevocable Family Trust, the sole beneficiaries of which are Mr. Mercer's
two children. Mr. Mercer will not have any voting or dispositive power with
respect to such 76,000 Common Shares.

51
<PAGE>
DESCRIPTION OF CAPITAL STOCK

GENERAL

The authorized capital stock of the Company consists of 40,000,000 Common
Shares, par value $.01 per share, and 10,000,000 preferred shares, par value
$.01 per share. As of May 30, 1996, 5,710,608 Common Shares were issued and
outstanding and 2,650,764 Common Shares were reserved for issuance pursuant to
the Wright Warrants. In addition, 1,150,000 authorized Common Shares have been
reserved for issuance under the Company's Incentive Stock Plan. There are no
preferred shares issued and outstanding.

COMMON SHARES

Holders of Common Shares are entitled to one vote for each Common Share held
of record on all matters presented to a vote of shareholders, including the
election of directors. Holders of Common Shares have no cumulative voting rights
and no preemptive rights to purchase or subscribe for any stock or other
securities. There are no conversion rights or redemption or sinking fund
provisions with respect to the Common Shares. Subject to preferences that may be
applicable to any outstanding preferred shares and subject to the applicable
debt instruments of the Company, holders of Common Shares are entitled to
receive such dividends as may be declared by the Board of Directors out of funds
legally available therefor. See "Dividend Policy." In the event of liquidation,
dissolution or winding up of the affairs of the Company, holders of Common
Shares are entitled to share pro rata in distribution of the assets of the
Company remaining after payment or provision for payment of liabilities and the
liquidation payments to holders of outstanding preferred shares. All outstanding
Common Shares are, and the Common Shares offered hereby when issued and paid for
will be, fully paid and nonassessable.

Application has been made for listing the Common Shares for quotation on The
Nasdaq National Market.

PREFERRED SHARES

The Company's Board of Directors has the authority to issue up to 10,000,000
preferred shares in one or more series and to fix, by resolution, the
designations, preferences and relative, participating, optional or other rights,
if any, but currently not the voting rights, and the qualifications, limitations
or restrictions thereof, if any, including the number of shares in such series
(which the Board may increase or decrease as permitted by Ohio law), liquidation
preferences, dividend rates, conversion rights and redemption provisions of the
shares constituting any series, without any further vote or action by the
Company's shareholders. Any series of preferred shares so issued could have
priority over the Common Shares with respect to dividend or liquidation rights
or both. In addition, the issuance of preferred shares, or the issuance of
rights to purchase such shares, could have the effect of delaying, deferring or
preventing a change of control of the Company or an unsolicited acquisition
proposal.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Shares is First Chicago
Trust Company of New York.

ANTI-TAKEOVER EFFECTS OF ARTICLES OF INCORPORATION, CODE OF REGULATIONS AND THE
OHIO GENERAL CORPORATION LAW

Certain provisions of the Articles of Incorporation and Code of Regulations
of the Company and of the Ohio GCL summarized in the following paragraphs may be
deemed to have an anti-takeover effect and may delay, defer or prevent a tender
offer or takeover attempt that a shareholder might consider in its best
interest, including those attempts that might result in a premium over the
market price for the shares held by shareholders.

NO SHAREHOLDER ACTION BY WRITTEN CONSENT

Section 1701.54 of the Ohio GCL requires that an action by written consent
of the shareholders in lieu of a meeting be unanimous, except that, pursuant to
Section 1701.11, the code of regulations may be amended by an action by written
consent of holders of shares entitling them to exercise two-thirds of the voting
power of the corporation or, if the articles of incorporation or code of
regulations otherwise provide, such greater or lesser amount, but not less than
a majority. The Company's Code of Regulations provides that, upon the closing of
the Offering, no action to amend the Code of Regulations may be taken by a
written consent of shareholders without a meeting. This provision may have the
effect of delaying, deferring or preventing a tender offer or takeover attempt
that a shareholder might consider in its best interest.

52
<PAGE>
SUPERMAJORITY VOTING PROVISIONS

The Code of Regulations provides that the provisions relating to the
elimination of shareholder action by written consent to amend the Code of
Regulations, removal of directors only for cause, indemnification of directors
and supermajority voting may not be repealed or amended in any respect, and no
other provision may be adopted, amended or repealed which would have the effect
of modifying or permitting the circumvention of such provisions, without the
vote of the holders of not less than 66 2/3% of the total voting power of the
Company.

ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

The Code of Regulations provides that shareholders seeking to bring business
before an annual meeting of shareholders, or to nominate candidates for election
as directors at an annual or special meeting of shareholders, must provide
timely notice thereof in writing. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Company not less than 60 days nor more than 90 days prior to the meeting;
provided, however, that in the event that less than 70 days' notice or prior
public disclosure of the date of the meeting is given or made to shareholders,
notice by the shareholder to be timely must be received no later than the close
of business on the 10th day following the day on which such notice of the date
of the meeting was mailed or such public disclosure was made. The Code of
Regulations also specifies certain requirements for a shareholder's notice to be
in proper written form. These provisions may preclude some shareholders from
bringing matters before the shareholders at an annual or special meeting or from
making nominations for directors at an annual or special meeting; provided that
nothing in such provisions shall prevent any shareholder from submitting a
shareholder proposal in compliance with Rule 14a-8 of the Exchange Act.

CONTROL SHARE ACQUISITION STATUTE

Section 1701.831 of the Ohio GCL (the "Control Share Acquisition Statute")
requires shareholder approval of any proposed "control share acquisition" of an
Ohio corporation. A "control share acquisition" is the acquisition, directly or
indirectly, by any person (including any individual, partnership, corporation,
limited liability company, society, association or two or more persons who have
a joint or common interest) of shares of a corporation that, when added to all
other shares of the corporation that may be voted, directly or indirectly, by
the acquiring person, would entitle such person to exercise or direct the
exercise of 20% or more (but less than 33 1/3%) of the voting power of the
corporation in the election of directors or 33 1/3% or more (but less than a
majority) of such voting power or a majority or more of such voting power. Under
the Control Share Acquisition Statute, the control share acquisition must be
approved in advance by the holders of a majority of the outstanding voting
shares represented at a meeting at which a quorum is present and by the holders
of a majority of the portion of the outstanding voting shares represented at
such a meeting excluding the voting shares owned by the acquiring shareholder
and certain "interested shares," including shares owned by officers elected or
appointed by the directors of the corporation and by directors of the
corporation who are also associates of the corporation.

The purpose of the Control Share Acquisition Statute is to give shareholders
of Ohio corporations a reasonable opportunity to express their views on a
proposed shift in control, thereby reducing the coercion inherent in an
unfriendly takeover. The provisions of the Control Share Acquisition Statute
grant to the shareholders of the Company the assurance that they will have
adequate time to evaluate the proposal of the acquiring person, that they will
be permitted to vote on the issue of authorizing the acquiring person's purchase
program to go forward in the same manner and with the same proxy information
that would be available to them if a proposed merger of the Company were before
them and, most importantly, that the interests of all shareholders will be taken
into account in connection with such vote and the probability will be increased
that they will be treated equally regarding the price to be offered for their
Common Shares if the implementation of the proposal is approved.

The Control Share Acquisition Statute applies not only to traditional tender
offers but also to open market purchases, privately negotiated transactions and
original issuances by an Ohio corporation, whether friendly or unfriendly. The
procedural requirements of the Control Share Acquisition Statute could render
approval of any control share acquisition difficult in that a majority of the
voting power of the Company, excluding "interested shares," must be represented
at the meeting and must be voted in favor of the acquisition. It is recognized
that any corporate defense against persons seeking to acquire control may have
the effect of discouraging or preventing offers

53
<PAGE>
which some shareholders might find financially attractive. On the other hand,
the need on the part of the acquiring person to convince the shareholders of the
Company of the value and validity of his offer may cause such offer to be more
financially attractive in order to gain shareholder approval.

MERGER MORATORIUM STATUTE

Chapter 1704 of the Ohio GCL (the "Merger Moratorium Statute") generally
prohibits a wide range of business combinations and other transactions
(including mergers, consolidations, asset sales, loans, disproportionate
distributions of property and disproportionate issuances or transfers of shares
or rights to acquire shares) between an Ohio corporation and a person that owns,
alone or with other related parties, shares representing at least 10% of the
voting power of such corporation (an "Interested Shareholder") for a period of
three years after such person becomes an Interested Shareholder, unless, prior
to the date that the Interested Shareholder became such, the directors approve
either the transaction or the acquisition of the corporation's shares that
resulted in the person becoming an Interested Shareholder. Following the
three-year moratorium period, the corporation may engage in covered transactions
with an Interested Shareholder only if, among other things, (i) the transaction
receives the approval of the holders of 2/3 of all the voting shares and the
approval of the holders of a majority of the voting shares held by persons other
than an Interested Shareholder or (ii) the remaining shareholders receive an
amount for their shares equal to the higher of the highest amount paid in the
past by the Interested Shareholder for the corporation's shares or the amount
that would be due the shareholders if the corporation were to dissolve. The
Merger Moratorium Statute is designed to prevent many of the self-dealing
activities that often accompany highly-leveraged acquisitions by prohibiting an
Interested Shareholder from using the corporation or its assets or shares for
his special benefit. The Merger Moratorium Statute will encourage potential
tender offerors to negotiate with the Board of Directors of the Company to
ensure that the shareholders of the Company receive fair and equitable
consideration for their shares. However, the Merger Moratorium Statute presents
potential pitfalls for unwary shareholders. Close attention to the impact of
common corporate actions, such as the grant of associate stock options and loans
to Interested Shareholders in the ordinary course of business, is necessary to
determine whether such actions are encompassed by the Merger Moratorium Statute.

54
<PAGE>
DESCRIPTION OF CERTAIN INDEBTEDNESS

The following summary sets forth the material terms of the New Credit
Agreement which has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part. Capitalized terms used but not defined herein
have the meanings set forth in the New Credit Agreement.

NEW CREDIT AGREEMENT

The Company has received a commitment from NBD Bank, as agent, to underwrite
the New Credit Agreement. NBD Bank is the sole lender under the Existing Credit
Agreement. Under the New Credit Agreement, NBD Bank and the other lenders will
provide up to $50.0 million in a five year, unsecured revolving credit facility.
The New Credit Agreement will be initially funded concurrently with, and is
conditioned upon, the closing of the Offering.

AMOUNT OF ADDITIONAL CREDIT AVAILABLE. The New Credit Agreement provides
for two tranches of revolving credit borrowings. Pursuant to Tranche A, the
Company may borrow up to $20.0 million against 80% of eligible accounts
receivable and 50% of eligible inventory, provided that inventory advances may
not exceed $4.0 million. Pursuant to Tranche B, the Company may borrow up to
$30.0 million against 75% of the quick retail value of its aircraft and eligible
machinery and equipment. Based on such borrowing base limitations, and after
application of the net proceeds from the Offering and funds borrowed under the
New Credit Agreement to repay all outstanding indebtedness under the Existing
Credit Agreement, the Company expects to have approximately $31.8 million of
financing available under the New Credit Agreement. The New Credit Agreement
also includes a standby and commercial letter of credit subfacility of up to
$3.0 million.

INTEREST. The New Credit Agreement will bear interest, at the Company's
option at (a) a fixed rate to be agreed upon by the Company and the lenders or
(b) a floating rate initially equal to (i) the higher of 0.5% per annum over the
Federal Funds Rate or NBD Bank's Prime rate or (ii) LIBOR plus a margin of
between 0.7% per annum and 1.125% per annum depending upon the Company's Funded
Debt to EBITDA ratio.

GUARANTEES. The New Credit Agreement will be guaranteed by any future
subsidiaries of the Company.

COVENANTS. The New Credit Agreement will include certain negative
covenants, including covenants which impose limitations on the ability of the
Company to, among other things: (i) sell all or substantially all of the assets
of the Company; (ii) merge or consolidate; (iii) incur indebtedness outside of
the New Credit Agreement; and (iv) make acquisitions for consideration in excess
of $3.0 million without consent. In addition, the New Credit Agreement will
contain financial covenants which contain different baselines or measure
financial ratios different from those in the Existing Credit Agreement,
including minimum Tangible Net Worth (85% of post-Offering Tangible Net Worth
plus 50% of annual Net Income), a Funded Debt to EBITDA ratio (not to exceed
2.5:1.0), a Funded Debt to Total Capitalization ratio (not to exceed 0.5:1.0)
and a Cash Flow Coverage ratio (not to be less than 1.05:1.0 through June 29,
1997 or less than 1.1:1.0 through September 29, 1997 or less than 1.2:1.0
thereafter) (capitalized terms, in each case, as defined therein).

FEES. Upon the closing of the New Credit Agreement, the Company will be
required to pay underwriting and other fees totaling $125,000 plus the
reasonable fees of NBD Bank's counsel, in addition to the $125,000 in fees paid
at the time the commitment to enter into the New Credit Agreement was accepted.
The New Credit Agreement will also provide for a $10,000 annual agency fee and a
facility fee of between 0.2% per annum and 0.375% per annum based on the
Company's Funded Debt to EBITDA ratio.

EXISTING CREDIT AGREEMENT

The total indebtedness outstanding under the Existing Credit Agreement as of
the closing of the Offering will be repaid from the net proceeds of the
Offering. For a description of the terms of the Existing Credit Agreement, see
Note 4 to the Company's Financial Statements.

55
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 11,477,835 Common
Shares outstanding (12,317,835 Common Shares if the Underwriters exercise their
over-allotment option in full). Of those Common Shares, the 5,600,000 Common
Shares (6,440,000 Common Shares if the Underwriters exercise their over-
allotment option in full) sold in the Offering will be freely transferable
without restriction under the Securities Act, except for any such shares which
may be acquired by an affiliate of the Company (as that term is defined in Rule
144 under the Securities Act).

The remaining 5,877,835 outstanding Common Shares held by current
shareholders constitute either "restricted securities," within the meaning of
Rule 144, or securities held by affiliates and will only be eligible for sale in
the open market after the Offering subject to the contractual lockup provisions
and applicable requirements of Rule 144 described below.

In general, under Rule 144, as currently in effect, if a period of at least
two years has elapsed between the later of the date on which restricted
securities were acquired from the Company and the date on which they were
acquired from an affiliate, then the holder of such restricted securities
(including an affiliate) is entitled to sell a number of Common Shares within
any three-month period that does not exceed the greater of (i) one percent of
the then outstanding Common Shares or (ii) the average weekly reported volume of
trading of the Common Shares during the four calendar weeks preceding such sale.
Sales under Rule 144 are also subject to certain requirements pertaining to the
manner of such sales, notices of such sales and the availability of current
public information concerning the Company. Affiliates also must sell Common
Shares not constituting restricted securities in accordance with the foregoing
volume limitations and other requirements but without regard to the two-year
holding period. Under Rule 144(k), if a period of at least three years has
elapsed between the later of the date on which restricted securities were
acquired from the Company and the date on which they were acquired from an
affiliate, a holder of such restricted securities who is not an affiliate at the
time of the sale and has not been an affiliate for at least three months prior
to the sale would be entitled to sell the Common Shares immediately without
regard to the volume limitations and other conditions described above.

Sales of a significant number of Common Shares could have an adverse impact
on the market price of the Common Shares. The Company and all of the Company's
executive officers and directors have agreed not to offer, sell, contract to
sell, pledge, grant any option for the sale of, or otherwise dispose or cause
the disposition of, any Common Shares or securities convertible into or
exchangeable or exercisable for such shares, for a period of 180 days after the
date of this Prospectus, without the prior written consent of Dillon, Read & Co.
Inc., except that the Company may award options and Common Shares pursuant to
the Incentive Stock Plan and may issue Common Shares in connection with a
transaction registered on Form S-4.

On the effective date of the Registration Statement of which this Prospectus
forms a part, the Company expects to file a registration statement on Form S-8
under the Securities Act covering 1,150,000 Common Shares reserved for issuance
under the Company's Incentive Stock Plan. Upon the filing of such registration
statement, Common Shares issued upon exercise of options or other awards granted
under the Incentive Stock Plan generally will be available for sale in the open
market by non-affiliates of the Company.

56
<PAGE>
UNDERWRITING

The names of the Underwriters of the Common Shares offered hereby and the
aggregate number of Common Shares which each has severally agreed to purchase
from the Company, subject to the terms and conditions specified in the
Underwriting Agreement, are as follows:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
- --------------------------------------------------------------------------- -----------------
<S> <C>
Dillon, Read & Co. Inc..................................................... 1,540,000
The Robinson-Humphrey Company, Inc......................................... 1,540,000
Advest, Inc................................................................ 60,000
Auerbach Pollak & Richardson Inc........................................... 30,000
Bear, Stearns & Co. Inc.................................................... 110,000
Brean Murray, Foster Securities, Inc....................................... 30,000
Alex. Brown & Sons Incorporated............................................ 110,000
CS First Boston Corporation................................................ 110,000
Dean Witter Reynolds Inc................................................... 110,000
Donaldson, Lufkin & Jenrette Securities Corporation........................ 110,000
A.G. Edwards & Sons, Inc................................................... 110,000
Furman Selz LLC............................................................ 60,000
Goldman, Sachs & Co........................................................ 110,000
J.J.B. Hilliard, W.L. Lyons, Inc........................................... 60,000
Hoefer & Arnett, Inc....................................................... 30,000
Lazard Freres & Co. LLC.................................................... 110,000
Legg Mason Wood Walker, Incorporated....................................... 60,000
Lehman Brothers Inc........................................................ 110,000
McDonald & Company Securities, Inc......................................... 60,000
Morgan Keegan & Company, Inc............................................... 60,000
Morgan Stanley & Co. Incorporated.......................................... 110,000
David A. Noyes & Company................................................... 30,000
The Ohio Company........................................................... 60,000
Oppenheimer & Co., Inc..................................................... 110,000
Ormes Capital Markets, Inc................................................. 30,000
PaineWebber Incorporated................................................... 110,000
Parker/Hunter Incorporated................................................. 30,000
Pennsylvania Merchant Group Ltd............................................ 30,000
Piper Jaffray Inc.......................................................... 60,000
Ragen MacKenzie Incorporated............................................... 60,000
Salomon Brothers Inc....................................................... 110,000
Schroder Wertheim & Co. Incorporated....................................... 110,000
Scott & Stringfellow, Inc.................................................. 30,000
Smith Barney Inc........................................................... 110,000
Stephens Inc............................................................... 60,000
Wellington (H.G.) & Co. Inc................................................ 30,000
--------
Total.................................................................. 5,600,000
--------
--------
</TABLE>

The Managing Underwriters are Dillon, Read & Co. Inc. and The
Robinson-Humphrey Company, Inc.

The Underwriters are committed to purchase all of the Common Shares, if any
are so purchased. The Underwriting Agreement contains certain provisions
whereby, if any Underwriter defaults in its obligation to purchase such Common
Shares, and the aggregate obligations of the Underwriters so defaulting do not
exceed ten percent of the Common Shares offered hereby, some or all of the
remaining Underwriters must assume such obligations.

57
<PAGE>
The Underwriters propose to offer the Common Shares directly to the public
initially at the offering price per share set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in excess
of $0.58 per share. The Underwriters may allow, and such dealers may reallow,
concessions not in excess of $0.10 per share to certain other dealers. The
offering of the Common Shares is made for delivery when, as and if accepted by
the Underwriters and subject to prior sale and withdrawal, cancellation or
modification of the offer without notice. The Underwriters reserve the right to
reject any order for the purchase of the Common Shares. After the public
offering of the Common Shares, the public offering price and the concessions may
be changed by the Managing Underwriters.

The Company has granted to the Underwriters an option for 30 days from the
date of this Prospectus to purchase up to 840,000 additional Common Shares at
the initial public offering price less the underwriting discount set forth on
the cover page of this Prospectus. The Underwriters may exercise such option
only to cover over-allotments of the Common Shares offered hereby. To the extent
the Underwriters exercise this option, each Underwriter will be obligated,
subject to certain conditions, to purchase the number of additional Common
Shares proportionate to such Underwriter's initial commitment.

The Company has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act, or to contribute to payments the
Underwriters may be required to make in respect thereof.

The Company and all of the directors and executive officers of the Company
have agreed, subject to certain exceptions, that they will not offer, sell,
contract to sell, transfer or otherwise encumber or dispose of any Common
Shares, or securities convertible into or exchangeable for Common Shares, for a
period of 180 days from the date of this Prospectus, without the prior consent
of Dillon, Read & Co. Inc., except the Company may issue options and Common
Shares pursuant to the Incentive Stock Plan and may issue Common Shares in
connection with a transaction registered on Form S-4.

Prior to the Offering, there has been no public market for the Common
Shares. Consequently, the initial public offering price for the Common Shares
was determined by negotiation between the Company and the Managing Underwriters.
Factors considered in determining the public offering price were prevailing
market conditions, the state of the Company's development, recent financial
results of the Company, the future prospects of the Company and its industry,
market valuations of securities of companies engaged in activities deemed by the
Managing Underwriters to be similar to those of the Company and other factors
deemed relevant.

The Underwriters do not intend to confirm sales to accounts over which they
exercise discretionary authority.

LEGAL MATTERS

The validity of the Common Shares offered hereby will be passed upon for the
Company by Vorys, Sater, Seymour and Pease, Columbus, Ohio, and for the
Underwriters by Gibson, Dunn & Crutcher LLP, New York, New York. Russell M.
Gertmenian, a partner in Vorys, Sater, Seymour and Pease, has agreed to serve as
a director of the Company upon the closing of the Offering.

EXPERTS

The financial statements of AirNet Systems, Inc. at September 30, 1994 and
1995, and for each of the three years in the period ended September 30, 1995,
included in this Prospectus and Registration Statement, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports thereon
appearing elsewhere herein and in the Registration Statement, and are included
in reliance upon such reports given upon the authority of such firm as experts
in accounting and auditing.

ADDITIONAL INFORMATION

The Company, after the Offering of Common Shares described herein, will be
subject to the informational requirements of the Exchange Act, and in accordance
therewith, will be required to file periodic reports and other information with
the Commission. Such information can be inspected without charge after the
Offering at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, or at its
Regional Offices located at Suite 1400, Northwest Atrium Center, 500 West

58
<PAGE>
Madison Street, Chicago, Illinois 60661 and at 7 World Trade Center, 13th Floor,
New York, New York 10048, and copies of such materials may be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed fees.

The Company has filed with the Commission a Registration Statement on Form
S-1 (herein, together with all amendments thereto, the "Registration Statement")
under the Securities Act with respect to the Common Shares offered hereby. This
Prospectus, which is part of the Registration Statement, does not contain all of
the information contained in the Registration Statement and the exhibits and
financial statements thereto, to which reference is hereby made. The
Registration Statement, including the exhibits thereto, may be inspected and
copies thereof can be obtained as described in the preceding paragraph with
respect to periodic reports and other information filed by the Company under the
Exchange Act.

The Company intends to furnish its shareholders with annual reports
containing audited financial statements, which have been certified by the
Company's independent auditors.

59
<PAGE>
AIRNET SYSTEMS, INC.
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Report of Independent Auditors............................................................................. F-2
Balance Sheets as of September 30, 1994 and 1995 and March 31, 1996 (Unaudited)............................ F-3
Statements of Income for the fiscal years ended September 30, 1993, 1994 and 1995 and for the six months
ended March 31, 1995 and 1996 (Unaudited)................................................................. F-4
Statements of Shareholders' Equity for the fiscal years ended September 30, 1993, 1994 and 1995 and for the
six months ended March 31, 1996 (Unaudited)............................................................... F-5
Statements of Cash Flows for the fiscal years ended September 30, 1993, 1994 and 1995 and for the six
months ended March 31, 1995 and 1996 (Unaudited).......................................................... F-6
Notes to Financial Statements.............................................................................. F-7
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS

To the Shareholders
AirNet Systems, Inc.

We have audited the accompanying balance sheets of AirNet Systems, Inc. (the
Company), formerly New Creations, Inc., as of September 30, 1994 and 1995, and
the related statements of income, shareholders' equity, and cash flows for the
each of the three years in the period ended September 30, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
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 AirNet Systems, Inc. at
September 30, 1994 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 1995, in
conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

Columbus, Ohio
November 27, 1995,
except for Notes 11 and 12
as to which the date is May 30, 1996

F-2
<PAGE>
AIRNET SYSTEMS, INC.
BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
SEPTEMBER 30, PRO FORMA
---------------------- MARCH 31, MARCH 31,
1994 1995 1996 1996
---------- ---------- ---------- -----------
(UNAUDITED) (UNAUDITED)
(NOTE 12)
<S> <C> <C> <C> <C>
Current assets:
Cash......................................... $ 257,419 $ 238,394 $ 2,928
Accounts receivable:
Trade, less allowances of $40,000 and
$2,000 in 1994 and 1995, respectively..... 6,402,564 6,057,987 6,496,228
Shareholders, affiliates and employees..... 415,540 303,490 1,313,028
Spare parts and supplies..................... 3,491,092 3,932,956 4,110,622
Prepaid expenses............................. 1,494,069 2,195,115 3,394,530
---------- ---------- ----------
Total current assets........................... 12,060,684 12,727,942 15,317,336
Net property and equipment (NOTE 2):........... 25,569,896 32,833,612 34,081,906

Other assets:
Intangibles, net of accumulated amortization
of $2,969,000 and $3,404,000 in 1994 and
1995, respectively (NOTE 3)................. 3,854,178 3,418,276 3,200,325
Other accounts receivable.................... 550,000 -- --
Deposits..................................... 106,160 57,060 51,860
---------- ---------- ----------
Total assets................................... $42,140,918 $49,036,890 $52,651,427
---------- ---------- ----------
---------- ---------- ----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable............................. $3,280,653 $3,937,894 $6,290,892
Accrued expenses............................. 376,624 556,778 409,932
Salaries and related liabilities............. 1,339,409 1,605,619 1,731,252
Current portion of notes payable (NOTE 4).... 3,674,286 5,565,706 6,229,186
---------- ---------- ----------
Total current liabilities...................... 8,670,972 11,665,997 14,661,262

Notes payable, less current portion (NOTE 4)... 12,575,952 13,662,633 11,301,802

Deferred compensation (NOTES 7 AND 8).......... 2,963,392 3,238,856 3,651,928

Shareholders' equity (NOTE 11):
Preferred stock, $.01 par value; 10,000,000
shares authorized; and no shares issued and
outstanding................................. -- -- --
Common stock, $.01 par value; 40,000,000
shares authorized, 5,710,608 shares issued
and outstanding in 1994 and 1995; 5,877,835
pro forma................................... 57,106 57,106 57,106 $ 58,778
Additional paid-in capital................... 349,534 349,534 349,534 23,205,641
Retained earnings (deficit).................. 17,888,345 20,385,860 22,913,651 (15,000,000)
Notes receivable from shareholders (NOTE
8).......................................... (364,383) (323,096) (283,856) --
---------- ---------- ---------- -----------
Total shareholders' equity..................... 17,930,602 20,469,404 23,036,435 $ 8,264,419
---------- ---------- ----------
-----------
-----------
Total liabilities and shareholders' equity..... $42,140,918 $49,036,890 $52,651,427
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

SEE ACCOMPANYING NOTES.

F-3
<PAGE>
AIRNET SYSTEMS, INC.
STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, SIX MONTHS ENDED MARCH 31,
------------------------------------------- ----------------------------
1993 1994 1995 1995 1996
------------- ------------- ------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Air transportation (net of excise taxes of
$1,776,000, $1,841,000 and $1,810,000 for
the year ended 1993, 1994 and 1995,
respectively):
Check delivery.......................... $ 49,357,903 $ 54,046,381 $ 58,263,706 $ 27,960,098 $ 30,569,670
Small package delivery.................. 7,967,447 8,241,332 8,191,723 3,972,980 4,460,319
Fixed base operations..................... 1,265,347 1,158,044 1,006,529 519,317 478,942
------------- ------------- ------------- ------------- -------------
58,590,697 63,445,757 67,461,958 32,452,395 35,508,931
Costs and expenses:
Air transportation:
Wages and benefits...................... 7,593,967 8,185,759 9,195,208 4,557,172 4,875,987
Aircraft fuel........................... 7,150,558 6,958,282 7,444,878 3,598,983 3,875,170
Aircraft maintenance.................... 5,426,981 5,720,763 6,033,739 3,075,195 3,291,213
Aircraft leases......................... 4,405,303 3,260,273 1,042,653 634,204 378,377
Ground couriers and other outside
services............................... 7,949,977 8,346,805 8,611,022 4,137,743 4,550,751
Depreciation and amortization........... 5,862,239 6,332,667 7,353,753 3,476,468 4,155,918
Other................................... 5,048,025 5,765,303 6,429,319 3,171,947 3,475,923
Fixed base operations..................... 1,150,199 1,081,502 955,792 446,078 390,153
Selling, general and administrative
expenses:
Executive compensation.................. 2,738,214 3,284,619 3,952,388 1,834,996 1,719,494
Executive compensation related to
employee stock purchase agreements and
deferred compensation plan (NOTES 7 AND
8)..................................... 247,003 1,598,176 2,635,157 1,162,056 1,400,792
Non-competition agreement with Wright
(NOTE 3)............................... 1,339,323 1,813,114 2,327,726 1,207,375 727,378
Other................................... 3,927,039 3,787,703 3,404,796 1,655,998 2,238,322
------------- ------------- ------------- ------------- -------------
Total costs and expenses.................. 52,838,828 56,134,966 59,386,431 28,958,215 31,079,478
------------- ------------- ------------- ------------- -------------
Income from operations...................... 5,751,869 7,310,791 8,075,527 3,494,180 4,429,453
Interest expense............................ 1,122,923 1,092,990 1,452,066 611,371 736,167
------------- ------------- ------------- ------------- -------------
Net income.................................. $ 4,628,946 $ 6,217,801 $ 6,623,461 $ 2,882,809 $ 3,693,286
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Unaudited pro forma information (NOTE 12):
Historical income before income taxes..... $ 6,623,461 $ 3,693,286
Pro forma adjustments other than income
taxes.................................... 7,367,337 3,083,831
------------- -------------
Pro forma income before income taxes...... 13,990,798 6,777,117
Pro forma taxes on income................. 5,596,319 2,710,847
------------- -------------
Pro forma net income...................... $ 8,394,479 $ 4,066,270
------------- -------------
------------- -------------
Pro forma net income per common share..... $ .74 $ .36
------------- -------------
------------- -------------
Weighted average common shares
outstanding.............................. 11,332,249 11,200,236
</TABLE>

SEE ACCOMPANYING NOTES.

F-4
<PAGE>
AIRNET SYSTEMS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK NOTES
---------------------- ADDITIONAL RECEIVABLE
NUMBER OF PAID-IN RETAINED FROM
SHARES AMOUNT CAPITAL EARNINGS SHAREHOLDERS TOTAL
----------- --------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, OCTOBER 1, 1992.............. 422,570 $ 4,226 $ -- $ 14,031,304 $ -- $ 14,035,530
Year ended September 30, 1993 --
Net income.......................... -- -- -- 4,628,946 -- 4,628,946
Shareholder distributions --
including stock dividend........... 3,803,130 38,031 -- (1,908,782) -- (1,870,751)
----------- --------- ----------- ------------- ------------- -------------
BALANCE, SEPTEMBER 30, 1993........... 4,225,700 42,257 -- 16,751,468 -- 16,793,725
Year ended September 30, 1994 --
Net income.......................... -- -- -- 6,217,801 -- 6,217,801
Issued stock (NOTE 8)............... 1,484,908 14,849 349,534 -- (364,383) --
Shareholders distributions.......... -- -- -- (5,080,924) -- (5,080,924)
----------- --------- ----------- ------------- ------------- -------------
BALANCE, SEPTEMBER 30, 1994........... 5,710,608 57,106 349,534 17,888,345 (364,383) 17,930,602
Year ended September 30, 1995 --
Net income.......................... -- -- -- 6,623,461 -- 6,623,461
Repayment of notes (NOTE 8)......... -- -- -- -- 41,287 41,287
Shareholders distributions.......... -- -- -- (4,125,946) -- (4,125,946)
----------- --------- ----------- ------------- ------------- -------------
BALANCE, SEPTEMBER 30, 1995........... 5,710,608 57,106 349,534 20,385,860 (323,096) 20,469,404
Six months ended March 31, 1996
(Unaudited) --
Net income.......................... -- -- -- 3,693,286 -- 3,693,286
Repayment of notes (NOTE 8)......... -- -- -- -- 39,240 39,240
Shareholders distributions.......... -- -- -- (1,165,495) -- (1,165,495)
----------- --------- ----------- ------------- ------------- -------------
BALANCE, MARCH 31, 1996 (UNAUDITED)... 5,710,608 $ 57,106 $ 349,534 $ 22,913,651 $ (283,856) $ 23,036,435
----------- --------- ----------- ------------- ------------- -------------
----------- --------- ----------- ------------- ------------- -------------
</TABLE>

SEE ACCOMPANYING NOTES.

F-5
<PAGE>
AIRNET SYSTEMS, INC.
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30 SIX MONTHS ENDED MARCH 31,
--------------------------------------------- ----------------------------
1993 1994 1995 1995 1996
------------- -------------- -------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income................................ $ 4,628,946 $ 6,217,801 $ 6,623,461 $ 2,882,809 $ 3,693,286
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization........... 5,925,728 6,394,898 7,435,602 3,507,934 4,194,933
Amortization of intangibles............. 435,545 435,902 435,902 217,951 217,951
Provision for (losses) recoveries on
accounts receivable.................... 17,823 (63,436) (38,384) (30,000) (18,000)
Deferred compensation................... 163,304 1,009,826 275,465 (32,382) 413,072
Loss (gain) on disposition of assets.... 280,350 287,468 73,472 (31,308) (6,020)
Changes in operating assets and
liabilities:
Accounts receivable................... (174,232) (760,059) 495,011 (175,959) (1,429,779)
Spare parts and supplies.............. (374,794) 151,609 (441,864) (69,800) (177,666)
Prepaid expenses...................... (237,935) (118,210) (701,046) (714,082) (1,199,415)
Accounts payable...................... (228,379) 989,483 657,241 699,698 2,352,998
Accrued expenses...................... (50,438) (25,339) 180,154 61,933 1,174,474
Salaries and related liabilities...... 230,728 119,825 266,210 163,834 (1,195,687)
Other, net............................ 193,093 81,950 49,100 43,500 5,200
------------- -------------- -------------- ------------- -------------
Net cash provided by operating
activities............................... 10,809,739 14,721,718 15,310,324 6,524,128 8,025,347

INVESTING ACTIVITIES
Purchases of property and equipment....... (8,378,145) (12,926,629) (14,543,850) (6,230,228) (5,437,207)
Proceeds from sale of equipment........... 129,729 112,193 321,059 -- --
------------- -------------- -------------- ------------- -------------
Net cash used in investing activities..... (8,248,416) (12,814,436) (14,222,791) (6,230,228) (5,437,207)

FINANCING ACTIVITIES
Proceeds from shareholder notes
receivable............................... -- -- 41,287 41,287 39,240
Net (repayment) borrowings under revolving
credit facilities........................ (3,000,000) 875,000 1,350,000 475,000 (850,000)
Repayment of long-term debt............... (220,740) (2,280,021) (10,311,899) (6,836,187) (3,595,351)
Proceeds from issuance of long-term
debt..................................... 2,540,000 4,486,000 11,940,000 6,540,000 2,748,000
Distributions to shareholders............. (1,870,751) (5,080,924) (4,125,946) (768,716) (1,165,495)
------------- -------------- -------------- ------------- -------------
Net cash used in financing activities..... (2,551,491) (1,999,945) (1,106,558) (548,616) (2,823,606)
------------- -------------- -------------- ------------- -------------

Net (decrease) increase in cash........... 9,832 (92,663) (19,025) (254,716) (235,466)
Cash at beginning of period............... 340,250 350,082 257,419 257,419 238,394
------------- -------------- -------------- ------------- -------------
Cash at end of period..................... $ 350,082 $ 257,419 $ 238,394 $ 2,703 $ 2,928
------------- -------------- -------------- ------------- -------------
------------- -------------- -------------- ------------- -------------
</TABLE>

SEE ACCOMPANYING NOTES.

F-6
<PAGE>
AIRNET SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS

(FOR THE YEARS ENDED SEPTEMBER 30, 1993, 1994 AND 1995 AND
UNAUDITED FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1996)

1. SIGNIFICANT ACCOUNTING POLICIES
AirNet Systems, Inc. (the Company), formerly New Creations, Inc., operates a
fully integrated national air transportation network which provides delivery
service for time-critical shipments for customers in the U.S. banking industry
and in other industries. The Company also offers retail aviation fuel sales and
related ground services for customers in Columbus, Ohio.

BASIS OF PRESENTATION

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

REVENUE RECOGNITION

Revenue on air transportation services is recognized when the packages are
delivered to their destination. Revenue on fixed based operations is recognized
when the maintenance services are complete or fuel is delivered.

ACCOUNTS RECEIVABLE

For fiscal 1995, approximately 89% and 84% of the Company's revenues and
related receivables, respectively, were generated from customers within the
banking industry. The Company performs periodic credit evaluations of its
customers' financial condition and generally does not require collateral. The
Company establishes an allowance for doubtful accounts based upon factors
surrounding the credit risks of specific customers, historical trends and other
information.

SPARE PARTS AND SUPPLIES

Spare parts and supplies are valued at the lower of cost (weighted average
method) or market.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Engines, overhauls and major
inspections, which have been capitalized and included in flight equipment, are
depreciated and amortized on the basis of hours flown. Airframes, other flight
equipment and other property and equipment (primarily furniture and equipment,
leasehold improvements and vehicles) are depreciated using the straight-line
method over the estimated useful lives of the assets, as summarized below:

<TABLE>
<S> <C>
Airframes............................................................. 7 years
Other flight equipment................................................ 2 - 3 years
Other property and equipment.......................................... 3 - 7 years
</TABLE>

Leasehold improvements are amortized over the lease terms or the estimated
useful lives of the assets, whichever is less.

PREPAID EXPENSES

The Company prepays certain engine repair and overhaul services. Such
prepaid balances were $391,994 and $1,026,571 at September 30, 1994 and 1995,
respectively, and are included with prepaid expenses on the balance sheet.

INCOME TAXES

The Company operates as an S Corporation under the Internal Revenue Code
and, consequently, is not subject to federal and certain state income taxes. The
shareholders generally include the Company's income in their own income for tax
purposes. Where the Company remains liable for certain state and local income
taxes, provision has been made for such taxes.

F-7
<PAGE>
AIRNET SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(FOR THE YEARS ENDED SEPTEMBER 30, 1993, 1994 AND 1995 AND
UNAUDITED FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1996)

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Effective October 1, 1993, the Company elected to adopt Statement of
Financial Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income
Taxes." SFAS No. 109 requires recognition of deferred tax liabilities and assets
determined based on the differences between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. The adoption of SFAS No. 109
did not have a material impact on the Company's financial condition or results
of operations.

INTANGIBLES

Intangibles include non-competition agreements with former competitors. The
balances are being amortized on the straight-line method over periods ranging
from ten to eighteen years.

STOCK OPTION PLANS

The Company follows Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" in accounting for its stock option arrangements
and intends to continue to do so.

STATEMENT OF CASH FLOWS

Cash paid for interest was $1,144,252, $1,078,470 and $1,264,522 for the
years ended September 30, 1993, 1994 and 1995, respectively. With respect to
non-cash activities, the Company converted a $550,000 note receivable under a
land contract to property during the year ended September 30, 1995.

INTERIM FINANCIAL REPORTING

In the opinion of management, the unaudited information as of March 31, 1996
and for the six months ended March 31, 1995 and 1996 includes all adjustments
(consisting of normal recurring adjustments) the Company considers necessary for
a fair presentation of such financial statements in accordance with generally
accepted accounting principles. Operating results for the six months ended March
31, 1996 are not necessarily indicative of the results that may be expected for
the year ending September 30, 1996.

2. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1994 1995
------------- -------------
<S> <C> <C>
Flight equipment.......................................................... $ 48,944,182 $ 62,021,356
Other property and equipment.............................................. 3,765,637 5,060,676
------------- -------------
52,709,819 67,082,032
Less accumulated depreciation............................................. 27,139,923 34,248,420
------------- -------------
$ 25,569,896 $ 32,833,612
------------- -------------
------------- -------------
</TABLE>

3. BUSINESS ACQUISITION
In 1988, the Company acquired certain of the assets of Wright International
Express, Inc. (WIE), an air freight transportation company, and entered into a
covenant not to compete with WIE and its principal shareholder (Donald Wright).
The original acquisition agreement (Wright Agreement) provided for annual
payments to Donald Wright as consideration for his agreement not to compete with
the Company. Subsequently, the Wright Agreement has been amended and now
provides for annual contingent payments based on the lesser of a percentage of
net income, as defined in the original acquisition agreement, or $900,000. The
amended agreement also provides for additional payments based on the Company's
cash flow and debt to equity ratio. Payments under the amended agreement are
guaranteed through 2018 to Donald Wright during his lifetime or upon death to
such person as

F-8
<PAGE>
AIRNET SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(FOR THE YEARS ENDED SEPTEMBER 30, 1993, 1994 AND 1995 AND
UNAUDITED FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1996)

3. BUSINESS ACQUISITION (CONTINUED)
designated by Donald Wright prior to his death and are being expensed in the
periods incurred. Such expenses to Donald Wright totaled approximately
$1,086,000, $1,559,000 and $2,074,000 in 1993, 1994 and 1995, respectively, and
$1,081,000 and $601,000 for the six months ended March 31, 1995 and 1996,
respectively.

In the event of a third party offer to acquire the Company, Donald Wright
has the option of making the acquisition on the same terms. If Donald Wright
does not exercise the option and the sale is consummated, Donald Wright is
entitled to receive 32% of the sale proceeds and the payments described above
will terminate.

The Company has also issued warrants to Wright for the purchase of up to
29.7025% of the outstanding shares of its common stock for $3,000 (the Donald
Wright Warrant) and to Wright's son, to purchase 2% of the Company's then
outstanding shares of common stock for $200 (the Jeffrey Wright Warrant). The
Donald and Jeffrey Wright Warrants are exercisable only in the event of an
initial public offering by the Company at any time prior to July 31, 2018. In
addition, the warrants entitle Donald Wright and Jeffrey Wright to certain
piggyback registration rights in connection with an offering of capital stock by
the Company.

4. NOTES PAYABLE
The Company had borrowings from a bank as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1994 1995
------------- -------------
<S> <C> <C>
Term notes................................................................ $ 10,075,238 $ 11,703,339
Revolving credit facility................................................. 6,175,000 7,525,000
------------- -------------
16,250,238 19,228,339
Current portion of notes payable.......................................... 3,674,286 5,565,706
------------- -------------
$ 12,575,952 $ 13,662,633
------------- -------------
------------- -------------
</TABLE>

Borrowings under the revolving credit facility are limited to the lesser of
$8,000,000, less outstanding letters of credit or the sum of (1) 80% of eligible
accounts receivable, (2) the lesser of 50% of eligible aircraft parts inventory
or $2,000,000 and (3) $2,000,000. Repayment is due on or before June 30, 1997.
The maximum amount available under the revolving credit facility at September
30, 1995 was $475,000. The interest rate on each of the individual borrowings
under the revolving credit facility is, at the Company's election, either the
prime rate (8.75% at September 30, 1995) or the Eurodollar rate plus 1.75%
(7.375% at September 30, 1995). At September 30, 1995, borrowings under the
revolving credit facility bearing interest at the prime rate totaled $1,525,000,
while borrowings bearing interest at the Eurodollar rate totaled $6,000,000. The
revolving credit facility is secured by all of the Company's assets.

The Company's revolving credit facility requires the maintenance of certain
minimum working capital and net worth levels and restricts the amount of
additional debt and capital expenditures.

F-9
<PAGE>
AIRNET SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(FOR THE YEARS ENDED SEPTEMBER 30, 1993, 1994 AND 1995 AND
UNAUDITED FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1996)

4. NOTES PAYABLE (CONTINUED)
Term notes consist of the following (secured by aircraft):

<TABLE>
<CAPTION>
SEPTEMBER 30,
----------------------------
1994 1995
------------- -------------
<S> <C> <C>
Due $126,190 monthly to November 1997, plus interest at 7.55%............. $ 4,795,238 $ 3,280,952
Due $480,000 quarterly to December 1996, plus interest at the Eurodollar
rate plus 1.75% (7.63% at September 30, 1995)............................ -- 2,880,000
Due $64,285 monthly to July 1998, plus interest at the Eurodollar rate
plus 1.75% (7.63% at September 30, 1995)................................. -- 2,185,720
Due $23,333 monthly to May 2000, plus interest at 8.13%................... -- 1,306,667
Due $25,000 monthly to July 1999, plus interest at 7.54%.................. -- 1,150,000
Due $25,000 monthly to August 1998, plus interest at 8.3%................. -- 900,000
Term notes, repaid during 1995............................................ 5,280,000 --
------------- -------------
Total term notes...................................................... $ 10,075,238 $ 11,703,339
------------- -------------
------------- -------------
</TABLE>

The aggregate annual maturities of long-term debt for the five years
following September 30, 1995 are summarized as follows: 1996 -- $5,565,706; 1997
- -- $11,170,706; 1998 -- $1,775,261; 1999 -- $530,000; and 2000 -- $186,666. The
carrying amounts of long-term debt reported on the balance sheet approximate
fair value.

5. LEASE OBLIGATIONS
The Company leases certain flight equipment under noncancelable operating
leases expiring through 1997. Total rental expense under flight equipment
operating leases was approximately $4,405,303, $3,260,273 and $1,042,653 for the
years ended September 30, 1993, 1994 and 1995, respectively.

The Company leases one facility from its majority shareholder through 2000.
Total rental expense incurred under the facility lease from this shareholder was
$592,000, $622,650 and $707,305 for the years ended September 30, 1993, 1994 and
1995, respectively.

At September 30, 1995, future minimum payments by year and in the aggregate
under noncancelable operating leases with initial or remaining terms exceeding
one year are as follows: 1996 -- $1,030,200; 1997 -- $772,600; 1998 -- $750,600;
1999 -- $750,600; and 2000 -- $312,750.

6. RELATED PARTY TRANSACTIONS
The Company has guaranteed a five year bank loan to its majority shareholder
which is collateralized by the Company's facilities. The loan bears interest at
prime plus .5% and had a balance outstanding of $850,000 at September 30, 1995.

7. DEFERRED COMPENSATION PLANS
The Company has entered into deferred compensation agreements with certain
key employees. Under the terms of the agreements, the Company is obligated to
pay the employees a certain percentage, ranging from one to ten percent and
totaling 27%, of the Company's net book value. Concurrent with the stock
purchase agreements described in Note 8, the accrual of benefits under the
agreements was curtailed as of March 31, 1994. Distributions are based on the
Company's March 31, 1994 net book value and are payable in ten equal annual
installments which began in December 1994. The Company recognized compensation
expense related to the agreements of approximately $247,000, $546,000 and
$308,000 for the years ended September 30, 1993, 1994 and 1995, respectively,
and $149,000 and $103,000 for the six months ended March 31, 1995 and 1996,
respectively.

F-10
<PAGE>
AIRNET SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(FOR THE YEARS ENDED SEPTEMBER 30, 1993, 1994 AND 1995 AND
UNAUDITED FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1996)

8. SHAREHOLDERS' EQUITY
On April 1, 1994, the Company entered into stock purchase agreements with
certain key executives whereby the executives purchased 1,484,908 shares of the
Company's common stock. The Company accepted notes receivable from the
executives as payment for the shares sold. The notes receivable are collectible
in ten equal annual installments through 2005 and bear interest at 5%. Under the
terms of the agreements, the executives may not transfer or sell their
respective shares to any party other than the Company. Upon the separation of
any of these executives from the Company, the Company is obligated to purchase
the shares held by the respective executive at a price ranging from the net book
value of the shares held, if less than the original amount paid, to the
appreciation in the book value of the stock from the date the shares were issued
to the date of the respective executive's separation from the Company.
Distribution of the repurchase price to the respective executive can be paid in
equal annual installments over periods ranging from three to ten years and is
governed by the nature of the executive's separation from the Company.

Based on the nature of this restricted stock plan, the Company is accounting
for it in a manner similar to a variable stock option plan. Accordingly,
compensation expense has been recognized each accounting period for the increase
in the repurchase price of the shares. This expense was $1,052,000 and
$2,327,000 for the years ended September 30, 1994 and 1995, respectively, and
$1,013,000 and $1,298,000 for the six months ended March 31, 1995 and 1996,
respectively.

9. RETIREMENT PLAN
The Company has a 401(k) retirement savings plan. All associates who have
worked a minimum of six months may contribute up to 15% of their annual earnings
to the plan. The Company's contributions, which are determined at the discretion
of the Company, were approximately $151,000, $210,000 and $355,000 for the years
ended September 30, 1993, 1994 and 1995, respectively.

10. CONTINGENCIES
The Company is subject to claims and lawsuits in the ordinary course of its
business. In the opinion of management, the outcome of these actions, which are
not clearly determinable at the present time, are either adequately covered by
insurance, or if not insured, will not, in the aggregate, have a material
adverse impact upon the Company's financial position or the results of future
operations.

11. SUBSEQUENT EVENTS (UNAUDITED)
On May 1, 1996, the Company reincorporated through a merger with an Ohio
corporation. The authorized capital stock of the Company consists of 40,000,000
common shares, $.01 par value, and 10,000,000 preferred shares, $.01 par value.
The outstanding shares of the existing company were converted into common shares
of the new company on a 422.57 for one basis. The Company's name was changed
from New Creations, Inc. to AirNet Systems, Inc. These changes have been
reflected in the accompanying financial statements.

The Company filed a registration statement with the Securities and Exchange
Commission for the sale of 5,600,000 of its authorized and unissued common
shares.

The Company adopted an Incentive Stock Plan on May 1, 1996 (Incentive Stock
Plan). The purpose of the Incentive Stock Plan is to attract and retain key
personnel, including consultants and advisors to the Company, to enhance their
interest in the Company's continued success and to allow associates an
opportunity to have an ownership in the Company through stock options, stock
awards and a stock purchase plan. The maximum number of common shares available
to be issued under the Incentive Stock Plan will be 1,150,000 and no award under
the Incentive Stock Plan may be granted after May 1, 2006.

In connection with the planned public offering, the Company will terminate
its status as an S Corporation and, accordingly, will record an additional net
deferred tax liability of $2,112,000 as a result of this change in tax status.

F-11
<PAGE>
AIRNET SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(FOR THE YEARS ENDED SEPTEMBER 30, 1993, 1994 AND 1995 AND
UNAUDITED FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1996)

11. SUBSEQUENT EVENTS (UNAUDITED) (CONTINUED)
With the election to terminate its S Corporation status, the Company is
paying distributions of approximately $21,000,000 to the shareholders of the
Company for undistributed earnings associated with the Company's S Corporation
status. The Company anticipates using proceeds from the anticipated sale of
shares to repurchase and cancel the Donald Wright Warrant and repay debt to be
incurred to make the planned distribution, with remaining proceeds to pay down
existing debt.

Simultaneous with the closing of the public offering, the Company will enter
into a new credit agreement to replace the existing agreement. The new agreement
will provide the Company with a $50,000,000, five year, unsecured revolving
credit facility. It will bear interest, at the Company's option of (a) an agreed
upon fixed rate or (b) a floating rate initially equal to (i) the higher of .5%
per annum over the Federal Funds rate or the banks prime rate or (ii) LIBOR plus
a margin. The new agreement will limit the availability of funds to certain
specified percentages of accounts receivable, inventory and the wholesale value
of aircraft and equipment.

In addition, the following actions are anticipated in connection with the
public offering:

- Upon the closing date of the public offering the Company plans to
repurchase and cancel the Donald Wright Warrant (equivalent to 2,483,537
shares) for $29,901,785 with a charge to additional paid-in capital and
the majority shareholder of the Company intends to acquire the Jeffrey
Wright Warrant (equivalent to 167,227 shares) for $2,013,413 and convert
that warrant for the number of shares indicated. In connection with the
repurchase of the Donald Wright Warrant, the Company expects to receive a
tax benefit of approximately $7,000,000.

- The Company will terminate the Wright Agreement and write-off the
unamortized asset relating to a covenant not to compete of approximately
$2,596,000.

- The Company will terminate all of the stock purchase agreements with
certain key executives and the notes related to these agreements will be
fully paid. In connection with the stock purchase agreements, the Company
will incur a non-recurring and non-cash charge of approximately
$15,000,000 at the time the public offering is consummated. Additional
paid-in capital will be increased by the same amount and shareholders'
equity will be unchanged. The pro forma income statement described in Note
12 has not been adjusted to reflect this non-recurring charge.

- The distribution of the undistributed earnings to shareholders of the
Company will eliminate a $1,654,000 liability relating to the stock
purchase agreements.

- The Company will terminate all of the deferred compensation agreements
with certain key executives which were curtailed on March 31, 1994. The
key executives will forego their remaining deferred compensation payments
in the aggregate amount of $1,998,000.

- The existing shareholders will repay outstanding notes receivable totaling
$284,000.

- The Company's guaranty of the five-year bank loan to the majority
shareholder will be terminated at or prior to the consummation of the
public offering.

F-12
<PAGE>
AIRNET SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(FOR THE YEARS ENDED SEPTEMBER 30, 1993, 1994 AND 1995 AND
UNAUDITED FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1996)

12. PRO FORMA INFORMATION (UNAUDITED)

PRO FORMA BALANCE SHEET INFORMATION

The pro forma balance sheet at March 31, 1996 reflects the following
transactions as if they had occurred at that date:

a.) In connection with termination of the S Corporation election:

(i) The S Corporation distributions in the amount of approximately
$21,000,000.

(ii) The recognition of additional net deferred tax liability of
$2,112,000.

(iii) Reclassification of remaining undistributed earnings of the S
Corporation from retained earnings to additional paid-in capital.

b.) The termination of the Wright Agreement, including the exercise of
the Jeffrey Wright warrant for $200, the write-off of the covenant not to
compete asset of $2,596,000, and the recording of a related tax benefit of
$7,000,000 to be realized by the Company.

c.) The elimination of the deferred compensation agreements liability of
$1,998,000 and the liability relating to the stock purchase agreements of
$1,654,000.

d.) The recognition of a non-recurring and non-cash expense relating to
the termination of the stock purchase agreements, with a corresponding
increase to additional paid-in capital, of approximately $15,000,000.

e.) The anticipated repayment of the notes receivable from shareholders
of $284,000.

PRO FORMA STATEMENTS OF INCOME ADJUSTMENTS

The pro forma statements of income information presents the pro forma
effects on the historical financial information reflecting certain transactions
as if they occurred on October 1, 1994 and 1995. The following adjustments have
been reflected in the pro forma statements of income information:

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS
SEPTEMBER 30, ENDED MARCH 31,
1995 1996
-------------- ---------------
<C> <S> <C> <C>
1. The elimination of interest expense relating to the debt to be repaid...... $ 1,452,000 $ 736,000
2. The elimination of payments under the Wright Agreement..................... 2,074,000 601,000
3. The elimination of amortization expense relating to the covenant not to
compete asset write-off.................................................... 254,000 127,000
4. The elimination of deferred compensation expense for certain key
employees.................................................................. 308,000 103,000
5. A reduction of compensation expense for executive officers based on new
employment agreements...................................................... 952,000 219,000
6. The elimination of employee stock purchase agreement expense for certain
key employees.............................................................. 2,327,000 1,298,000
-------------- ---------------
Total.................................................................. $ 7,367,000 $ 3,084,000
-------------- ---------------
-------------- ---------------
</TABLE>

Prior to the closing of the public offering, the Company will terminate its
status as an S Corporation. The pro forma adjustments reflect increased
provisions for income taxes at an effective rate of 40%.

F-13
<PAGE>
AIRNET SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(FOR THE YEARS ENDED SEPTEMBER 30, 1993, 1994 AND 1995 AND
UNAUDITED FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1996)

12. PRO FORMA INFORMATION (UNAUDITED) (CONTINUED)
PRO FORMA NET INCOME PER SHARE

Pro forma net income per common share is based on the weighted average
number of shares of common stock outstanding during the period (using the
treasury stock method), plus the estimated number of shares required to fund the
repurchase and cancellation of the Donald Wright Warrant, the planned
distribution to shareholders and the estimated number of shares to be issued to
repay existing debt.

Supplemental pro forma income before taxes and net income considering only
the repayment of existing debt would have been $8,076,000 and $4,845,000,
respectively, for the year ended September 30, 1995, and $4,429,000 and
$2,658,000, respectively, for the six months ended March 31, 1996. Supplemental
pro forma income per share would have been $.66 for the year ended September 30,
1995 and $.37 for the six months ended March 31, 1995, based on the weighted
average number of shares of common stock outstanding during the period, plus the
estimated number of shares to be issued to repay existing debt.

F-14
<PAGE>
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No dealer, salesperson or other person has been authorized to give any
information or to make any representation in connection with the offering other
than those contained in this Prospectus in connection with the offer contained
herein, and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company or any Underwriter. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy Common Shares in any jurisdiction to any person to whom it is unlawful to
make such offer or solicitation in such jurisdiction or in which the person
making such offer or solicitation is not qualified to do so. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create an implication that there has been no change in the
affairs of the Company since the date hereof.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary........................ 3
Risk Factors.............................. 8
Prior S Corporation Status................ 11
Offering Related Transactions............. 12
Use of Proceeds........................... 14
Dividend Policy........................... 14
Capitalization............................ 15
Dilution.................................. 16
Selected Financial Data................... 17
Selected Unaudited Condensed Pro Forma
Financial Data........................... 19
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 22
Industry Overview......................... 31
Business.................................. 33
Management................................ 41
Certain Relationships and Related Party
Transactions............................. 47
Principal Shareholders.................... 51
Description of Capital Stock.............. 52
Description of Certain Indebtedness....... 55
Shares Eligible for Future Sale........... 56
Underwriting.............................. 57
Legal Matters............................. 58
Experts................................... 58
Additional Information.................... 58
Index to Financial Statements............. F-1
</TABLE>

------------------------

Until June 24, 1996, (25 days after the date of this Prospectus) all dealers
effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as Underwriters and with respect to their unsold allotments or
subscriptions.

AIRNET SYSTEMS

------------

5,600,000 SHARES

COMMON SHARES

PROSPECTUS
MAY 30, 1996

------------------

DILLON, READ & CO. INC.

THE ROBINSON-HUMPHREY
COMPANY, INC.

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