Aircraft observations of the arctic surface were obtained during the recent Surface Heat Budget of the Arctic Ocean (SHEBA) and FIRE Arctic Clouds Experiment. A series of images were created from a downward looking video camera that was mounted on the underside of a research aircraft as it flew in the vicinity of the SHEBA camp, which drifted with the pack ice in the Beaufort and eastern Chukchi Seas. These data are processed to determine the distribution of melt ponds and open water during five flights in July 1998. Melt pond and open water coverage vary between 25--34% and 5--9%, respectively. Coincident observations of albedo derived from upward and downward looking broadband shortwave radiometers indicate that the albedo decreased through July until the last week, when the albedo began to rise. Pond fraction was observed to vary inversely with albedo through July. By relating the areal coverage of the surface features to the observed surface albedo, mean albedos of 0.26, 0.07, and 0.60 are found for melt ponds, open water, and pack ice, respectively. ¿ 2001 American Geophysical Union