================================================================================

                      SECURITIES AND EXCHANGE COMMISSION

                           Washington, D.C. 20549

                                   FORM 10-Q

------
X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
------
      SECURITIES EXCHANGE ACT OF 1934

      For the quarterly period ended March 31, 2000

                                 OR

------
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
------
      SECURITIES EXCHANGE ACT OF 1934


      Commission File Number:                 0-24795

                    AVIATION GENERAL, INCORPORATED

           (Exact name of registrant as specified in its charter)


      Delaware                                             73-1547645
      (State of Incorporation)                             (IRS Employer
                                                           Identification No.)

      7200 NW 63rd Street
      Hangar 8, Wiley Post Airport

      Bethany, Oklahoma                                       73008
      (Address of principal executive offices)             (Zip Code)

                                 (405) 440-2255

      (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
      to be filed by Section 13 or 15(d) of the Securities  Exchange Act of 1934
      during the  preceding 12 (or for such shorter  period that the  registrant
      was  required  to file such  reports),  and (2) has been  subject  to such
      filing requirement for the past 90 days.

      Yes__X__                   No_____
           -

         There were 6,373,786 Shares of Common Stock Outstanding
         As of April 28, 2000

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<PAGE>




PART I. FINANCIAL INFORMATION
ITEM  I. FINANCIAL STATEMENTS

                     AVIATION GENERAL, INCORPORATED AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                               (Unaudited)
                                                                                March 31,               December 31,
                                                                                  2000                      1999
                                                                           --------------------      --------------------
<S>                                                                        <C>                       <C>
                                    ASSETS

Current Assets

    Cash and cash equivalents                                                         $397,515                  $281,138
    Accounts receivable                                                                304,568                   111,403
    Current portion of note receivable                                                  19,920                    19,535
    Inventories                                                                      5,170,118                 5,143,720
    Prepaid expenses and other assets                                                  164,998                   172,273
                                                                           --------------------      --------------------
       Total current assets                                                          6,057,119                 5,728,069
                                                                           --------------------      --------------------

Property and equipment

    Office equipment and furniture                                                     357,105                   355,492
    Vehicles and aircraft                                                               84,021                    84,021
    Manufacturing equipment                                                            364,726                   362,205
    Tooling                                                                            564,393                   563,193
    Leasehold improvements                                                             311,764                   311,764
                                                                           --------------------      --------------------
                                                                                     1,682,009                 1,676,675
    Less accumulated depreciation                                                     (981,936)                 (951,791)
                                                                           --------------------      --------------------
                                                                                       700,073                   724,884
                                                                           --------------------      --------------------

Other assets

    Notes receivable, less current maturities                                          119,323                   125,331
    Available-for-sale equity securities - related party                             1,021,884                   317,151
    Note receivable from related party                                               1,695,507                 1,736,552
                                                                           --------------------      --------------------
                                                                                     2,836,714                 2,179,034
                                                                           --------------------      --------------------

                                                                                    $9,593,906                $8,631,987
                                                                           ====================      ====================

</TABLE>


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


<PAGE>







                AVIATION GENERAL, INCORPORATED AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                               (Unaudited)
                                                                                March 31,               December 31,
                                                                                  2000                      1999
                                                                           --------------------      --------------------
<S>                                                                        <C>                       <C>
                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

    Accounts payable                                                                 $555,057                   $451,645
    Accrued expenses                                                                  470,849                    344,525
    Refundable deposits                                                               158,650                    233,363
    Notes payable                                                                   1,129,350                    731,780
                                                                           --------------------      --------------------
       Total current liabilities                                                    2,313,906                  1,761,313
                                                                           --------------------      --------------------

Stockholders' Equity

    Preferred stock, $.01 par value, 5,000,000
        Shares authorized; no shares outstanding                                            -                          -
    Common stock, $.50 par value, 20,000,000
        Shares authorized; 7,043,186 shares issued
        at March 31, 2000 and December 31, 1999                                     3,521,593                  3,521,593
    Additional paid-in capital                                                     36,881,466                 36,881,466
    Less: Treasury stock at cost (639,400 shares at
        March 31, 2000 and 529,400 shares at
        December 31, 1999)                                                           (878,615)                  (658,615)
    Accumulated other comprehensive income                                            591,143                          -
    Accumulated Deficit                                                           (32,244,444)               (32,873,770)
                                                                           --------------------      --------------------

    Total stockholders' equity                                                      7,280,000                  6,870,674
                                                                           --------------------      --------------------

                                                                                   $9,593,906                 $8,631,987
                                                                           ====================      ====================
</TABLE>


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


<PAGE>




                                      AVIATION GENERAL, INCORPORATED
                             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                               (Unaudited)

<TABLE>
<CAPTION>

                                                                  Three Months Ended March 31,
                                                               2000                          1999
                                                      -----------------------       -----------------------
<S>                                                   <C>                           <C>
Net sales - aircraft                                             $3,475,750                    $1,644,653
Net sales - service                                                 466,825                       613,639
                                                      -----------------------       -----------------------
   Total net sales                                                3,942,575                     2,258,292
                                                      -----------------------       -----------------------

Cost of sales - aircraft                                          2,779,963                     1,741,241
Cost of sales - service                                             317,996                       370,752
                                                      -----------------------       -----------------------
   Total cost of sales                                            3,097,959                     2,111,993
                                                      -----------------------       -----------------------

Gross margin                                                        844,616                       146,299
                                                      -----------------------       -----------------------

Other operating expenses

   Product development and engineering costs                         96,307                        79,038
   Selling, general and administrative expenses                     733,865                       489,972
                                                      -----------------------       -----------------------
     Total other operating expenses                                 830,172                       569,010
                                                      -----------------------       -----------------------

Operating income (loss)                                              14,444                      (422,711)
                                                      -----------------------       -----------------------

Other income (expenses)
   Other income                                                      54,459                        56,867
   Interest expense                                                 (30,532)                      (13,024)
   Other expense                                                       (188)                         (697)
                                                      -----------------------       -----------------------
   Total other income (expenses)                                     23,739                        43,146
                                                      -----------------------       -----------------------

Net income (loss)                                                   $38,183                     ($379,565)
                                                      =======================       =======================

Net Income (loss) per share

   Weighted average common shares
      outstanding, basic                                           6,449,720                     7,269,437
                                                     -----------------------       -----------------------

   Net Income (loss) per share, basic                                  $0.01                       ($0.05)
                                                      =======================       =======================

   Weighted average common shares
      outstanding, diluted                                         6,713,720                     7,269,437
                                                      -----------------------       -----------------------

   Net Income (loss) per share, diluted                                $0.01                       ($0.05)
                                                      =======================       =======================
</TABLE>


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


<PAGE>




                                         AVIATION GENERAL, INCORPORATED
                                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                             Three Months Ended March 31,
                                                                            2000                     1999
                                                                     --------------------     --------------------
<S>                                                                  <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net Income (Loss)                                                          $38,183                ($379,565)
     Adjustments to reconcile net income (loss) to
         net cash provided (used) in operating activities
         Depreciation and amortization                                           30,145                   27,730
         Non-cash interest earnings                                             (32,122)                 (32,532)
         Receipts on aircraft notes receivable                                   41,045                        -
         Changes in assets and liabilities
               (Increase) decrease  in
                   Accounts receivable                                         (193,165)                 (14,170)
                   Notes receivable                                               5,623                    8,666
                   Inventories                                                  (26,398)                (106,968)
                   Prepaid expense and other assets                              39,397                   23,800
               Increase (Decrease) in
                   Accounts payable                                             103,412                 (194,904)
                   Accrued expenses                                             126,324                   39,809
                   Refundable deposits                                          (74,713)                 (90,071)
                                                                     --------------------     --------------------
     Net cash provided (used) by operating activities                            57,731                 (718,205)
                                                                     --------------------     --------------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchase of securities of related party                                   (113,590)                       -
     Capital expenditures                                                        (5,334)                  (2,718)
     Payment on related party note receivable                                         -                  800,000
                                                                     --------------------     --------------------
     Net cash used (provided) by investing activities                          (118,924)                 797,282
                                                                     --------------------     --------------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from borrowings                                                 1,407,380                  385,050
     Payments on borrowings                                                  (1,009,810)                (404,600)
     Purchase of treasury stock                                                (220,000)                (100,000)
                                                                     --------------------     --------------------
     Net cash provided (used) by financing activities                           177,570                 (119,550)
                                                                     --------------------     --------------------

Net increase (decrease) in cash                                                 116,377                  (40,473)
Cash and cash equivalents at beginning of period                                281,138                  645,706
                                                                     --------------------     --------------------
Cash and cash equivalents at end of period                                     $397,515                 $605,233
                                                                     ====================     ====================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION

      Cash paid during the period for:

         Interest                                                               $32,824                   $4,983
         Income taxes                                                                 -                        -

</TABLE>


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


<PAGE>




              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)

1. The condensed financial  statements included herein have been prepared by the
Company,  without audit, pursuant to the rules and regulations of the Securities
and Exchange  Commission.  Certain information and footnote disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations;  however, the Company believes that the disclosures are adequate to
make the information  presented not  misleading.  In the opinion of the Company,
all adjustments  necessary to present fairly the financial  position of Aviation
General,  Incorporated  as of March 31,  2000 and  December  31,  1999,  and the
results of operations and cash flows for the three month periods ended March 31,
2000 and 1999 have been  included  and are of a normal,  recurring  nature.  The
results of operations for such interim periods are not necessarily indicative of
the results for the full year. It is suggested  that these  condensed  financial
statements be read in conjunction  with the Company's 1999 Annual Report on Form
10-K.

2. Basic income  (loss) per share of common stock has been computed by using the
weighted average number of shares of common stock outstanding during the period.
Diluted income (loss) per share has been computed  based on the assumption  that
all dilutive options are exercised.

                                                     Three months ending
                                           March 31, 2000        March 31, 1999
                                           --------------        --------------

  Numerator

       Net income (loss)                        $38,183            ($379,565)

  Denominator

       Weighted average shares outstanding,
         basic                                6,449,720            7,269,437

       Effect of dilutive securities
         Stock options                          264,000                    -
                                              ---------       --------------

  Denominator for income (loss) per share
    assuming dilution                         6,713,720            7,269,437
                                              =========           ==========

  Income (loss) per share, basic                 $ 0.01              ($ 0.05)
                                              =========        ==============

  Income (loss) per share, assuming dilution     $ 0.01              ($ 0.05)
                                              =========        ==============


3. The  Company  purchased  80,000  shares of its common  stock at an  aggregate
purchase price of $100,000,  or $1.25 per share from its majority shareholder on
January 21, 2000. On March 27, 2000, the Company  purchased 30,000 shares of its
common stock at an aggregate purchase price of $120,000, or $4.00 per share from
its majority  shareholder.  This price was consistent with shares trading freely
on the NASDAQ SmallCap Market on that date. Some of the shares will be issued to
employees  under the  Company's  401(k) plan and the balance will be retained in
treasury or cancelled.

4.   Total comprehensive income (loss) for the periods presented is as follows:

                                    2000                       1999
                                    ----                       ----

  Quarter ended March 31           $629,326                  ($379,565)


5. Inventories  consist  primarily of finished goods and parts for manufacturing
and servicing aircraft.  Inventory costs include all direct  manufacturing costs
and applied overhead. These inventories, other than used aircraft, are stated at
the lower of cost or market, and cost is determined by the average-cost  method.
Used aircraft are valued on a specific-identification basis at the lower of cost
or current estimated  realizable  wholesale price.  Inventory  components at the
balance sheet dates were as follows:

                                    March 31, 2000           December 31, 1999

  Raw materials                        $3,227,475                 $2,867,102
  Work in process                         697,358                    595,593
  New aircraft                            744,870                    964,324
  Pre-owned aircraft                      500,415                    716,701
                                     ------------               ------------

  Total inventories                    $5,170,118                 $5,143,720
                                       ----------                 ----------


6. The Company is subject to  regulation  by the FAA.  The Company is subject to
inspections  by the  FAA and may be  subjected  to  fines  and  other  penalties
(including orders to cease  production) for noncompliance  with FAA regulations.
The Company has a Production  Certificate  from the FAA, which  delegates to the
Company the  inspection  of each  aircraft.  The sale of the  Company's  product
internationally  is subject to  regulation  by  comparable  agencies  in foreign
countries.

         The Company  faces the  inherent  business  risk of exposure to product
liability claims. In 1988, the Company agreed to indemnify a former manufacturer
of the Commander  single engine  aircraft  against claims  asserted  against the
manufacturer with respect to aircraft built from 1972 to 1979. In 1994, Congress
enacted  the  General  Aviation   Revitalization   Act,  which   established  an
eighteen-year  statute  of  repose  for  general  aviation  manufacturers.  This
legislation  prohibits  product liability suits against  manufacturers  when the
aircraft  involved in an accident is more than  eighteen  years old. This action
effectively  eliminated all potential  liability for the Company with respect to
aircraft  produced in the 1970s as of December 31, 1997.  The Company's  product
liability  insurance  policy with coverage of $10 million per occurrence and $10
million  annually in the aggregate  with a deductible of $200,000 per occurrence
and annually in the  aggregate  expired  March 1, 1995.  Subsequent  to March 1,
1995,  the  Company is not  insured for  product  liability  claims.  Management
believes  that the  interest  of  shareholders  is better  served by  vigorously
defending  claims  through the  services  of highly  qualified  specialists  and
attorneys rather than retaining product liability insurance to settle exorbitant
claims.

         The Company is routinely  involved in various legal matters  arising in
the normal course of business,  including product  liability claims.  Management
intends to vigorously  defend  against these claims and currently  believes that
legal  matters will not result in any material  adverse  effect on the Company's
financial position or results of operations.  Accordingly,  no provision for any
liabilities that may result have been recorded in the financial statements.  Due
to the  uncertainty of these matters,  it is at least  reasonably  possible that
management's view of the outcome will change in the near term.

7. The  Company's  business  strategy is to capture a  significant  share of the
existing  domestic  and  international   market  for  the  single  engine,  high
performance  aircraft by offering a premium  updated  version of an  established
aircraft design.  Commander  aircraft have an airframe design decades newer than
the  competition  and are  certified to more  stringent  standards.  The Company
believes  the  domestic  and  international  market  for its  aircraft  includes
individuals  and  corporations  that will  purchase the  Company's  aircraft for
business  and  personal  travel,   and  governments,   commercial  and  military
organizations that will use the aircraft for training and other purposes.


<PAGE>



         The Company  believes  the market for its  products  will  improve as a
result  of  attrition  of  the  existing  fleet  of  aging  single  engine  high
performance  aircraft,  development  of new  international  markets  for general
aviation  aircraft,  increased use of single engine aircraft as a corporate tool
for small and  medium-sized  businesses,  and demand for advanced  single engine
trainers.

         Recognizing  that the size of the used aircraft market is significantly
larger than new aircraft sales,  the Company has structured a separate  aviation
services  division within the Company to purchase,  refurbish and sell pre-owned
aircraft at reasonable profit margins.  The Aviation Services Division also acts
as broker for  pre-owned  aircraft and serves as advisor to  potential  aircraft
buyers and sellers.

         The Company  markets its  aircraft  through a factory  direct sales and
marketing organization comprised of regional sales personnel who are managed and
supported   from  the  Company's   headquarters   in  Oklahoma.   The  marketing
organization is augmented by a worldwide network of Commander Authorized Service
Centers  (ASCs).  The  Company's  marketing  program  utilizes a highly  focused
domestic  and  international  advertising  and  public  relations  program  that
includes  product  advertising  in leading  business and aviation  publications,
ongoing  direct  mail  programs  to owners and pilots,  and  internet  marketing
communications.

         The Company's CFI Referral Program  actively  engages  certified flight
instructors  (CFIs)  in  the  evaluation  and  acquisition  process  with  their
students.  CFIs play an important role in advising  potential  owners.  To date,
more than 1800 CFIs have enrolled in this program.

         The Company  has one of the most  comprehensive  worldwide  service and
support  networks in its class.  The Company grants domestic  Commander ASCs the
non-exclusive  right to refer  prospects for new Commander  aircraft.  Commander
ASCs  receive a referral  fee for  identifying  purchasers,  and  provide a full
complement  of service and support  services,  including  financing,  insurance,
service and support, hangar/storage,  flight instruction, and professional pilot
service.  The Company selects ASCs from among experienced  independent  aviation
sales and service  organizations that it believes to have excellent  facilities,
service  capabilities,  reputation  and  financial  strength.  Through its ASCs,
Commander Aircraft Company offers a turn-key aircraft ownership program designed
to  stimulate  ownership  of  Commander  aircraft  by  companies  that  have not
previously owned or operated aircraft.  This flexible program can be tailored to
meet each customer's specific requirements.

         Revenues generated by The Aviation Services Division grew significantly
in 1998, 1999 and the first quarter of 2000 and are expected to remain strong in
2000. In addition,  the Company's new subsidiary,  Strategic Jet Services,  Inc.
generated its first  revenues in 1999 and is expected to  contribute  additional
earnings in 2000.


<PAGE>



PART 1.      FINANCIAL INFORMATION
ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
             OPERATIONS AND FINANCIAL CONDITION

GENERAL

         Aviation  General,  Incorporated  announced  on March 22, 2000 that the
Board of Directors  authorized  the  purchase of up to  2,000,000  shares of the
Company's  outstanding common stock.  Purchases of shares will be made from time
to time,  in either open market or  negotiated  transactions,  subject to market
conditions. The previous stock repurchase of 1,000,000 shares announced on April
7, 1999 was completed  during the first quarter of 2000.  The Company  purchased
110,000  shares of its common stock  during the first  quarter of 2000 at prices
consistent  with  shares  trading  freely on the NASDAQ  SmallCap  Market on the
respective purchase dates.

RESULTS FROM OPERATIONS

         Revenues  from the  sale of  aircraft  for the  first  quarter  of 2000
totaled $3,475,750 compared to $1,644,653 for the comparable period of 1999. The
increase in revenue for the first  quarter of 2000 was the result of  delivering
15 new and pre-owned aircraft compared to 7 for the first quarter of 1999.

         Service  revenues totaled $466,825 for the quarter ended March 31, 2000
compared  to  $613,639  for the  comparable  quarter in 1999.  The  decrease  in
revenues  was due to a  single  large  aircraft  rebuild  job in 1999  for  over
$240,000.  Excluding  this large rebuild,  service  revenues were up 25% for the
first quarter of 2000 over the same period in the prior year.

         Cost of aircraft  sales for the three month period ended March 31, 2000
increased to $2,779,963  compared to $1,741,241 for the three month period ended
March 31, 1999. The additional cost was due to higher new and pre-owned aircraft
sales during the period.  Gross margins on aircraft  sales were 20% in the first
quarter of 2000 compared to a loss of 6% in the first quarter of 1999.

         Cost of sales for  service  and parts for the  quarter  ended March 31,
2000  decreased to $317,996  from $370,752 for the quarter ended March 31, 1999.
The  reduction  was due  primarily to the decrease in revenues  from service and
parts as explained above.

         Product  development and engineering costs increased to $96,307 for the
first  quarter of 2000,  from  $79,038 for the  comparable  period in 1999.  The
increase  was for higher  salary and  technical  consulting  to support  various
product improvement initiatives currently underway.

         Sales, general and administrative expense increased for the three-month
period ended March 31, 2000, to $733,865 from $489,972 for the comparable period
ended March 31, 1999. Consistent with the increase in sales volume,  commissions
were $141,340 in 2000  compared to $29,053 in 1999.  Salaries,  payroll  burden,
advertising, legal and travel costs were higher, partially offset by lower costs
for administration of Strategic Jet Services.

         Interest  expense  increased  to $30,532 for the first  quarter of 2000
from  $13,024  for the  comparable  period in 1999 due to higher  borrowings  at
banks.

LIQUIDITY AND CAPITAL RESOURCES

         Cash balances  increased to $397,515 at March 31, 2000 from $281,138 at
December 31, 1999. Accounts  receivable  increased by $193,165 at March 31, 2000
due to a trade balance from the sale of a pre-owned aircraft and a $72,000 parts
order secured by an irrevocable letter of credit.  Notes receivable decreased to
$139,243  at March 31, 2000 from  $144,866  at December  31, 1999 due to regular
quarterly  payments  received  from the debtor.  Notes  receivable  from related
parties decreased by $41,045 from December 31, 1999 to March 31, 2000 based on a
principal payment.  Accrued interest due on the note receivable from the related
party at March 31, 2000 was  $32,122.  The note is secured by Aviation  General,
Incorporated  stock pledged,  as well as a personal guarantee from the principal
shareholder  of the debtor.  The note is  classified as  non-current  due to the
probability that payment in full will not occur within the next year.

         The  Company's   investment  in  equity  securities  is  classified  as
available  for sale with  unrealized  gains or losses  excluded  from income and
reported as other comprehensive income. Declines in the fair value of securities
that are other than temporary  result in  write-downs  are included in earnings.
This  investment is in the common stock of a related party.  Subsequent to March
31,  2000 a  decrease  in the share  price of the  underlying  common  stock has
resulted in a decrease in the unrealized gain.

         Inventories  increased to $5,170,118 at March 31, 2000 from  $5,143,720
at  December  31,  1999.  Raw  materials,  parts and work in  process  increased
approximately  $462,138 as the Company  increased  production of new aircraft to
meet higher market  demand.  New aircraft  inventory  decreased from $964,324 at
December 31, 1999 to $744,870 at March 31, 2000. Inventory of pre-owned aircraft
decreased to $500,415 at March 31, 2000 from $716,701 at December 31, 1999.

         During the first three  months of 2000,  expenditures  for fixed assets
totaled  $5,334.  The Company does not plan to spend  significant  funds for new
property,  plant and  equipment  for the balance of fiscal  2000.  Most  capital
expenditures  will be for repairs or  replacements of plant  equipment,  and for
computer  hardware  and software  improvements  which are not expected to exceed
$50,000 for the balance of the fiscal year.

         Accounts payable  increased to $555,057 at March 31, 2000 from $451,645
at December 31, 1999.  Increased production of new aircraft in the first quarter
of 2000  resulted  in higher  material  and parts  inventory  purchases  on open
account.  Accrued expenses increased to $470,849 at March 31, 2000 from $344,525
at December  31,  1999.  The  increase in accrued  expenses is  attributable  to
amounts  accrued  for  payroll  taxes,  employee  benefits,   and  miscellaneous
expenses.

         Refundable  deposits  decreased  to  $158,650  at March  31,  2000 from
$233,363 at December 31, 1999  reflecting  sales of new and  pre-owned  aircraft
that were deposited  prior to year-end.  Borrowings from bank lines increased to
$1,129,350 at March 31, 2000 from $731,780 at December 31, 1999.

         Since   commencement  of  production  in  1992,  annual  revenues  have
increased significantly and annual losses have substantially declined concurrent
with ongoing  investment in the Company's future.  Cash needs have been financed
with debt,  private investor capital,  proceeds from an initial public offering,
and proceeds from subsequent stock issuances.  The Company  continues to broaden
its general  aviation  capabilities  by increasing its business in the pre-owned
piston and jet  markets.  These  markets are much larger than the market for new
high  performance,  single engine  aircraft.  Furthermore,  this diversifies the
Company's  business and revenue base and is synergistic with the  manufacturing,
marketing and support services of our high performance,  single engine Commander
aircraft.

         Management  believes  the  reduction  in net loss  from  operations  is
attributable to plans  implemented in late 1996 and 1997 to provide new revenues
for the  Company.  During  1999,  the Company  continued  to expand the Aviation
Services   Division  ("ASD"),   which  sells  pre-owned   aircraft  and  markets
refurbishment  services.  In the first quarter of 2000, this division  continued
expanding  efforts  to  purchase  and accept  trade-in  of  pre-owned  aircraft,
refurbish  these  aircraft  and sell them at a  reasonable  profit.  The Company
continues to take  advantage  of its factory  facilities  to market  upgrades to
existing  aircraft  owners for new paint,  interior  and  equipment.  Management
expects  growth to continue in 2000 for  refurbishment  and  pre-owned  aircraft
sales.

         In October 1998,  the Company  announced the formation of Strategic Jet
Services,   Inc.  (SJS),  a  wholly  owned  subsidiary  established  to  provide
brokerage,  sale, consulting and refurbishment work for jet aircraft.  This line
of business  generated  first  activity  in 1999 and is  expected to  contribute
earnings in 2000.

         During 1999, the Company began  certification  of new  state-of-the-art
avionics  systems that offer the customer the latest  technology in navigational
and communication  equipment.  The Company  introduced a new de-icing option and
received  certification  from  the  Federal  Aviation  Administration  in  1998,
allowing  equipped  aircraft  to operate in known  icing  conditions  similar to
larger,  more  expensive  aircraft.  Sales of this  equipment  not only  provide
additional  revenues and  earnings,  but also increase the value of the aircraft
relative to its competition.

         During the first quarter of 2000, the Company introduced the 115 series
of high  performance,  single engine aircraft.  The Commander 115 represents the
culmination of a multitude of  improvements  to the Commander line, and features
numerous  airframe,  engine and systems  refinements,  as well as  significantly
increased  range  capability  and an upgraded  standard  avionics  package which
includes  dual  Garmin  430  global  navigation,  communication  and  moving map
displays.  The  Commander  115  series is the latest of a  thoroughbred  line of
aircraft that offer the ultimate  combination of performance,  comfort,  safety,
and utility,  and has become  recognized  as the  Mercedes of the single  engine
fleet.

         In  addition to the above  actions by the Company to increase  revenue,
management has made efforts to reduce costs and cash  requirements by optimizing
its production schedule using just-in-time  scheduling,  thereby  systematically
decreasing   inventories  and  payables  since  production  commenced  in  1992.
Management  has reduced the costs incurred to advertise new aircraft by focusing
marketing efforts at a specific customer profile.

         The Company  continues to advertise in industry and trade  publications
at a significantly  reduced level, while directly contacting potential customers
whose demographic characteristics closely match the typical customer, especially
in the  areas  of  income,  pilot  experience,  and  types  of  businesses  with
demonstrated  regional travel  requirements.  Further reducing selling expenses,
the Company has organized its service  center,  paint and interior  shops into a
completion center to focus on the growing after-market refurbishment business.

         The  Company  has  expanded  its  operations  to  include  ASD and SJS,
enhanced the Commander  brand with the  introduction  of the Commander  115, and
more  effectively  targeted  sales and marketing  expenditures.  With  continued
activity in the parts,  service and pre-owned  aircraft  sales,  the Company has
lowered its break even sales to only 13 new  aircraft  per year.  With the large
investment  complete,  management  believes  it has  made  significant  progress
towards the  building of a world class  aviation  company and is poised to break
into  profitability.  Based on  performance  in the first  quarter of 2000,  the
Company  believes  that annual  results for the year  ending  December  31, 2000
should exceed the prior year. Due to numerous  factors beyond the control of the
Company, there can be no assurances that these results will be achieved.

Forward Looking Statements

         This Form 10-Q  includes  certain  statements  that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act. All statements,  other than statements of historical fact, included in this
Form 10-Q that addresses  activities,  events or  developments  that the Company
expects,  projects,  believes,  or anticipates  will or may occur in the future,
including  matters  having to do with  expected  and future  aircraft  sales and
services revenues,  the Company's ability to fund its operations and repay debt,
business strategies,  expansion and growth of operations and other such matters,
are   forward-looking   statements.   These  statements  are  based  on  certain
assumptions  and analyses made by our  management in light of its experience and
its  perception  of  historical  trends,  current  conditions,  expected  future
developments,   and  other   factors  it  believes   are   appropriate   in  the
circumstances.  These  statements are subject to a number of assumptions,  risks
and  uncertainties,  including  general  economic and business  conditions,  the
business opportunities (or lack thereof) that may be presented to and pursued by
the Company, the Company's  performance on its current contracts and its success
in  obtaining  new  contracts,  the  Company's  ability  to  attract  and retain
qualified employees,  and other factors,  many of which are beyond the Company's
control.  You  are  cautioned  that  these  forward-looking  statements  are not
guarantees of future  performance  and that actual results or  developments  may
differ materially from those projected in such statements.


<PAGE>



PART 1.    FINANCIAL INFORMATION
ITEM 3.    QUANITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The registrant  has no material  market risk  associated  with interest
rates, foreign currency exchange rates or commodity prices.

PART II.  OTHER INFORMATION
ITEM 1.   LEGAL PROCEEDINGS

         On  February  18,  2000,  a lawsuit  was  filed in the  Third  Judicial
District  Court in Salt Lake  City,  Utah on behalf of the  estate of Frank Earl
against   Aeroquip-Vickers,   Inc.,  Commander  Aircraft  Company,  and  Textron
Lycoming,  Inc. The plaintiff alleges that Mr. Earl was killed in the crash of a
Commander  114TC July 18,  1998 due to the  failure of a clamp  manufactured  by
Aeroquip-Vickers,  Inc. that secured the turbocharger to the exhaust pipe, which
ultimately caused the aircraft to crash. Amounts of damages are not specified in
the complaint.  Although it is too early for the ultimate  outcome of this claim
to  be   determined,   management   does  not  believe  the  Company  bears  any
responsibility  and will  vigorously  defend  against  this claim and  currently
believes  that this  action  will not have a  material  impact on the  Company's
operations.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits - None

(b)      Reports on Form 8-K - None


<PAGE>















                                    SIGNATURE

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

                          AVIATION GENERAL INCORPORATED

                                  (Registrant)

                           By: /s/ Ronald F. Thomason

                               Ronald F. Thomason

                             Vice President Finance

                          (Chief Financial Officer and

                                                         Authorized Signatory)




Date:  May 15, 2000