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

                      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, 2001

                                         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 months (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 6,279,330 Shares of Common Stock Outstanding as of May 10,
2001.


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



<PAGE>




PART I. FINANCIAL INFORMATION
ITEM  I. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

               AVIATION GENERAL, INCORPORATED AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                               (Unaudited)
                                                                                March 31,               December 31,
                                                                                  2001                      2000
                                                                           --------------------      --------------------
<S>                                                                  <C>                          <C>
                                    ASSETS
Current Assets
    Cash and cash equivalents                                                          109,407                  $135,016
    Accounts receivable                                                                 15,703                   551,425
    Current portion of note receivable                                                  22,027                    25,628
    Inventories                                                                      9,019,280                 7,992,171
    Prepaid expenses and other assets                                                  176,739                   153,490
                                                                           --------------------      --------------------
       Total current assets                                                          9,343,156                 8,857,730
                                                                           --------------------      --------------------
Property and equipment
    Office equipment and furniture                                                     367,311                   363,388
    Vehicles and aircraft                                                               95,115                    95,115
    Manufacturing equipment                                                            385,179                   382,124
    Tooling                                                                            676,027                   654,619
    Leasehold improvements                                                             311,764                   311,764
                                                                           --------------------      --------------------
                                                                                     1,835,396                 1,807,010
    Less accumulated depreciation                                                   (1,101,462)               (1,085,037)
                                                                           --------------------      --------------------
                                                                                       733,934                   721,973
                                                                           --------------------      --------------------
Other assets
    Notes receivable, less current maturities                                           93,121                    95,921
    Available-for-sale equity securities - related party                               402,000                   603,000
    Note receivable from related party                                               1,529,889                 1,529,889
                                                                           --------------------      --------------------
                                                                                     2,025,010                 2,228,810
                                                                           --------------------      --------------------

                                                                                   $12,102,100               $11,808,513
                                                                           ====================      ====================

</TABLE>


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



<PAGE>







<TABLE>
<CAPTION>


                     AVIATION GENERAL, INCORPORATED AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                               (Unaudited)
                                                                                March 31,               December 31,
                                                                                  2001                      2000
                                                                           --------------------      --------------------
<S>                                                                     <C>                         <C>
                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
    Accounts payable                                                               $1,501,973                 $1,226,414
    Accrued expenses                                                                  472,662                    561,398
    Refundable deposits                                                                89,166                    115,814
    Notes payable                                                                   3,968,000                  3,035,000
                                                                           --------------------      --------------------
       Total current liabilities                                                    6,031,801                  4,938,626
                                                                           --------------------      --------------------
    DEFERRED TAX LIABILITY                                                                  -                     58,568
                                                                           --------------------      --------------------
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; 7,051,519 shares issued at
        March 31, 2001 and  December 31, 2000                                       3,525,759                  3,525,759
    Additional paid-in capital                                                     36,889,799                 36,889,799
    Less: Treasury stock at cost, 772,189 shares at
        March 31, 2001 and December 31, 2000                                       (1,294,193)                (1,294,193)
    Accumulated other comprehensive income (loss)                                     (28,741)                   113,691
    Accumulated deficit                                                           (33,022,325)               (32,423,737)
                                                                           --------------------      --------------------
    Total stockholders' equity                                                      6,070,299                  6,811,319
                                                                           --------------------      --------------------
                                                                                  $12,102,100                $11,808,513
                                                                           ====================      ====================
</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,
                                                               2001                          2000
                                                      -----------------------       -----------------------
<S>                                                   <C>                          <C>
Net sales - aircraft                                             $2,134,212                    $3,475,750
Net sales - service                                                 505,548                       466,825
                                                      -----------------------       -----------------------
   Total net sales                                                2,639,760                     3,942,575
                                                      -----------------------       -----------------------

Cost of sales - aircraft                                          1,813,500                     2,779,963
Cost of sales - service                                             434,586                       317,996
                                                      -----------------------       -----------------------
   Total cost of sales                                            2,248,086                     3,097,959
                                                      -----------------------       -----------------------

Gross margin                                                        391,674                       844,616
                                                      -----------------------       -----------------------

Other operating expenses
   Product development and engineering costs                         95,307                        96,307
   Selling, general and administrative expenses                     818,359                       733,865
                                                      -----------------------       -----------------------
     Total other operating expenses                                 913,666                       830,172
                                                      -----------------------       -----------------------
Operating income (loss)                                            (521,992)                       14,444
                                                      -----------------------       -----------------------

Other income (expenses)
   Other income                                                      44,049                        54,459
   Interest expense                                                (120,644)                      (30,532)
   Other expense                                                          -                          (188)
                                                      -----------------------       -----------------------
   Total other income (expense)                                     (76,595)                       23,739
                                                      -----------------------       -----------------------
Net income (loss)                                                 ($598,587)                      $38,183
                                                      =======================       =======================

Net income per share

   Weighted average common shares
      outstanding, basic                                           6,279,330                     6,449,720
                                                      -----------------------       -----------------------

   Net income (loss) per share, basic                                ($0.10)                         $0.01
                                                      =======================       =======================

   Weighted average common shares
      Outstanding, diluted                                         6,279,330                     6,713,720
                                                      -----------------------       -----------------------

   Net income (loss) per share, diluted                              ($0.10)                         $0.01
                                                      =======================       =======================
</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,
                                                                            2001                     2000
                                                                     --------------------     --------------------
<S>                                                               <C>                        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net Income (Loss)                                                        ($598,587)                 $38,183
     Adjustments to reconcile net income (loss) to
         net cash used by operating activities
         Depreciation and amortization                                           16,425                   30,145
         Non-cash interest earnings                                             (36,343)                 (32,122)
         Receipts on notes receivable - related party                                 -                   41,045
         Changes in assets and liabilities
               (Increase) decrease  in
                   Accounts receivable                                          535,722                 (193,165)
                   Notes receivable                                               6,401                    5,623
                   Inventories                                               (1,027,109)                 (26,398)
                   Prepaid expense and other assets                              13,094                   39,397
               Increase (decrease) in
                   Accounts payable                                             275,559                  103,412
                   Accrued expenses                                             (88,736)                 126,324
                   Refundable deposits                                          (26,648)                 (74,713)
                                                                     --------------------     --------------------
     Net cash provided (used) by operating activities                          (930,222)                  57,731
                                                                     --------------------     --------------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Purchase of securities of related party                                          -                 (113,590)
     Capital expenditures                                                       (28,387)                  (5,334)
     Payment on related party note receivable                                         -                        -
                                                                     --------------------     --------------------
     Net cash (used) provided by investing activities                           (28,387)                (118,924)
                                                                     --------------------     --------------------

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from borrowings                                                 1,988,013                1,407,380
     Payments on borrowings                                                  (1,055,013)              (1,009,810)
     Purchase of treasury stock                                                       -                 (220,000)
                                                                     --------------------     --------------------
     Net cash provided by financing activities                                  933,000                  177,570
                                                                     --------------------     --------------------

Net increase (decrease) in cash                                                 (25,609)                 116,377
Cash and cash equivalents at beginning of period                                135,016                  281,138
                                                                     --------------------     --------------------
Cash and cash equivalents at end of period                                     $109,407                 $397,515
                                                                     ====================     ====================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION
      Cash paid during the period for:
         Interest                                                              $126,060                  $32,824
</TABLE>




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


<PAGE>




                         AVIATION GENERAL, INCORPORATED
              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, 2001 and December 31, 2000, and the
results of operations and cash flows for the three month period ended March 31,
2001 and 2000 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 2000 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.
<TABLE>
<CAPTION>

                                                                    Three months ending
                                                         March 31, 2001              March 31, 2000
                                                         --------------              --------------
<S>                                                    <C>                         <C>
  Numerator
       Net income (loss)                                      ($598,587)                   $38,183

  Denominator
       Weighted average shares outstanding,
         basic                                                6,279,330                  6,449,720

       Effect of dilutive securities
         Stock options                                                0                    264,000
                                                           ------------               ------------

  Denominator for income (loss) per share
    assuming dilution                                         6,279,330                  6,713,720
                                                           ============               ============

  Income (loss) per share, basic                               ($ 0.10)                     $ 0.01
                                                           ============               ============

  Income (loss) per share, assuming dilution                   ($ 0.10)                     $ 0.01
                                                           ============               ============
</TABLE>


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

                                          For the three months ending March 31,
                                                  2001           2000
                                                  ----           ----

  Net income                                    ($598,587)        $38,183
  Other comprehensive income (loss)              (142,432)        591,143
                                              ------------ --------------

  Comprehensive income (loss)                   ($741,019)       $629,326
                                              ============      =========


<PAGE>




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, 2001             December 31, 2000
                                  ------------------         -----------------

  Raw materials                           $2,435,414                 $2,522,930
  Work in process                          1,986,981                  1,710,363
  New and pre-owned aircraft               4,539,990                  3,663,866
  Other                                       56,895                     95,012
                                              ------                     ------
  Total inventories                       $9,019,280                 $7,992,171
                                         ===========                ===========


6. The  effective  tax  rate  differs  from  the  statutory  rate  primarily  to
utilization of net operating loss  carryforwards and the change in the valuation
allowance for deferred income tax assets

7. 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.

8. 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. In addition,
Commander aircraft have a significantly better safety record and higher resale
value than all other aircraft in their class. 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.

         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 pre-owned 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 piston aircraft at reasonable profit margins. The Aviation
Services Division also acts as broker for pre-owned piston 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 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.

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

RESULTS FROM OPERATIONS

         Revenues from the sale of aircraft for the first quarter of 2001
totaled $2,134,212 compared to $3,475,750 for the comparable period of 2000. For
the first quarter of 2001, eight new and pre-owned aircraft were sold, compared
with fifteen new and pre-owned aircraft sold in the same period for 2000. The
revenues for the first quarter of 2001 were adversely impacted by the
uncertainty of the economy, causing customer cancellation or postponement of new
and pre-owned aircraft purchases. Thus, the Company has made and will continue
to make appropriate adjustments in its cost and overhead structure. The Company
believes business will begin to pick up as economic and stock market conditions
stabilize, and as the effect of lower interest rates, which significantly lowers
aircraft purchase finance costs, takes hold. The Company expects to return to
profitability in the second half of the year.

         Service revenues totaled $505,548 for the quarter ended March 31, 2001
compared to $466,825 for the comparable quarter in 2000. The increase was
partially due to increased aircraft repair and refurbishment activity.

         Cost of aircraft sales for the three months ended March 31, 2001
decreased to $1,813,500 compared to $2,779,963 for the three months ended March
31, 2000. The decrease in cost was due to lower new and pre-owned aircraft sales
during the period.

         Cost of sales for service and parts for the quarter ended March 31,
2001 increased to $434,586 compared to $317,996 for the quarter ended March 31,
2000. The increase was due to the increase in service activity and was partially
offset by a decrease in after-market parts sales activity.

         Aircraft sales margins were lower for the three months ended March 31,
2001 compared to the prior period due to the decrease in sales volume of new and
pre-owned aircraft. Service margins were lower for the three months ended March
31, 2001 compared to the prior period because of a decrease in the sale of
after-market parts.

         Product development and engineering costs decreased to $95,307 for the
first quarter of 2001, from $96,307 for the comparable period in 2000.

         Sales, general and administrative expense increased for the three
months ended March 31, 2001, to $818,359 from $733,865 for the comparable period
ended March 31, 2000, as a result of increased legal expense.

         Interest expense increased to $120,644 for the first quarter of 2001
from $30,532 for the comparable period in 2000 due to higher borrowings to
finance aircraft manufactured or purchased for resale.


LIQUIDITY AND CAPITAL RESOURCES

         Cash balances decreased slightly to $109,407 at March 31, 2001 from
$135,016 at December 31, 2000. Accounts receivable decreased by $535,722 at
March 31, 2001 due to a payment received in the first quarter for an aircraft in
accounts receivable at December 31, 2000.

         Notes receivable decreased to $115,148 at March 31, 2001 from $121,549
at December 31, 2000 due to regular quarterly payments from the debtor. Notes
receivable from related parties remained unchanged from December 31, 2000 to
March 31, 2001. Accrued interest due on the note receivable from the related
party at March 31, 2001 was $36,343. 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 or loss. 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.

         Inventories increased to $9,019,280 at March 31, 2001 from $7,992,171
at December 31, 2000. Raw materials, parts and work in process increased
approximately $150,985 as the Company increased production of new aircraft to
meet anticipated market demand. New and pre-owned aircraft inventory increased
by $876,124.

         During the first three months of 2001, expenditures for fixed assets
totaled $28,386, which included replacement of machinery and fabrication
tooling.

         Accounts payable increased to $1,501,973 at March 31, 2001 from
$1,226,414 at December 31, 2000, as the anticipated increase in production of
new aircraft in 2001 resulted in higher material and parts inventory purchased
on open account. Accrued expenses decreased to $472,662 at March 31, 2001 from
$561,398 at December 31, 2000. The decrease in accrued expenses is attributable
to disbursement of property taxes and payroll that were included in normal
expense accruals at December 31, 2000.

         Refundable deposits decreased to $89,166 at March 31, 2001 from
$115,814 at December 31, 2000. Borrowings from bank lines increased to
$3,968,000 at March 31, 2001 from $3,035,000 at December 31, 2000 to offset the
decrease in cash flow from lower sales volume.

         The Company formed Strategic Jet Services, Inc. (SJS), a wholly owned
subsidiary, to provide brokerage, sale, consulting and refurbishment work for
jet aircraft. This line of business generated first activity in 1999,
contributed revenue in 2000, and is expected to contribute additional revenue in
2001.

         The Company continues to certify 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, 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 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. 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, interior and avionics shops
into a completion center to focus on the growing after-market refurbishment
business.

         The Company has expanded its operations to include 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 15 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 which will achieve sustained annual profitability.
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.

PART I.  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.


<PAGE>





PART II.  OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      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/ Wirt D. Walker
                                 Wirt D. Walker
                          Chairman of the Board of Directors
                           (Chief Executive Officer and
                              Authorized Signatory)




Date:  May 14, 2001